What Would Happen if Marijuana Were Decriminalized? A Freakonomics Quorum

Two years ago we ran a quorum debating the pros and cons of decriminalizing marijuana. Since then, a largely theoretical debate has moved quite substantially toward the realm of reality, with a growing number of states and municipalities having changed their laws. The details from place to place vary greatly and are very much a patchwork; the most prominent state to make a move is Massachusetts. The California legislature, meanwhile, is wondering whether marijuana could save its economy — which, as we read just this morning, is badly in need of saving.

Although President Obama doesn’t seem interested, arguments in favor of decriminalization are popping up everywhere, from the Law Enforcement Against Prohibition platform to the senior thesis of a graduating economics major at Brown named Max Chaiken, which finds that “a legally taxed and regulated marijuana market could generate upwards of $200 billion annually in excise tax revenues for the federal government … [which] would be enough to fund Medicaid.”

So we asked a group of people — Paul Armentano, Mike Braun, Joel W. Hay, Jeffrey Miron, and Robert Platshorn — to think about a national decriminalization of marijuana (unlikely, let’s be honest) and answer the following: What would be some of the most powerful economic, social, and criminal-justice effects?

Here are their answers. As you will see, consensus on this issue is now — and will probably always remain — elusive.

Joel W. Hay is professor of Pharmaceutical Economics and Policy in the School of Pharmacy at the University of Southern California.

“It is a fallacy that pot legalization will provide badly needed state and federal revenue through taxation of decriminalized marijuana.”

With all of our current problems, Americans do not need more marijuana. Pot combines mind-altering and judgment-clouding qualities (like alcohol) with carcinogenic, respiratory, and second-hand smoke qualities (like tobacco); it is emphatically not a safe or benign substance. Daily pot smokers have a 30 percent increased risk of accidents, and one study found that more emergency-department trauma admissions were associated with pot use than alcohol. We don’t need hundreds of billions of dollars in new medical-care costs, traffic and other accident costs, reduced worker productivity, and lower educational achievements in an increasingly competitive global marketplace.

It is ironic that the public health community, who so vociferously decries the dangers of tobacco with reams of scientific evidence, falls strangely silent when voters in state after state are encouraged by the pot lobby to legalize marijuana specifically as a “medical therapy.” There isn’t a shred of scientific evidence that marijuana is safe and effective for any medical condition. Moreover, THC, the active ingredient of pot, has been approved by the FDA and on the market in capsule form since 1985. As a further irony, while the Obama administration has put $1.1 billion behind scientific comparative effectiveness research to demonstrate whether medical treatments actually work, his Attorney General has decided to downplay federal prosecutions in California of medical marijuana distributors and users, apparently because state voters trump science when it comes to making medical policy for mind-altering substances.

It is a fallacy that pot legalization will provide badly needed state and federal revenue through taxation of decriminalized marijuana. A California Assembly decriminalization bill is currently being promoted as a $1 billion pot-tax cure for the state’s fiscal headaches. The problem with this logic, as alcohol and tobacco clearly demonstrate, is that economic costs will increase by amounts far greater than any possible revenue gains. Tobacco taxes only cover about 20 percent of tobacco-related costs, and alcohol taxes only cover about 10 percent of alcohol-related costs. Raising taxes on either tobacco or alcohol enough to merely cover their medical costs and other detrimental effects would create flourishing black markets in these commodities. Raising marijuana taxes high enough to cover medical and other costs associated with legalized pot use will mean both more potheads and continued marijuana narco-trafficking.

The final argument against decriminalization is that it would create powerful and legal marijuana business interests who then become entrenched in the system, contributing to politicians, advertising to consumers, and pushing for even more liberal drug laws. Alcohol and tobacco are safe as long as their business interests contribute to pot legalization, and marijuana will be safe after decriminalization as long as their merchants contribute to the inevitable next round of political campaigns to legalize heroin and cocaine.


Robert Platshorn
(a.k.a. The Black Tuna) is a former marijuana smuggler and was the leader of one of the largest marijuana-trafficking organizations in the 1970’s.

“For 29 years I lived in 11 prisons, costing you millions, as America’s longest-serving non-violent prisoner of the War on Weed.”

