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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 20-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

New Congressional Resolution Condemns Police Brutality And War On Drugs

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Twelve House members introduced a resolution on Friday condemning police brutality in light of the recent law enforcement killings of two black individuals that have galvanized mass protests. The measure specifically notes the racial injustices of the war on drugs.

The resolution is partly motivated by the killings of George Floyd in Minnesota, where a police officer suffocated him to death, and Breonna Taylor in Kentucky, where she was fatally shot by police during a botched drug raid.

Protests have erupted across the U.S. this week, with calls for justice and law enforcement accountability. The new House measure, if adopted, would formally align the body with that sentiment, condemning police brutality, racial profiling and excessive use of force.

The drug war has contributed to those problems, the lawmakers said, with people of color being more likely to be arrested for drug offenses than white people despite similar rates of consumption.

The “system of policing in America, and its systemic targeting of and use of deadly and brutal force against people of color, particularly Black people, stems from the long legacy of slavery, lynching, Jim Crow laws, and the War on Drugs in the United States and has been perpetuated by violent and harmful law enforcement practices,” a provision of the resolution states.

In addition to condemning “all acts of brutality, racial profiling, and the use of excessive force by law enforcement officers and calls for the end of militarized policing practices,” the resolution urges the Justice Department to investigate individual cases of police violence and racial profiling and establish all-civilian review boards to provide community oversight of policing.

The measure also “calls for the adoption of sound and unbiased law enforcement policies at all levels of government that reduce the disparate impact of police brutality and use of force on Black and Brown people and other historically marginalized communities.”

Reps. Ayanna Pressley (D-MA), Ilhan Omar (D-MN), Karen Bass (D-CA) and Barbara Lee (D-CA) led the resolution. Other cosponsors include Reps. Joaquin Castro (D-TX), Katherine Clark (D-MA), James McGovern (D-MA), Rashida Tlaib (D-MI), Alexandria Ocasio-Cortez (D-NY) and Joseph Kennedy III (D-MA).

“From slavery to lynching to Jim Crow, Black people in this country have been brutalized and dehumanized for centuries,” Omar said in a press release. “The war on drugs, mass criminalization, and increasingly militarized police forces have led to the targeting, torture and murder of countless Americans, disproportionately black and brown.”

“The murder of George Floyd in my district is not a one-off event. We cannot fully right these wrongs until we admit we have a problem,” she said. “As the People’s House, the House of Representatives must acknowledge these historical injustices and call for a comprehensive solution. There are many steps on the path to justice, but we must begin to take them.”

Advocacy groups including the Leadership Conference on Civil and Human Rights, Drug Policy Alliance, Color of Change, ACLU chapters and NAACP Legal Defense and Educational Fund have endorsed the resolution.

This measure is being introduced one week after 44 members of the House sent a letter to the Justice Department, calling for an independent investigation into a fatal police shooting of Taylor.

In that letter, the legislators cited prior excessive force incidents with two of the three officers involved in Taylor’s shooting—as well as prior alleged improper enforcement by the department’s SWAT team in a botched marijuana raid—as evidence of the need for an investigation.

“For too long, Black and brown bodies have been profiled, surveilled, policed, lynched, choked, brutalized and murdered at the hands of police officers,” Pressley said about the new resolution. “We cannot allow these fatal injustices to go unchecked any longer. There can be no justice for George Floyd, Breonna Taylor, or any of the human beings who have been killed by law enforcement, for in a just world, they would still be alive. There must, however, be accountability.”

Federal Judge Gives Arkansas Marijuana Legalization Activists A Boost With Signature Gathering Ruling

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Joe Biden’s New Disability Plan Includes Boosting Medical Marijuana Research

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Presumptive Democratic presidential nominee Joe Biden’s new plan for people with disabilities involves promoting research into the therapeutic potential of marijuana.

The former vice president, who remains opposed to broader cannabis legalization, said he will “ensure people with disabilities have a voice in their government and are included in policy development and implementation.” That includes cannabis policy.

“A Biden Administration will prioritize the research needed to advance science-based federal policies related to the use of marijuana for medical conditions, chronic pain, and disabilities,” the plan, released on Thursday, states.

This is another example of Biden featuring marijuana issues in broader policy platforms. Earlier this month, he released a plan on racial justice that included his existing modest cannabis reform proposals for decriminalization and automatic expungements.

But while advocates agree with the need for those policy changes, they’ve remained disappointed about Biden’s ongoing opposition to adult-use legalization—something they argue should go hand-in-hand with the social justice principles he’s touted.

The presumptive nominee has argued that more research needs to be done on the potential risks and benefits of marijuana before he’s be open to legalization. In a recent interview, a host pushed back and said, anecdotally, there have been decades of research given that millions of people consume cannabis.

Biden agreed and said he knows “a lot of weed smokers” but, in agreeing to that premise, he seemed to signal the people he knows who consume marijuana have demonstrated the need to maintain prohibition.

While he’s given no indication that he’s willing to embrace legalization ahead of the November election, some are holding out hope that a criminal justice task force he formed with former rival Sen. Bernie Sanders (I-VT) will push him in that direction. Most of the members of that group support legalization.

The former vice president does support legalizing medical marijuana, rescheduling cannabis under federal law, decriminalizing the plant, providing for automatic expungements and allowing states to set their own laws.

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Federal Judge Gives Arkansas Marijuana Legalization Activists A Boost With Signature Gathering Ruling

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Activists behind a marijuana legalization initiative in Arkansas are seeing glimmers of hope that they will be able to qualify for the November ballot despite serious setbacks caused by the coronavirus pandemic.

