Economic Benefits of the Legalization of Marijuana Essay

Crimes related to marijuana have gotten out of control in our society. With more than 750,000(MPP.org) people arrested annually on charges related to marijuana it’s clear that a change needs to occur. A clear choice would be to crack down on the sale and manufacture of marijuana, but the smarter choice would be to legalize it.

There are many economic benefits to the legalization of marijuana. The economic benefits that producers and consumers would receive are numerous, the tax that could be placed on a product would make the government a main benefactor as well, as well as the money saved on the enforcement of marijuana prohibition.

The first argument for the legalization of marijuana would be that of the economic benefits that producers and consumers would receive. Farmers would be the most likely to start producing marijuana because it is easy to grow and maintain. One source estimates that marijuana would currently cost on $1.35 lbs. to grow […] with the sale being anywhere from $30 to $700 per ounce. (Walters p. 4). This is a huge profit margin that the producers could in turn receive.

In an economic view, the legalization of marijuana would attract entrepreneurs to the new market, thus flooding the market with more growers and more product. An increase in product would drive the cost of a product down, thus saving the consumer a large amount of money. In a real market situation, $30 per ounce (or $480 per lbs.) would probably be driven down to near its production cost. $30 per ounce equates to about $0.09 per lbs. If producers were to decide on a relatively fair price after production, shipping, and retail costs – say $1.00 per ounce – it would give the consumer a savings of $29.00 per ounce (or $464 per lbs.)

So the economic savings for the consumer are very clear, and the profit for the producers would be very large too.

There have been over seven million marijuana arrests in the United stated since 1993. Approximately 77,000 marijuana offenders are in prison or jail right now. One person is arrested for marijuana every 42 seconds. ( MPP.org). These numbers show just how outrageous the war against marijuana users has gotten. With an all time record breaking number of 755,186 arrests in 2003 (MPP.org), it is clear just how outrageous it is.

The next strong reason to legalize marijuana would be the benefit the government would receive at all levels through savings on enforcement of marijuana prohibition. Currently the government spends nearly $12 billion annually on marijuana prohibition enforcement ( MPP.org). This $12 billion annually is spent on the Drug Enforcement Agency (DEA), Federal Bureau of Investigation (FBI), border control, prison systems, and many other programs. If the government were to legalize marijuana all of the people employed by the government could be placed elsewhere doing things like apprehending murderers, terrorists, rapists, and other criminals that cause harm to society. Or this $12 billion annually could be spent towards things like improving our school systems, concentrating on drugs that are detrimental to our society like methamphetamines or heroin, or it could be put toward eliminating our nation’s debt. Also, the National Drug Control Strategy is asking for $11,679,300, 000.34 this year (Walters p. 6). Over $11 billion dollars unnecessarily spent on trying to control marijuana usage. Together, nearly $24 billion dollars that is coming out of the American taxpayers pocket towards a drug that has no recorded deaths and can’t be linked directly to anything hurting our society.

As well as the immediate savings, one could observe that all related crimes would decrease – which would also save the government money on law enforcement. Because the price of product would be decreased, those who resort to burglary or other crimes would not need to do these things to afford their product. This decrease in secondary crimes would be a great help to the American government.

The legalization of marijuana would also create more jobs for the government. The FDA or some other sort of government entity would be used to regulate the marijuana product, which would require a bigger workforce, thus employing Americans in the government.

The biggest source of income for the government would be the ability to tax the marijuana product either at the federal, state, or local level. Dr. Steven T. Easton, professor of Economics at Simon Fraser University, conducted a study that estimates the average profit of a unit of marijuana sold on the street at $6.90 per unit (Easton). In a market controlled by the government, this profit would be able to go to them. Easton states

If we Substitute a tax on marijuana cigarettes equal to the difference between the local production cost and the street price people currently pay – that is, transfer the revenue from the current producers and marketers (many of whom work with organized crime) to the government, leaving all other marketing and transportation issues aside we would have a revenue of (say) $7 per unit. If you could collect on every cigarette and ignore the transportation, marketing, and advertising costs, this comes to over $2 billion on Canadian sales and substantially more from an export tax […].

Though that number is specific to Canadian sales, it would be sufficient to American sales as well. Another source estimates the revenue from taxation of marijuana sales to range from $2.4 billion to $6.2 billion annually if taxed like alcohol or tobacco (Miron). So if government were to tax marijuana they could receive over $6 billion every year.

The government could also set the amount that the legal drug would be sold at if they opted to control it whether than leave it to a free market. If they decided to control the price themselves, they could set the price at whatever they pleased and there would be no telling how much revenue they could receive. But in 1991, as an illegal substance, the purchase and sale of marijuana constituted between five and nine billion dollars (Walters p. 5). So it would be easily concluded that the government could make something in that figure.

All of the revenue received by the government could be used towards programs to control substance abuse, much like they have for tobacco and alcohol. The government could do this through either government programs, interest groups, or other means, which would again create jobs for Americans and help the American economy.

Some people believe that the war on drugs is a necessary thing. They believe that the government is helping out the American people by prohibiting marijuana, but others think otherwise.

The total efforts of the federal government equate to $30 billion spent, $2 billion of marijuana seized, 7 million arrested, a quarter million sentenced beyond a year, and essentially no permanent change in usage from the sixties to now. Was it worth it (Torruella)

Judge Juan R. Torruella, Chief Judge, First Circuit, Court of Appeals clearly thinks that it would be better for the American people if the government were to eliminate the prohibition of marijuana because of all of the money that it would save them.

The benefits of legalizing marijuana are many. They don’t just reach out to the economic community, but also to the general public’s way of life. The savings to the American consumer. The opportunities for the American producer. The tax revenue for the American government. The possibility to sell the product themselves for the American government. And the saving for the American government through eliminating a costly program. All of these benefits clearly outweigh the opposition’s thoughts that eliminating marijuana is good for America. All of the efforts by the American government seem to have been an economic waste.

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