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Legalizing Drugs Would Boost US Budgets By $100 Billion, Harvard Researcher Concludes

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Ending the prohibition of marijuana and other currently illegal drugs and instead taxing and regulating their sales would supplement federal and state government budgets to the tune of up to $106.7 billion a year, according to a new analysis from a Harvard University researcher.

“At both the federal and state levels, government budgets would benefit enormously from drug legalization policies,” Jeffrey Miron, director of undergraduate studies in the Department of Economics at Harvard University, wrote in the report published on Monday by the libertarian Cato Institute.

“This report estimates that $47.9 billion is spent annually on drug prohibition enforcement, whereas $58.8 billion could potentially be raised in tax revenue.”

Miron, who also serves as director of economic studies at Cato, published a previous estimate of the economic impact of legalizing cannabis and other drugs in 2010, but actual revenues from states that have since legalized marijuana blew those projections out of the water.

“Washington collected nearly $70 million in marijuana tax revenues during the first year of legalization, almost exactly the estimate in the 2010 report once adjusted for inflation. In fiscal year 2016, however, Washington collected nearly triple that amount, and in fiscal year 2017 tax revenues reached nearly $320 million. Oregon collected only $20.6 million in fiscal year 2016, about half the 2010 estimate, but it collected $70.3 million in fiscal year 2017, well above the 2010 estimate. In Colorado, marijuana tax revenues have risen from $67.6 million in calendar year 2014 to $247.4 million in calendar year 2017. Even adjusting for inflation, those figures far outstrip the 2010 estimates as well as the updated estimates presented in this paper.”

In the new analysis, Miron speculates that the real numbers could be higher because of robust cannabis tourism in legalization state so far, or it could be because marijuana prices haven’t fallen as far as he initially projected would occur under legalization.

“Revenues may continue to increase over time as more stores open or if demand increases as a result of greater cultural acceptance of marijuana,” he wrote. “But revenues in existing legalization states may also moderate if other states or the federal government legalize marijuana. Another consideration is that a nontrivial share of tax revenue in Colorado, Oregon, and Washington has been generated from collection of one-time application and licensing fees… As recreational marijuana becomes a more established industry, states will likely see a decline in the number of new entrants and therefore a decline in licensing revenue.”

Aside from revenues, Miron also looks at potential criminal justice cost savings resulting from the end of drug prohibition, which he estimates are “likely to be modest in practice, even if the number of drug arrests falls substantially.”

“Early experience suggests that governments will reallocate rather than reduce those expenditures.”

See below for Miron’s state-by-state calculations on the impact of drug legalization, courtesy of Cato:

Table 1: State and local expenditures attributable to drug prohibition, billions of dollars, 2016

All drugs Heroin/cocaine Marijuana Synthetic Other
29.37 12.78 6.04 4.93 5.62

 

Table 2: State and local expenditures attributable to drug prohibition, millions of dollars, 2016