A federal judge ruled on Monday that the secretary of state must accept signatures that were not collected in-person or notarized, as has been required by existing policy, because of excessive burdens that imposes on campaigns amid the health crisis. Legalization advocates say the temporary injunction, which comes before a final ruling, gives them confidence their measure can qualify ahead of a July 3 deadline to submit signatures.

Now people can download, print and mail in signed petitions—significantly bolstering the chances the legal cannabis campaign can make up for the petitioning deficit created by stay-at-home orders and social distancing requirements enacted due to the COVID-19 outbreak.

In the April lawsuit that brought about the federal injunction (which was not filed by legalization activists but by another initiative campaign), plaintiffs also made the case that full-scale electronic signature gathering should be permitted. U.S. District Judge P. K. Holmes empathized with that request in his order, noting that in many scenarios outside the ballot process, officials have recognized the validity of digitally signed documents—including in legal proceedings he oversees.

“It is not that electronic signatures cannot similarly be determined to be genuine. In fact, electronic signatures are commonplace and accepted for all manner of official business, and not only by the State, but by this Court,” he said. “Counsel for Plaintiffs and the Secretary of State electronically signed the briefing on this very motion, and the Court has electronically signed this opinion and the order.”

However, the judge said there must be a balance that takes into account the state’s interest in ensuring the validity of signatures and so he’s doubtful the final ruling will provide for digital signatures.

In any case, the court’s temporary injunction bodes well for the marijuana reform campaign, Arkansans for Cannabis Reform, which says it was on the path to qualifying before in-person signature gathering was suspended. Melissa Fults, executive director of the group, told Marijuana Moment in a phone interview on Wednesday that she’s confident the new policies will help the initiative get placed before voters.

“I am still confident. We’re going to give a hard push these next four-and-a-half weeks—hoping and praying that we get signatures and get them turned in and get on the ballot,” she said. “And I think it’ll pass once it gets on the ballot.”

Arkansas voters approved a medical cannabis ballot measure in 2016.

As the state begins the process of reopening, Fults said the campaign will also be engaging in limited in-person collection with enhanced safety mechanisms in place, as well as “drive by” gathering for people to sign the initiative from their vehicles.

In order to make the ballot, the group needs to submit about 90,000 valid signatures from registered voters by July 3. Fults said they’ve collected roughly 20,000 so far, and so these last five weeks will prove critical.

Under the proposal, adults 21 and older would be able to purchase and possess up to four ounces of cannabis flower and grow up to six plants and six seedings.

A minimum of one dispensary must be licensed per county, and there must be at least 30 shops per congressional district.

Tax revenue from marijuana sales would first go toward implementation. After that, 60 percent would be used to fund public pre-K and after school programs and 40 percent would fund the operations of the University of Arkansas for Medical Sciences.

Another campaign that was working to put cannabis legalization on the state’s ballot told the Arkansas Democrat Gazette on Tuesday that it is ending its effort for the year and will shift its focus to 2022. An Arkansas True Grass spokesperson said “we weren’t able to do any of our spring events” because of the virus, leaving them without an opportunity to qualify.

Here’s a status update on other drug policy reform efforts throughout the country: 

Activists in Montana and Nebraska have resumed signature gathering with new safety measures in place for campaigns to legalize adult-use marijuana and medical cannabis, respectively.

In Arizona, the organizers of a legalization effort asked the state Supreme Court to instruct the secretary of state to allow people to sign cannabis petitions digitally using an existing electronic system that is currently reserved for individual candidates seeking public office. That request was denied but in March the campaign expressed optimism that they had amassed enough signatures to qualify anyway.

Separate Oregon campaigns to decriminalize drug possession while significantly expanding substance misuse treatment and to legalize psilocybin mushrooms for therapeutic purposes recently submitted more than enough raw signatures to qualify for ballot access, though they must still be verified.

Activists in Washington State are continuing to work on a drug decriminalization and treatment measure.

Washington, D.C. activists behind a psychedelics decriminalization campaign are more confident that they will be able to make the ballot after the District Council voted in favor of a series of changes to signature gathering protocol.

A federal judge recently ordered Ohio officials to accept electronic signature submissions to place local marijuana decriminalization measures on the ballot—a decision that could potentially have positive implications for a statewide legalization campaign in the works.

California activists had hoped to get a measure to legalize psilocybin on the state’s November ballot, but the campaign stalled out amid the coronavirus pandemic.

A California campaign seeking to amend the state’s cannabis law asked for a digital petitioning option, but state officials haven’t signed on.

A campaign to legalize cannabis in Missouri officially gave up its effort for 2020 due to signature collection being virtually impossible in the face of social distancing measures.

North Dakota activists said they plan to continue campaign activities for a marijuana legalization initiative, but it’s more likely that they will seek qualification for the 2022 ballot.

Idaho medical cannabis activists announced that they are suspending their ballot campaign, though they are still “focusing on distributing petitions through online download at IdahoCann.co and encouraging every volunteer who has downloaded a petition to get them turned in to their county clerk’s office by mail, regardless of how many signatures they have collected.”

Prior to the COVID-19 outbreak and stay-at-home mandates, measures to legalize marijuana for medical and recreational purposes qualified for South Dakota’s November ballot.

The New Jersey legislature approved putting a cannabis legalization referendum before voters as well.

And in Mississippi, activists gathered enough signatures to qualify a medical cannabis legalization initiative for the ballot—though lawmakers also approved a competing (and from advocates’ standpoint, less desirable) medical marijuana proposal that will appear alongside the campaign-backed initiative.

Read the federal judge’s order on Arkansas signature gathering below: 

20-5070 Miller Et Al v. Thu… by Marijuana Moment on Scribd

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