The Economic Prospects of Marijuana Legalization Essay

As the debate rages over the causes and appropriate solutions for the current crisis of global capitalism, this paper proposes to take stock of a persistent problem plaguing the American economy due to an unintended consequence of – in the opinion of this essay – a fallacious policy. To locate the root of this problem, we must cast our minds to a time before the Global War on Terror became the signpost for guiding international policy, and even before American economy started shifting from the domination of global production to the domination of global finance.

The problem in question arose out of a much older “war” being fought by the United States (US) lawmakers and administrators: the war on drugs. The attempts to ensure a drug-free world stretch not only to the prohibition on harder substances like (powder and crack) cocaine and heroin, but also to marijuana, which has proven medicinal qualities as a pain reliever. The Mariana Policy Project (MPP), a D.C. based think-tank, describes marijuana prohibition as a resounding failure, and reports that in the US, “there are more arrests for marijuana possession each year than for all violent crimes combined” ( Frivolous incarcerations for marijuana possession and use not only put increasing pressure on prisons and community jails, but also use up precious resources that could otherwise be diverted to other, more useful, areas of public spending. This paper proposes that the existing marijuana policy be repealed and drug legalization takes its place; the following paragraphs shall attempt to substantiate this suggestion.

Marijuana or medical cannabis, as mentioned above, has proven medicinal qualities, mostly as a herbal pain reliever, and this fact is what seems to have taken the issue of drug prohibition into a veritable gray area. Due to the high costs of prescription painkillers, many opt to smoke marijuana instead as a cheap alternative; under the current regulations, however, this is unlawful. The arrest of a Seattle resident in July 2008 for marijuana possession incited one news editor to brand the existing legal framework governing the use of marijuana as “reefer madness” (Ramsey 2008).

What confounds this legal framework is the disparity between the laws in certain states vis-à-vis other states’ and federal laws on the matter. The Controlled Substances Act, a federal statute, deems cannabis as a Schedule I drug, without any expressly known or accepted medicinal value. Therefore, one cannot have an unfettered access to marijuana, the only recourse being the Food and Drug Administration’s (FDA) program of Investigational New Drug Application. Under the Single Convention on Narcotics, which is an international treaty to which the federal government is a Party, cannabis is a Schedule IV drug; the federal government can

“…prohibit the production, manufacture, export and import of, trade in, possession or use of any such drug except for amounts which may be necessary for medical and scientific research only, including clinical trials therewith to be conducted under or subject to the direct supervision and control of the Party” (International Narcotics Control Board 1961).

State governments, on the other hand, have increasingly found it prudent to legislate in favor of the legalization of marijuana use for medical purposes. Since 1978, more than 30 state legislatures have voted to uphold marijuana’s medicinal value, including states such as California, New York and Florida. Marijuana eases neuropathic pains for HIV affected individuals and arguments against its effectiveness as a pain reliever are becoming gradually but surely untenable ( 2008).

California’s Proposition 215 of 1996 provided the impetus to mobilize a 6-state movement calling to legalize the use of medicinal marijuana, with five further states joining the fray over time. Matters have since come to a head between the states and the federal government. Federal law bans the possession, use or trade in the ‘controlled substance’; for any person living in a state that recognizes the use of medical cannabis, he or she is still subject to arrest by federal law enforcement agencies. In fact, the Supreme Court declared that the US Drug Enforcement Administration was fully within its rights to perform this function, even in states where marijuana possession is legal (Lane 2005).

To be sure, the federal position employs a negative approach to drug use, with the free availability of medicinal marijuana posing the consequent problem of abuse: people may (and do) fake illness or transfer legally obtained marijuana to others, in order to use it for recreational purposes. Some of these fears were vindicated when residents of Mendocino County in California complained that Proposition 215 “…has increasingly and unintentionally provided legal cover for large-scale marijuana growers – and the problems such big-money operations can attract” (McKinley 2008). Since no express mechanism exists through which marijuana can be obtained, many patients prescribed to use the drug grow it on their own, opening clubs which supply the pain reliever, and giving incentives to large-scale cultivation in some cases. All of these contributed to recreational (and hence, illegal) use of marijuana.

However, the federal strategy has only been to reinforce the draconian anti-drug regime, without exploring possible alternatives. Instead of recognizing that marijuana is not nearly as harmful a substance as crack cocaine or heroin, the path forward has conventionally entailed stronger regulations using up precious resources like time, manpower and money. This policy has resulted in an extremely high number of criminal convictions for marijuana possession; many of the victims were using the drug upon prescription from their physicians:

“Federal marijuana penalties assign up to a year in prison for as little as one marijuana cigarette — and up to five years for growing even one plant. There is no exception for medical use, and many states mirror federal law” (Marijuana Policy Project 2008).

In 2006 alone, there were 829,627 marijuana related arrests, 89% of which were on counts of possession and use and the rest for sale and manufacture (MPP 2008). Now consider the amount of taxpayers’ dollars it takes to sustain an individual in prison for a year: approximately $25,000 (Aizenman 2009). Assuming that each marijuana related arrest results in one year of incarceration, the total amount spent by federal and state governments to sustain convicted individuals in prison is in excess of $20 billion! Just to put this into perspective, this amount is close to 5% of the fiscal stimulus package recently approved to revive the American economy in order to reverse the trends of the (now 15-month) recession. The total US expenditure, yearly, on the drug war is in excess of $50 billion (Nadelmann 2007: 28).

