What Happened?
A recent article in the NYTimes.com profiles the state of California and surprising results from its 17-year effort to legalize medical marijuana. New studies of that state’s program predict lower alcohol use by younger people in new Washington and Colorado state roll-outs, with an increase expected in marijuana use. Two economists use CA data to show positive results from that behavioral change.
The Goal
In 1996, the state passed the Compassionate Use Act, which removed criminal penalties for using, possessing and cultivating medical marijuana. Initially, use of medical marijuana was a means of treating glaucoma, cancer and other medical needs. As time passed, doctors have been willing to write prescriptions for people with more common ailments such as back pain, sleeplessness and headaches. The result is that in some parts of the state, marijuana is as widely used as alcohol.
Studies
A recent study by two economics professors who surveyed the California program, details the following points:
- Cannabis use seems to be a substitution for alcohol use
- A reduction in traffic fatalities is seen due to lower risk taking, slower driving with people under the influence of marijuana vs. alcohol
- No increase has been seen in high school students as dispensaries became more widespread
- legalization of marijuana increases both the supply and demand of marijuana
- legalization leads to a decrease in the price of high-quality product
- when given the option of alcohol or marijuana, a reduction in heavy drinking was seen among 18-29 old people
- Due to a link between alcohol abuse and violent crime, the authors expect reductions in violent crime
Regulation
A key to success for cities in California is strict regulations from the onset of legalization. Dictating the number of dispensaries, how they operate, and growing guidelines can play a major role in success. Typically, San Francisco, Oakland and Berkeley are all viewed as having solid cultivation, dispensing, taxing and licensing methods, allowing for successful use and very few crime or public safety issues.
Finding the right balance in regulation is critical. For instance, if, as a municipality, you were considering banning dispensaries, consider how you will regulate delivery services.
Consumers
Ultimately, as in any good government program, the consumer is the ultimate winner. In the case of California’s initiative, potency of marijuana has increased while prices have tended to decrease. Further, an array of new products have been introduced into the market. Edible foods, ointments and oils are all available to medical marijuana patients, rather than just smokable versions of the plant.
Economic Development
In Oakland, one of the state’s largest dispensaries contributes $1.2M in sales taxes for the products it sells. But its not just the end product that generates new revenue. There are now laboratories, growing equipment stores, insurance companies, lawyers and software developers who all specialize in the medical marijuana industry.
Policing
An initial concern for municipalities who imposed local taxes on consumers was that users would instead seek out underground retailers (drug dealers) to find non-taxable product. Instead, it seems the opposite has happened, chiefly due to the safety with buying from a “retailer” and the opportunity to get “known” high quality and reliable product.
While the International Association of Chiefs of Police and many other police organizations still have many concerns about legalizing marijuana, citing drug dependence, use of other drugs and the message it sends to children, a recent article in Rolling Stone details many law enforcement veterans who are ready for a change in the drug war.