The Cost and Benefit of Legalization of Marijuana

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In this paper, I will demonstrate some of the benefits and costs associated with the legalization of marijuana. This paper helps clarify some of the disagreements surrounded the issue today by focusing on the costs and benefits encountered by the consumer, alongside with, the producer and government if marijuana were to be legalized. In previous years, many states have contemplated the notion to legalize the use of cannabis. After the 2016 U.S election to current time, around 29 states have legalized medical marijuana, along with nine states and Washington. DC, have legalized marijuana for recreational use, for adults over the age of 21. The legal cannabis industry is accountable for the making, roughly about 123,000 full-time jobs in the United States, according to Figure 1 from a data provider in California (43,374), Colorado (23,407) and Washington D.C (22,952), accounted for the United States in the highest full-time job creation. The expansion of creating legal cannabis use has grown because of the understanding by public and lawmakers that marijuana use is harmless, exceptionally when compared to the harm of current legal drugs, such as, alcohol and tobacco. In the 2014 Monitoring the Future survey, it was reported that a significant decline in usage amongst 8-12 graders was found over the course of five-years – from 52.4% of high school seniors to 36.1%.

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Additionally, it is essential to consider the fact that these are hard-working, taxpaying Americans whose jobs are supported by legal cannabis and not illegal, underground market sales that are not counted into our GDP. Which further speaking, results in the cost of lost revenue for our government due to the inability to collect taxes on illegal drugs. Examining, from 2014 to May 31 of 2017, cannabis sales generated $506 million in tax revenue, just alone in Colorado. Tax revenue by definition is revenues collected from taxes on incomes and profits, social security contributions, taxes levied on goods and services, and other taxes.

Through this tax revenue came positive reinforcement on a community in Aurora, Colorado. Money that Colorado’s marijuana industry was bringing in is being used to help homeless citizens, address mental health and end the state’s opioid epidemic. The decision to legalize marijuana can be seen as a benefit, rather than a cost, especially when focusing on this local community. Aurora streets contribute over 1,000 homeless citizens and to see local government strategizing to help the most vulnerable members of society, really sets a positive impact across the lifespan of individuals.

In addition to that contribution, money has also been given to Comities Crisis Center and Aurora Mental Health, to be able to buy a van and employ more care workers. With this resource, employees are capable of aiding homeless citizens who can’t reach their walk-in centers, these reasons can vary, but primarily due to the lack of money for public transport. Tax revenue from marijuana was able to create full-time jobs, paying employees $45,000, according to Cheryl Strayed in When focusing on the impact the marijuana industry has, it seems to have a greater benefit over cost. Aurora is evidence of what positive use money made from marijuana can do. Besides the city of Aurora not giving back to its community, it takes the money made from legal marijuana and gives right back to this population, and prove what good can truly be completed if done correctly. Summing up, the legalization of marijuana was able to create jobs, which lowers our economy’s unemployment rate and help citizens in need of treatment/resources to better our communities.

It is not oblivious that legalizing marijuana will increase tax revenue, however, it will also decrease crime. Marijuana use or production is usually correlated with crime, but only in states that outlaw marijuana. As a result of this outlaw, marijuana farmers, sellers, or consumers are all considered criminals, giving the idea that marijuana causes crime. Nonetheless, it is not proven that marijuana that is sold or bought through the black market will stop. It would be impossible to control for all individuals, however, a majority of those who wish to purchase marijuana will choose to purchase it through dispensaries or get a medical card because of the lack of punishment that would occur if purchased through an underground market. An individual that commits crime is more willing to work in an underground market. One may believe that if the black market is completely eliminated, the costs associated with enforcing felony activities would always result in a decrease. With that being stated, law enforcement has a higher concern on untruthful tests for impaired drivers for regular users, as written in

Nonetheless, cannabis also has an undeniable effect on driving ability, however, we must also acknowledge that so does alcohol and the lack of sleep. In order to estimate the cost for vehicle collisions after the use of marijuana, we must consider the current annual per capita cost of vehicle collisions, one must take the percentage of users likely to drive under the influence of marijuana, and the number of individuals using marijuana into account. Furthermore, evidence in, suggest that both alcohol and cannabis affect driving skills, but alcohol’s impact tends to be worse because the measurable presence of THC in a person’s system doesn’t compare with impairment in the way that blood alcohol concentration does. For better understanding, legalization of marijuana will not have a new effect on driving when comparing it to pre-legalization consumers. Legalizing marijuana, just like legalizing alcohol doesn’t advocate to drive while high or drunk at any means.

Just like when considering the labor force. Marijuana effects an individual’s work productivity, however, the first thing to acknowledge once again, is that marijuana usage on the job isn’t advocated, any more than anyone allows drinking or being drunk on the job. Employees are expected to come to work support, this is nothing new but something that has been promoted for ages. The employer has the right to fire any worker that cannot obey that basic requirement, as those chargers are believed to continue even for marijuana users. Consumer surplus represents the total difference between the selling price and the price consumers are willing to pay in total with other consumers in the market. With that being said, consumer surplus would increase if the marijuana market expanded, you can see this in Figure 2, between the demand curve and the market price.

More consumers would be willing to pay the higher price to secure a “risk premium” of getting in trouble or caught with illegal marijuana purchased from the underground market. Legalization of marijuana will allow states to tax all sales of the drug at each level at the supply chain, with makes the demand for marijuana a key factor. Producers and sellers will each experience an increase tax on their transactions and with that revenue collected states will be able to fund programs related to drug treatments and preventions as mentioned previously. On the other side, deadweight loss represents a loss of economic efficiency that can occur when equilibrium for a good. As for the deadweight loss (DWL) associated with the table above, if all costs were fixed, the assumption can be made that the number of producers and sellers would remain constant.

By legalizing marijuana, it is possible to use the marijuana market as a positive reinforcement and to put an end to the history of criminalized drug use in the United States of America and of course other countries as well. This would be possible by monitoring tax rates to keep the market prices at pre-legalization prices in order to over-ride the black market and continue to have a high demand for the product. Once again, demand for marijuana is a key factor the government must consider, for there to be tax revenue to collect. Also, by having law enforcement continue enforcing the law on felony marijuana activities as powerfully as they do today. These positive effects this will have an enormous impact on communities that need the financial help in order to help other citizens. Therefore, it can be easily observed that the legalization of marijuana, although may have some negative attributions, provides greater benefits for a community as well as for our country if legalized.

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The Cost And Benefit Of Legalization Of Marijuana. (2022, Sep 30). Retrieved February 8, 2023 , from

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