“I’m not against all wars, I’m against dumb wars.” – Barack Obama

On May 2, 1979, a New York Times headline read “$300 Million Drug Ring Reported Cracked in Florida.” The “ring” consisted of my two partners and myself. We hadn’t made 10 percent of that, but the government had reasons for turning a couple of small fish into “The Black Tuna Gang.” Those were the early days of the DEA, and they needed to justify their mission and their budget.

So for 29 years I lived in 11 prisons, costing you millions, as America’s longest-serving non-violent prisoner of the War on Weed. When Feds kicked in my door, I’d been retired from smuggling for two years. My ice cream and food concessions employed about 50 people. My Miami auto auction, body shop, and barbershop employed another 40. Good jobs and serious tax dollars — all gone in an instant, not to mention my freedom, my wife and children, and the life savings of my parents, who paid for years of fruitless appeals.

What was accomplished? The War on Weed that started in the 1970’s discouraged pot smuggling by small timers like me, and filled the void with drug cartels far more interested in the lucrative cocaine trade. Big profits bred violence, enough to make Miami the U.S. murder capital. Today, we see that same prohibition-fueled violence along our Mexican border.

Legalizing marijuana would deprive this dangerous black market of profits and relieve a ridiculous burden on taxpayers; it would allow police to focus on serious crime instead of arresting more than 800,000 Americans every year for pot at a cost to taxpayers of at least $14 billion, according to “The Budgetary Effects of Marijuana Prohibition,” which was endorsed by Milton Friedman and more than 500 other economists. One man, Harry Anslinger, was almost singlehandedly responsible for outlawing marijuana. Admitting in private it was harmless, he wanted to create a powerful tool to control “deviant minorities.” Our for-profit prison system continues that work.

So, based on lies and distortions, we demonized a plant that’s proven effective in treating chronic pain, glaucoma, MS, arthritis, and the effects of chemotherapy, AIDS-wasting syndrome, and other chronic illnesses. Studies in at least five countries have shown marijuana to slow and often reverse the growth of cancer cells. All this from a plant less toxic than aspirin and less habit-forming than coffee or wine.

That’s why I’m working with the NORML and others on a new campaign called Geezers for Medical Weed. I have high hopes that the Obama administration will soon realize that for more than 70 years, the War on Marijuana has indeed been America’s dumbest war.

Jeffrey A. Miron is the director of undergraduate studies at Harvard University’s economics department.

“Marijuana legalization is not a panacea; rather, it is a significant step in the direction of saner drug policy.”

Marijuana legalization would mean repeal of federal and state laws that ban production, distribution, and possession. Legalized marijuana would likely be subject to the kind of regulation and taxation that currently applies to alcohol and tobacco — e.g., sin taxes and age restrictions — but it would otherwise be no different under the law than an espresso at Starbucks.

Legalizing marijuana would produce important benefits for the United States.

Legalization would allow people who use marijuana, without harm to themselves or others, to do so without fear of arrest or incarceration. This is exactly what occurs now for alcohol and tobacco.

Legalization would reduce violence. In underground markets, participants cannot resolve their disputes with lawyers, courts, or advertising, so they employ violence instead. Violence was common in the alcohol industry during alcohol prohibition, but not before or after; in gambling markets before state and federal governments legalized most forms of gambling; and in prostitution markets where prohibition forces these underground. Legalization would also reduce corruption, since producers and consumers would have no reason to bribe police, judges, and politicians.

Legalization would allow the medical community to evaluate marijuana’s medicinal effects without interference from law enforcement. Considerable evidence suggests marijuana has important medical uses, but prohibition has made controlled, double-blind studies all but impossible.

Legalization would diminish restrictions on civil liberties. Crimes like robbery or assault generate a victim who complains to the police, but neither party to a marijuana transaction wants to alert authorities. Thus police use intrusive tactics like warrantless searches or undercover buys, and the victimless nature of marijuana “crime” encourages racial profiling.

Legalization would increase respect for the law. No matter how draconian the penalties and how extensive the enforcement, many people produce and use marijuana. Thus everyone learns that laws are for suckers.

Legalization would benefit the public purse. My research indicates that legalization would save federal and state budgets approximately $13 billion in enforcement costs and allow collection of about $7 billion in tax revenues, assuming marijuana were taxed like alcohol and tobacco.

