Legalizing Marijuana I
As the discussion about legalizing marijuana heats up, many express concern that legalization would open the floodgates, and the number of users and of related problems would greatly increase. Analysis of the economic, psychological, and social factors suggests these concerns are largely unfounded. A good estimate is that while casual and social use might increase significantly, problematic use – that causing harm to the user or others – and habitual or dependent use will increase little, if they increase at all.
Basic economics shows that when the price of a commodity decreases, demand increases; and if supply is able to increase to meet that demand, consumption will increase. The price of legalized marijuana will probably drop dramatically: possibly by two orders of magnitude. A recent report from Czechoslovakia shows legal marijuana there at a retail price of $0.85 per ounce, compared to the $200 – 400 per ounce common in the United States.
But the price to the purchaser includes not only the monetary cost to the purchaser, but also the personal utilities and disutilities accruing to him. Most of the utilities accruing to the purchaser of an illegal drug would reverse polarity if the drug were legalized. Those utilities might also change in value or intensity.
Three major disincentives, or disutilities, face the consumer considering purchasing illegal marijuana. They are the risk of arrest and conviction and the disabilities arising from those, the reluctance of most people to break the law, and the disapproval of others for one doing a bad or immoral act.
The costs of being convicted are very high. Jail sentences can be as high as a year for possession of a small amount. If convicted, one can be denied educational benefits and have difficulty finding a job or place to live, a disability that can be life-long. Many, even if not ultimately convicted, are unable to make bail and remain in jail pending trial, which may also result in lost jobs or dwellings.
But the true value of a cost occurring in the future is determined by the expectation value of that cost The expectation value of a risk is the amount available if the risk occurs multiplied by its probability. Today, the probability of being arrested and convicted for possessing marijuana is incredibly small. SAMHSA estimates about 15 million monthly users. Between 700,000 and 800,000 are arrested for marijuana possession each year, or about 75,000 per month. The probability of being arrested, then, is 75,000/15,000,000, or 1 in 200 (these numbers are only approximate, but are close enough to be valid); a risk most people would probably ignore.
The social and psychological factors increasing the cost of illegal marijuana are primarily the reluctance of most people to break the law and the fear of social and peer disapproval of someone doing something that is “bad”, or socially disapproved or immoral. However, my many casual conversions with teenagers, college students, and youths in their twenties and thirties suggest that this group has, to a large extent, been treating marijuana and its users as if it were already legal and that definitely think it should be legalized. The attitudes of older people, while they have not changed nearly as much, seem to be trending in the same direction. These older people are not a major concern since they, for the most part, would not being new consumers of legal pot. I have not had opportunity to look for formal studies on these questions, but I am sure they exist.
Likewise, illegal marijuana has its own positive utilities, including the challenge of breaking the law, the attraction of the forbidden, and the frisson of rebellion. These, too, have been largely devalued as marijuana has become more accepted and commonplace.
The social and psychological factors contributing to the decision to purchase marijuana have been largely devalued, leaving only the monetary considerations. The users themselves must be examined to determine what effect a dramatic price drop would cause.
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Would all marijuana consumers be affected equally, or do differences exist among them?
Current medical thinking divides marijuana (or other drug) users in three categories. The “Diagnostic Statistical Manual (DSM-IV), the standard for diagnosing mental disorders, recognizes two conditions: substance abuse and substance dependency (it also recognizes the parallel alcohol abuse and alcohol dependency. By implication, then, a third category is created consisting of those users who are neither abusive nor dependent. Abuse (greatly simplified) is using the drug under conditions where the user knows that use might result in harm to himself or another. Dependency, likewise, is compulsively using the drug even if the user wants to quit or knows its use is harmful to him.
Historically, the percentage of users who become dependent is virtually constant for any drug. For the highly addictive drugs like tobacco and alcohol, that percentage is about fifteen. For the common addictive drugs like the opioids, stimulants, and benzodiazepines, it is around ten percent. For marijuana, it is well under ten per cent and may be as low as three.
Best evidence suggests that those likely to become dependent on drugs could be identified by the time they enter adolescence. Their propensity arises from a combination of genetic factors, psychological history, and current environmental pressures. Dr. Drew Pinsky, formerly head of a large in-patient addiction center of a large Los Angeles hospital, claims that all of his patients shared a history of physical or sexual abuse and came from dysfunctional families. These strong predetermining factors suggest the likelihood that a majority, if not most, of those susceptible to dependency are already getting drugs in the current illicit market.
Unfortunately, all of our somewhat reliable statistics on drug use come from times in which drug prohibition was in effect, making them somewhat uncertain when applied to a legal market. However, the roughly similar figures for legal alcohol and tobacco suggest that the ratios would be roughly the same. Caffeine statistics deviate from the others, but the extremely high percentage of the population using it skews the distribution so far as to make it unreliable as a predictor.
However, each drug seems to find a level of use at which that society finds compatible with its perceived harms. Caffeine is used by over eighty percent of the population. Alcohol is used by about two-thirds of Americans, significantly lower than its level of use at the time of the Revolution. In 1950, tobacco was used by a majority of adults, but that figure has now declined to just over twenty per cent and is still going down (tobacco is the greatest killer among the psychoactive drugs, with over 400,000 deaths each year attributable to it.). Non-medical use of opioids is about the same as it was in 1914, before they first came under regulation with the Harrison Act. Prof. Rasmussen claims that the level of use – legal and illegal combined – of the amphetamine-like drugs (amphetamine, methamphetamine, and Ritalin) today is approximately the same as it was in the 1960s, when it was one of the most widely prescribed and used drugs.
Marijuana seems to still be seeking its level. In 1937, the government claimed that less than 100,000 people used it; now SAMHSA claims that about 100,000,000 have tried it and over 15,000,000 use it at least once a month. Among very young users, it is more popular than tobacco.
Based on these considerations, an educated estimate would be that, if legalized, the regular users of marijuana might double or even triple, to around 45,000,000, or around fifteen per cent of the population. However, the number of dependent users would increase much less, probably not even doubling. A positive aspect of this increase is that some studies show that, as marijuana use increases, alcohol consumption decreases, lowering the number of alcohol-related diseases and deaths and decreasing drunk driving incidents and domestic violence. This change would be a welcome trade-off.
 See “The Price of Legalized Drugs”, posted here.
 I understand that a new edition, DSM-V is due in 2011 and that it may change the definitions of these disorders significantly.