ECON 1010

Microeconomics
Paper
Noelle Cranmer
ECON 1010

The war on the legalization of marijuana does not look like it will end anytime
soon. There are so many arguments as to its benefits that it makes it hard to know what
to think about it. How are we to legalize something that is illegal to grow, sell or have on
your person? Are there real health benefits to this innocuous plant? Are there real
monetary benefits associated with it? Or is the whole legalization debate just a bunch of
smoke going up our backsides?
The use of marijuana as a medicine has been around for thousands of years. In
ancient China, the Pen ts'ao, a compendium of herbal medicines, listed marijuana as
a treatment for constipation, gout, malaria, rheumatism, and menstrual problems. In
Ayurvedic medicine, marijuana was used to manage pain, act as an aid in helping you
sleep, promote an appetite and help with digestion. (1) In more recent times, I have
heard people say that they use it to manage certain chronic conditions such as
generalized anxiety disorders; migraine headaches; fibromyalgia and glaucoma.
After reading the virtual laundry list of conditions that are or could be improved by
the usage of marijuana, why is there still a debate on whether or not it should be made
legal? Therein lies the twenty-million-dollar question. Co-author Jonathan P. Caulkins of
the book entitled, Marijuana Legalization: What Everyone Needs to Know had this to
say, In most states, current drug laws criminalize the behavior of users as well as
dealers: simply possessing marijuana constitutes a crime. (2) Even in those states that
have made it legal to possess marijuana, or to purchase it through dispensaries, the
federal government has not followed suit1.
1 As reported in USA Today on August 11, 2016, the Drug Enforcement Agency
(DEA) announced that they will keep marijuana illegal for any purpose. (3)

In states that have yet to pass legislation on the legalization of marijuana, such
as Utah, just having it on you is a misdemeanor offense. Are people willing to go
through the humiliation of being arrested and face the possibility of going to court
because they have marijuana? If societal stigmas2 are still very much part of the
legalization debate, what other benefits are there for doing it?
Money of course! And why not sell your green and receive green for it! What is
the cost benefit of growing plants for yourself, versus a full-scale production? Is it more
cost effective to grow your own plants in your basement, or to grow plants on an acre of
land? There are associated risks with either scenario.
Historically marijuana has been a plant that has been grown indoors. Some of
the obvious issues are security (from individuals taking your plants and because it still is
a quasi-legal activity), animals that may try to eat your plants and any other factor such
as bugs3 or birds. But did you know that in order to grow marijuana plants in your
basement, closet, etc., it will require some fairly heavy duty equipment which in turn will
require quite a bit of electricity to keep your plants at their optimum?
Evan Dashevsky, a writer for PC magazine, wrote an article in 2014 about the
energy consumption of pot growers. He states:

2 When I was a teenager attending Highland High school, we had what were called,
The North Doors. This was where the smokers and stoners would hang out. Even
being caught near the doors implied that you were part of the smoker/stoner group.
Immature to be sure, but also a powerful motivator to not be caught there.
3 Believe it or not, aphids, spiders, slugs, crickets and weevils will happily munch on
your cannabis plants. (4)

According to a 2012 report4 from sustainability researcher and consultant

Evan Mills, Cannabis production (legally sanctioned and otherwise) accounted
for 1 percent of all national electricity consumption. To put that number into
context: marijuana grow houses used the same amount of electricity as 2 million
homes and equaled the carbon output of 3 million cars. Energy costs for indoor
production cost $6 billion a yearsix times the power needs of the entire U.S.
pharmaceutical industry. A single marijuana grow house has the same power
needs of a similarly sized, energy greedy data center. (5)
Now, I suppose if you grew marijuana with the intent of growing it only for
yourself, the energy consumption would not be as severe. You would not see many
profits if you just grew a few plants. But perhaps you do not mind because you have no
intention of selling it.
With regards to other marijuana growers however, especially those that are in
states that have not legalized marijuana, the cost of producing it indoors is
astronomical. You most likely would need financial backers to stay out of the red. Of
course, you could grow it outside, but then if your state is not one that has made it legal,
you may open yourself up to even more problems.
When examining states that have legalized marijuana (medical and recreational),
it is apparent that much good can be done from the proceeds that selling generates.
The state is able to profit from the taxes on the sales of marijuana. For example, when
assessing the state taxes that are collected from sales of marijuana in states such as
4 The link that goes to Evan Mills energy report: http://evan-mills.com/energyassociates/Indoor.html

Colorado, the numbers are quite impressive to say the least. Colorado has reported the
combined state taxes for medical marijuana and retail marijuana for the month of
September 2016 to be in the amount of $3,584,480.00! (6) Three million dollars in taxes
for just one month! 5
Instead of states putting ineffective and costly measures on the war against
drugs, states should start thinking about ways to regulate instead. Certain procedures
would have to be put into place before it could become a reality though. For example,
dispensaries are not permitted to sell in excess of blank number of grams; the selling
of marijuana to minors is prohibited; all transactions for marijuana must be completed
no later than 6:00pm the sale of marijuana after 6:00 pm is prohibited, etc. If Colorado
is to serve as a model, I think that we can all agree that they have more than returned
on their investment of time, resources and money.
If states legalized marijuana and began to treat it like alcohol or cigarettes, and
included the procedures mentioned above, then the opportunity to generate tremendous
revenue would be possible. Court dockets may be a tad bit lighter if misdemeanor pot
charges were not added to it. Tax dollars that are spent on jails and prisons for
individuals that are housed there for possession could be greatly reduced. The money
that is generated from taxes could go to other critical needs programs like domestic
violence shelters, low income schools, roads, and so many other worthy programs that
never seem to have the funds to do real good in the world.
5 There is a fascinating show called Drugs, Inc. on the National Geographic Channel.
There was an episode not so long ago where it showed three friends in Colorado
that decided to go into the marijuana dispensary/grow house industry. One of the
friends said that he had to rethink his entire business model when at the end of the
day, they loaded up multiply 30-gallon garbage sacks with cold hard cash.

Works Cited
(1)

Iversen, Leslie L. The Science of Marijuana. Oxford: Oxford

University Press, 2000. eBook Collection (EBSCOhost)

(2) Caulkins, Jonathan P., Angela Hawken, Beau Kilmer, and Mark
Kleiman. Marijuana Legalization: What Everyone Needs to Know. Oxford: Oxford
University Press, 2012. Print.
(3) Leinwand-Leger, Donna. "Marijuana to Remain Illegal under Federal Law, DEA
Says." USA Today. Gannett Satellite Information Network, Sept. 2016. Web.
(4) McPartland, J.M. Cannabis Pests. Journal of the International Hemp
Association 3(2): 49, 52-55, 1996
(5) Dashevsky, Evan. "Marijuana Production: The Next Great Energy Hog?" PC
Magazine. Ziff Davis, 3 Sept. 2014. Web.
(6) Marijuana Tax Data." Marijuana Tax Data | Department of Revenue. The Office of
Research and Analysis, State of Colorado.
Web.https://www.colorado.gov/pacific/revenue/colorado-marijuana-tax-data