States that legalize adult-use marijuana experience both economic gains and increased social costs, according to a recent report from the Kansas City branch of the Federal Reserve Bank. The study found that legalizing marijuana led to a 3 percent increase in average state income, a 6 percent rise in housing prices, and a 2 percent population increase. However, it also resulted in a 17 percent increase in substance use disorders, a 35 percent rise in chronic homelessness, and a 13 percent increase in arrests in legal states.
States that legalized earlier tended to experience similar social costs but larger economic gains, suggesting a potential “first-mover advantage.” The marijuana industry saw significant job growth, with over 425,000 jobs in the industry by 2022, making up more than 4 percent of total employment growth from 2017 to 2022.
While tax collections related to marijuana sales increased, they were offset by decreases in alcohol and tobacco tax revenue. The report indicated that there was no significant overall impact on total tax revenues or general sales tax revenues. For example, in Illinois, marijuana sales generated more revenue than alcohol but less than the previous year.
The increase in state income was primarily due to increases in proprietors’ income, and states with adult-use cannabis experienced higher population growth and housing prices. Self-reported marijuana use increased by 28 percent after legalization, along with a corresponding increase in substance use disorders and arrests. The authors also noted that arrests increased without a significant change in overall crime rates, potentially due to increased funding for law enforcement from marijuana tax revenue.
The report cautioned that it doesn’t provide a comprehensive cost-benefit analysis of marijuana legalization but suggested that the economic benefits could be used to fund social programs to offset the costs. It also highlighted the need for policymakers to consider both the benefits and social costs of legalization, particularly in states that recently legalized or are considering it.
The authors speculated that states legalizing earlier experienced greater economic benefits, possibly because marijuana was less novel, and there was less of a perceived amenity or demand shock from “marijuana tourism” compared to the first states to legalize.
This report, titled “Economic Benefits and Social Costs of Legalizing Recreational Marijuana,” was authored by Jason P. Brown, Elior Cohen, and Alison Felix and published by the Federal Reserve Bank of Kansas City in late September. It builds on previous reports from the Federal Reserve Bank regarding the economic impact of marijuana legalization in various states.
, an independent military force, and allied militias in Sudan raped several dozen women and girls in West Darfur’s capital, El Geneina, and those fleeing to Chad between late April and late June 2023, Human Rights Watch said today. The assailants appear to have targeted people because of their Massalit ethnicity and, in some cases, because they were known activists.){kind=link}