How much of a revenue boost can state and local governments expect to see from legalizing marijuana? Does marijuana legalization create expensive new problems for states, cities, and towns to deal with?
States Where Marijuana Is Legal for Recreational Use
These questions weigh heavily on the minds of public officials and regular citizens alike as more states seriously consider allowing adults to buy, sell, and use marijuana. The experience of communities in the Pacific Northwest provides some insight into what happens when states open legal markets for the plant.
Voters in Washington legalized marijuana in 2012, and Oregon followed suit in 2014, and both states have brought in substantial new tax revenues. In the fiscal year that ended in June, 2018, Oregon collected in $82.2 million in taxes on legal marijuana sales, putting the state ahead of its economists’ predictions. Washington collected $262 million from marijuana excise taxes in the same period – $100 million more than the state expected, but considerably less than the record $319 million it collected in 2017.
Marijuana Revenue vs. Marijuana Costs
Has legalization created new problems whose costs exceed those revenues?
Before legalization, many in Washington and Oregon worried that the proliferation of dispensaries would lead to an increase in marijuana use by young people, potentially creating new problems for schools and police departments. So far, that doesn’t seem to be the case. A 2018 study by the RAND Corporation “found that marijuana use dropped a small, but statistically significant amount among eighth graders and 10th graders in Washington following legalization, while no change was observed among 12th graders.”
Legalization has, however, resulted in increased adult marijuana use in both Oregon and Washington.
Critics of legalization argue that an increased adult marijuana use leads to decreased productivity in the workplace. Current research suggest that this is a complex issue. A 2017 study found that states that legalized marijuana saw an average 1.3% decrease in productivity the following year. However, that decrease was confined to one sector – construction – and leveled off in subsequent years. A 2014 analysis of national data suggests that apparent decreases in income and employment associated with marijuana use disappear when the data are adjusted to take into account education level, gender, race, mental health status, and other similar variables.
Cannabis Crime?
What about increased in crime? In a January, 2019 article in the New Yorker, journalist, Malcom Gladwell, suggested that marijuana legalization may have led to an increase in murders and assaults in Washington. Critics quickly pointed out that the increases in murder and assault rates in Washington matched complex national trends, and that Washington has a much lower overall violent crime rate than the national average.
The jury is out on the question of whether legalizing marijuana causes more deadly traffic accidents. One study found in increase in deadly car accidents in Washington and Colorado in the first year after legalization, but a longer term study that tried to correct for confounding factors found that legalization “did not lead to discernible increases in marijuana fatalities.”
Legal Weed and Public Health
Emergency rooms and poison control centers in both Washington and Oregon report an increase in marijuana-related visits and calls. Anxiety seems to be the most common complaint bringing marijuana users to the emergency room. The change in marijuana’s legal status may be making people who feel too high more likely to reach out to doctors. Regardless of the reason for the increase, patients, taxpayers, and insurance companies pay the price.
The coming years will reveal more of the long-term positive and negative health, social, and economic effects of marijuana legalization in Washington and Oregon. Lawmakers around the country can benefit from looking at the evidence emerging from these states’ living laboratories.
– Seán O’Donoghue