Hudson Institute

The False Arguments for Legal Marijuana

 A customer pays for cannabis products at Essence Vegas Cannabis Dispensary after the start of recreational marijuana sales began on July 1, 2017 in Las Vegas, Nevada. (Getty Images)
A customer pays for cannabis products at Essence Vegas Cannabis Dispensary after the start of recreational marijuana sales began on July 1, 2017 in Las Vegas, Nevada. (Getty Images)

Advocates for marijuana legalization, buoyed by success in several states, public polling numbers, and endorsement from nearly every major Democratic presidential candidate, have begun to indulge in a bit of triumphalism, sensing what they see as the inevitability of their cause.

The rationale for legalization varies, from achieving “social justice” (even though racial disparities in arrests persist in legalized states like Colorado or Washington) to more blatant appeals to greed. The global legal market has been estimated at $9.5 billion for 2017, with investor testimonials projecting future markets at values between $300 and $500 billion in a few short years.

But not all signs are rosy. The evidence to date—such as the consequences in states like Colorado where legalized regimes have operated long enough to generate reliable data—is that the progress of legalization across the states is less like a victorious procession and more like a nip-and-tuck race between salesmanship and disaster.

Advocates feel the need to proselytize in new states, and do it quickly, in order to keep ahead of the growing damage in already legalized states. From the perspective of broken promises, the legalization movement represents not so much the arc of history as a classic Ponzi scheme.

And now the legalization momentum may be stalling. Recent political setbacks in several states, as well as more widespread discussion of the manifest dangers of the drug (exemplified by Alex Berenson’s new book, Tell Your Children), have revealed a public that is rightly wavering on approving yet more legal intoxicants.

For advocates, the crucial battle now focuses on enlisting Capitol Hill and federal law, where marijuana remains a Schedule I Controlled Substance, before rising concerns about the public health and criminal justice costs of legalization sway public commitment and deter investors from what has been touted as a multibillion-dollar industry. 

The Legalization Argument

To support quickly changing federal law, some proponents, such as Professor Mark A. R. Kleiman (“The Public-Health Case for Legalizing Marijuana”), seek to justify marijuana legalization, offering some policy adjustments in response to failures. Are these “fixes” sufficient, or are they false promises made in the interest of the marijuana industry?

In general, the arguments over legalized marijuana consist of two types. There are evidence-driven disputes over how much damage has resulted, at the state level, from the various schemes to date.

A now well-established literature on health impacts, for instance, has documented serious concerns, especially for youths who engage in early and frequent use of marijuana commercial products with unprecedented potency levels of THC, the intoxicating chemical. Such negative effects include long-term impairment of IQ. In particular, there are high risks, found in a direct dose-response relationship to THC exposure, of impacts on cognition, memory, and psychoses, as documented by entities such as the National Academy of Sciences. Recently updated findings, appearing in major scientific and medical journals with dismaying frequency (almost monthly), are referred to here in attached links.

The arenas affected are mental health, schools, criminal justice, traffic safety, emergency departments (see also here and here), the workforce, and overall quality of life, where purported benefits of legalization are weighed against the actual costs to society.

The evidence, though mounting, is nonetheless contested, and many arguments turn on differing interpretations of the impact on tax rates, criminal justice outcomes, and public health of the greatly increased marijuana prevalence rates that follow from commercial access.

They are important arguments, but the accumulating evidence has not been treated as dispositive by all parties.

Legalization Creates a Safe Harbor for Transnational Crime 

The second major argument presents a fundamental show stopper. Its heart is the undeniable, and devastating, persistence of a flourishing black market, under the command of criminals who refuse to simply fold up and slink away in the face of legalization. In fact, it is they, and their ruthless tactics of violence, coercion, corruption, fear, and the lash of addiction, who demonstrably have grown more entrenched, powerful, and wealthy, perversely in the very states that have legalized (though their reach now stretches well beyond those boundaries).

At issue is whether their presence is a transient vestige of prohibition, able to be ultimately extinguished by progressive policies and regulatory capture, or whether they represent, in reality, the essential dark heart of traffic in addiction.

If the latter is correct, then criminal forces cannot be appeased, or shamed, or regulated into yielding. They must be destroyed by enforcing the rule of law.

Despite all promises to the contrary from legalization advocates, transnational cartel criminals not only hold the upper hand in today’s legal cannabis market, but are thriving

in what is now the “worst of both worlds” scenario: the legal market is providing criminals with a host of benefits, the most important of which is the suppression of law enforcement.

