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The War on Drugs, and the Federal Government's stance on Drugs bec

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Marijuana: good for the munchies, for nausea, for chronic pain, and now apparently good for business. On Tuesday, the citizens of Colorado approved a ballot initiative that would institute a 25% tax on marijuana sales. The question of taxation was effectively the last barrier to recreational marijuana stores, which are expected to open in January.


The marijuana industry is one of the fastest-growing business sectors in the U.S. The industry is helping the economy by creating small business jobs and expanding tax revenues. Both Colorado and Washington State legalized the recreational use and sale of marijuana through 2012 ballot initiatives. Despite the contradiction between these states' new marijuana policies and federal law, the Department of Justice said they will not sue either state.


Legal marijuana has created the opportunity for a multitude of small businesses to open. The Colorado Marijuana Enforcement Division accepted applications from over 130 businesses seeking to open recreational stores in the state. In Washington, the Liquor Control Board will allow 334 retail marijuana stores to open after an 11-month research and debate process. The ArcView investment group bankrolled more than 1 million into Colorado's marijuana startup businesses, which ArcView's CEO Troy Dayton called "the next great American industry." The marijuana industry is growing at a rapid rate; some claim it is growing even faster than the smartphone market!

In addition to creating jobs, legalizing marijuana increases state revenues. In Colorado, the tax measure approved by voters — which also earmarks the first $40 million in marijuana tax revenue to fund school construction projects — is projected to increase annual state revenue by $67 million. Washington officials estimate the state will rake in $300 million in revenue for the 2014 fiscal year. This is a critical issue as all 50 states hold a combined $4.19 trillion dollars of the national debt. New York and California — two states that have passed 4/20-friendly laws (California's 1996 medical marijuana law and New York's 1977 decriminalization law) — are hundreds of billions of dollars in debt.

As concerns over the national debt continue in Washington, D.C., perhaps lawmakers should consider legislation to legalize marijuana to create small business jobs.




The War on Drugs is dead, stick a fork in it. As states pile higher and higher debt you can bet more politicians in these states are going to look into pot legalization to alleviate their budgetary issues.





Keeping marijuana illegal is possibly keeping billions of dollars out of the economies in the most rural parts of the United States, preventing these regions from banking on America's "biggest" cash crop.

Just how much money are we talking about? Estimates point to as high as $100 billion, easily darwfing America's current top two biggest cash crops.


The map above is one of the first of it's kind which lays out the complexities of the marijuana marketplace. The map focuses mainly on retail price of marijuana, based on user-generated reports from the PriceofWeed website. It was compiled by the Floating Sheep blog. Darker spots are where marijuana is the cheapist, lighter spots are where marijuana is more expensive.


The map points to some massively interesting trends. Cost rises as one moves east from the Pacific Coast (with Oregon being the cheapest). There are also pockets of maximum affordability around where marijuana is produced, notably in Northern California, Eastern Kentucky, and Western Tennessee. Price also varies based on your city, with the cost generally spiking the larger the urban area you live in.


The map confirms other research: Kentucky, for instance, is reported to be a major center of marijuana production in the U.S. More so, it paints a picture of a complex marketplace that has failed to be fully tapped.


Just how big is the marijuana market? There are a variety of estimates, but when you put them all together you get a range of $10 billion to more than $120 billion a year. For comparison, the market for brewed beverages (i.e. beer) in the U.S. is a little over $100 billion. Some studies claim marijuana is the biggest cash crop in America easily exceeding the combined value of corn ($23.3 billion) and wheat ($7.5 billion). Wowza.


Just think how much money Kentucky, Tennessee, and California are missing out on.


It's bizarre that such simple economic analyses on this product don't exist, especially since it's estimated that the legal marijuana market is poised to grow faster than the smartphone market. Not even experts on Wall Street study this market.


So why has no Wall Street economist charted the price of marijuana like this?


As the authors of the Floating Sheep blog who compiled this map can atest: "Underground economies, by their nature, are extremely challenging to analyze and study. They tend to be characterized by a lack of empirical data, unresponsive and secretive research participants, and difficult research environments."


But as the authors further point out, understanding the trade in illegal drugs is of critical importance. Recreational drug consumption is a widespread practice, and there are significant health and policy issues involved with this market.

Primarily, there is the current question on weather the government's "war on drugs" is more wasteful than beneficial. Enforcement costs about $40 billion per year. Since it was heavily ramped up by President Nixon, it has cost nearly $1 trillion.




Only a fool could continue to support this silly war on drugs. It's untenable. It is a liberty-hating, destructive, bureaucratic-creating, costly, and big-government policy that in-no-way serves the best interests of the American public. Libertarians see it for what it is, government not only failing miserably in policy (yet again) but also ruining lives, racking up debt, and bloating itself at the detriment of society. Imagine that.


As more and more states legalize marijuana, politicians in the Beltway, the special interests (prison workers unions, police unions, border patrol unions, for-profit prison companies, etc) are going to be in for a rude awakening.


Enjoy what little control you have over the American public concerning marijuana while you can Statists, your days are numbered.



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