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by Dale Gieringer, Ph.D., Coordinator, California
NORML
Abstract:
Marijuana legalization offers an important advantage
over decriminalization in that it allows for legal distribution
and taxation of cannabis. In the absence of taxation, the free
market price of legal marijuana would be extremely low, on the
order of five to ten cents per joint. In terms of intoxicating
potential, a joint is equivalent to at least $1 or $2 worth of
alcohol, the price at which cannabis is currently sold in the
Netherlands. The easiest way to hold the price at this level under
legalization would be by an excise tax on commercial sales. An
examination of the external costs imposed by cannabis users on
the rest of society suggests that a "harmfulness tax"
of $.50 -$1 per joint is appropriate. It can be estimated that
excise taxes in this range would raise between $2.2 and $6.4 billion
per year. Altogether, legalization would save the taxpayers around
$8 - $16 billion, not counting the economic benefits of hemp agriculture
and other spinoff industries.
The Case for Legalization:
As drug war hysteria subsides it becomes increasingly
certain that there must be a serious re-examination of the laws
prohibiting marijuana. The decriminalization of soft drugs has
now emerged as an active political issue in Germany, Italy, Switzerland,
France and Australia. The policies being considered range from
"decriminalization," or repeal of criminal penalties
for private use and cultivation of cannabis, to full "legalization,"
in which cannabis is commercially sold like alcohol, tobacco and
other commodities.
Decriminalization has enjoyed impressive support
from a succession of official panels, including the Presidential
Commission on Marijuana, the California Research Advisory Panel,
and the Canadian Le Dain Commission. Decriminalization was also
officially the policy of the state of Alaska from 1976 through
1990, when it was narrowly overturned in a referendum. The basic
appeal of decriminalization is to reduce the harm of criminal
punishment and respect personal freedom and privacy, while avoiding
offensive commercialization. The basic flaw in decriminalization
is that it does not make allowance for pot users who cannot or
will not grow their own. The result is to create an illicit black
market for cannabis that is neither regulated nor taxed, leaving
many of the same basic enforcement problems as prohibition.
These problems can be avoided by legalization, under
which cannabis could be legally sold, taxed and regulated like
alcohol or tobacco. (It should be noted that legalization need
not involve the evils of commercialization, given suitable restrictions
on advertising). The world presently has no example of a completely
legalized cannabis market, since this is forbidden by the Single
Convention Treaty on Narcotics. The nearest approximation may
be seen in the Netherlands, which officially tolerates the possession
and sale of up to 30 grams of hashish or marijuana in coffeehouses,
although distribution and manufacture are technically illegal
and large-scale traffickers are punished. The apparent success
of the Dutch in controlling hard drug abuse without a major hashish
abuse epidemic has led a league of 15 European cities to endorse
the principle of legalized cannabis in the so- called Frankfurt
Resolution. An important advantage of legalization is to open
the door to taxation of marijuana - a potentially valuable source
of public revenue - while eliminating the need for an illegal
market.
In the following, we will examine more closely the
economics of a legalized cannabis market.
The Cheapest Intoxicant:
In an untaxed free market, cannabis ought to be as
cheap as other leaf crops. Bulk marijuana might reasonably retail
at the price of other medicinal herbs, around $.75 -$1.50 an ounce.
Premium cured and manicured sinsemilla buds might be compared
to fine teas, which range up to $2 per ounce, or to pipe tobacco,
which retails for $1.25- $2.00. This appears to have been the
historical price range for cannabis in the days when it was still
legal: advertisements from medical catalogs imply that it sold
for around $2.50-$5 per pound in 1929-30. 1 Adjusting for inflation,
this works out to $1.20-$2.40 per ounce, a breathtaking 100- to
300-fold reduction from today's illicit prices, which range from
$100- $200 per ounce for low-grade Mexican to $400- $600 per ounce
for high-grade sinsemilla.
