Most Americans have taken part in some black market activity such as lawn mowing or babysitting. The buying and selling of marijuana is part of the black market but slowly is transitioning into the United States’ GDP. States such as Colorado and Washington have legalized the sale of medicinal and recreational marijuana, and the sales have a great impact on the economy of those states. Data from the Department of Revenue stated that Colorado retailers sold $386 million of medical marijuana and $313 million for recreational users, which generated $63 million in tax revenue. This money is being taken out of the black market and added to the country’s GDP, which also deprives the criminal market substantially because of competition and a change in the supply and demand for legal vs. illegal marijuana.
Colorado’s total increase in revenue is likely greater than the data shows because the figures do not include smoking tools and increased tourist spending on hotels and restaurants. If all 50 states legalized marijuana, it is estimated that the country would collect more than $3 billion per year in additional taxes, which would have a small but adequate effect on GDP. Other benefits of the legalization of cannabis include less crime, as shown from the data in the graph, and the wider availability of jobs, especially to people who were previously considered felons for using or distributing marijuana. The decrease in crime could be unrelated to the legalization because the data is not so compelling, and crime rates have dropped nationwide from 2013 to 2014.
There are also some measurable problems involved with the legalization. This includes transportation of cannabis from states where it is legal to others. The number of Postal Service-mailed packages containing pot intercepted in Colorado increased by 1,280 percent from 2010. Economically, legalizing marijuana will create new jobs, but also many jobs will be terminated due to less expenditures on the drug war. Less money spent on prisons, drug investigations, and ending bureaucratic drug agencies all lead to less government spending, decreasing GDP. Whether the total benefit is greater than the total cost is up for more investigation, but at the end of the day, it is all about whether the country will be economically better off.