Legalization of Marijuana about More than Just Economics

Colorado has famously legalized marijuana in what many consider a grand experiment regarding legitimate drug sales. Moreover, by many accounts, it is a resounding success. However, the legalization of marijuana is about more than just economics. When considering the impact of legalized marijuana use on society, does the economic gain track with its social ramifications?

Huge Boost to Economy of Colorado

Colorado has famously legalized marijuana in what many consider a grand experiment regarding legitimate drug sales. Moreover, by many accounts, it is a resounding success. However, the legalization of marijuana is about more than just economics. When considering the impact of legalized marijuana use on society, does the economic gain track with its social ramifications?

Huge Boost to Economy of Colorado

According to the New York Times, the Colorado Department of Revenue reported that retail cannabis sales raised about $76 million in tax revenues and fees in 2014. That equates to retail sales of marijuana in the range of approximately $700 million. When marijuana is illegal, all of those funds would go untracked and those tax revenues would not have flowed into the government’s coffers. These figures also do not account for the application and regulatory fees associated with the nearly 16,000 licenses issued in 2014 to new employees working legally in the marijuana industry.

The legalization of marijuana has also reduced the government’s expense burden related to the prosecution and housing of those possessing and distributing the drug. Since 2012, marijuana possession prosecutions are down about 80 percent, marijuana cultivation prosecutions are down about 94 percent, and marijuana distribution prosecutions are down by 98 percent. Before 2012, these prosecutions would have cost the state several million dollars, plus the ongoing expense of housing and monitoring those convicted of these crimes. Nevertheless, now that marijuana is legal, these funds can be used for more important social objectives and/or to reduce the increase in taxes.

Some Unconvinced by Financial Argument

However, legalization of marijuana is about more than just the compelling economics described above. What are the social consequences of legalization on Colorado? Has crime skyrocketed as some predicted? Has unemployment gone up, homelessness increased, or have other social problems developed because of what is, by all accounts, the liberal use by a large swath of the population of marijuana?

Simply put, the answer to all of these questions appears to be “no.” Granted, the legalization occurred during a time when the economy of the entire nation was improving, so some might argue that this is a question of what stimulus created the observed effects. But, several years into Colorado’s grand experiment, it is becoming apparent that the worst-case scenarios regarding the fall out of legalized marijuana use simply are not occurring. This has prompted many to ask why the rest of the nation is not adopting a pragmatic regulatory framework similar to Colorado’s that allows for the regulated commercial production and sale of cannabis to adults in a fashion similar to alcohol or tobacco.

What Will Legalization Really Take?

Marijuana legalization movements are cropping up around many parts of the nation, but none has yet gone as far as Colorado. Doubts remain among many regarding the social impact this drug use will have in the end. Unfortunately, while the numbers pertaining to Colorado’s finances thanks to legalization are compelling, the argument is about much more than money to many. This is another example of the critical failing of many economic models in predicting irrational human behavior (i.e. more money with little or no negative social impact warrants legalization, versus irrational fears about what harms marijuana use may cause). In the end, legalization movements will only prevail if they are able to point at more than the compelling economic argument, but also overcome the fears of those who still oppose non-criminalized marijuana use.