Economics of marijuana legalization : Alice Wo's Blog

Having moved to BC, I’ve witnessed the predominance of marijuana in the pop-culture scene. The topic is controversial and often receives strong opinions from supporters and dissenters in regards to health concerns. Basically, it is viewed more as an ethics issue, and perhaps it would be interesting to investigate the financial and economic implications of legalizing marijuana.

I did some digging and found a petition started by economists in favor of legalization. The report supporting this document states that $7.7 billion per year would be saved from all the government spending on prohibition efforts. If the drug were taxed like alcohol and tobacco, the government could receive $5.3 billion in tax revenues.

The finances of legalizing weed

The economists that supported this notion probably shared the same opinion as Milton Friedman. His view, as always, is that people should be free to do as they please and the consequences would be fair since only they could be held responsible. In response to Tina’s blog post against legalization, the markets for alcohol and tobacco are relatively unregulated but are proven to be more harmful socially and health-wise. Accessibility would increase, which would initially cause a spike in demand, but the market has a way of regulating itself and reaching equilibrium.