One thing legalization would not do is produce a major increase in marijuana use; existing evidence suggests prohibition has only a modest impact. Alcohol consumption declined moderately but not dramatically during alcohol prohibition, for example.

A second thing legalization would not do is eliminate the bulk of violence, crime, and corruption induced by drug prohibition, since much of that relates to cocaine, heroin, and methamphetamine. To achieve the full benefits of legalization, policy must legalize all drugs.

Marijuana legalization is thus not a panacea; rather, it is a significant step in the direction of saner drug policy.

Paul Armentano is deputy director of the National Organization for the Reform of Marijuana Laws (NORML) and co-author of the forthcoming book Marijuana Is Safer: So Why Are We Driving People to Drink?.

“Our criminal justice policies are alienating millions of otherwise law-abiding citizens while creating widespread disrespect for the rule of law among minorities and young people.”

Last November, U.S. law enforcement made its 20 millionth marijuana arrest since 1965. Yet today, almost 90 percent of teens report that pot is “fairly easy” or “very easy” to obtain, and nearly one out of two graduating high-school seniors admit to having tried it.

Clearly it’s time to try another approach.

The enforcement of marijuana prohibition is an archaic, overly punitive, and ineffective policy that carries with it a staggering array of social and economic costs. According to the FBI, in 2007 police made a record 873,00 marijuana arrests — 9 out of 10 of them for pot possession, not trafficking, cultivation, or sale. A disproportionate number of those arrested were African Americans and Hispanic males. Some 75 percent of those arrested were under age 30. In short, our criminal justice policies are alienating millions of otherwise law-abiding citizens while creating widespread disrespect for the rule of law among minorities and young people.

It’s also costing us money we can no longer afford. According to Harvard University economist Jeffrey Miron, it costs taxpayers at least $7 billion per year to pay for the arrest and prosecution of pot offenders. Taxpayers pay another $1 billion per year to house the estimated 50,000 state and federal inmates serving time for pot, according to data derived from the U.S. Bureau of Justice Statistics.

Conversely, a recent George Mason University report estimates that taxing the production and sale of marijuana in a manner similar to alcohol could potentially raise $31 billion in new revenue while reallocating existing police and prosecutorial resources toward more serious crimes. In California alone, data provided by the State Board of Equalization and Taxation — which has endorsed legalizing the adult use of cannabis — estimates that regulating pot would yield over $1.3 billion annually in new state tax revenue.

This policy would have the added benefit of removing the production and trafficking of pot out of the hands of drug cartels and other criminal entrepreneurs and placing it under the control of state-licensed establishments — which would operate in accordance to government regulations and community standards.

Naturally, critics of this alternative inevitably argue that such a policy would increase Americans’ use of pot — an outcome that they believe negates the social, economic, and criminal justice benefits that would be associated with regulating cannabis like booze. NORML disagrees on both counts.

First, the use of pot by adults is objectively safer to the individual, and to society as a whole, than the use of either alcohol or tobacco, whereas the continued criminal prohibition of pot causes innumerable and far greater harms.

Further, the great irony of our existing policy is that nearly half of all Americans — including our nation’s three most recently elected U.S. presidents — have used, and many continue to use, pot despite the imposition of prohibition. Would this percentage be even higher if marijuana were legalized? Possibly, but not likely.

As noted in the opening paragraph, almost every U.S. teen (or adult for that matter) can already access pot if he or she wants to. Yet despite this practically unfettered access — many surveys now indicate that it’s harder for young people to acquire booze than weed — many Americans choose never to try marijuana, and most are not regular users. Similarly, in the Netherlands, where the sale and use of marijuana is legal to those over age 18, the use of pot by the Dutch is far less common than in America. In short, the use of marijuana is not for everybody — or even most people — and that fact is not going to change, regardless of American pot policy.

Mike Braun recently retired from the U.S. Drug Enforcement Administration (DEA) as the Assistant Administrator and Chief of Operations.

“Is it O.K. with you if the government or corporate America opens a marijuana distribution center in your neighborhood, or should they only establish them in the economically depressed areas of town?”

