Legalization of marijuana

The third main variable that concerns the legalization of marijuana is whether or not it will help, or even harm the economy. It seems unlikely that it could possibly harm the economy, as the federal government could easily make some money off every legal sale of the drug (money that the government is presently missing out on, as the drug is now illegal, and all sales, except for the small amount of medical marijuana sales, are carried out behind the government’s back).

But if the government was able to legalize and effectively regulate the drug, it would be profitable for everyone. Costs would go down for buyers (as the current legal status of the drug causes the high prices now) and the even farmers in the United States could produce the drug in large quantities, providing jobs to some people who currently do not have them.

The federal government (or the state government, if different states wanted different tax policies regarding the drug) could make money by taxing buyers of the drug, or placing large tariffs on foreign product, and the price would likely still be lower for buyers than it is now. “The study estimates that the average price of 0. 5 grams (a unit) of marijuana sold for $8. 60 on the street, while its cost of production was only $1. 70,” Mike Moffatt writes in his article entitled Should Governments Legalize and Tax Marijuana?

“In a free market,” Moffatt continues, “a $6. 90 profit for a unit of marijuana would not last for long. Entrepreneurs noticing the great profits to be made in the marijuana market would start their own grow operations, increasing the supply of marijuana on the street, which would cause the street price of the drug to fall to a level much closer to the cost of production. ” This would obviously alleviate some of the burdensome prices that buyers experience today, and would still provide a valid, legal source of income to the producers of the drug. “Stephen T.

Easton argues that if marijuana was legalized,” Moffatt writes, “we could transfer these excess profits caused by the risk-premium from these grow operations to the government: If we substitute a tax on marijuana cigarettes equal to the difference between the local production cost and the street price people currently pay--that is, transfer the revenue from the current producers and marketers (many of whom work with organized crime) to the government, leaving all other marketing and transportation issues aside we would have revenue of (say) $7 per [unit].

If you could collect on every cigarette and ignore the transportation, marketing, and advertising costs, this comes to over $2 billion on Canadian sales and substantially more from an export tax, and you forego the costs of enforcement and deploy your policing assets elsewhere. ” Justification of the Hypothesis based on Three Variables So it seems that the three main variables could work to support the legalization of marijuana.

That being said, I will hypothesize that marijuana could fit into similar legal restrictions as those surrounding alcohol use, and that would cut down on the dangers (such as drugged driving or operation of machinery) presented by its legalization (assuming, for the sake of the hypothesis that now, as the drug is illegal, no one uses it or has accidents because of its use). And marijuana could stimulate the economy at the same time as it helps to eliminate crime. Some illicit activities regarding the illegal drug would become regulated, profitable, organized forms of employment, in a time when many people find themselves unemployed.

So marijuana legalization could be employed without a spike in dangerous activities, as they could be regulated in the same way similar issues concerning alcohol use are regulated. It also does not have to be a gateway drug, and parents need to realize that there is strong potential for the drug’s safe use. And lastly, it can stimulate the economy. “When considering legalizing marijuana, there are many economic, health, and social issues we must analyze,” Moffatt writes.

“One economic study will not be the basis of Canada's public policy decisions, but Easton's research does conclusively show that there are economic benefits in the legalization of marijuana. With governments scrambling to find new sources of revenue to pay for important social objectives such as health care and education expect to see the idea raised in Parliament sooner rather than later,” which means that, when it is proposed, the idea of marijuana legalization could prove to be enticing, as its legalization benefits more people than it disadvantages the drug dealers we have today.


Bonnie, Richard J. Marijuana use and criminal sanctions: Essays on the theory and practice of decriminalization. Charlottesville, VA: Michie. 1980. 264 p. Moffatt, Mike. Should Governments Legalize and Tax Marijuana? 2009. Accessed 27 April 2009. http://economics. about. com/od/incometaxestaxcuts/a/marijuana. htm NHSDA. Marijuana Use Among Youths. 2002. Accessed 27 April 2009. http://www. oas. samhsa. gov/2k2/YouthMJuse/YouthMJuse. htm

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