It is useful to translate these prices to a per-joint
basis, where one joint is defined to represent the standard dosage
of marijuana. The number of joints in an ounce depends on the
potency of the product involved, where potency is measured in
terms of the concentration of tetrahydrocannabinol (THC), the
chief psychoactive ingredient in marijuana. THC potencies typically
range from 2-3% for low-grade leaf to 10-15% or more for premium
sinsemilla buds. We will define a standard dose of THC to be that
contained in the government's own marijuana joints, which NIDA
supplies to researchers and selected human subjects. These consist
of low-quality 2.5%-3% potency leaf rolled into cigarette-sized
joints of 0.9 grams, yielding a 25 milligram dose of THC. The
same dose can be had in a slender one-third or one- quarter gram
joint of 10-12% sinsemilla. A typical joint has been estimated
to weigh about 0.4 grams.2 Taking this as a standard, we will
define a "standard joint" to be 0.4 grams of average-quality
6% buds. Thus an ounce of "standard pot" equals 60 joints,
an ounce of 12% sinsemilla 120, and an ounce of government pot
only 30 joints. Due to the fact that the price of marijuana tends
to be proportional to potency, the price of a one-quarter gram
joint of $600-per-ounce sinsemilla is about the same as a one-gram
joint of $150-per-ounce ditchweed, that is around $6.
We have seen that in the absence of taxation, the
price of legal marijuana would be cut by a factor of 100 or more.
At this rate, a joint costing $6 today would cost less than $.06
in a free legal market. It therefore appears that marijuana would
be a very cheap bargain compared to other intoxicants, including
alcohol.
The free-market price of joints can also be calculated
by comparison to tobacco cigarettes, which would probably cost
the same to manufacture. Cigarettes now sell at an average of
$1.83 per pack, or $.09 per cigarette, one-quarter of which represents
federal and state taxes.3 There is no reason to think that joints
could not be sold for the same price under legalization.
At a nickel per joint, marijuana would be a uniquely
economical intoxicant. For only one-half dollar per day, a pothead
could nurse a whopping ten-joint per day habit. It may be doubted
whether public opinion would tolerate so low a price for marijuana.
On one hand, it would invite extensive abuse. Parents would no
doubt object against making a serious marijuana habit so affordable
for their young. Moreover, cheap pot would also pose a serious
challenge to the alcohol industry, a powerful political interest,
whose products are over ten times as expensive. In order to make
legalization politically palatable, it would almost certainly
be necessary to raise the price through taxation or regulation.
Putting a Value on Cannabis:
One way to estimate a reasonable price for marijuana
is to evaluate it in comparison to the major competing intoxicant,
alcohol. While it is
impossible to make an exact comparison between pot
and booze, since their duration and effects are different and
dosages vary from person to person, a joint might be roughly equated
to an intoxicating dose of alcohol - between one and two ounces,
or two to four drinks. Thus one joint might be worth two to four
12-oz. beers or 1/3 - 2/3 bottle of wine. These are currently
sold on grocery shelves at a minimum price of around $1.25 - $2.50.
It may therefore be concluded that a reasonable minimum price
for marijuana should be around $1.25 - $2.50 a joint, with higher
prices for premium grades. This works out to $75 - $150 per ounce
for standard 6%-potency marijuana.
Coincidentally, this price range is in line with
that presently seen in the Netherlands, where coffeehouses sell
hashish and sinsemilla by the gram for 4 to 15 guilders, or $2.15-
$8.10.4 Taking the cheaper grade to yield two joints per gram
and the premium grade four, this works out to $1 to $2 per joint.
The fact that the Dutch have not been plagued by widespread cannabis
abuse and indeed believe they have obtained public health benefits
from their system provides reassurance that this price level is
realistic.5
It should be noted that Dutch prices are inflated
by the fact that cannabis remains illegal, not by any form of
legal taxation (though the state does tax cannabis indirectly
through the sales tax on cafes). Although Dutch authorities tolerate
a number of small-scale domestic producers, international traffickers
and domestic distributors are both subject to busts at the whim
of the police. As a result, Dutch consumers pay inflated black
market prices. This is not necessarily the optimal model for marijuana
price control, since the lion's share of the profits go to illicit
traffickers.
In a legalized market, the easiest way to maintain
marijuana prices would appear to be through some form of excise
tax, as presently imposed on alcohol and tobacco. This could conveniently
be assessed on licensed manufacturers or wholesalers, like the
federal tax on cigarettes. Aside from a strict prohibition against
sales to unlicensed distributors, cultivators need not be directly
regulated. Excise taxes have the advantage of being easy to enforce,
since they involve a relatively small number of distributors.
The latter in turn pass the tax along with a markup, magnifying
the price increase throughout the distribution chain.
Another way to control the market would be to tax
or regulate cultivation. However, experience shows that it is
no easy task to track down and regulate marijuana growers. More
so than alcohol or tobacco, marijuana lends itself easily to small-scale
home cultivation and production. The problem therefore arises
as to how to treat home cultivation in the legal market. Clearly,
the sale of untaxed home marijuana must be banned. In theory,
home cultivation could also be taxed and licensed in order to
maintain high prices. However, it seems unlikely that such requirements
could be enforced in a world of legalized marijuana. The policing
of home growers would appear to require many of the most odious
and objectionable techniques of current marijuana enforcement,
such as helicopter surveillance, snooping on homes and spying
on garden stores.