In 1975, the Alaska Supreme Court ruled that an adult’s possession of marijuana for personal consumption in the home was legal. Although the ruling applied only to persons 19 and over, teen consumption of the drug skyrocketed. A 1988 University of Alaska study found that the state’s 12- to 17-year-olds used marijuana at more than twice the national average for their age group. School equivalency test scores plummeted, as work place accidents, insurance rates and drugged-driving accidents went through the roof. Alaska’s residents voted to recriminalize possession of marijuana in 1990, demonstrating their belief that legalization and increased use was too high a price to pay.

In 1985, Stanford University conducted a study of airline pilots who each consumed a low grade marijuana cigarette before entering a flight simulator involving a stressful, yet recoverable scenario. The test resulted in numerous crashes. More alarming was the fact that the pilots again crashed the simulator in the same scenario a full 24 hours after last consuming marijuana, when they all showed no outward signs of intoxication, reported feeling “no residual effects” from the drug, and each also stated they had “no reservations” about flying! Part of the problem with marijuana is that Delta 9-tetrahydrocannabinol (THC), the psychoactive ingredient in marijuana that gives the user his or her high, is absorbed into the fatty tissues of the body where it remains for at least several days, and can continue to have an adverse impact on one’s ability to act capably under stress days after the drug was last ingested.

If healthy pilots can’t respond effectively in the cockpit 24 hours after smoking a low-grade marijuana cigarette, do we really want our kids transported to and from school by a school bus driver who smoked one or two joints the night before? How do we ensure the cop on the beat, who’s carrying a badge and gun, hasn’t smoked marijuana 24 hours before entering onto duty once the drug is legal? And what about those pilots?

Marijuana legalization advocates love to say that we can tax the sale of the drug and generate revenue to cover all the costs associated with legalization, but a few more questions need to be asked.

Will the taxes pay for the significant increases in health and casualty insurance the experts tell us will be levied if marijuana is legalized? Is the government going to hand out free marijuana to those who can’t afford it? If so, who pays for that? Is it O.K. with you if the government or corporate America opens a marijuana distribution center in your neighborhood, or should they only establish them in the economically depressed areas of town? Which government agency will be responsible for rigorous testing to ensure that marijuana sold in the marketplace meets the strictest of consumer standards and is free of pesticides and drugs such as LSD and PCP? Which government agency is going to be responsible for taxing your next-door neighbor when he starts growing marijuana in his back yard, adjacent to your prized roses, of course? What happens when the taxes on marijuana become so excessive from covering all the ancillary costs of legalization that the vast majority of users simply grow the product themselves? Then who will pay for all of this?

I can’t help but ask a couple final questions. What’s the legal age limit we attach to marijuana use? Is it 18; is it 21? And what do we do about the predatory narcotics traffickers who shift every “ounce” of their undivided and merciless attention to those under the authorized age limit once the drug is legalized? Folks, all we need to do is educate ourselves, ask the tough questions, and apply common sense and logic when making a decision on this issue. Most hard-working taxpayers with kids like me will come up with the same answer, which is no to legalization.


Steve

I did not read the discussion but I searched for the word "hemp" as in "industrialized hemp" and did not find it. For me, removing restrictions on growing industrial hemp is the most compelling reason to decriminalize marijuana.

I'm sure I do not have to tell a well-informed group like this all the benefits of hemp but replacing trees for pulp wood and the water and chemical intensive cotton crop for other fiber uses are two examples that should resonate in this times.

Scientist - Numerical Modeling expert

The work of Dr. Manuel Guzman, published in "Nature Cancer Reviews" shows that there are compounds in Marijuana that attack Cancer at the two places where we have to defeat it to cure a Cancer and keep it cured.

Marijuana contains compounds that encourage apoptosis and discourage angiogenisis.

Marijuana is an exciting source of "lead compounds" for fighting cancer.

Its time to put some funding behind this.

Laura

Kat - you are attempting to apply logic to an emotional argument, which is why it doesn't resonate with you, a thoughtful, rational person.

It's interesting to me that the only commentary that actually links out to supporting data is the NORML guy. You'd think, in making a research-driven argument against legalisation, you could refer to at least one supporting source.

Also, "What's the legal age limit we attach to marijuana use? Is it 18; is it 21? And what do we do about the predatory narcotics traffickers who shift every “ounce” of their undivided and merciless attention to those under the authorized age limit once the drug is legalized?"

