Is there gold to be reaped in the green of marijuana and its legalization?
That's the question increasingly being batted around statehouses nationwide as governments stagger under budget crises and marijuana use becomes more tolerated, if not accepted.
The answer? Yes -- with an asterisk, or maybe three.
Marijuana has been called the largest cash crop in the United States. It's certainly the most popular illegal drug, the center of an estimated $15 billion to $30 billion "industry" in the U.S. Whether you like it or not, weed is everywhere: Four in 10 Americans say they've tried it, and 17 million say they've used it in the past month. That's about 5.5% of the nation's population (and some researchers speculate that an additional 3 million-plus use it but don't cop to that in surveys).
What's more, attitudes on pot are changing. A record, ahem, high of 50% of Americans now favor the drug's legalization, polling company Gallup says. Sixteen states and the District of Columbia now have laws allowing marijuana use for some medical purposes, and Connecticut may soon join them.
California has been in the vanguard, though. And there's arguably one reason why the debate has gone mainstream in the Golden State, and thus elsewhere: Legalization could spell money for state coffers during hard times.
Does all this ring a bell? It should.
"It's exactly the same -- precisely -- why the country had turned against Prohibition long earlier," says Daniel Okrent, the author of "Last Call: The Rise and Fall of Prohibition." (Prohibition, the 1919 constitutional amendment banning alcohol, lasted 14 years, until the bottom of the Great Depression.)
Though Prohibition may have begun as a moral issue, it ended as a business decision. When the stock market crashed in 1929 and ushered in the Depression, "income tax collection over the next four years fell as much as 30%," Okrent says. "And capital gains taxes disappeared entirely. The government had no money to operate on."
Pressure built to legalize beer and hard booze once again, in order to tax them.
The 21st Amendment was ratified in 1933, repealing the ban on booze. The first year after Prohibition was repealed, alcohol taxes made up a whopping 9% of federal revenue, Okrent says. Prohibition's end "was very much a tax issue," he says. "It's very similar to where we are today" with marijuana.
What the numbers say
So how much money could marijuana raise, if the nation legalized, regulated and taxed it?
It's not a simple question with a precise answer, because there's no precedent. Nowhere in the world can you legally produce, sell and use cannabis like any other product. Even in the Netherlands, famous for its "coffee shops" that are allowed to sell pot, it's actually illegal to supply the shops with marijuana, a contradiction the Dutch have never sorted out.
That said, Jeffrey Miron has tried to crunch the numbers. In a 2010 study, Miron, a senior lecturer in economics at Harvard and a senior fellow at the libertarian Cato Institute, said legalizing marijuana nationwide would save about $8.7 billion a year in law-enforcement costs.
What are those costs? About 750,000 people are arrested nationwide for marijuana possession annually. Those arrests -- and expenses related to them -- could vanish. Ditto for jail time. So could the time spent on most court cases involving marijuana, Miron says.
"Marijuana comprises 60% of (drug) cartel income," adds Stephen Downing, a retired Los Angeles deputy chief of police and a board member of Law Enforcement Against Prohibition, a group of current and former criminal-justice professionals critical of the war on drugs. "So if it's regulated and controlled, there's going to be a severe cut in criminal income and, hopefully, a reduction in marijuana-related violence."
That would mean less police work, Downing says. And it doesn't end there.
"There are serious costs associated with being arrested, to the individual and their families," says Beau Kilmer, a co-director of Rand's Drug Policy Research Center and a co-author of an upcoming book, "Marijuana Legalization: What Everyone Needs to Know." A marijuana conviction can make it more difficult to get public housing, student aid and possibly a job, Kilmer says. Those costs -- very real, if harder to quantify -- would also vanish.
