The Economics of Marijuana Legalization in California

Custom Student Mr. Teacher ENG 1001-04 11 September 2016

The Economics of Marijuana Legalization in California

Drugs are all useful when taken in moderation or in right prescription. Anything that goes beyond the limit can be called substance abuse or addiction which appeals to our moral sense. However, aside from the health concerns that drugs bring to the debate is the business behind it. Those termed as illegal drugs are now found to be useful not only for improving ones health but also to improving the economy. On the other hand, they could also be harmful and destructive while being profitable for the economy.

The question now should be: will the legalization of marijuana bring monetary benefits to government aside from the possible health benefits it could bring? And will these benefits outweigh the costs of addiction and destruction of oneself and society? In 2008, California has the highest gross domestic product in US which is the 8th largest in the world economy as well. But with the challenges the US recession brought, California has not been safe with problems and crises, regardless how productive and large their economy is.

Problems on unemployment and service cuts were aggravated by the recent financial crisis and to get back into its shape, government officials are taking steps, even new and innovative steps. Legalizing marijuana is seen as a potential source of income for government since the drug has proven uses not only in medicine but in other industries as well (Miron, 2005, p. 2). But marijuana has long been secluded in the category of ‘illegal’ drugs and legalizing its use, in any form of use and purpose, is not morally correct due to the fatal dangers it can cause.

Legalization will bring profits but there are inevitable costs that will directly affect the user and the society such as violence, crime and threats. Even if the government enforcers and law are clear about the limited access to marijuana, it may entice people to use and abuse the substance since it will be now more available with legalization. Economic Benefits of Marijuana Legalization The US government has been bombarded by lobbyists for legalization of marijuana but not all states entertain such propositions.

States have differing stands against and for the legalization and in California they entertain only legalization of marijuana but not in its raw form but in its ‘medical’ form. In short, the concern of the Californian government remains on the health benefits ‘medical marijuana’ can offer to the needed patients. This is because of the proven fact of Food and Drugs Administration that raw marijuana is definitely harmful, even if taken in small amounts. This is supported by the experiment of Alaskan government when they legalized marijuana in 1970’s and led to significant increase in consumption.

This paved way to re-criminalization of marijuana use in 1990 (US Drug Enforcement Administration [US DEA], 2003). Since Marinol (medical marijuana) is now readily available in legal drugstores but only released with prescriptions, this medical marijuana is now included in the market of medicines (US DEA, 2003). This inclusion in the market means a tax can be charged in its sales, thus offering additional revenues for the Californian government. This legalization of medical marijuana is appealing since California is in need for additional income in propping up their economy.

However, some lobbyists are not yet contented with this limited legalization because they insist full-blown legalization of marijuana. They argue that marijuana use criminalization is just a wrong and pessimistic perspective. If the Californian government will entertain the proposal, there will be larger tax collections because California has 443,000 users between ages 12-17, 1,109,000 users between ages 18-25, and 1,670,000 users aging 26 or older (US NO DRUGS, 2003).

But full-blown legalization can not be pursued because albeit the Californian government will earn from millions of marijuana users, there are other costs that must be considered such as violence, crime and societal threats. Possible Societal Costs of Marijuana Legalization Legalization of marijuana or even of its medical form has economic benefits in terms of increased government revenues. But economics is not only concerned with this; long-run costs and non-monetary costs should be also considered.

Legalization of marijuana serves as a threat to societal peace and order because its use, even in minimal dose, is harmful to ones health and behavior. This is the most crucial discussion because marijuana is powerful in influencing people as in terms of character, habit, spending behavior and criminal behavior. Increased rate of substance abuse is highly possible if marijuana will be legalized because aside from the fact that it is addicting, readily available marijuana can entice users to consume more.

Marijuana addiction results to violence and crime as well as accidents particularly road accidents because it affects the cognitive and non-cognitive abilities of man (Heckman, Stixrud & Urzua, 2005, p. 22). Long lists of studies prove that marijuana use goes hand-in-hand with crime and these crimes bring damages to other people and properties. In addition to the violence, marijuana addicts are prone to steal or rob money in order to acquire marijuana. With the long-lists of criminal offences committed in association with marijuana use, police resources could be saved if it will be legalized (Miron, 2008, p.

3-5). For example, youths may save their allowances for marijuana consumption and if they are short, they may resort to theft and stealing in order to have money for that drug. The spending for marijuana can so large that consumption for others like food and medicine could be affected. Also, when marijuana is legalized its price will be pushed down as more growers will enter the market as they will see the profitability of engaging in marijuana business (Miron, 2005, p. 12). In short, more marijuana will be available, there will be more users, and there will be more crime, violence and accidents.

Views on Marijuana Legalization Having discussed two arguments for and against the marijuana, it is important for the law-makers to weigh the benefits and costs of marijuana legalization. There can be no problems on medical marijuana or Marinol as long as the enforcement on its distribution will be strict but there are looming problems of addiction if raw marijuana will be legalized in California. There are a lot of marijuana users in California and the government could think of it as an opportunity to gain profits.

Marijuana has the potential to form a new and large industry wherein more businesses may invest in such profitable business. But the discussion should not be contained on having additional revenues because raw marijuana is a threat for social order. The large population of California can be seen as the target market of marijuana industry, if legalized. If the government is not oriented with the serious health disturbances that substance could bring or if it will not pay attention to the highly probable costs on society, the benefits of having increased tax collection will never outweigh the benefits.

The spending behavior of a person could be greatly affected up to the point wherein he or she is willing to take risks of committing crimes just to acquire marijuana. There may be more school drop-outs who could have been an asset for the society but could not because of addiction. Increased and intense crime and violence are known to be a major reason of fleeing investors. Addiction will be a threat to human capital which is an ever essential factor in any economies. Thus Californian government should focus first not on the money marijuana business will bring but on the well-being of its people.

There may be huge amount of money but this is not enough to offset the costs to health and social order. References Heckman, J. J. , Stixrud, J. , Urzua, S. (2005, October). The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior. Retrieved from http://www. iza. org/conference_files/prizeconf2005/heckman_j130. pdf Miron, J. A. (2008, October). The Effect of Marijuana Decriminalization on the Budgets of Massachusetts Governments, With a Discussion of Decriminalization’s Effect on Marijuana Use An Update of Miron (2002a).

Retrieved from http://www. economics. harvard. edu/faculty/miron/files/decrim_update_2007. pdf Miron, J. A. (2005, June). The Budgetary Implications of Marijuana Prohibition. Retrieved from http://www. prohibitioncosts. org/MironReport. pdf US NO Drugs. (2003). Retrieved from http://www. usnodrugs. com/statistics. htm? state=California&cat=marijuana US Drug Enforcement Administration. (2003). Retrieved from http://www. justice. gov/dea/demand/speakout/index. html


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