Marijuana – Should be legalized!

16 05 2011

Cannabis, also known as marijuana, among many other names, refers to any number of preparations of the Cannabis Plant  intended for use as a psychoactive drug or for medicinal purposes.  Marijuana is being used by kids, teenagers and adults in today’s society. Apparently there is a great demand for this product, yet it is not legalized. There were three million Canadians who used marijuana in 2002, according to Statistics Canada. That’s about 12 per cent of the population older than 15, up from seven per cent in 1989. The Canadian Medical Association estimates that about 1.5 million Canadians smoke marijuana recreationally. Taking a look at these statistics one can just imagine how much revenue Canada’s government has lost due to the illegalization of marijuana.

There sure is a failure in the market for marijuana. People who don’t get it use different and illegal ways to get marijuana. By illegal ways I’m referring to the black market. In this situation we can see the concept of price floor where there is not enough supply and the demand is greater than supply. Consumers in this case use other ways to get what they want. So this has created a black market in Canada for marijuana. People buy marijuana from the black market where products are not taxed due to which the government looses a lot of money.  The government is always trying to catch these people because they loose out on taxes that people are suppose to pay. But then again why not just legalize marijuana if you want taxes?

A study estimates that the average price of 0.5 grams (a unit) of marijuana sold for $8.60 on the street, while its cost of production was only $1.70. It is true that Increased marijuana use can have ill effects on the health of the population but the increased sales bring in more revenue for the government. However, if legalized, governments can control how much marijuana is consumed by increasing or decreasing the taxes on the product. There is a limit to this, however, as setting taxes too high will cause marijuana growers to sell on the black market to avoid excessive taxation.

Just like cigarettes smoking marijuana has some negative externalities as well. The smoke sure does destroy not only your but other people’s health as well. There are many negative effects of marijuana. The short-term effects of marijuana include:

  • Distorted perception (sights, sounds, time, touch)
  • Problems with memory and learning
  • Loss of coordination
  • Trouble with thinking and problem solving
  • Increased heart rate, reduced blood pressure

Sometimes marijuana use can also produce anxiety, fear, distrust, or panic.

Although marijuana has all these effects, so does smoking cigarettes and drinking alcohol. If the government can charge taxes on cigarettes and alcohol then they should do the same for marijuana.

In conclusion, every drug has its own effects on the consumer and the society.  I think marijuana should definitely be treated like alcohol and tobacco in terms of taxation. I’m sure the government can control the consumption of marijuana by implying reasonable taxes. They should use the command and control policy where there are laws imposed on certain things. This is something they should think about.  I think marijuana should be legalized. The government is loosing a lot of money by not legalizing marijuana in fact they are loosing billions of dollars. There should be laws against the consumption of marijuana. It should be treated the same way as alcohol and tobacco. It should be taxed. This way the government will earn vast amount of revenue and people will be happy.

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2 responses

17 06 2011
Weed

Do you think marijuana should be legalized?

19 06 2011
lokhineconomics

^lolol @ Weed… It states explicitly in his blog post that he thinks it should be legalized. Economically in any case. I think you did a good job in presenting the problems with Marijuana and what the government is losing out. However, I don’t believe that the government is chasing people who buy things on the black market for taxes. That’s more of a moral thing. Not to mention, its illegal. I would also like to point out that many of those side effects you listed have not been proven or actually disproved, and that it is actually in terms of externalities, less negative than cigarettes or alcohol.

Still very well written blog post!

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