Maybe Legalizing Marijuana Wasn’t Such a Good Idea

Depending on where you live and how you want to use it, marijuana is fairly easy to obtain in the United States. Initially, medical marijuana, which has legitimate palliative uses, was widely accepted.

Over time, however, the requirements for proof of medical use have weakened, leading to de facto legalization in many regions. Today, 24 states plus the District of Columbia, representing half the country’s population, have approved legalization of recreational use.

And yet the key question remains unanswered: is this really a good idea?

Despite the political popularity of marijuana legalization, many people I know resent its practical implications. In many places, both urban and suburban, the smell of marijuana in the air is a common sight. In the meantime, cannabis has become much more potent, with stronger effects on users than it was 30 years ago.

There is, however, a more systematic way to approach this question. What do the numbers reveal? A new study from the Federal Reserve Bank of Kansas City offers some answers.

Let’s start with the good news, or what seems like good news. After legalization, states that legalized marijuana saw revenues increase by about 3 percent, housing prices increase by 6 percent, and populations increase by about 2 percent. The researchers used appropriate statistical controls, but there are questions about causality and correlation. At a minimum, it seems very likely that state GDP increased: a state with legal marijuana can sell it, including to users in other states. Selling marijuana is a new business, and like any new business, it stimulates the local economy.

But it’s not that simple. GDP and GDP per capita measures are usually good indicators of human well-being, but not always. Cigarette sales, for example, are not as beneficial to citizens as the initial increase in GDP might suggest, because nicotine is harmful to most people.

Selling marijuana poses some of the same problems. Many people want to smoke it, but it’s not good for everyone.

Marijuana advocates claim that it is less addictive than alcohol and healthier than cigarettes. They point out that it can also be a lot of fun and socially bonding. Even if all of this is true (and I have no reason to believe it isn’t), the overall numbers suggest very real concerns.

In states where marijuana is legal, self-reported use increased by 28 percent. At the same time, substance use disorders increased by 17 percent. The number of chronically homeless people increased by 35 percent, a possible sign that marijuana use leads to a downward spiral of financial loss, and perhaps job loss, for many users. Arrests increased by 13 percent, even though reported crimes did not increase.

This combination of results is difficult to interpret. Perhaps part of the increase is due to governments investing more resources in policing. It is also true that the numbers do not quantify the pleasure felt by responsible marijuana smokers.

That said, these results aren’t exactly a good advertisement for the legalization experiments. They stand in stark contrast to what legalization advocates have promised: an end to the black market, safer marijuana, and a better-protected user population. And if I may think less like an economist for a moment, I’ll admit that I’m not very happy about a social practice that lowers effective IQ. Nobody smokes weed to score higher on aptitude tests.