Criminals are protected from law enforcement by operating within the market of “legitimate” state production. They find a greatly expanded bonanza of users, facilitated interstate (and even international) smuggling opportunities, the development of new and more potent forms of the drug, and “Mad Men” type commercial advertising. Finally, they seek mechanisms for laundering their transnational criminal proceeds to insinuate their funds into legitimate financial and banking instruments, where they can deploy those funds to support political activities that will allow them to corrupt political authority and increase their power.

Caveat emptor, indeed.

I will argue here that this persistence of transnational organized crime within the legal market is not, in reality, a temporary situation, to be fixed—according to proponents of legalization—by adjustments in taxation or pricing or refinements in regulatory features of the legal trade or the scope of its markets. Rather, the persistence represents an inescapable feature of the trade in dangerous and addicting drugs, upon the cliffs of which the entire premise of a controlled, regulated, and “safe” drug market founders.

Proponents of legalization, evincing the mentality of economic modelers and social engineers, are simply in denial about this reality. The market behavior of the law-abiding should not be used to model the behavior of criminal organizations, which follow imperatives beyond market calculations. Heavily armed criminals do not comply with regulatory burdens, nor bend the knee like dutiful citizens. And, pace economists, the trade in addictive intoxicants is not a rational market with participants responding predictably to price incentives.

In this regard, my argument runs counter to the positive scenarios offered by prominent legalization defenders, best exemplified by the above-mentioned analysis offered by Professor Kleiman, writing in the Spring 2019 issue of National Affairs.

To his credit, Kleiman acknowledges problems in current legalization initiatives, but in his hands, the blame for such problems is placed on the faulty design of current schemes, seen as defects to be re-engineered. That is, Kleiman does not regard the failures as essential.

Even the title of Kleiman’s piece seems counterintuitive, since more marijuana, more freely accessible, is a central factor in the rejection of legalization, based on the overwhelming evidence of the public health damage it causes.

The Myth of Moderation

Kleiman’s goal, however, is not a society that prevents cannabis use, but rather one that fosters what he terms “moderate use.” Legalization, then, should be adopted precisely because, as he contends, it creates the conditions for moderation.

What behavior constitutes “moderation” is not defined, nor does Kleiman examine whether even moderate use, whatever its parameters, avoids inflicting the grave public health damage that would mount higher as national prevalence rates soar.

The matter of drug use he mostly treats as less a public health challenge, or a moral quandary, than an econometric design problem. As he writes: “Price is probably the single most important factor to control. … It's hard to see any social purpose that would be served by making cannabis intoxication cheaper still. … Unfortunately, the natural tendency of legalization will be to greatly decrease cannabis prices … Taxation to prevent a continued price collapse poses some tricky policy-design problems.” Indeed. 

Left unexplored is the problem that far higher drug potencies, more threatening forms of consumption, and intensifying patterns of frequency of use (surely species of immoderate behaviors) have not abated following legalization in any state and have, in fact, all worsened. Where is the evidence that use became more moderate when Colorado permitted the sale of THC-laced gummy bears, or 70 to 90 percent THC potency “shatter” cooked with butane? How can the stunning surge since legalization in newborns testing positive for THC in Pueblo, Colorado be regarded as a form of “moderation”?

But such questions are not a hindrance to Kleiman, once he posits two propositions.

The first is that no other policy works, since “cannabis prohibition is no longer enforceable” because “the size of the black market is too large to successfully repress.” Therefore, legalization is the only relief.

The second proposition tries to explain the threatened collapse of legalization in states that have tried it, with runaway supply, deficient revenues, increasing costs, public health damage, and criminal exploitation. Kleiman argues that the failures one finds are only contingent, following from the lack of a truly nationwide scheme of legalization. People evading taxation by using illegal suppliers, or illicit cannabis markets that smuggle product between states, are only able to do so, the argument holds, because a state-by-state approach creates disparities of either taxation/price or residual prohibitions on acceptable access to the drug.

Hence, a “national strategy for regulation” will better “protect public health.” And with regard to the first type of evidence from legalization outcomes, such as damage to mental health, Kleiman flips the scenario: the more dangerous we find cannabis use to be, the more urgently, it is argued, must we turn to the nationwide legalized strategy.

In that sense, for Kleiman, the more egregious the damage from cannabis, the more his expanded course of action remains the only viable policy option.

In fact, the real blame for the damage lies, if anywhere, with prohibitionist dead-enders who have failed to capitulate: “It is precisely because cannabis isn't harmless—because Cannabis Use Disorder and use by minors are real problems—that we need national legalization now, as a measure to protect public health. The futile, last-ditch resistance being mounted by the champions of prohibition will have substantial public health costs if its result is a continued process of state-by-state quasi-legalization under inadequate controls and with regulatory mechanisms ripe for industry capture.&rdquo

Has Enforcement Been Futile?

