Social Impacts of Legal Cannabis in California

In 1996, California voters approved Proposition 215, making California the first state to legalize medicinal marijuana use. There were detractors, sure that growers and dispensaries would attract crime. But when the Los Angeles Police Department studied the question, it found crime didn’t rise after legalization.

Since then, the majority of U.S. states have made some form of medical marijuana legal. More than two decades later, there are important social benefit to be felt in California, and in states that followed suit. People with health problems – from glaucoma to stroke symptoms, from to social anxiety to alcoholism – may get a prescription that helps them enjoy full lives.

At the same time, compassionate medicinal use no longer carries a stigma. Patients are freed from fears of social disapproval.

Today, we see various (and measurable) social impacts in addition to this first one. Let’s explore.

Stronger Economies

California’s legal marijuana industry took another giant step in 2016. That year, California voters approved the Control, Regulate and Tax Adult Use of Marijuana Act – a ballot measure that created the largest legal market for marijuana products in North America. Proposition 64 allowed the growing, distribution, and sales of pot for adult use, and required the sale of medicinal weed to be licensed by the state.

In January 2018, a $148/lb. cultivation tax took effect on cannabis harvested for commerce. So did a 15% excise tax on cannabis sales.

The legal industry could potentially bring the state $1 billion a year in tax revenue, the Los Angeles Times reported in March 2018. It’s not there yet – but in May, California’s Department of Tax and Fee Administration announced that state cultivation, excise and sales taxes have already added up to $60.9 million in the year’s first quarter. And that’s not counting city and county tax revenues.

Moreover, economic successes keep spreading outward, prompting increased demand for local businesses. Growers need greenhouse and warehouse space. They buy expensive growing and irrigation equipment. They hire contractors, accountants, and lawyers. Cannabis scholars are now teaching university courses, contributing to the economic health of the University of California.

A Market Moves From Underground to Aboveboard

The rapid growth in weed sales is largely a shift. It is not so much about an overall rise in marijuana demand as it is about moving supplies from the shadows into a market of licensed, regulated, and taxpaying businesses. The Marijuana Policy Group, which studies the economics of weed, expects that 90% of the market will be legit by 2020. (The rest will be mostly made of home-grown smokers and suppliers who hang on to a customer base yet never move fully into the regulated sphere.)

Legalizing a drug frees a good number of financially poor people from the likelihood of being incarcerated for petty reasons, thereby fostering a fairer society.

It also means dangerous pesticides and mixes are kept out of pot batches.

It means safety regulations are established and followed.

It’s essential, at this point, that California continues to undercut the illicit market. That’s exactly why lawmakers are poised to offer at least temporary relief from combined state and local cannabis and sales taxes that can increase legal suppliers’ costs by around 45%. Their bill would reduce the excise tax to 11% until June 2021, when the tax would revert to 15%, and suspend the cultivation tax during the same period.

Lower Crime Statistics

When pot is less valuable for the illegal trade, there are fewer scenarios in which violent crime can arise. Logically, it comes as no surprise that police records show legalizing medicinal weed did not increase crime, and may lead to lower rates of assaults and killings.

Researchers at the University of Texas at Dallas examined crime stats nationwide, and in 2014 published their findings in the highly ranked science journal PLOS One. Turns out that the FBI reports, between 1990 and 2006, during which time medical weed got the green light in 11 states, showed no rise at all in these states in any of the classes of crimes against people or property: murder, assault, rape, robbery, burglary, car theft or larceny. And indeed the research indicated declines in homicide and assault.

The researchers, Robert G. Morris et al., speculate that marijuana legalization may lead individuals to substitute marijuana for alcohol, thereby decreasing alcohol-related crimes enough to impact states’ statistics.

You know the saying: “Correlation is not causation.” These researchers acknowledged that. While their study doesn’t prove medical marijuana reduces crime, its authors observe, relaxed medical weed laws may correlate with “a more tolerant populace that is less likely to infringe on one another’s personal rights…” Given these understanding attitudes, the authors write, “we are unlikely to expect an increase in crime and might even anticipate a slight reduction in personal crimes.”

Food for thought, to say the least.

Lead On, California

California serves as a model of healthful, intelligent pot regulation. The state is still finding its balance with tax rates, but is already reaping impressive social and economic benefits.

As states follow California by legalizing pot – and especially if marijuana is ultimately freed from the federal government’s Drug Schedule – one major impact of cannabis legalization will be a multi-billion dollar industry. The sector will surpass manufacturing, to help struggling state and local governments balance their budgets nationwide.

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