The most practical policy is thus likely to be the
one most consistent with principles of personal freedom and civil
liberties, namely to let Americans grow their own cannabis at
home, just as they might grow tomatoes, apples or grapes. The
inducements to home cultivation should not be exaggerated: in
Alaska, where it was the one legal way to get marijuana before
1991, pot continued to be sold illicitly at prices around $250
an ounce, proof that many pot smokers are quite disinclined to
grow on their own. Nonetheless, home cultivation would effectively
put a lid on the amount marijuana could be taxed, since consumers
would be induced to grow their own if prices rose too high.
Another possible way to limit marijuana abuse would
be to regulate consumers directly, for instance, by requiring
"user's licenses" for the right to buy or use marijuana,
as proposed by Kleiman.6 By charging fees for these licenses,
the state could raise tax revenues. User fees are apt to be more
costly to administer than excise taxes, since they must be collected
from a much wider population. More importantly, they are also
apt to be unenforceable, given the ease with which unlicensed
users can grow their own at home. One situation in which user
fees might be attractive would be under a regime of decriminalization,
where commercial sales were illegal. Consumers might then be allowed
to purchase a license to consume and grow marijuana for personal
use. In this system, licenses would afford the one opportunity
for the government to derive tax revenues from marijuana, while
an active marijuana surveillance program would still be needed
to prevent commercial sales and unlicensed use.
The problem of cannabis enforcement was first rigorously
addressed one hundred years ago by the British Indian Hemp Drugs
Commission.7 The commission concluded that cannabis prohibition
was not practicable, and that the best solution was to tax it
to the extent possible. After examining the different regulatory
systems in various provinces of India, the Commission especially
recommended the system in Bengal, where cannabis was taxed more
rigorously than in other provinces by means of a system of excise
fees and vendors' licenses. Noting that hemp drugs tended to be
much cheaper than liquor, the Commission argued that cannabis
was undertaxed.8 It also noted that there were regions where cannabis
grew wild, in which it was virtually impossible to control traffic
in bhang, a low-potency beverage made from leaves. Cannabis remained
legal in India until recent years, when it was banned under pressure
from the U.S.
Computing A Harmfulness Tax
The question might well be asked from a libertarian
free-market perspective why cannabis (or other drugs) should be
taxed in the first place. Why should government concern itself
with regulating what is in essence a private decision, that is,
what kind of drugs to ingest? Why shouldn't prices simply be settled
by supply and demand?
The best answer is that marijuana consumption may
impose costs on innocent third parties who do not consume it.
According to standard economic theory, such "external costs"
may be compensated by means of a harmfulness tax. 9 Examples of
external costs of drug abuse include increased insurance costs,
accidents affecting third parties, and drug-induced violence and
criminality. In principle these costs must be distinguished from
"internal costs" that fall on the user, such as ill-
health, reduced personal income, poor achievement, etc. Because
users already pay for the latter, there is no sense in making
them pay again through a tax.
From a non-libertarian, public health perspective,
higher taxes are often justified simply as a disincentive to prevent
people from overindulging in what is presumably an unhealthy habit.
This argument is most persuasive in the case of highly addictive
drugs such as nicotine, where naive users run a high risk of getting
themselves trapped in an unhealthy habit due to initial misjudgment.
Punitive taxation appears less justifiable in the case of cannabis,
not only because it has low addictivity, but also because of the
ease with which home growers can evade excessive taxes.
In the following discussion, we will examine the
external costs of marijuana abuse as the basis for a prospective
harmfulness tax. At the outset, it should be noted that much further
epidemiological research is needed to accurately assess the costs
of marijuana; nonetheless, it is possible to hazard a guess at
their magnitude. Overall, the general scientific consensus is
that marijuana has definite deleterious effects, though less so
than alcohol or tobacco. In the words of the California Research
Advisory Panel: "An objective consideration of marijuana
shows that it is responsible for less damage to society and the
individual than are alcohol and cigarettes."10
From a physiological standpoint, the major health
risk of heavy marijuana use appears to be respiratory harm due
to smoking.11 A recent epidemiological study by the Kaiser Permanente
Center for Health Research found that daily cannabis smokers had
a 19% higher rate of respiratory complaints.12 Aside from cases
of passive smoking, these must be counted as internal costs, except
to the extent that they may raise group health insurance costs
for others. (There are actually good grounds to believe that legalization
would reduce the costs of respiratory damage from marijuana smoking
by encouraging the development of better smoke filtration technology,
the substitution of more potent, less smoke-producing varieties
of marijuana, and the substitution of oral preparations for smoked
marijuana.)
