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.


Nutjob

The arguments for legalisation can be boiled down to this:

- Pot kills almost no-one while legal alcohol and tobacco kills millions, so its not a public health issue.

- Pot funds criminals while depreiving the state of valuable tax dollars and frees enforcement spending.

- Prohibition doesn't work and has little effect on the market for pot.

So all that's left is fear and hypocrisy.

Adam

The discussion over legalizing marijuana frequently overlooks one extremely important benefit: eliminating marijuana as a "gateway drug."

As anyone in business can tell you, establishing a trusted distribution channel with clients is expensive in both time and money. Drug dealers, our distributors in this example, try to recoup their cost by cross-selling products, namely harder drugs such as cocaine and heroin. By legalizing marijuana, we separate the distribution channel for marijuana from the harder, addictive drugs. This increases the search costs for people looking for hard drugs (a good thing) and prevents marijuana users from being subjected to aggressive cross-selling tactics from the "predatory narcotics traffickers" referenced above.

Mike

Arguments such as the following:

"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?"

only serve to discredit those who make them. Does he really think Phillip-Morris would spike their product with hallucinogens?

I don't smoke pot and would have little to no interest in doing so if/when it becomes legalized, but I've never seen an argument from a prohibitionist that wasn't completely assinine.

James L

Have any more studies on the effects of weed on pilots been conducted in the 24 years since the last one? Why is it that all the studies supporting legalization are only a couple years old, while those supporting prohibition are closer to 20?

Man with a job, and family

It's funny to me when people talk about the risks and costs of legalization/decriminalizing marijuana. I live in a city, Madison WI, which has already decriminalized marijuana. In the city, it is legal to possess less than 1 ounce

zadig

When one of your analyses (Joel Hay's) contains this line:

There isn't a shred of scientific evidence that marijuana is safe and effective for any medical condition.

This site, for example: The Science of Medical Marijuana has lots of links showing scientific evidence. It was first on my google search. Dr. Hay could have found it before exaggerating in his essay. So it's fairly easy to dismiss the remainder of his argument as biased hyperbole.

Great discussion by the way. Hope we have more of it.

Man with a job, and family

It's funny to me when people talk about the risks and costs of legalization/decriminalizing marijuana. I live in a city, Madison WI, which has already decriminalized marijuana. In the city, it is legal to possess less than 1 ounce of marijuana in a private place. How bad has this been for the city? What kind of terrible ills have befallen us? All I can say is it's been hell living in a city that is consistently in the top ranking for "best places to live" in the U.S.

Invariably, those opposed to legalizing marijuana know little to nothing about it and have little to no first hand experience with it. In my opinion and experience, it's a far softer drug than alcohol and on its own leads to less addiction and heartbreak than alcohol as well.

econobiker

Gov't legalized lotteries and gambling to take that revenue away from criminals so why not marijuana?

It would create a cash crop in place of tobacco in many areas.

It would encourage criminals to enter the illegal tobacco trade...

Rory Wohl

Dr. Hay states that "There isn't a shred of scientific evidence that marijuana is safe and effective for any medical condition."

Would that be because, as Dr. Miron offers, "prohibition has made controlled, double-blind studies all but impossible?"

Dr. Hay can't have it both ways. He can't say there's no medical evidence when the prohibitions he supports don't allow for medical research in this area.

Eric W

Pot is mind altering, but not like alcohol. Who would you rather deal with a drunk or a pot head?

What we know of pot smokers is that they have none of the same risk factors for lung and other cancers like smokers. No legitimate study has been able to link long term pot use to lung cancer despite the similarities.

It's less dangerous than alcohol and less addictive than tobacco but it carries a criminal penalty. It's insane that we can't legalize and tax the stuff like any other product for adults.

kat

RE: "one study found that more emergency-department trauma admissions were associated with pot use than alcohol".

I would like to know where that came from!!! I am a veteran Paramedic working in a major municipality, and I can tell you with absolute certainty, that 99.9% of the horrific tragedies I have witnessed, and I have witness a LOT of them, are associated with consumption of alcohol. In fact, I have not even seen a marijuana related tragedy!!! Not that they don't exist... but if there where more emergency room visits associated with marijuana than alcohol, I would think that I would have seen at least one of them in 25 years on the street!!!!

Garry C

There is no problem with this country for which opiating ourselves even further is an appropriate solution.

kat

... furthermore, I have also worked part-time as a paramedic at major concert events. I can't tell you how relieved we are (police included!) when our noses tell us it is not a drinking crowd!!!!

Dave C.

