Has Colorado Gone to Pot?

Last week I had the chance to spend a few days in Denver while giving a talk as part of the Exploring Economic Freedom Lecture Series at the Metropolitan State University of Denver (you can find a link to the video of my lecture on police militarization here).

After landing at the airport I received several text messages from family and friends asking if I was “walking through smoke clouds,” enjoying the “mile HIGH city,” or “stepped off the plane with a contact high.” These messages, all referring to Colorado’s legalization of marijuana this past January, reflect a broader idea about impact of drug legalization. Indeed, legalized marijuana is gaining traction throughout the U.S. In yesterday’s election, voters in Oregon, Alaska, and Washington, D.C. voted to legalize recreational marijuana in various ways.

Opponents of drug legalization often argue that the legalization of drugs would lead to rampant drug use, increases in crime, and higher rates of overdose. In 2012, Douglas County Sheriff David Weaver stated if Colorado legalized marijuana,

I believe there will be many harmful consequences. Expect more crime, more kids using marijuana and pot for sale everywhere. I think our entire state will pay the price.

A large body of literature, however, counters these claims, illustrating why drug legalization is likely to decrease crime, decrease overdose deaths, and decrease the use of hard drugs like heroin and other opiates.

Colorado provides a unique opportunity for a natural case study. Here is a state in which recreational marijuana was (for all intents and purposes) illegal one day and legal the next. So, since legalizing marijuana, has Colorado gone to pot?

Based on personal observation, I saw a few marijuana dispensaries in downtown Denver, but they weren’t at all pervasive. I failed to observe any roving gangs of potheads blasting Bob Marley music, eating entire bags of potato chips, or discussing their vast collection of Cheech and Chong sequels. The city looks like a healthy economic hub with lots of restaurants, shops, and other commerce.

But what do the statistics look like?

First, Colorado’s pot sales have hit a new high (pardon the pun). In September, recreational marijuana sales exceeded those of medical marijuana. This implies that customers who previously bought products on the black market are now going through legal venues, buying products from legitimate vendors. While sales are much higher, it does not appear that the use of marijuana among teens has increased.

Second, crime rates have fallen. According to government sources the murder rate in Denver fell 42.1% in the first six months of legalization (this is compared to the same period the year before). Major crimes against property have fallen 11.5% and violent crime is down about 2%.

Third, the state of Colorado is making and saving money. As opposed to spending more resources to combat crimes involving marijuana, the Colorado Center on Law and Policy estimated the state would save between $12 million and $40 million as a result of legalization. As of June, the state collected some $4.7 million just in sales tax on marijuana. As of mid-July, the state boasted $25.3 million in taxes on pot. This number is expected to reach $60 to $70 million by the end of the fiscal year.

Opponents of broad drug legalization claim that such policies would mean increased crime, more drug addicts, a drain on state budgets, and more overdose deaths. The question of “how many addicts” and “how many deaths” is empirical. We can’t know beforehand how many addicts would exist in a world of legalized marijuana (or other drugs for that matter) or how many overdoses would occur every year. However, there is very good reason to believe that legalizing drugs would actually lower the likelihood of overdose. Such theories have seen empirical validation in a variety of studies, including recent research published by the Journal of the American Medical Association. The researchers found that overdose deaths in states with some form of legalized marijuana saw a 25% reduction in overdose deaths from other drugs.

What is the appropriate drug policy? It is important when analyzing programs to look at the facts. Does policy X achieve goals Y and Z? It may be the case that legalization works to combat issues like overdose and crime better than does outright prohibition. Without a doubt, current drug policies have largely failed to achieve their goals. When the DEA started its operations in 1973, they employed about 2,700 personnel with a budget of $74.9 million. By 2011, the DEA employed 10,000 people and maintained an annual budget of over $2 billion. Despite these efforts, overdose deaths, drug-related crime, and addiction rates have increased over the past 40 years.

It is clear that states are starting to consider the costs and benefits of other policies related to drugs. It’s high time the country as a whole does the same.


Abigail R. Hall is a Research Fellow at the Independent Institute and an Associate Professor of Economics at Sykes College of Business at the University of Tampa.
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