How Economics Support Marijuana Legalization

In 2016, more Americans were arrested for marijuana possession than all violent crimes combined. What makes this more surprising is the fact that a number of states, and many other jurisdictions, are either legalizing or decriminalizing marijuana. Nevertheless, possession arrests are increasing (659,700 in 2017, compared to 653,249 in 2016), and these arrests don’t have anything to do with growing marijuana or selling it.

In all, 44% of drug possession arrests in the U.S. are marijuana related and when you add in the arrest for growing and selling pot, fully 49.5% of drug-related arrests trace back to weed.

In an issue that we’ll cover more in a future article, there is also a major social justice issue to consider. When it comes to usage rates, a vast majority of studies show similar rates of use in the black population and the white population. However, black people are almost four times more likely to be arrested for marijuana possession, according to the ACLU. I’ll dig deeper into this serious problem in a future article.

What is the human and societal cost of these arrests?

As the move toward legalization seems to be gaining steam (62 percent of Americans are now in favor), it’s critical to consider the economic costs of criminalization and the benefits to legalization.

What Does Criminalization Cost Us?

As you might suspect, the costs are high. States spend about $3.6 billion enforcing marijuana laws annually, according to a 2013 study by the American Civil Liberties Union. If marijuana was removed from the schedule of controlled substances, there would be fewer court cases and reduced incarceration. A 2005 study by a visiting economics professor at Harvard University revealed that marijuana legalization could save $7.7 billion in enforcement costs each year.

Another way to look at the cost of criminalization is to consider the reality of the black market money flowing to drug cartels, and the associated costs to public safety. Here’s what Stephen Downing, the former Deputy Chief of Police of Los Angeles, says, “When we ended the prohibition of alcohol, Al Capone was out of work the next day. Our drug policy is really anti-public safety and pro-cartel, pro-street gang, because it keeps them in business.”

Another cost to consider is the effect that having a criminal record has on individuals, even if it’s “just” for possession. Any criminal record can be easily found by a landlord or potential employer, and make it significantly more difficult to secure housing or a job. A possession conviction also suspends a student’s federal financial aid. A survey conducted in 2017 by Yahoo News and Marist Poll shows that the majority (52%) of Americans over the age of 18 have smoked weed in their lifetime, meaning the majority of Americans have broken federal law.

Clearly, the costs of criminalization are steep. By legalizing recreational marijuana and removing it from the schedule of controlled substances, substantial savings could be achieved across the criminal justice system.

What about Tax Revenue?


Free Tools to Help You Predict the Market

Happy Easter weekend (for those that celebrate it)! I hope you’re all enjoying a lovely spring weekend.

Today, I want to bring you a market update on what’s been going on in the markets. I’ll be showing you the new key levels that the S&P has reached, and where we could head from here.

I’ll also share with you a great tool for gauging whether a stock is overbought or undersold, called “sentiment charts.” I’ll also show you a great way to measure breadth (how many companies are moving up or down in a period of time), which helps determine if the market has strong momentum. I’ll walk you through – step by step -how to access this free tool, as well as how to interpret it.

Finally, we’ll look at the performance of the major sectors to see which ones have performed best recently, and where our best investment opportunities lie in the future.

Click below to watch.