The Economic Effects of Legalizing Marijuana
87Please note: The following argument highlights the benefits of legalizing marijuana, however, it does not reflect my personal opinion on the legalization of certain drugs, including marijuana. The view of the argument is solely a socioeconomic perspective on the effects of legalizing the substance. If I were to support legalizing marijuana, the following ideology would be the basis of my argument. I do not support or condone the use of illicit drugs in any way.
The Evolution of a Legal Business Operation
Legalizing marijuana is a hot topic that continues to burn. From an economic standpoint, there would be numerous benefits to legalizing marijuana. A new industry could emerge that would allow people to buy and sell marijuana without being incarcerated. The illegal pot dealer that is currently making their “dirty money” under the table, and possibly living on welfare or other government aid, could possibly start a profitable business. They would already have a client base, which is a key component in a sales environment. A marijuana distributing business could be created with a small amount of capital thanks to the Internet. Marijuana could be shipped out to customers, since drug trafficking would no longer be illegal. This would create desperately needed jobs across the country. It would also help increase our Gross Domestic Product (GDP), since more goods would be created/grown and sold. Current drug sales make a noticeable difference in our unofficial GDP, even though they are not part of our official GDP. According to the United Nations Office on Drugs and Crime, in 2003, illicit drugs accounted for 1% of the world’s GDP. A mere percent sounds minute, but this “small” amount is higher than 88% of all countries’ GDPs in the world. Individuals participating in the legal marijuana industry would finally have a steady and more importantly, legal stream of income that would be taxed and go towards the ungodly budget deficit that has accumulated.
What about the Consumer?
There would be numerous
venues for purchasing legal marijuana, which means stronger competition, thus
creating lower prices for the consumer.
Since the current consumer is purchasing marijuana illegally, a higher
price is charged for the risk and also for the low amount available. Remember, a lower supply available
results in higher prices. These
consumers that are currently spending top dollar would have more disposable
income to save, invest, or spend directly into the economy. Since the consumer is buying goods
legally, there is no doubt a sales tax would be involved, once again leading to
more money for the government.
Overall, more people would be paying in to the system, rather than being
supported by it.
Lowering the Amount of Poverty
Let’s face it. Virtually all drug peddlers are part of the lower socioeconomic spectrum. There simply aren’t many doctors or lawyers selling weed on the street corner. Most of these people are just trying to make ends meet while struggling with poverty. Having the opportunity to run or to be a part of a legitimate business is part of the entrepreneurial spirit that drives the American Dream. People who are selling marijuana illegally now could become respectable and accepted individuals in our society. If they pursued their business venture with enough effort and motivation they could raise their position in society and create a better, more positive future for their children.
Lowering Government Expenses
In 2008, Texas state prisons spent $46.1 million supervising marijuana-only related prisoners. The cost of marijuana enforcement in California alone is estimated to be over $146 million. This means if marijuana was legal, prisons would save a ton of money and the taxpayer would be spared for a change. It would also help, but likely not solve the overcrowding problems.
The Effect on the Financial Markets
If a marijuana distribution firm grew large enough, it could be registered and traded on an exchange. Typically, when the market is in a recessionary period, alcohol and tobacco brands sometimes perform better than other companies. Marijuana companies may be classified in a similar category and would provide a safe house for investors. Since marijuana is a type of commodity, it would likely be traded in the futures markets as well. So who knows, in the future, the floor traders on CNBC may be buying and selling marijuana.
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Good article, even with your "disclaimer" in the opening LOL Did you know that is is LEGAL to say, "I support ..."? Sure, none of us "supports" breaking the law, but we can and should stand up and be counted when we recognize that a law is archaic, etc. "I don't support breaking the law. I support changing it!"
Linking to your article from mine: http://hubpages.com/hub/Medical-Uses-for-Marijuana
I still say no to legalizing marijuana for economic reasons, simply because it will come back and bite the economy in a way never suspected! Also, here's another reason why i say NO to weed! http://stop-smoking-weed.org
!!! Nicely done. There will always be two sides to this argument.. How about we compromise: http://hubpages.com/hub/Marijuana-A-self-justifyin
Tell me what you think of the potential solution. Thanks!