In an instructive article, pro-drug legalization activist Ethan Nadelmann labels the War on Drugs as a lost cause and most certainly battle that cannot be won (2007). While harder substances like heroin and crack cocaine have become cheaper and found greater coverage and access, millions of dollars in taxpayers’ money has also been channeled to the War to pay for elaborate preventive mechanisms that have repeatedly failed in their purpose. Simultaneous to these developments, marijuana production and its medicinal use have proliferated. Nadelmann warns that there can never be a guarantee that the demand for drugs can be reduced, and as with any sort of addiction, the policy with drugs should focus not on “zero tolerance” but on “harm reduction,” to combat the suffering from drug misuse and failed prohibition policies (2007: 25). In fact, he maintains that reduction in supply is as probable as decreasing demand for drugs to succeed in curbing drug use: such policies only result in a shift of locale for drug crops, though global production has remained relatively stable and has, in fact, grown over the long term. What has confounded an effective regulation of the drug trade is that other countries have taken the lead from the US’ policies that have been well documented to have succeeded little.

In a recent report published by the Center for Health and Justice in Illinois, a set of cost-effective solutions to incarcerations for drug related crimes were proposed. What is more interesting is the principle of “no entry” that the Center elaborates in the report, which should guide policy-making. The authors of the report argue that addiction must be understood as a brain disease, the links between crime and drug use should be acknowledged, trends of current policies implicating minority communities should be reversed, alternative treatment of drug related cases should be encouraged, and that taxpayers’ money should be effectively used (Braude, Heaps, Rodriguez, & Whitney 2007: 6-7).

The authors propose that state governments should provide community-based treatment for at least 25,000 drug offenders; where this benchmark is not met, the capacity should be brought to scale. Secondly, an overhead financial appropriation of $10 million should provide for such community-based efforts, with an annual increase in terms of proportional increase in outreach. Thirdly, limitations to alternative treatments should be removed. Fourthly, they claim that newer punishment strategies should not be devised each time a new drug surfaces or an old one proliferates: policy should be based on continuity. Finally, an enhancement in the punitive measures for drug related crimes should first consider the fiscal and community impact the same shall have (Braude, Heaps, Rodriguez, & Whitney 2007: 7).

In fact, many argue that the prohibition of marijuana is unconstitutional, much like the alcohol and tobacco prohibition of the 1930s and 1940s, which needed a constitutional amendment (later repealed) extending the breadth of the federal government to impose a draconian regulatory system. Since marijuana consumption does no appreciable bodily harm in the short or medium term – similar to alcohol and tobacco – its use becomes a matter of individual choice. Bans on its production, trade, possession and use, and incarcerations due to any of these activities, goes beyond the spirit of the US Constitution and demands a serious rethink of existing policies.

Progressive, pro-drug legalization legislation at the state level has shown a way forward, but the federal government’s drug war policies remain outdated and regressive. It appears that the latter is trying to police individual ends – marijuana production, possession or consumption – through a heightened sense of morality. This, however, results in a friction with individual rights, and each time there is a clash between rights and ends, the former must win out. As a matter of public policy, the reality not only of medicinal marijuana’s emergence, but also the permanence of drug addiction and usage must be accepted at the federal level without delay; taking a leaf out of the states’ books would indeed be a wise decision in this regard. In any event, drug legalization appears as the most economically sound and rational path forward.

Works Cited

Aizenman, N. C. “The High Cost of Incarceration.” The Washington Post, 29 February 2008. Retrieved 2 March 2009 from

Braude, Lisa, Melody M. Heaps, Pamela Rodriguez, & Tim Whitney. No Entry: Improving Public Safety through Cost-Effective Alternatives to Incarcerations in Illinois. 2007. Chicago: Center for Health and Justice at Treatment Alternatives for Safe Communities.

International Narcotics Control Board. Single Convention on Narcotic Drugs. 1961. Retrieved 2 March 2009 from

Lane, Charles. “A Defeat for Users Of Medical Marijuana: State Laws No Defense, Supreme Court Rules.” The Washington Post, 7 June 2005: A01.

Marijuana Policy Project. State-by-State Medical Marijuana Laws: How to Remove the Threat of Arrest. 2008.

McKinley, Jesse. “Marijuana Hotbed Retreats on Medicinal Use.” The New York Times, 9 June 2008. Retrieved 2 March 2009, from “About the Migration Policy Project.” Migration Policy Project. Retrieved 2 March 2009 from

Nadelmann, Ethan. “Think Again: Drugs.” Foreign Policy (September/October 2007): 24-30.

Ramsey, Bruce. “Editorials/Opinion: The New Reefer Madness: Arresting People in Pain.” The Seattle Times, 23 July 2008. Retrieved 2 March 2009 from “Medicinal Marijuana Eases Neuropathic Pain in HIV.” The Washington Post, 6 August 2008. Retrieved 2 March 2009 from