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Legalizing Marijuana is the Right Policy for California and the Nation

Legalizing Marijuana is the Right Policy for California and the Nation

On November 2, California will vote on Proposition 19, a measure to legalize marijuana. Advocates believe Prop 19 will generate a major budgetary windfall and unleash an economic boom in marijuana-related industries while reducing crime, corruption and Mexican drug violence.

Prop 19 opponents fear it will increase marijuana and other drug use via the gateway effect and spur the alleged negatives of use, such as crime or diminished health.

Most claims on both sides are exaggerated or misleading. Legalizing marijuana is the right policy for California and the nation. But in considering Prop 19, everyone should start with a balanced assessment of its likely impact.

California has long been at the forefront of the push-back against marijuana prohibition. The state decriminalized marijuana in 1975, meaning it eliminated criminal penalties for possession of small amounts. California then legalized medical marijuana in 1996. Plus, in 2009, U.S. Attorney General Eric Holder said the federal government would not interfere with medical marijuana in states where it is legal under state law.

Prop 19 goes a step further by legalizing all marijuana use for adults 21 or older as well as production and sales. Thus marijuana would be a legal product under California law.

Full legalization sounds like a major policy change. But under existing law, marijuana is almost legal in many respects. Almost anyone can get a prescription for medical marijuana, and prices are not much elevated compared with a legal market. So legalization would have minimal impact on use. This means that concerns over the negatives of use — valid or not — are irrelevant.

Legalization would be a significant change in that marijuana production and sale would move above ground. State and local governments could then tax it. California is expecting $1.4 billion in additional tax revenue from legalization, along with reduced criminal justice expenditure.

In a recent Cato Institute paper, however, Kate Waldock and I estimate that California could collect only $352 million in addition revenue. This amount is not trivial, but it is minor compared with California’s budget deficit. California might also see a reduction of around $960 million in expenditure on arrests, prosecutions and prisons, but only by laying off police, judges and prison guards. This is politically painful, so it may not happen.

Legalization advocates also believe that bringing the market above ground will spur related industries, such as head shops or marijuana cafes. Most of this economic activity, however, is already present; legalization just recognizes it officially. Marijuana cafes, for example, will shift business from medical marijuana dispensaries, or bars, without a major net increase.

What about Prop 19’s effect on crime? Critics believe marijuana causes criminal behavior, as in “reefer madness,” but these claims have no empirical support.

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