State All drugs Marijuana Heroin/cocaine Other
United States 29,374.9 6,036.9 12,779.2 10,555.4
Alabama 252.9 51.2 111.5 90.2
Alaska 111.8 17.4 54.0 40.4
Arizona 615.1 96.7 286.3 232.0
Arkansas 192.9 40.3 82.8 69.9
California 5,963.4 951.4 2,718.4 2,293.0
Colorado 422.3 64.2 200.1 157.9
Connecticut 314.9 74.1 142.3 98.5
Delaware 113.5 25.1 48.5 39.9
Florida 1,170.0 180.4 564.3 425.2
Georgia 1,339.2 424.0 457.9 457.8
Hawaii 172.6 33.9 72.8 65.8
Idaho 140.7 23.2 63.8 53.7
Illinois 713.1 125.4 334.9 252.7
Indiana 637.6 236.5 193.0 207.4
Iowa 204.8 59.0 77.1 68.5
Kansas 206.5 54.2 81.5 70.7
Kentucky 276.9 56.8 122.2 97.9
Louisiana 376.2 72.2 170.0 133.9
Maine 174.5 63.5 67.1 44.0
Maryland 514.9 77.5 248.7 188.6
Massachusetts 481.0 115.5 215.5 150.0
Michigan 860.3 200.9 356.2 302.7
Minnesota 443.5 130.7 164.1 148.4
Mississippi 278.7 86.3 96.9 95.6
Missouri 335.8 76.6 141.5 117.5
Montana 160.4 28.7 68.4 63.3
Nebraska 147.2 31.1 63.2 52.8
Nevada 223.3 34.6 106.6 82.1
New Hampshire 175.7 65.2 67.0 43.5
New Jersey 669.3 117.8 320.5 231.0
New Mexico 345.1 59.3 149.4 136.4
New York 1,889.6 308.8 915.1 665.4
North Carolina 891.2 263.3 319.0 309.3
North Dakota 310.7 153.7 62.6 94.0
Ohio 650.2 111.0 311.3 227.7
Oklahoma 589.5 209.5 182.1 198.2
Oregon 375.4 57.2 177.7 140.4
Pennsylvania 1,033.0 179.6 493.7 359.6
Rhode Island 203.6 76.1 77.4 50.2
South Carolina 244.7 47.4 108.9 88.4
South Dakota 158.8 67.5 40.9 50.2
Tennessee 342.7 53.9 165.1 123.7
Texas 1,711.5 291.3 798.2 621.9
Utah 767.3 151.9 300.1 315.3
Vermont 69.3 19.5 29.5 20.4
Virginia 602.1 81.2 296.1 224.7
Washington 545.8 82.4 259.3 204.0
West Virginia 270.1 94.5 85.4 90.3
Wisconsin 414.8 62.7 199.1 152.9
Wyoming 223.5 42.9 89.3 91.3
District of Columbia 47.2 8.5 22.0 16.7

 

Table 3: Federal expenditures attributable to drug prohibition, billions of dollars, 2015 (in 2016 dollars)

All drugs Marijuana Cocaine Heroin Other
18.47 3.96 8.42 1.47 4.61

 

Table 4: State and federal tax revenues from drug legalization, billions of dollars, 2016

Total Marijuana Cocaine Heroin Other
Federal revenues 39.21 8.04 17.28 10.18 3.71
State revenues 19.60 4.02 8.64 5.09 1.86

 

Table 5: State tax revenues from drug legalization, distributed by population, millions of dollars, 2016

State Total Marijuana Cocaine Heroin Other
All states 19,603.33 4,020.00 8,640.00 5,090.00 1,856.67
Alabama 296.52 60.81 130.69 76.99 28.08
Alaska 45.07 9.24 19.86 11.70 4.27
Arizona 416.48 85.41 183.56 108.14 39.45
Arkansas 181.91 37.30 80.18 47.23 17.23
California 2,382.11 488.49 1,049.89 618.51 225.61
Colorado 332.86 68.26 146.71 86.43 31.53
Connecticut 218.99 44.91 96.52 56.86 20.74
Delaware 57.67 11.83 25.42 14.97 5.46
Florida 1,236.75 253.62 545.09 321.12 117.13
Georgia 623.07 127.77 274.61 161.78 59.01
Hawaii 87.06 17.85 38.37 22.61 8.25
Idaho 100.97 20.71 44.50 26.22 9.56
Illinois 784.33 160.84 345.69 203.65 74.29
Indiana 403.97 82.84 178.05 104.89 38.26
Iowa 190.72 39.11 84.06 49.52 18.06
Kansas 177.57 36.41 78.26 46.11 16.82
Kentucky 270.30 55.43 119.13 70.18 25.60
Louisiana 285.22 58.49 125.71 74.06 27.01
Maine 81.22 16.65 35.79 21.09 7.69
Maryland 366.23 75.10 161.41 95.09 34.69
Massachusetts 414.44 84.99 182.66 107.61 39.25
Michigan 605.87 124.24 267.03 157.31 57.38
Minnesota 334.92 68.68 147.61 86.96 31.72
Mississippi 182.62 37.45 80.49 47.42 17.30
Missouri 371.19 76.12 163.60 96.38 35.16
Montana 63.05 12.93 27.79 16.37 5.97
Nebraska 115.69 23.72 50.99 30.04 10.96
Nevada 176.17 36.13 77.64 45.74 16.69
New Hampshire 81.26 16.66 35.81 21.10 7.70
New Jersey 545.86 111.94 240.58 141.73 51.70
New Mexico 127.09 26.06 56.01 33.00 12.04
New York 1,206.34 247.38 531.68 313.23 114.25
North Carolina 613.04 125.71 270.19 159.18 58.06
North Dakota 46.23 9.48 20.38 12.00 4.38
Ohio 708.95 145.38 312.46 184.08 67.15
Oklahoma 238.70 48.95 105.21 61.98 22.61
Oregon 245.86 50.42 108.36 63.84 23.29
Pennsylvania 781.45 160.25 344.42 202.90 74.01
Rhode Island 64.49 13.22 28.42 16.74 6.11
South Carolina 299.02 61.32 131.79 77.64 28.32
South Dakota 52.41 10.75 23.10 13.61 4.96
Tennessee 402.89 82.62 177.57 104.61 38.16
Texas 1,675.66 343.62 738.53 435.08 158.70
Utah 182.70 37.46 80.52 47.44 17.30
Vermont 38.25 7.84 16.86 9.93 3.62
Virginia 511.17 104.82 225.29 132.73 48.41
Washington 437.42 89.70 192.79 113.58 41.43
West Virginia 112.47 23.06 49.57 29.20 10.65
Wisconsin 352.36 72.26 155.30 91.49 33.37
Wyoming 35.83 7.35 15.79 9.30 3.39
District of Columbia 40.95 8.40 18.05 10.63 3.88