Where were these guys when I was 16 and looking ofr cigarettes and beer? I can attest that i was looking and I was not finding the predators whose undivided and merciless attention was focused on me.

Jake

I agree that marijuana isn't great, but the argument for keeping it illegal because its bad doesn't make sense. People are using the drug, making it illegal forces taxpayers to pay for the jailing and prosecution of this substance. The lesser evil in this case is legalization. Just because its legal doesn't mean that everyone will become a pothead. This is a case of quality of life. We are wasting money keeping it illegal. We could spend that money on education or healthcare. Also, pot doesn't have to be smoked - the harmful effects can be removed.

Andrew

Thank you Dave. The "airline pilots who smoked pot crashed the plane" is a strawman argument. I don't think anybody is advocating operating a plane, heavy machinery or car while stoned.

(And I'm skeptical of the 24 hours later scenario. If they're doing the same similation, its seems to me they may have learned a wrong response or had a negative association - ie cognitive, not biochemical.)

I was impressed with Hay's point about entrenching marijuana sellers as big biz lobbyists. This can be addressed by placing the same restrictions on advertising that tobacco and alcohol has.

And anyway, I doubt legalizing pot will make it more "cool" to the kids. My guess would be a short term up swing in use, followed by a gradual decline as pot looses its forbidden fruit status.

E

So, What happened in Alaska after 1990?

ObiJan

Here's a novel idea:
Instead of "making up" what would happen, how about taking look at some other countries/regions where MJ was legalised, and the effect of that?

Also, there are plenty of other countries with different alcohol laws too.

If only we had a freaknomist to analyze it and write it up?

Jon Webb

Joel Hay -- this guy's a professor? Who's paid to think and reason? What's he been doing, smoking dope? His argument is full of internal contradictions, holes, and ridiculous exaggerations..
He seems to completely miss the irony of talking about how raising alcohol and tobacco taxes to cover their costs would create a flourishing black market in them -- presumably a bad thing -- while endorsing the flourishing black market in marijuana.
In one sentence he says that marijuana has never been shown to have health benefits. In the next he says THC, the active ingredient in pot, has been approved by the FDA.
He seems to have not thought through the possibility that pot users and society in general might get some benefit from its use -- from relaxation or whatever -- just as we acknowledge there is some benefit to alcohol consumption, in moderation. Or the possibility that some current alcohol users might substitute marijuana, a significantly safer drug.
He mentions the risks to health from marijuana smoke without noting that it is consumed less frequently than tobacco, so the total exposure is significantly less.
His claim that legalization of pot makes the alcohol and tobacco companies safe is odd, together with the idea that the next step will be legalization of heroin and cocaine. I wonder how he came up with this idea. It's not like recreational drugs form some sort of hierarchy. Tobacco use is on the decline, marijuana legalization is growing; how does he reconcile these facts?
I have doubts about many of the arguments on the pro-marijuana side, but if these are the best arguments the antis can trot out, it's no wonder the pros are winning.

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R.

The entire "medical marijuana" movement is nothing more than a way to legalize marijuana.
Another drug of abuse legaiized?
Think about it.

Arvin

Can everyone just admit that any person arguing against the legalization of marijuana is so easily contradicted by that person's reluctance or refusal to argue just as strongly that cigarettes and alcohol be made ILLEGAL?

And if you cite Prohibition as an argument against THAT, then I think you just answered your own question.

"Tobacco taxes only cover about 20 percent of tobacco-related costs, and alcohol taxes only cover about 10 percent of alcohol-related costs. Raising taxes on either tobacco or alcohol enough to merely cover their medical costs and other detrimental effects would create flourishing black markets in these commodities."

Then guess WHAT: Maybe they should be just as illegal as marijuana and other drugs are. I expect your essay for the movement towards that due Monday, please.

Outer Boro Adam

Dave C.- why give out more speeding tickets, and back up traffic, when you could raise the gas tax a little?

Shine

"There isn't a shred of scientific evidence that marijuana is safe and effective for any medical condition. Moreover, THC, the active ingredient of pot, has been approved by the FDA and on the market in capsule form since 1985."

Did anybody else noticed the contradiction here? Marijuana is not safe and effective, but the active ingredient is a legal medication? Could it be that the pharmacist only wants people to relieve themselves by giving money to pharmacists?