More important than the respiratory harm of marijuana
is the increased risk of accidents due to mental impairment. In
the Kaiser study, this emerged as the number one hazard of marijuana
use, with daily users reporting a 30% higher rate of injuries
than non-users. Presumably, these injuries reflected an increased
risk of accidents that might also involve third parties. Hence,
accidents should probably be counted as the major external cost
of marijuana use. Other concerns, such as amotivation, poor school
performance and the controversial "gateway drug" syndrome
are more properly classified as internal costs.
In order to quantify the external costs of marijuana,
it is useful to consider those of alcohol and tobacco. These are
shown in Table 1, based on an analysis by W. Manning et al.13
aimed at estimating the appropriate level of taxation for alcohol
and cigarettes. Manning's analysis shows how the health costs
imposed on the insurance system by tobacco- and alcohol-related
illness tend to be counterbalanced by the fact that smokers and
drinkers die younger, and therefore collect fewer pension and
retirement benefits.
Table 1 - External Costs of Drug Use
Cigarettes (pack of 20)* Alcohol (1excess oz)* MJ
(1joint) Health Costs $0.15 smoking diseases $0.26 $.01-.02 smoking
$0.23 passive smoking Accidents $0.93 $0.38-0.93 Total $0.38 $1.19
$0.40-0.95 * Source: Manning et al., "The Taxes of Sin: Do
Smokers and Drinkers Pay Their Way?," JAMA 261:1604-9.
In the case of tobacco, Manning estimates the gross
cost of medical care for smoking-related diseases at $.26 a pack,
or just over one penny per cigarette. This turns out to be largely
compensated by savings in retirement pensions and nursing home
care for smokers. The final balance is highly sensitive to technical
assumptions about the economic discount rate, and can even be
made to show net external benefits at interest rates under 3%.
Manning's final net estimate of $.15 per pack assumes a 5% interest
rate.
By estimating the equivalency between joints and
cigarettes, one can translate these costs to marijuana. On a weight-for-weight
basis, pot smokers inhale about four times as much noxious tars
as cigarette smokers;14 as we have seen, however, the average
joint weighs about half as much as a cigarette. Also, cannabis
lacks nicotine, a leading factor in tobacco-related heart disease.
It seems reasonable on this basis to suppose that a joint is equal
to less than two cigarettes, putting the net external cost of
marijuana smoking at under 1.5 cents per joint.
One fault in Manning's accounting of external costs
is that it excludes the costs of second-hand smoking, which he
estimates at $.23 per pack, on the questionable grounds that these
costs are mainly internal to the users' families. We treat them
here as external costs instead. There are grounds to think that
passive smoking is of much less concern with cannabis since pot
smokers emit less smoke than cigarette smokers. It therefore seems
reasonable to conclude that the total smoking-related costs of
active and passive pot smoking are unlikely to exceed two cents
per joint.
Turning to alcohol, Manning concludes that the net
medical-less- pension costs of alcoholism-related disease are
$.26 for every "excess ounce" of alcohol, which is defined
to mean an ounce in excess of one per day (Manning does not try
to account for the possibility that moderate consumption may actually
extend life). These costs turn out to be greatly outweighed by
the cost of alcohol-related accidents, which he estimates at $.93
per excess ounce. This figure includes traffic accidents to third
parties caused by drunken drivers, but does not appear to include
other alcohol-related accidents. Also missing from Manning's account
are the external costs of alcohol-related violence. Altogether,
Manning concludes that the total cost of alcohol is $1.19 per
excess ounce, or $.48 per ounce when averaged over all alcohol
drunk.
While the cost of alcohol seems clearly dominated
by accidents, it is unclear how to relate these to marijuana.
The burden of expert opinion appears to be that marijuana is less
of an accident risk than alcohol, though this is disputed.15 Studies
of fatal car accidents indicate that, at least on the road, marijuana
tends to be a secondary risk factor compared to alcohol.16 On
the other hand, one survey of trauma patients found that with
respect to all accidental injuries, cannabis may be every bit
as much a risk factor as alcohol.17 In terms of intoxicating potential,
one joint probably lies between one ounce and one excess ounce
of alcohol. At the high end, if one equates a joint with one excess
ounce, the accident costs of pot would be $.93 per joint. More
reasonably, one could equate a joint with an "average"
ounce of alcohol, the accident costs of which work out to $.38.