The problem with the illegalization of marijuana is this: How can marijuana be illegal while cigarettes/alcohol are legal? Cigarettes have no health value whatsoever (although cigarette butts have recently been found out to stop rust).
I think it should be legal. Let's see what Cali does.
i Agree with pdo9d cigarettes are so much worse for you marijuana is better for u it does less to your body i think it should be legal
Thanks for giving some essential information about the economic effects of legalizing Marijuana. I am satisfied and agreed with all the facts.
Good article, but I think the government is in such sad shape now that the politicians make more money from the prisons lobbyists than you think. Prisons are a multi-billion dollar industry in this country, and the companies that run the prisons want as many people there as possible, including Dennis Dime Bag who was doing a friend a favor by hooking him up with a quarter bag/joint/dime bag or what have you, only to find out that his friend got in trouble with the law and turned informant. Marijuana doesn't kill people. Alcohol kills people. Cigarettes kill people. Crack kills people. There are more medical benefits that are unknown because pot is a schedule 1 drug. Just like LSD, Heroin and Meth. Companies can't work with schedule 1 drugs. On the other hand, Angel Dust is schedule 2, and valium and xanax are all the way down to schedule 4. Do they really think that weed is as bad or worse than Heroin or Cocaine? Really? Get it reclassified into the same category as tobacco. Make money from the taxes and enjoy the benefits.
The example you used about lowering government expenses only told part of the story. I believe Texas and California have turned their prison systems over to for profit corporations to run. While it is true that government expenses would drop, so would corporate profits. That is the real sticking point with our government. They are forbidden from meddling in corporate profits unless they are seeking to increase them.
Look at the money being made by the same companies that are profiting from the three other wars we are funding. Afghanastan, Iraq, and the ever profitable war on terror. The DEA is receiving the same high priced equipment Our soldieder fighting a real war ar receiving. The sheer numberof government employees who owe their jobs to Marijuana remaining legal will not allow common sense to run them out of a job. When is the last time a government employee was terminated due to noyt being needed?
The drop in profits that the drug companies would see from the legalization of marijuana are another reason our elected officials routinely ignore the cold hard facts about medicinal marijuana.
I haven't seen the statistics but I wonder if there has been a drop in legal drug sales in states that have legalized medicinal marijuana. I am sure that this is information that the drug companies have but I doubt we will see any of it. If we do it will be as doctored as the reports they [provide concerning the safety of their latest killer substance.
i think this is a vast wide talked about topic but it is taken to a different proportion of how people do it illegaly.... its like what if they still do it because youll still have to have a 215 card to get it from a store
Prosecuting people for marijuana related offenses is just a waste of tax payers money. Look at Holland, they haven't had any problems as a result of legalizing marijuana. It's just modern day prohibition .. hopefully in 50 years we will look back on this and think "what were they thinking"?
I smoke weed bareeeeeee and im ite so yeah its good!
Thanks. Great article to use for a short essay on economics in relation to legalization.
When the People speak about legalizing Marijuana they are speaking about Medical Marijuana. Look at Prop 215. The economical benefits will only happen if its used for compassion. Think small businesses. 64% of the employment in America is because of small businesses. These dispencaries in CA are taxed 8% and make anywhere from 100,000-200,000 legally. If the amount goes higher the DEA steps in an investigates. The "clubs" pay employees pay the owners salary and the rest of the profit goes back into the business. They provide medical patients with new kinds of product and grow their business. If legalized as a recreational drug (Prop 9) then big greedy ass corporations will take over, R.J Reynolds ect. Then there is nope hope of rebuilding the Land of The Free. Education will fall farther into the cracks, Law enforcement will do the same. The things that hold this country strong will end up in the gutters. Lets be smart about how we view legalizing what! Marijuana is safer than alcohol in all aspects. It is given to cancer patients to help improve eating habits. your body must have nutrients to help fight off any disease. Medical Marijuana is what need to be legal. this means a person will get a prescription card from a doctor then this is when you can legally grow, distribute and sell legally as long as you are not profiting.
