Official figures show $2.1 million in state taxes were generated during the first month. That equates to about 40 cents in marijuana taxes for each resident of Colorado, says Mike Moffatt, an associate professor at Western University’s Richard Ivey School of Business. Assuming a similar model for Canada would mean $5 million per month – or $60 million per year – in taxes for the province of Ontario, which has a population of about 13 million people.
For all of Canada, the number comes out to $13.5 million per month, or $162 million in annual tax revenue.
“A lot of this tax money is money that would otherwise be going to drug dealers and organized crime,” says Moffatt. “Instead of financing that, why not finance schools and hospitals and all the things our society needs?”
In fact, it’s not just taxes that would help lower the federal deficit. Moffatt cites a study by Fraser Institute that shows legalizing marijuana could add over a billion to government coffers. In addition to tax revenue, legalizing marijuana would erase the enormous costs involved with prosecuting marijuana offenders.
It may even have a positive impact on public health, according to research from a U.S. paper published last year where Montana State University professor D. Mark Anderson and University of Colorado professor Daniel Rees showed that legalizing marijuana would likely lead to a reduction in various costs associated with alcohol consumption, including traffic fatalities and violent crime.
This outcome is mostly based on the idea that legalizing marijuana would provide alcohol consumers with a safer substitute – especially when it comes to impaired driving.
“Reducing traffic injuries and fatalities is potentially one of the most important public health benefits from legalizing the use of recreational marijuana.”
And research definitely supports the notion that marijuana is not nearly as dangerous on the road as alcohol. Specifically, while marijuana appears to double the risk of being involved in an accident overall, alcohol at levels higher than the legal limit results in a 4-27x increase in accident risk.
Offering marijuana as a substitute for alcohol could also reduce crime rates.
“There is evidence of a link between alcohol abuse and violent crime, including domestic violence. Therefore, if the legalization of recreational marijuana leads to reduced alcohol consumption, we expect violent crime to fall. It is also possible that non-violent crime will fall as policing resources are freed up and reallocated.”
The authors note other benefits as well, including a reduction in suicides and better quality control of marijuana. Marijuana on the black market is sometimes laced with chemicals including PCP and embalming fluid, which the authors say could be overcome by regulating its production.
Indeed, while it’s likely that more adults would use marijuana if it were legal, that may not be a bad thing considering alcohol’s current toll on society. What’s more, the fear of encouraging teen use doesn’t seem to be supported by the data, according to the authors of the latest study.
“Based on existing empirical evidence, we expect that the legalization of recreational marijuana in Colorado and Washington will lead to increased marijuana consumption coupled with decreased alcohol consumption. As a consequence, these states will experience a reduction in the social harms resulting from alcohol use. While it is more than likely that marijuana produced by state-sanctioned growers will end up in the hands of minors, we predict that overall youth consumption will remain stable.”
While conceding that more questions remain, for now the authors seem to agree with an important argument for reform: Legalizing marijuana is the healthier choice.
“On net, we predict the public-health benefits of legalization to be positive,” they conclude.