How Marijuana Legalization Would Effect the Economy Table of Contents
Introduction ................................................................................................... Page 3
Economic Growth …..................................................................................... Page 3
Policing Efforts …......................................................................................... Page 4
Illegal Immigrants …..................................................................................... Page 6
Tax Revenue …............................................................................................. Page 6
Conclusion …................................................................................................ Page 7
Bibliography …............................................................................................. Page 9

Introduction Marijuana is known to be the most used illegal drug in the world, with 17.4 million past-month users in 2010 (National Survey on Drug Use and Health, 2010). The topic of legalizing marijuana is one for the masses, because almost everyone has an opinion on it, or at least something to say about it. The debate about whether to legalize marijuana has been going on for quite some time, but in the last could years, people have been beginning to understand the effects it could have on our economy in a positive way. The debate that many people bring to the table is one more related to the criminal aspect and health related concerns. While I am not trying to diminish their opinions, I am saying that there is a much more important aspect related to the legalization of marijuana, one related to economic growth, less money spent on police enforcement, and increased tax revenue.

Economic Growth The unemployment rate has been a huge topic of conversation for the past couple of years, and it does not seem to be improving drastically. One reason for this is due to the lack of jobs that are available to workers. In July of 2010, there were 14.6 million people in America searching for jobs, but only 70,000 jobs were created (Allmand, 2010). If the legalization of marijuana were to happen, jobs would be created. People would be needed to regulate the marijuana, sell the marijuana, and it would aid in the growth of related industries. Retail marijuana production would create jobs in growing, cutting, processing, distribution, and sales. Additional jobs would also be created at the state and federal levels, as governments would take on inspectors and regulators to oversee the marijuana production industry (Legalizing Marijuana, 2011). This increase in jobs would give people hope, and would increase the overall morale of the country. If more people are working, it means that there is more money being made in order to be spent, and ultimately stimulate the economy. It has been found that someone who is struggling to support their family, such as someone who is unemployed, is far more likely to turn to criminal activity than someone in a stable environment (Poverty in America, 2007). Since legalizing marijuana would create jobs, it could ultimately restore faith to those who had been hit hardest by the recession. Aside from the jobs that would be generated that have already been mentioned, Amsterdam-style coffee houses would generate not only jobs, but also tourism. If you were to compare the possible marijuana industry to that of the wine industry, it would generate 50,000 jobs and 1.4 billion dollars in wages, and that is if the marijuana were only one third of the size of the wine industry. Industrial hemp could also become a major business, comparable to the 3.4 billion dollar cotton industry in California (Gieringer, 2009). If we were to only take into account one state, like California, it could be said that there would be an increase of about 12 to 18 billion dollars in total economic activity, 60,000 to 110,000 jobs would be created, and 2.5 to 3.5 billion dollars would be made in legal wages (Gieringer, 2009). If such an increase could be made in just one state, the outcome would be much larger on a national level.