 

Table 6: Summary of expenditure savings and additional revenues from drug legalization, billions of dollars, 2016

All drugs Marijuana Heroin/cocaine Other
Expenditures State 29.4 6.0 12.8 10.6
  Federal 18.5 4.0 9.9 4.6
Total 47.9 10.0 22.7 15.2
Revenues State 19.6 4.0 13.7 1.9
  Federal 39.2 8.0 27.5 3.7
Total 58.8 12.0 41.2 5.6

 

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.

Tom Angell is the editor of Marijuana Moment. A 15-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he founded the nonprofit Marijuana Majority. Previously he reported for Marijuana.com and MassRoots, and handled media relations and campaigns for Law Enforcement Against Prohibition and Students for Sensible Drug Policy. (Organization citations are for identification only and do not constitute an endorsement or partnership.)

Politics

Governor Signs Bill Legalizing Medical Marijuana In The U.S. Virgin Islands

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Medical cannabis was legalized in another U.S. territory on Saturday after the governor of the U.S. Virgin Islands signed a long-awaited bill into law.

“I have approved the Virgin Islands Medicinal Cannabis Care Act because it is a step in the right direction toward assisting Virgin Islanders suffering from autoimmune and other debilitating medical conditions,” newly sworn-in Gov. Albert Bryan Jr. (D) said in a press release.

The Virgin Islands Medical Cannabis Patient Care Act allows qualified patients to obtain, possess and consume marijuana for therapeutic purposes. It also establishes legal dispensaries and facilities to cultivate, test and manufacture cannabis products.

“After such a prolonged beating, I don’t know how to feel, except relieved for the people who will finally have access to healthy, effective, and affordable medicinal cannabis,” Senator Terrence ‘Positive’ Nelson, who for several legislative sessions in a row has sponsored medical cannabis bills that were ultimately defeated, said in a text message to Marijuana Moment.

“I feel redeemed and excited that the effort went from ‘laughable’ to law!”

Photo courtesy of Gov. Albert Bryan’s office.

Patients suffering from a list of serious medical conditions including cancer, HIV/AIDS, Parkinson’s disease and chronic pain will be able to receive a recommendation for medical marijuana from a licensed medical practitioner. Qualifying residents can possess up to four ounces of cannabis at a time and possession for non-residents will be capped at three ounces.

The legislation was approved by lawmakers last month.

In an interview with The St. Thomas Source last year, Bryan said he supports legalizing medical cannabis “based on the proven health benefits in the relief of pain and treatment of symptoms for many serious ailments including cancer.”

“I believe a properly regulated medicinal cannabis industry can provide relief to those seeking alternatives to conventional medicine and can also be an economic driver attracting new revenues for the Virgin Islands,” he said.

Revenue from the territory’s medical cannabis program will be used to fund drug rehabilitation, tourism projects, agriculture investments, work training and infrastructure.