If you adhere to the notion that continued “prohibition” is a better response than, say, “grudging toleration” (a term Kleiman introduced in his 1992 book Against Excess: Drug Policy for Results), Kleiman’s argument circles you back to the first proposition above: that law enforcement is powerless against this foe, and hence, resistance is futile.

This loop constitutes the “public health” case for why, as Kleiman insists, “Congress should proceed at once to legalize the sale of cannabis.”

Further, control of the legalized product cannot be, for Kleiman, left to commercial forces, but rather must be commanded by some type of governmental entities. The problem is that “the commercial interest in cannabis is diametrically opposed to the public-health interest, which in this case would involve urging that the drug be used only in moderation.”

Clearly this turn in the argument not only threatens those promoting a coming investment bonanza for commercial control of cannabis; it further positions either states, or Congress itself, as the proprietary holder (or overseer) of the intoxicant, dispensing a potential neurotoxin to citizens in the name of public health. Surely, one thinks, there is some liability exposure contained in this outcome.

Be that as it may, there are some distortions contained in Kleiman’s initial two propositions that need to be peeled back. In support of his “enforcement is futile” brief, he reviews the history of cannabis control, starting from 1913 and leading us to 1979, when youthful cannabis use rose to its peak rates and the National Institute on Drug Abuse (NIDA) survey “Monitoring the Future” revealed that one in ten high school seniors reported “daily or near-daily use.”

Even though the potency of the drug then was only a small fraction of the potency of current commercial products (roughly one-tenth to one-twentieth), the 1979 prevalence presented a genuine crisis. What happened next?

Kleiman mentions Nancy Reagan, parents’ groups, and anti-drug advertising, all of which somehow gained traction against cannabis use, “hardening anti-drug attitudes,” he writes, as shown by NIDA findings for 1992, “which marked a trough” in youth cannabis use.

In reality, the data show youth use being driven down by nearly two-thirds between 1979 and 1992, even though the foe was an enormous black market which drove the unprecedented prevalence. Nonetheless, the data show that cultural attitude shifts, and crucially, policies of law enforcement and supply reduction, produced precisely what they were meant to do: far from being futile gestures, they suppressed drug use.

Yes, youth cannabis use did rebound during the next decade, only to fall again by fully 25 percent from 2001 until 2008 when the current—and accelerating—surge began another upward turn.

Kleiman fails to admit that this evidentiary trajectory undermines his first proposition. It was only when “hardened” attitudes and enforcement policies, successful from 1979 onward, were explicitly abandoned as a matter of policy, that the gains against drug use and suppression of the black market were reversed.

Presidential Administrations and Teen Drug Use

The prevalence rates associated with each recent presidential administration further demonstrates the impact of federal policy and law enforcement on drug use. One can contrast the rates of teenage marijuana use under the policies of successive administrations from Reagan through Bush 43 with those under Obama, as seen in the figure below.

In fact, the second downturn, followed by the second upturn (2009 to the present) makes an even stronger case in favor of enforcement policies: when effective policy interventions were turned on, drug use fell. Both times. When they were turned off, drug use rose again. Both times. In social science methodology, the case presents what is termed an “interrupted time-series.”

Drug Use Under Successive Administrations

The real lesson, contra Kleiman, is not that effective enforcement and prohibition are impossible; it is rather that they must be sustained.

But there are worse contradictions lying in wait for Kleiman’s legalization solution.

Remember that Kleiman opposes a “states’ rights” approach in favor of national legalization, because cannabis is “too easy to smuggle across state lines” and “if cannabis is cheap anywhere, it will be available and fairly cheap everywhere.”

He then goes on a long economic excursion exploring the differential created, across the several state schemes, by varying taxation and pricing regulations. He surmises that if the states could be rendered comparable in policy, then the black market would have no reason to operate.

Kleiman’s position is similar to excuses offered for the continued black market operating not only between states like California or Colorado or Oregon, but also within them. Here, advocates note that not all municipalities agreed to the state-level commercial dispensaries, and hence, their reluctance must be responsible for the persistence of smugglers. But this problem is not dependent on municipalities or states.

Kleiman seems not to appreciate that his explanation, relying on disparities between regions, is a regress. If all states (or cities) were comparable, then, we are to believe, the black market would have no purchase. Yet today we see Colorado as the home of transnational organized criminals smuggling high-potency, very cheap commercial marijuana from their own criminal grow-ops, not only within Colorado, but also to multiple other states, as well as to nations with more stringent policies. And profiting from this.

In fact, one development is that criminal cartels, facing an otherwise tough task of smuggling over the border, have moved workers and production processes from lawless havens abroad into the “safe haven” zones of legalized states. This has effectively internalized the international boundaries, capitalizing on the relatively unrestricted flow of commerce between US states and the lack of stringent monitoring of US products sent around the world. Unless the US legalization scheme is globalized, international disparities will create opportunities for illegality.