The anti- arguments seem to be based on the harm due to conduct under the influence. This pre-assumes that decriminalizing possession will be accompanied by some sort of immunity. If we decriminalize marijuana that does not give pilots or bus drivers the right to use drugs on the job.

There also seems to be a buried assumption that legalization will increase use. However, this is not at all clear. It's some of the lure of using drugs for teens because they are "forbidden fruit"

Furthermore, it is much easier to police something that is age restricted. State liquor commissions often use minors to buy beer or cigarettes because there is no danger of violence. However, police using minors for illegal drug buys is not the same deal.

In addition, none of the commenters addressed the moral aspect. Don't we receive a social benefit to society from freedom to use marijuana regardless of whether it's harmful or has negative effects.

Finally, isn't there a middle road where we still punish marijuana use but less severely? Maybe the problem is not the fact that drugs are illegal but that they are disproportionately punitive. In Washington state, I think drug possession is the only misdemeanor with mandatory jail time. Drug possession is also the sole grounds for civil forfeiture of your car without being convicted of a felony. Instead of almost-felonies, couldn't drug offenses be treated as almost-traffic-tickets? How about a $100 fine for using marijuana with no jail time and no forfeiture? Maybe this is closer approximating the actual harm.

Read more...

Mike

Dave C, the only problem with the ticket-style punishment for marijuana (which is a great step in the right direction and has been implemented in several places) is that it keeps the drug cartels in business. Until the megacorporations get involved, violence will continue.

Kelly

I think it's interesting that no one has mentioned a potentially Huge problem with decriminalizing marijuana or any other drug.
Right now, the prisons are filled with non-violent drug users, with many more being arrested every day. If drugs are legalized, then the legal issue becomes what to do with these citizens who are incarcerated for something which is no longer a crime.
Also, what about the billions of dollars spent each year for the "War On Drugs", and the millions of jobs which would be lost? There would be no need for narcotics officers, undercover officers, drug court, etc, if drug use was no longer illegal. This would put millions of people out of work, and would require a complete overhaul of the criminal justice system. That'll never happen.

J. Smith

“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?"

This is a ludicrous statement on so many levels. First of all, it would cost a manufacturer/dealer more to lace marijuana than to just sell it plain. Plus, LSD and PCP aren't addictive and wouldn't provide any benefit for the dealer to lace with. Finally, hallucinogens like LSD cannot be burned/smoked to use, and in fact high temperatures destroy the active ingredients in them.

Besides, wouldn't the answer be the FDA?? They manage to regulate and monitor things ranging from meat and produce to processed products to pharmaceuticals already...

Buckeye

Since this is an econ blog, I guess we should ask ourselves, "Do the marginal costs outweigh the marginal benefits?"

Personally, i belive the answer is yes. Unfortunately, none of the articles merge the two arguments very well. I would like to see the NORML guy discuss some of the costs. Not acknowledging the costs, or benefits, errodes the credibility of either argument.

diogeron

I hate to sound like the reformed academic that I am, but when people make claims like this one, which don't make a lot of intuitive sense, they really should drop a footnote or at least give the source so that we can see how good the research was.

htb

I've read some well-conducted (but generally small) studies that show actual harm from marijuana consumption, but they are routinely, even automatically, dismissed by the NORML crowd because they give the "wrong answers". I no longer expect a rational debate on this subject.

I have had the same fruitless conversation with another smart woman for years:

She: Marijuana can't cause car wrecks. People who are smoking pot actually drive slower than normal, because they realize that they can't handle it, so they're safer than normal drivers.

Me: People who are falling-down-drunk do exactly the same thing. "Too slow" is the most specific indicator of a drunk driver. And if even their pot-addled brain can figure out that "they can't handle it", then why are you saying that they're just fine drivers?

She: Well, I've never seen a person in a wreck who was smoking pot.

Me: How would you even know? It's not like their skin turns purple.

True fact: I once worked with a medium-low level drug dealer. Our employer didn't realize it, but this was his "cover job," so that he had a legitimate occupation to report. I found out what was going on when he silently failed to show up for work one week. I happened to meet a neighbor of his, who laughed at my concern and told me he was just fine, expect for having been arrested during a drug sting three counties over. He re-appeared the next day without a word of explanation. I guess he was finally able to post bail.

Read more...

frankenduf

good discussion here- had to lol at #3, who characterizes an argument as "completely asinine", then refutes it with his point whether anyone would "really think Philip Morris would spike their product"???!!!- dude, i'll presume we're on the same side, i got no beef with pot- but your naivete about PM (or any other drug company, for that matter) made me giggle :)