While reform efforts in mainland U.S. have been receiving significant attention, advocates are also scoring wins in various U.S. territories. For example, the Commonwealth of the Northern Mariana Islands fully legalized cannabis last year, before even implementing a medical cannabis system.

“This legislation also gives effect to a Virgin Islands community-wide Referendum held in 2014 that approved the introduction of the medical-use sale of cannabis products by a majority of the voters,” Bryan said. “Since the Referendum, it is clear that marijuana-use policy in the United States has been changing rapidly in favor of medicinal and recreational use and will continue, even potentially on the federal level.”

The governor also suggested that the new medical cannabis policy may be tweaked going forward.

“The Legislature recognized that the Bill, as passed, is not perfect and needs more refinement and amendment and provides for an implementation period that we must aggressively pursue,” he said. It is part of the process of implementation of the regulatory and operational system. And therefore it will be essential that further revisions be developed, with professional guidance, in the implementation process, including preparation of Regulations, forms, fees, and procedures; and to undertake necessary amendments to the Bill with the Legislature.”

Nelson, the bill’s sponsor, said that he is looking forward to staying involved in the medical cannabis implementation process but that he is also ready to begin pushing for broader marijuana policy reforms.

“I am ready to assist with the establishment of rules and regulations which will be the next step,” Nelson said. “However, each jurisdiction cannot be satisfied with our own success in getting local law changed, but must continue the charge until there are changes to federal government law.”

“This is just another small victory on the rugged road to full legalization.”

Read the full text of the Virgin Islands Medical Cannabis Patient Care Act below:

USVI medical marijuana bill by on Scribd

UPDATE: A previous version of this story reported that the legislation was signed on Thursday as told to Marijuana Moment by the bill’s sponsor, Sen. Nelson. The governor signed the bill on Saturday.

Legal Marijuana Advocates Rank The Best And Worst Governors On Cannabis

Photo element courtesy of Wikimedia.

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Marijuana Descheduling Could Be ‘Next Step’ In Congressional Criminal Justice Reform

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Lawmakers in Congress are already weighing additional criminal justice bills as a follow up to recently passed sentencing reform legislation.

Reps. Hakeem Jeffries (D-NY) and Douglas Collins (R-GA), who championed the successful First Step Act signed into law by President Trump last month, are now considering introducing a bill that would clear the criminal records of people with nonviolent drug convictions that occurred before Congress reduced minimum sentencing requirements, The Washington Post reported on Thursday.

The legislation, which Collins is tentatively describing as the “Next Step Act,” is still in the early stages of being negotiated and drafted, would also restore people’s ability to get certain jobs after serving their sentences.

Jeffries, the fifth top ranking Democratic in the House, says that provisions removing marijuana from the Controlled Substances Act should be on the table for inclusion in the bill, and he is holding open the possibility that the minority party will get on board with the idea.

“Descheduling marijuana at the federal level shouldn’t actually be that controversial, and it’s consistent with Republican principles of states’ rights and federalism,” he told the Post.

Jeffries previously described cannabis decriminalization as the natural “next step” in criminal justice reform after the First Step Act passed.

“It’s great to see a member of this stature among House Democrats make this commitment,” Queen Adesuyi, policy coordinator with Drug Policy Alliance, told Marijuana Moment. “Jeffries is a long champion of marijuana reform and really gets how we cannot have a full conversation about criminal justice reform and economic justice without a conversation about ending marijuana prohibition in a way that centers those most harmed by its enforcement.”

“I’m excited to see what his office will do as they lead on these efforts.”

But while descheduling stands a good chance of passing in the Democratic-led House, it’s not certain that Jeffries’s GOP counterpart would attach his name to a criminal justice reform bill that includes significant cannabis policy changes. Collins would be “unlikely to support such a move,” the Post reported, citing a staffer.

And the prospects of passage in the Republican-controlled Senate are even more dubious.

Still, Jeffries is optimistic that lawmakers of all stripes could get behind descheduling.

“There’s a growing number of conservatives, libertarians and Republicans who are in agreement with Democrats, who believe that we should at least take a hard look at descheduling marijuana,” he said.