I'm so high I have no idea what's going on right now.
Lmfao I feel u....
Hehehehe....me too....pass the joint man????
the problem of legalizing pot runs into a snag when you try to tax it but only because everyone wants it taxed now but it needn't be imediate 1st it should be known weeds being legalized and that any one growing and selling it should get a business liscence, this alone will give the government money 2nd give, say, 1 year to obtain said liscence from the announcement of legalization if caught after that year you're comitting a crime of simply conducting a business without a liscence. during that time frame the government can sanction land to grow similar to the way its done for crops like corn and grain, which grows just as easily. independant growers can sell to grocery and convieniant stores as a means of competition and doing it that way will generate more businesses and more income for the government. now since itd be legal the money for anti marijuana campaigns sponsored by the government would cease and that money could easily be divided into schools and police stations giving to a better education and better police equipment and more personnel allowing better methods of locating dead beat dads etc. both of which will have possitive results for the politicians who want and are elligible for re-elections and since people wouldnt be buying from dealers some illegal drugs would see a downwards trend. i smoke cigarettes and occasionally drink and have smoked pot for many years, tho i've given up weed til it can be legalized i would gladly give up cigs and booze and save myself money by purchasing herb at my local cheveron texaco or shell when i go to fill up my tank. alabamians and the rest of the "bible belt" need to stop listening to the lies that are fd thru the chuch that has become more corrupt than our politicians and every one else should look around and see the changes the 21st amendment gave us since no longer can we be arrested for purchasing alcohol as back in the andy griffith days and lets stand united to legalize a product less harmful more benificial and with alot less side effects than the prescription meds most of the people reading this are taking "Legalize It".
If it was legal, wouldnt the current drug dealers move onto harder drugs, or even creat new ones? Then we would have more pot heads, and even more coke etc on the streets. Dont think that would be a good thing personally
i love pot. love it. but you have to take your personal feelings out of it. there is a good and bad to everything. cars are legal but people die in car wrecks. and the old tired line tobacco and alcohol are legal and people are dying every min from them. As long as "our" politicians base their decision on how they feel about it cannabis will not be legal until all these lifetime members of gov. are gone. its old thinking. "cannabis leads to harder drugs." Those people that went on to harder drugs would have done so even if cannabis didnt exist. The normal pot user like most of us out there dont want or need harder drugs, why take something i know i will become dependent on or worse addicted to. americans use more rx painkillers than any other country in the world which puts money in the pharmaceutical companys pockets which then makes its way to politicians pockets. So these dirty politicians have no reason to make cannabis legal. make weed legal rx sales will drop. Why take something that might help that was made by man that may have adverse effects later down the road when i can take something i know will help, that grows all by itself and doesnt have the longterm adverse effects that pharmaceuticals have. How many people have died from tobacco and alcohol? How many from acetaminophen, a drug you can buy as much of as you want? Yes Yes smoking is bad for your health longterm, no matter what your smoking, but there are many ways to ingest cannabis. I would love for cannabis to be legal, but at this point at least make research legal so we dont have the gaps in information that we have. but research wont be legal because then we would all know the truth that regular cannabis users already know.
legalize it!!
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mega1 Level 3 Commenter 2 years ago
I like to see more and more open discussion of this hot topic. All your arguments are so correct, however, what you may not realize is that the current illegal dealers are so happy to inflate their prices they might take up a very virulent fight to avoid legalization, taxation etc. This would have its own costs to society. I'm convinced that legalization hasn't happened before now primarily because big crime likes it the way it is and their influence should not be discounted. Medical marijuana and regulation? Its already working pretty well some places. I like to emphasize to my kids that marijuana is a potent MEDICINE, not intended for the healthy, unless they need to calm down!