Legalizing Marijuana will Benefit California’s Economy

The State of California is considering a bill that would legalize the personal use of marijuana. Legalizing marijuana in California would benefit the state’s economy by providing additional tax revenue while freeing up funds currently used for law enforcement. The state’s most valuable agricultural commodity currently contributes no direct tax revenue, and is in fact a net drain on the economy due to the costs associated with its legal classification as well as the detrimental effect on the personal economics of those who are prosecuted for its use. Although opponents of the bill cite evidence that legalization will lead to more widespread use, addiction, and presumably higher associated treatment costs, the preponderance of the evidence makes it clear that legalization will be of great economic benefit to the state.

With an estimated value of 14 billion dollars annually, marijuana is California’s most valuable cash crop (Gieringer, MercuryNews.com) but produces no direct tax revenue in a state facing severe budget shortfalls. The estimated tax benefit from its legal sale amounts to 1.3 billion dollars (Stateman). Legalization would also have the economic benefit of all legal businesses including payroll and business taxes plus support businesses such as suppliers and distributors. These associated industries are estimated to have a total economic impact of 12-18 billion (Gieringer, CANORML).

Instead of taxing this product, California currently spends 170 million annually to arrest, prosecute, and incarcerate marijuana users. Although it is difficult to quantify, there is certainly an additional cost to be found in the damaged lives of otherwise law-abiding citizens who have been prosecuted for personal marijuana use.

Opponents of legalization cite evidence of addiction leading to psychiatric problems and their resultant costs as arguments against legalization. Kevin A. Sabet, a senior drug policy adviser in the Clinton and Bush administrations argues against legalization in an article published in the Silicon Valley Mercury News. He asserts that legalizing marijuana will lead to increased use and addiction and the resulting treatment costs will more than offset any gains in tax revenues. (1)

Unfortunately, in an argument purporting to refute the economic benefit claims of the legislation’s supporters, Sabet does not support his assertion with any economic statistics, but does cite one study linking marijuana use with schizophrenia. His argument is dependent on two assertions which are difficult if not impossible to prove: There is a proven link between marijuana use and psychiatric illness, and criminalizing marijuana leads to a decrease in its use.

The economic benefits are promising. Prohibition has been tried and has failed. The State of California should reform its marijuana laws to turn a drain of resources into a positive flow.

Works cited:

Gieringer, Dale “Marijuana Legalization Could Yield California Taxpayers Over $1.2 Billion Per Year” California NORML report. February 2009. 16 April 2009. <http://www.canorml.org/background/CA_legalization2.html>.

Gieringer, Dale. “Opinion: Legalize marijuana and reap the revenues for California.” MercuryNews.com. 1 March. 2009. 16 April 2009 <http://www.mercurynews.com/ci_11816324?IADID=Search-www.mercurynews.com-www.mercurynews.com>.

Sabet, Kevin A. “Opinion: California can't afford to legalize marijuana.” SiliconValley.com. 7 March. 2009. 15 April 2009 < http://www.siliconvalley.com/ci_11864334.>

Stateman, Alison. “Can Marijuana Help Rescue California's Economy?” Time.com. 13 March. 2009. 17 April 2009 <http://www.time.com/time/nation/article/0,8599,1884956,00.html?iid=digg_share>.