Steve Phillips

I live in a state (Massachusetts) which decriminalized possession of less than one ounce of pot through a voter initiative last November. Just as with the failed attempt to overturn our state's legalization of gay marriage, we were besieged before the referendum with dire warnings about how this would destroy our way of life and corrupt our youth. Guess what actually happened? Nothing. Nobody even talks about this issue any more. The voters fixed the problem and we've moved on.

After a lifetime of waiting for my government to come to its senses, I expected that decriminalization of pot would be a major hurdle which would meet with tremendous controversy. Instead, I am amazed at how anticlimactic this was, once the voters changed their minds.

I am old enough to remember the DEA propaganda poster showing the signs of drug abuse in your teenager -- sleeves rolled down to hide needle tracks, sunglasses, etc. -- and I learned early on that NOTHING our government tells us about pot is true. I smoke pot EVERY SINGLE DAY, and somehow I managed to grow up to be a successful adult. As a creative professional, I pay more in taxes than most of you earn all year, so I have to laugh at all of these claims that pot will ruin your life. Pot is a benign substance (unlike alcohol), despite all of the scare tactics by the DEA and the morality police.

Grow up, America. Do the right thing and legalize pot...

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Bev

Keeping marijuana illegal provides jobs and profits for many. The money we pay to private-contractor jailers, lawyers, police, helicopter makers is what keeps this "drug war' in place. The hard drugs should be medicalized (free in a clinic with medical care) and pot should be legal for adults and taxed. We'd save money and lives.

Jack

"The use of pot by adults is objectively safer to the individual, and to society as a whole, than the use of either alcohol or tobacco"

That is a ridiculous statement. Let's say a person goes driving after 1 drink, 1 cigarette, or 1 joint. Which is safer?

Legalization is worth considering, but there are bogus arguments on both sides of this issue.

Nick S

"Is the government going to hand out free marijuana to those who can't afford it? If so, who pays for that?"

Legalizing marijuana is a far cry from guaranteeing a toke to every person who wants one. Who has ever made this suggestion?

"Which government agency will be responsible for rigorous testing to ensure that marijuana sold in the marketplace meets the strictest of consumer standards and is free of pesticides and drugs such as LSD and PCP?"

As was pointed out above, why would a corporation risk civil litigation as well as criminal charges by spiking their product with much more powerful substances. On top of that, LSD breaks down at temperatures that are much lower than those needed to combust cannabis. The LSD spiked pot myth is just that, a myth.

"Which government agency is going to be responsible for taxing your next-door neighbor when he starts growing marijuana in his back yard, adjacent to your prized roses, of course?"

The same agency that taxes homebrewers, none. The tax would be on the commercial product.

This post goes to show that the DEA are more out of touch regarding marijuana than any other group involved with it.

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DMH

kat #13 - you're right. I recall talking to a cop outside (one of my few) Grateful Dead shows at MSG. The cops loved the work - few crowd control issues.

I believe it was Molly Ivans who said "the most trouble someone stoned gets in is not being able to get off the couch to grab another bag of Cheetos". A bit of an overstatement, but not by much. You don't hear the term "pot muscles"....

James

Think about it this way. Pot is essentially quazi-legal. For most users, the threat of getting caught smoking pot is very low- a ticket perhaps, maybe an overnight in jail if very unlucky. This is because most local and state governments have recognized that Marijuana is indeed less harmful than other so called "hard drugs", and should be less of a priority. Local governments recognize that prosecuting users of marijuana only serves to crowd the criminal justice system, without making society noticeably safer. The net result is that lots of people smoke pot regularly (reliable statistics are hard to come by, but estimates vary between 10% of the population to as much as 40% smoke pot regularly). So think about it, if the government lacks both the resources to enforce marijuana laws, and the political will to repeal them, then effectively the government is giving you a tax break to smoke the stuff. This doesn't make sense. . . if large segments of society are going to be doing it anyways, it may as well be taxed.

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Verimius

I would like to add another rhetorical question to Mike Braun's list: after cannabis is legalized, what government agency should be tasked with rehabilitating and retraining superfluous DEA agents?

Rogan

Note that the guy tied up with the pharmaceutical industry doesn't want marijuana to be legalized. Big surprise there.