There are reasons to favor a lower external cost on marijuana
relative to alcohol, notably the fact that marijuana tends to
suppress violence, whereas alcohol tends to aggravate it. From
this perspective alone, an overall shift from alcohol to marijuana
may be desirable.
In conclusion, one can reasonably argue that marijuana
should be assessed a harmfulness tax of $.40 to $.95 per joint
- or, say, $.50 - $1 in round figures. Experience indicates these
taxes would probably be magnified at least twofold in the market,
resulting in a minimum retail price of $1 - $2 per joint.18 Happily,
this is consistent with the target price range we derived previously.
Different lines of reasoning thus converge to argue
that cannabis should be taxed at $.50 to $1 per joint. That is
$15-$30 per ounce for low-grade 3% leaf or $30 - $60 per ounce
for 6% standard cannabis. Ideally, the tax rate per ounce should
be proportional to THC potency. In practice, this could be implemented
through a schedule of fixed product categories similar to those
used for alcohol (beer, wine and hard liquor). These categories
might include: (1) leaf (potency <3%), (2) standard blend cannabis
(4 - 10% potency), and (3) high-grade sinsemilla or hashish (potency>10%).
Other cannabis-based products, such as hashish, hash oil, tonics
and foodstuffs, could be taxed according to their leaf or bud
content. It should be noted that low- grade leaf, though harsh
for smoking, could play a valuable role in the market as a source
for cooked preparations and extracts, which are likely to play
an increasing role in the market as health-conscious consumers
seek to avoid smoking.
Revenues From Legalization:
Assuming a tax of $.50 or $1 per joint, we can venture
a rough estimate of the revenues that could be raised from legalized
cannabis. According to the 1991 National Household Survey on Drug
Abuse, some 19.5 million Americans used marijuana at least once
in the year, of whom 5.3 million used at least once a week and
3.1 million daily. About one-half of the latter are thought to
be multipleJdaily users, who can be expected to make up the bulk
of total consumption.19 Assuming the mean consumption of all daily
users is two or three joints per day, current national consumption
can be figured to exceed 7 to 10 million joints per day, or 1200
to 1800 metric tons of 6% THC cannabis per year. These figures
may well be low, since the Household Survey underestimates actual
use. A considerably higher estimate is given by Kleiman, who puts
1986 consumption at the equivalent of 2700 metric tons of 6% THC
cannabis; other trafficking-based estimates range as high as 4700
tons.20
Consumption would surely expand further in a legal
market where joints were freely and cheaply available. At the
height of marijuana's popularity around 1979, consumption was
over twice that of today. One factor that could significantly
expand the demand for legal cannabis in the future would be the
development of mild cannabis beverages like bhang, which traditionally
constituted the bulk of demand in India. It is therefore not unreasonable
to forecast ultimate consumption at 15 - 30 million joints per
day, or 2750 - 5500 metric tons of 6% THC cannabis per year.
The obvious question remains what portion of consumption
would be absorbed by home growers. As we have seen, it is probably
hopeless to limit personal use cultivation. Home growing would
naturally be most attractive to heavy users with little money,
who probably account for a major share of consumption. At $2 per
joint, a three-joint per day habit would cost over $2000 a year,
a hefty incentive for any home gardener. It therefore seems likely
that home cultivation would absorb a substantial portion of the
consumption of multiple daily users, who are estimated to account
for 60% of the total market.21
We shall estimate the size of the commercial cannabis
market by posing two price scenarios. (1) Given a $.50 excise
tax and a minimum price of $1 per joint, we will assume that home
growing absorbs 20% of consumption (that is, one-third of the
consumption of multiple daily smokers), leaving a commercial demand
of 12-24 million joints per day. This works out to about $2.2
to $4.4 billion per year in tax revenues. (2) Given a $1 excise
tax and a price over $2 per joint, we assume commercial consumption
would be cut by 40% to 9 - 18 million joints, yielding $3.2 to
$6.4 billion per year. We conclude that revenues from cannabis
excise taxes might range from $2.2 to $6.4 billion per year. This
is comparable to the revenues currently raised through the federal
tax on alcohol ($8 billion) and cigarettes ($5 billion).
