Economics of Cannabis Legalization (1994) Detailed Analysis of the Benefits of Ending Cannabis Prohibition

1. A 1929-30 Parke-Davis catalog advertised a 4 oz. bottle of tincture of cannabis of 20% potency for $5, which works out to the equivalent of $5 per pound at 5% potency. Another Squibb catalog of uncertain date lists powdered cannabis at $2.50/lb: from the collection of Dr. Tod Mikuriya.

2. Peter Reuter, cited in Mark Kleiman, Marijuana: Costs of Abuse, Costs of Control, Greenwood Press, N.Y. 1989: p 38.

3. Tobacco Institute, The Tax Burden On Tobacco: Historical Compilation, Washington DC 1992.

4. A.C.M. Jansen, Cannabis in Amsterdam: A Geography of Hashish and Marihuana, desktop publishing: Dick Coutinho, Postbus 10, 1399 ZG Muiderberg, Netherlands, 1991: p. 67.

5. A similar price range may be found in the state of South Australia, where the cultivation of fewer than 10 plants has been decriminalized to a minor misdemeanor punishable by a fine. There cannabis is sold on the black market for about $100 - $150 per ounce, about one-half to one-third the price elsewhere in Australia.

6. Mark Kleiman, Against Excess: Drug Policy for Results, Basic Books, N.Y. 1992.

7. Report of the British Indian Hemp Drugs Commission, 1893-4, Simla, India (7 Volumes).

8. In Bombay, the commission heard testimony that "the ordinary liquor consumer pays twice as much for what he wants as the ordinary ganja consumer would, or three times as much as the ordinary bhang drinker. I think the rates should be equalized." (Report of the British Indian Hemp Drugs Commission, 1893-4,, Vol. 1, Chap. XVI, p. 327). Even in Bengal, where taxes were higher, the Commission found that "the average allowance of liquor to the habitual consumer was "much higher than in the case of ganja." It concluded, ÒJudged by this test, there is room even in Bengal for increased taxation" (ibid., p. 311).

9. Lester Grinspoon, "The Harmfulness Tax: A Proposal for Regulation and Taxation of Drugs," North Carolina Journal of International Law & Commercial Regulation 15#3: 505-10 (Fall 1990)

10. 20th Annual Report of the Research Advisory Panel Report, 1989 Commentary Section: available from Dr. Frederick Meyers, Univ. of California, San Francisco.

11. Dr. Donald Tashkin, "Is Frequent Marijuana Smoking Harmful to Health?" Western Journal of Medicine 158#6: 635-637 (June 1993).

12. Michael Polen, Stephen Sidney, Irene Tekawa, Marianne Sadler and Gary Friedman, "Health Care Use by Frequent Marijuana Smokers Who Do Not Smoke Tobacco," Western Journal of Medicine 158#6: 596-601 (June 1993).

13. Willard Manning, Emmett Keeler, Joseph Newhouse, Elizabeth Sloss , and Jeffrey Wasserman, "The Taxes of Sin: Do Smokers and Drinkers Pay Their Way?" JAMA 261:1604-9 (March 17, 1989).

14. TC Wu, D Tashkin, B Djahed and JE Rose, "Pulmonary hazards of smoking marijuana as compared with tobacco," New England Journal of Medicine 318: 347-51 (1988).

15. Peter Passell, "Less Marijuana, More Alcohol?" New York Times, June 17, 1992 p. C2.

16. D. Gieringer, "Marijuana, Driving, and Accident Safety," Journal of Psychoactive Drugs 20 (1): 93-102 (Jan-Mar 1988).

17. Dr. Carl Soderstrom et al., "Marijuana and Accidents: Use Among 1023 Trauma Patients," Archives of Surgery , 123: 733-37 (June 1988). Conceivably, alcohol may be a greater risk factor in traffic accidents because it promotes speeding, whereas pot smoking-drivers tend to slow down. On the other hand, marijuana may be more involved in other kinds of accidents where forgetfulness or loss of concentration are a risk factor.

18. In Bengal in 1892-3, excise taxes and licensing fees on ganja totaled more than 10 rupees per ser (i.e., kilo), over one-half the average retail price of 20 rupees. This appears to have represented a 10-fold increase over the free-market price of cannabis, which sold for as little as 2 rupees in other provinces where it was lightly taxed. Report of the British Indian Hemp Drugs Commission, Vol. 1, Ch. XV p.295 and Ch. XVI pp. 311-2, p.321. The U.S. cigarette tax has historically accounted for about 25% - 50% of retail prices, according to the Tobacco Institute (op. cit.).

19. Among 18-25 year-olds, four-sevenths of daily users reported being multiple daily users, according to NIDA in its National Survey of Drug Abuse: Main Findings 1982.

20. M. Kleiman, Marijuana: Costs of Abuse, Costs of Control, pp. 38-9.

21. Peter Reuter, "Prevalence Estimation and Policy Formulation," Journal of Drug Issues, Vol 23, No. 2, 1993: p 173.

22. A.C.M. Jansen, op. cit., p. 59.

23. Report of the Indian Hemp Drugs Commission, Vol. 1, Chap. XVI, p. 312.

24. This assumes 1000 joints to the kilo, or 3% potency for Indian ganja.

25. Jansen, op. cit. p. 64

26. "Drug Use in California, 1989-1990," California Legislative Analyst's Office, Sacramento.