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Archive for the ‘Drug Legalization’ Category

While watching the show Weeds, I had a thought about the effects that prohibition have on the nature of the substances that are prohibited.

During Prohibition in the 1920s, the quality of alcohol was often very low because production was forced underground.  Moonshine was distilled in rural locales and was often very dangerous to consume.  Now, people can buy liquors in stores without worrying about going blind.  Microbreweries across our country brew very unique, complex beers.  Society benefits from all the choices.  During Prohibition, beer production was probably non existent because of the facilities required for brewing beer.

In the same way, before abortions were made legal, they were very dangerous because they could be performed in sterile facilities by qualified professionals (b.n. Whether or not abortion is ethical is an entirely different issue).

What if marijuana were legalized, and marijuana began to have their own versions of microbreweries?  Like with microbreweries, users could have greater access to much more diverse products.  They would benefit because of higher quality goods, as well as knowing that their marijuana is safe (like drinkers know their liquor does not contain poison because they bought it from a liquor store).  Furthermore, as alcohol is regulated, marijuana would be regulated, and therefore would be safer.

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I just got done reading an article by The Economist (http://www.economist.com/node/16591136), and it got me thinking.

The article was about legalizing or simply decriminalizing marijuana consumption in California.

It was interesting to me because of how it could affect the economy.  In the article, the RAND Corporation predicted that the retail price of an ounce of marijuana would decrease by 80%.  This decrease can mean many different things.  It would be very bad for business for dealers and distributors because of the loss of revenues.  I recently started watching the Showtime show Weeds, and this point was further reinforced when Nancy’s distributor Heylia expressed disdain for legalization or decriminalization.

Another less obvious point that comes from this decrease in retail price is the ability of governments to tax purchases of marijuana.  If the retail prices does in fact decrease by 80%, then that is all the room government has to tax the marijuana without distorting consumer behaviors.  Furthermore, they would still have the room to levy a tax that would still make the price lower than when it was illegal, which could increase consumption, and thereby increasing tax revenues.

I am not an expert on tax policy, but these points are definitely something for policymakers to consider when dealing with near bankrupt state governments.

Of course, as many economists and analysts have stated before, legalization could decrease crime because of the elimination of marijuana’s black market.  Furthermore, cost to government to incarcerate “criminals” would decrease.

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