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The Journal of the Trachtenberg School of Public Policy and Public Administration at The George Washington University


Marijuana legalization has gained traction in recent years in the United States with a variety of bipartisan supporters. Primary benefits often cited include savings in enforcement and incarceration costs, additional tax revenue and jobs, release and expungement for those incarcerated, and lowered racial and economic disproportionality in the U.S. criminal justice system. Critics often bring up health costs, increases in impaired driving, harmful effects on adolescent brain development, and greater attendant crime as possible drawbacks. This article examines the potential costs and benefits of federal marijuana legalization under the Senate version of the Marijuana Justice Act of 2017 (S. 1689) introduced in the 115th Congress, assuming 30 additional states legalize recreational marijuana and set up a regulated commercial retail system. Using an analysis that operates under a net present value over 1,000 years and reflects 2017 dollar amounts, the results are overwhelming: these combined efforts could lead to nationwide lifetime net benefits of over $168 billion, with approximately $50 billion in the first year alone, and $17 billion in tax revenue that federal and state governments could receive annually. This article also runs best- and worst-case scenario sensitivity analyses in a postenactment universe—best being one in which all 50 states legalize recreational marijuana and worst being one in which no additional states legalize. Even the worst-case scenario would lead to lifetime net benefits of over $77 billion ($4 billion/year) and, in the best case, over $1.4 trillion ($75 billion/year). For all scenarios, this analysis accounts for the states that have legalized recreational marijuana as of November 5, 2018: Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Vermont, and Washington.

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