Policing Efforts The amount of money spent on enforcing marijuana related laws are probably much higher than anyone would ever expect. According to calculations done by Jeffery Miron, an economics professor at Harvard University, the government would save 7.7 billion dollars a year if they did not have to spend money policing and prosecuting marijuana activity (Wastler, 2005). Although the number of people that are actually held in jail because of marijuana related reasons is relatively low, it does not mean that there are not at least some. Also, the arrests related to possession of marijuana make up a large percentage of total arrests. In 2007, police arrested a record of 872,721 persons for marijuana violations, according to the Federal Bureau of Investigations. This is the largest total number of arrests for marijuana ever recorded by the FBI. These types of arrests make up about 47.5 percent of all drug arrests in the United States (Marijuana Arrests, 2008). The total number of arrests for marijuana in 2007 exceeded the total number of arrests in the United State for all violent crimes combined. If police officers did not have to be so worried about those committing marijuana related crimes, the could focus more of their attention on more serious crimes. In California alone, the cost of marijuana enforcement is estimated at over 200 million dollars per year, taking into account prison and jail costs, probation, and arrest and court costs (Gieringer, 2009). Prison overcrowding is a he source of debate in our society, and hosing marijuana users in the prisons is definitely not helping the problem. It costs upwards of 22,000 dollars per year just to house one inmate in a state correctional facility (Legalizing Marijuana, 2011). A lot of times, marijuana offenders are placed on probation to make sure that they are not becoming repeat offenders. The cost of a federal offender to be supervised by probation officers for a twelve month period, was 3.621.24 dollars in 2007 (Burton, 2008). Many of those that are incarcerated for marijuana related crimes face longer sentences than necessary due to the fact that the sentencing guidelines are meant for those committing more violent crimes. If we could eliminate the marijuana related crimes, much less money would be spent on the judicial system, and more money would be going to the states and the federal government, which carries its own budget deficit.
Illegal Immigrants One of the problems that does not get as much attention as it should is how illegal immigrants in the United States are handled when it comes to marijuana crimes. When illegal immigrants are found with marijuana, they are not only sentenced in the United States for violating immigrant laws, they are also sentenced for the drug offense. Many illegal immigrants come into the United States from South America because of the United States demand for marijuana from their country. If we were to legalize marijuana, the demand for the drug from other countries would almost diminish. This would eliminate the need to house these illegal immigrants in our jails, and would save us money. When they are incarcerated, the United States taxpayers money is used to feed, clothe, and care for them just to deport them after they have completed their sentence. Another benefit related to this is that there would be less taxpayer money being used by immigration and border control agencies.
Tax Revenue With our economy in the shape it is in, something needs to be done to increase revenue for our country. If marijuana were to be legalized, it could be regulated and taxed. If the federal government were to tax marijuana at a rate comparable to cigarettes and alcohol, 6.2 billion dollars would be generated (Wastler, 2005). Not only would tax money be generated by the legalization of marijuana, the tax money that is currently being put towards suppression and eradication efforts, could be spent in different ways. This money could be spent on enforcing other more serious drugs, such as cocaine and heroin. If these harder drugs could be more regulated, crime rates could also be lowered. Since marijuana sales are currently kept in the black market underground economy, the profits are untaxed. It is estimated that the potential tax earnings from legal marijuana to be 11 billion dollars per year, and that does not even include the income generated by the legal sellers, distributors, and producers (Kupfer, 1988). It has been recognize that legalizing marijuana will drive down the price, but it would be offset by increased consumption. Since marijuana is less destructive than alcohol and tobacco, it would be safe to assume that some alcohol and tobacco users might switch to smoking marijuana. If this were to happen, it could be expected that health care costs might go down. Since the income generated by black market drug dealers is not reported, they do not pay taxes. If marijuana was legal, the federal and state taxes associated with legal workers would add revenue (Vitiello). The money that would be generated by taxing marijuana could be used to build new buildings and add new roads, which would lead to better communities and ultimately stimulate the economy. In 1992, the city of Amsterdam, with a million people, had 300 coffee houses retailing marijuana (Passell,1992). That has obviously increased by now, but when scaled to the United States population back then, it would amount to over 60,000 retailers and 100,000 jobs. Each one of those 60,000 retailers would be required to pay business taxes and property taxes, and each of the 100,000 employees would be required to pay their appropriate taxes also. Not only would the government generate revenue from the sale of marijuana, they could also impose an excise tax. If a 50 dollar per ounce excise tax was imposed, it would bring in about 1.5 billion dollars per year. With the national deficit as high as it is, the government needs to start looking at this as a viable option.

Conclusion Someday, most Americans will look back on drug prohibition and think of it much like alcohol prohibition and think of it much like alcohol prohibition, repressive, unjust, expensive, and ineffective. Other countries have already accepted the fact that their marijuana laws are unpopular and unenforceable, so they have changed the way they do things. The United States remains the only place to ignore these recommendations consistently. With the many positive effects mentioned above such as increased tax revenue, decreased spending on law enforcement, and economic growth, marijuana legalization would be the smartest move to make. The transition from prohibition to regulation is a difficult one, but it is definitely one that needs to be considered.

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