Treating marijuana as a legally regulated commodity would yield some $17.4 billion dollars annually in cost savings and new tax revenue, according to an economic report published yesterday by the CATO Institute think tank in Washington, DC.
The report, entitled “The Budgetary Impact of Ending Drug Prohibition,” estimates that taxing the commercial sale of marijuana in a manner similar to alcohol would generate some $8.7 billion in annual revenue. The report further estimates that abolishing marijuana prohibition would additionally yield approximately $9 billion in annual law enforcement savings. Full text of the entire report is available for download here.
A previous 2005 study commissioned by NORML estimated that marijuana law enforcement cost taxpayers some $7.6 billion per year.
A separate California statewide analysis published in 2009 by the state Board of Equalization and Taxation estimated that imposing retail taxes on the commercial sale of cannabis in California would yield approximately $1.4 billion in yearly revenue.
An op/ed in favor of legalization by the CATO study’s co-author, Jeffrey Miron of Harvard University, appears in today’s Los Angeles Times here.