Marijuana Laws Cost Taxpayers $41.8 Billion Per Year

Marijuana Policy Project

Marijuana prohibition costs taxpayers $41.8 billion every year in law enforcement expenses and revenues lost to government at all levels, according to a new report released today.


The analysis, by researcher Jon B. Gettman, who has a doctorate in public policy and specializes in economic development, is based primarily on government estimates of the U.S. marijuana supply, prices, and arrests. Gettman made international headlines in December 2006 with an analysis showing marijuana to be the top cash crop in the U.S. The full report, "Lost Taxes and Other Costs of Marijuana Laws," which uses different methodology than previous analyses of the costs of marijuana prohibition, is available at www.drugscience.org/bcr/index.html .


"This report documents a massive waste of taxpayer dollars in pursuit of eradicating a government-forbidden plant, and the financial waste hit all-time high levels last year, as the FBI just reported there were a record 829,627 marijuana arrests in 2006," said Rob Kampia, executive director of the Marijuana Policy Project in Washington, D.C. "Prohibition has done nothing to reduce marijuana use, which remains at about the level it's been for decades, but prohibition has created a massive underground economy that's completely unregulated and untaxed. The parallels with Alcohol Prohibition in the 1920s, including the needless violence and a huge underground economy, are eerie."


Key findings from Gettman's report include:


**Marijuana arrests constitute 5.54 percent of all U.S. arrests, costing taxpayers $10.7 billion.


**The total U.S. marijuana supply is 14,349 metric tons annually, with a retail value of $113 billion.


**Marijuana prohibition diverts the entire $113 billion in sales from the legal, taxed economy. Based on the White House Office of Management and Budget's estimate that 28.7 percent of the U.S. gross domestic product goes to federal, local, and state governments as tax revenue, marijuana prohibition costs $31.1 billion in lost tax revenues annually.