Is Keeping Marijuana Illegal the Best Way to Reduce Harm?

Is Keeping Marijuana Illegal the Best Way to Reduce Harm?

Geoff SimmonsEconomics

Last week a poll revealed majority support for decriminalising marijuana, and legalising its use for medicinal purposes. Prime Minister John Key responded that the law is enforced on a discretionary basis and he is ‘not a fan’ of law reform:

It’s been my longstanding view really that one of the things that Parliament does is send a message to people about activity we want to see or not want to see’

In other words, by keeping marijuana illegal the Prime Minister wishes to send a message that people shouldn’t use marijuana. Does that ‘message’ have any impact? This is an empirical question, and according to a new report by NZIER the answer seems to be no; there is no evidence that keeping cannabis illegal is reducing the harm it causes. Instead, the report suggests that as a nation we are giving up significant benefits from not legalising.

The high cost of (not) stopping people getting high

Essentially the goals of the current drug policy are to reduce the demand for marijuana (especially amongst young people), the supply of marijuana, and the harm caused by marijuana. The NZEIR report judges that the current regime is failing on all these goals:

  • Marijuana use is widespread – around 42% of the country has tried it, 11% has used it in the last year. That figure is much higher for young people aged 15-24 at almost 25%. Use and prices have largely been stable over time despite varying levels of enforcement.
  • Most of the adverse consequences of marijuana occur because it is unregulated, illegal, and supplied by criminals. There are few health problems linked with overdoses or addiction.
  • NZ is losing out on at least $150m in tax revenue by not legalising marijuana. At the moment that money is going into the pockets of criminals instead.
  • NZ is spending around $180m on enforcing the existing laws. In total that is a cost of over $300m from criminalising cannabis.

Is the ‘message’ getting through?

The Prime Minister believes that Parliament has a role on signaling what activity we want to see from people. We’ll put to one side why Parliament chooses to send us a message on this issue but not on the problems caused by other issues like junk food. The question is this: is the message working? The NZIER report concludes that there is little evidence, either here or overseas, that keeping marijuana illegal has had an impact on the number of drug users. It appears the Prime Minister’s ‘message’ may not be getting through.

Of course it is difficult to be certain of this because we don’t know the counterfactual; what would happen if we legalised cannabis? Would consumption go up? NZIER argues that the best way to ensure this doesn’t happen would be to slap a tax on cannabis to ensure the price stayed higher than it currently is on the black market.

We can get some indication of what might happen by looking overseas. NZIER note that many countries around the world are legalising marijuana for medicinal use, and some are legalising all use. The US state of Colorado in particular has monitored the impacts of legalisation. Most notably, after legalisation the use by youth was unaffected, and may have even declined; remember that this is a major aim of the current drug policy in New Zealand. There has been an increase in use by adults (particularly tourists) with some increase in health impacts as a result. However, this increased consumption may be linked to a falling price; as noted above NZIER argue that the secret to avoiding this affect is by keeping the price high through taxation. Much like we see with tobacco, the downside of high taxation is that it may also keep a small black market alive; some people seek to avoid paying the tax.

The Prime Minister also pointed out that the law was enforced in a discretionary fashion. The report points out that enforcing marijuana laws still occupies $180m worth of criminal justice (police and court) time, which could be better spent in other ways. It also points out that applying laws in a discretionary fashion undermines the rule of law. Finally, the report notes that keeping marijuana illegal forces ordinary citizens to deal with criminals in order to access cannabis, boosting the coffers of dealers as a result.

What should we do instead?

NZIER have five recommendations on the best way to achieve the aims of our drug policy:

  1. Legalising marijuana
  2. Reducing demand using a tax to ensure the price stays the same or higher as it was in the black market;
  3. Regulation of the product to ensure safety, quality and consumer rights;
  4. Education of consumers; and
  5. Monitoring of use and effects.

The report is far from conclusive on the issue of cannabis law reform – more work needs to be done and it will be interesting to watch the experiments progress overseas. But it does call into question the sound bite response of politicians; that keeping marijuana illegal ‘sends a message’. It seems like the hundreds of thousands of cannabis users out there haven’t got the memo.


Is Keeping Marijuana Illegal the Best Way to Reduce Harm? was last modified: August 24th, 2016 by Geoff Simmons
About the Author

Geoff Simmons

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Geoff Simmons is an economist working for the Morgan Foundation. Geoff has an Honours degree from Auckland University and over ten years experience working for NZ Treasury and as a manager in the UK civil service. Geoff has co-authored three books alongside Gareth.