By comparison, in the Netherlands, a nation of 15
million people, total domestic sales of soft drugs have been estimated
at under 1 billion guilder, or $500 million. 22 Extrapolating
this to the U.S. population, one arrives at total retail sales
of about $8 billion. If one- half of this went to taxes, one would
get $4 billion per year.
Similarly, in Bengal, with a population of 50 million,
the Indian Hemp Drugs Commission reported total tax revenues from
ganja of 24 million rupees in the year 1892-3, or about $10 million
(1892 dollars).23 Extrapolated fivefold to the current U.S. population,
this would work out to $700 million in 1992 currency. The tax
on ganja was about 8 rupees per kilo in Bengal, or just $.04 per
joint in current dollars. 24 Were the tax increased tenfold to
the level we have proposed, revenues would presumably increase
to $7 billion, minus a substantial amount due to decreased demand
from higher prices.
In addition to excise taxes, states could impose
sales taxes on cannabis. Unlike excise taxes, sales taxes would
be proportional to final retail price, including the added markup
for premium brands. Just like alcohol, it can be expected that
marijuana would often be sold for substantially more than its
minimum price: in a hotel bar, a good sinsemilla joint might well
go for $5. Assuming average retail prices of $ 1.50 - $2.50 per
joint, and sales taxes between 4% and 6%, the total revenues raised
might range from $200 million to $1.3 billion.
In addition, legalization would create numerous revenue-generating
spinoff industries, such as coffee houses, gardening equipment
and paraphernalia. The city of Amsterdam, with a million people,
boasts 300 coffee houses retailing cannabis.25 Translated to the
U.S, this would amount to over 60,000 retailers and 100,000 jobs.
Finally, the legalization of cannabis would also
permit the agriculture of hemp, a versatile source of fiber, protein,
biomass and oil, which was once one of America's top crops. Hemp
production might well rival that of other leading crops such as
cotton or soy beans, which are currently on the order of $ 6 -
10 billion per year.
On the other side of the ledger, legalization would
save the considerable economic and social costs of the current
criminal prohibition system. Current federal drug enforcement
programs run at $13 billion per year. State and local programs
are probably of similar or greater magnitude: in California, the
Legislative Analyst's Office estimated the cost of state drug
enforcement programs at around $640 million per year in 1989-90,
plus perhaps twice as much more in local expenditures.26 A sizable
chunk of these costs involve cannabis, which accounts for 30%
of drug arrests nationwide. Legalization of cannabis would also
divert demand from other drugs, resulting in further savings.
If legalization reduced current narcotics enforcement costs by
one-third to one-fourth, it might save $6 - $9 billion per year.
The economic benefits of marijuana legalization are
summarized in Table 2. The total direct savings to government
in taxes and enforcement come to some $8 - $16 billion per year.
These figures are somewhat lower than those sometimes bandied
about in public discourse, as both legalizers and prohibitionists
have a tendency to make consumption estimates that are in our
opinion inflated. Nonetheless, the benefits of legalization seem
both substantial and undeniable, and deserve to be taken seriously.
Table 2 - Economic Benefits of Cannabis Legalization
Excise Taxes $2.2 - $6.4 Billion
Sales Taxes $0.2 - $1.3 Billion
Enforcement Savings $6 - $9 Billion
Hemp Industry $6 - $10 Billion
Others: Spinoff industries, Reduced hard-drug and
alcohol abuse
FOOTNOTES
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,
"Judged 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).
11. 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).
12. 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).
13. 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).
14. Peter Passell, "Less Marijuana, More Alcohol?"
New York Times, June
17, 1992 p. C2.
15. D. Gieringer, "Marijuana, Driving, and
Accident Safety," Journal of
Psychoactive Drugs 20 (1): 93-102 (Jan-Mar 1988).
16. 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.
17. 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.).
18. 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.
19. M. Kleiman, Marijuana: Costs of Abuse, Costs
of Control, pp. 38-9.
20. Peter Reuter, "Prevalence Estimation and
Policy Formulation," Journal
of Drug Issues, Vol 23, No. 2, 1993: p 173.
21. A.C.M. Jansen, op. cit., p. 59.
22. Report of the Indian Hemp Drugs Commission,
Vol. 1, Chap. XVI, p. 312.
23. This assumes 1000 joints to the kilo, or 3%
potency for Indian ganja.
24. Jansen, op. cit. p. 64
25. "Drug Use in California, 1989-1990,"
California Legislative Analyst's
Office, Sacramento.
(Paper submitted for the Drug Policy Foundation Conference,
Nov. 1993.
Please do not cite without permission).
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