Colorado’s black-market marijuana, produced in illegal warehouses by illegal workers, makes Colorado a competitive international drug smuggling center, furnished (unlike, say, Afghanistan) with ample infrastructure and efficiencies, and even an overarching lawful order to protect against armed havoc.

Conversely, both Mexico and Canada are currently major (though perhaps declining) smuggling centers for cannabis headed to the US. Canada is already accelerating its production, potency, and competitiveness following its own flight from prohibition, and Mexico threatens soon to follow—as does Colombia, the source of flowers, not to mention cocaine.

Since there is a disparity between costs and restrictive policies between nations, just as between the states, what will keep such foreign products from regaining their former dominance and displacing American federal official marijuana if the foreign product can be produced and delivered even more cheaply?

Legalization’s Marijuana Bureaucracy

Any reasonable legalization proposal must admit of some restrictions on who may access the drug (e.g., the under-aged, pregnant women, or the mentally disabled), on potencies, on comestible form, and on permitted amount per day and price. Some users may even decide to use immoderately.

What is to be done to uphold these restrictions, since law enforcement is of no avail? What legions of officers must now monitor producers, consumers, and dispensaries in a world where only some cannabis is illegal under some conditions? Will there be an army of bureaucrats checking licensing, product potency, sales volumes, labeling, purity, and purchase quotas and assuring compliance with regulations on moderation— all features that Kleiman envisions as necessary for his “public health” argument? What authorities do they hold? What penalties lie at their command? What if the “enforcement,” as it were, produces racially unjust disparities? All of these are currently unanswered questions, though it certainly seems as if “enforcement” mechanisms of some sort are unavoidable, regardless of redesign.

Given Kleiman’s argument that enforcement was futile during the time when the criminal justice system could undertake full legal attacks against any cannabis, the question for him becomes, how is enforcement/regulation supposed to be successful if it guards only the boundaries of unlicensed or non-moderate use and does not interfere with truckloads of “legitimate” cannabis commerce?

Hence, Kleiman’s second stumble. Any one of multiple proposed restrictions or requirements resulting from his policy remediation constitutes a form of prohibition or “disparities” of access. As such it offers a grappling hold for the black market, which will deliver directly to prohibited classes of persons their preferred prohibited volumes and potencies and varieties of drugs, even after hours.

The delivery folks may even suggest trying some of their other consumer lines, much more difficult for customers to access, as long as they’re in the neighborhood and still in charge of what moves.

Thus, we see that the black market’s continued presence, and the violence and coercion and corruption involved, are not “contingencies” to be tweaked by adjusting regulatory schemes. Instead, they are an inherent feature of any regulatory scheme that does not present an absolute, even immoderate, open season for drug use.

If so, then the black market is like a cancer, and the only viable public policy option is to defeat the black market, now firmly entrenched. This implies the necessity of enforcement, which will not only have to enlist the criminal justice system but further the national security apparatus and efforts at maintaining strong cultural norms against unfettered drug use. Each of these factors is being perversely undermined by the presence of legal cannabis. 

This is the scenario currently playing out in legalized states like California and Colorado. State officials, seduced by promises of a peaceful and benign enterprise generating surplus revenue, now find themselves pleading for more enforcement resources to be brought against the vicious black-market criminals who are ruining the regulatory system.

Kleiman’s irrational belief in universal, safe marijuana use distorts his capacity to see the damaging phenomena all around us. His policy promise was to reduce the burden on law enforcement, freeing it up to take on supposedly serious drugs and real crime. Perversely, his policy solution ends up increasing the burden, draining the existing criminal justice system of capacity in response to the new cannabis bonanza. 

Yet Kleiman still argues that “a serious crackdown on cannabis dealing seems beyond the realm of the possible.”

Yet the opposite is true: a serious crackdown would prove politically difficult and costly, but who would pay that price? The first to lose would be all those who invested funds in an addictive industry with the promise of untold billions in profit. Second, the advocates for the marijuana industry, such as Kleiman, would be losers. Finally, the biggest losers must include the powerful transnational criminal forces already entrenched within our states, who must be forcefully evicted and broken.

These are certainly not “innocent victims” when compared to the thousands of Americans destroyed by addiction, mental illness, and violence. The public health case for legalizing marijuana fails.

In reality, the public health, security, and well-being of our country are being damaged as never before by marijuana, and that fact will not be changed by false arguments, wishful thinking, or denial. In the absence of a restoration of law, the cost is unsustainable, and the only question is how much damage must be done to America before this irresponsible force is stopped.