Economic and Social Costs
October 27, 2023 - Outcomes associated with nonmedical cannabis legalization policy in Canada: taking stock at the 5-year mark. Legal adult use of cannabis was legislated in Canada in October 2018 (for many Provinces, minimum legal age is 18). With five years after policy implementation, the authors of this publication (Fischer et al., 2023) summarize available evidence on the public health and safety impacts of legalization.
The authors concluded that the “evidence suggests that outcomes related to health — such as the prevalence of cannabis use, cannabis-related emergency department visits and admissions to hospital and cannabis- impaired driving — have mostly increased or remained steady.” The authors stated that data on some important health indicators, such as the impact on youth development and on fetal development, were not available.
With regard to social impacts, substantial reductions in criminal arrests and charges related to cannabis use among both adults and youth were noted.
October 22, 2023 - Economic Benefits and Social Costs of Legalizing Recreational Marijuana. The authors of this cannabis legalization impact report (Brown et al., 2023) are members of the Federal Reserve Bank of Kansas City. The senior author, James P. Brown is the V.P. of this bank and is well-published in the peer reviewed economist literature.
The report analyzes the effects of legalizing recreational marijuana on state economic and social outcomes during the years 2000–2020. The analysis was based on a common statistical strategy used by economists to estimate relative impacts of economic gain and social or health costs (known as the “difference-in-differences estimation robust to staggered timing and heterogeneity of treatment” statistical approach).
The health/social impact measures were the following: marijuana and other substance use rates; several public health measures (e.g., homelessness, traffic accident fatalities, drug related deaths, substance abuse treatment admissions, and hospitalizations); and arrests and crimes.
The economic benefit measures were these: state tax revenues; and several economic measures (data on gross domestic product, income per capita, wages per capita, proprietors’ income per capita, labor force participation rate, unemployment rate, residential real estate, and population changes).
The authors concluded that there were “moderate economic gains” as indicated by these average increases: state income growth (by 3%), housing prices (by 6%), and population (by 2%). These gains were “accompanied by some social costs”. The most significant were these increases: substance use disorders (by 17%), chronic homelessness (by 35%), and arrests (by 13%).
A noteworthy concluding statement by the authors: “Although some of our estimates are noisy, our findings suggest that the economic benefits of legalization are broadly distributed, while the social costs may be more concentrated among individuals who use marijuana heavily.”
Comment by this reviewer (KCW): This report is worthy of considerable debate. I am not an economist but have heard talks by several over the years. One perspective to keep in mind when economic benefits are compared to social/health costs. It is necessarily an “apples vs oranges comparison”. Economic benefits can be monetized and tallied with generally reliable measures and procedures, whereas social/health costs are generally not amenable to comparable methods. How does one objectively judge a comparison between economic growth figures versus human/social costs and suffering?
The Legalization of Marijuana in Colorado: The Impact
Volume 6, September 2019
Report prepared by the Rocky Mountain High Intensity Drug Trafficking Area (HIDTA)
Economic and Social Costs of Legalized Marijuana
November 15, 2018
Study conducted by the Centennial Institute
The study found that for every one dollar in tax revenue from marijuana, the state spends $4.50 as a result of the effects of the consequences of legalization.