Descheduling would be one way to address conflicting federal and state marijuana policies—something that attorney general nominee William Barr said was necessary as more states legalize cannabis during a confirmation hearing this week.

As it stands, marijuana is a Schedule I drug under the Controlled Substances Act, the most restrictive category. In the past, there have been efforts to reschedule cannabis in order to make it easier for researchers to access and study, but those efforts have so far stalled.

Federal Officials Recognize How Marijuana’s Legal Status Blocks Research, Documents Show

Photo courtesy of Carlos Gracia.

Marijuana Moment is made possible with support from readers. If you rely on our cannabis advocacy journalism to stay informed, please consider a monthly Patreon pledge.
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First Senate Marijuana Bill Of 2019 Would Force Study On Medical Cannabis For Veterans

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The first Senate marijuana bill of the new Congress focuses on increasing research on the medical benefits of cannabis for military veterans.

The legislation, introduced by Sens. Jon Tester (D-MT) and Dan Sullivan (R-AK) on Thursday, would direct the U.S. Department of Veteran Affairs (VA) to conduct clinical trials on the effectiveness of medical marijuana in the treatment of conditions common among military veterans.

While the new bill has the same title as a proposal the bipartisan duo filed during the last Congress, its language—which is not yet online but was obtained by Marijuana Moment—much more forcefully directs VA to begin researching medical cannabis than the earlier legislation did.

Whereas last year’s version simply said that the department “may conduct and support research relating to the efficacy and safety of forms of cannabis,” nothing in current federal law actually prevents it from doing so.

This latest version stipulates that the VA, which has been reluctant to engage in marijuana studies, “shall” begin conducting clinical trials on cannabis.

“The VA needs to listen to the growing number of veterans who have already found success in medicinal cannabis in easing their pain and other symptoms,” Tester, the ranking member on the Senate Veterans’ Affairs Committee, said in a press release. “Our bill will make sure the VA takes proactive steps to explore medicinal cannabis as a safe and effective alternative to opioids for veterans suffering from injuries or illness received in the line of duty.”

The proposed double-blind randomized controlled clinical trials are meant to cover the potential therapeutic applications of marijuana for post-traumatic stress disorder and chronic pain.

In particular, the department would have to study areas such as medical marijuana’s effect on opioid, benzodiazepine and alcohol consumption, as well as inflammation, sleep quality, spasticity, agitation, quality of life, mood, anxiety, social functioning, suicidal ideation and frequency of nightmares or night terrors.

Marijuana reform advocates praised the new legislation’s more forceful language as compared to the prior bill.

“The more assertive language is great improvement to this commonsense research bill that could ultimately help veterans with debilitating conditions,” Michael Liszewski, principal of The Enact Group, a lobbying and consulting firm that focuses on cannabis issues, told Marijuana Moment.

“The Department of Veterans Affairs already has the ability to conduct this research and the previous language would have let the Department continue to drag its heels,” he said. “It’s sort of like the difference between a parent telling their child ‘maybe you should clean up your room’ versus ‘you will clean up your room, now.'”

Sullivan said that he’s heard from many veteran constituents who are interested in finding an alternative to prescription painkillers for their pain.

“Many of our nation’s veterans already use medicinal cannabis, and they deserve to have full knowledge of the potential benefits and side effects of this alternative therapy,” he said in a press release.

During the last Congress, the Senate version of the legislation garnered six cosponsors, while 55 representatives ultimately signed onto the House version. The bill became the first standalone piece of marijuana legislation to clear a congressional panel when the House Veterans’ Affairs Committee approved it in May.

Nonetheless, VA leadership remained reluctant about engaging in marijuana research.

“VA is committed to researching and developing effective ways to help Veterans cope with post-traumatic stress disorder and chronic pain conditions,” VA Secretary David Shulkin wrote in a letter to lawmakers last year. “However, federal law restricts VA’s ability to conduct research involving medical marijuana, or to refer veterans to such projects.”

That isn’t true.

Meanwhile, top officials in the Trump administration have talked about pressuring the VA to conduct studies on medical marijuana for veterans, emails revealed, but they expressed concerns about how the Justice Department would react.

Read the full text of the new Senate veterans medical cannabis bill below:

Senate Veterans Medical Mar… by on Scribd

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