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Is Amazon's Jeff Bezos Responsible for the Push to Legalize Marijuana?


If not for Amazon and the huge rise in Internet shopping that it has inspired, states would not be in such bad shape financially, and therefore, not in favor of legalization for financial reasons.

It seems only yesterday that Bill Clinton was chewing his lower lip and confessing that yes, he had smoked marijuana in his student years, but he hadn't actually inhaled. How times have changed.

Now everyone – President Obama, columnist David Brooks, Michael Bloomberg, Clarence Thomas, for heaven's sake – admits to being a former stoner, and proud of it. Only die-hard fuddy-duddies are lining up to oppose what appears to be a national embrace of pot smoking. Legalization is on the rise, with fiscal hardship the go-to rationale. We spend too much money enforcing (failed) anti-drug laws, supporters argue, and states need the revenues they can get from taxing pot.

In other words, it's all Jeff Bezos' fault. If it weren't for Amazon (NASDAQ:AMZN), and the huge rise in Internet shopping that Bezos' firm has inspired, states would not be in such bad shape. Well, not exactly, but the loss of billions in sales tax revenues -- more than $11 billion in 2012 alone – in combination with rising employee costs and the impact of a recession has sent cities and states scurrying to find alternative sources of revenues. Legalizing marijuana is a lot more popular -- and hip! -- than raising income taxes.

So, as of January 1, 2014, Colorado became the first state in the nation to legalize the sale of marijuana for recreational use. Washington State will shortly follow, and it's likely that other states will be tempted. Fiscally impaired New York State just agreed to allow the consumption of pot for medical purposes, and it's just a matter of time before the allure of a new tax source proves irresistible.

Polling is generally positive on legalization, with 58% of the country in favor. As my colleague Bruce Bartlett recently pointed out in an enthusiastic column on this site, even half of (generally conservative) Boomers favor the change.

That doesn't make it right. Boomers are to be forgiven -- the haze of decades (and pot) makes for fond memories, especially when it comes to the 60s. But recollections of innocent flower children in bell bottoms need to be updated. For one thing, as most parents know, the marijuana of today is significantly more powerful than the weed our generation dabbled in.

As Dr. Sanjay Grupta wrote in a recent piece, "Since 1972…. the average THC content of marijuana has soared from less than 1% to 3-4% in the 1990s, to nearly 13% today." Law enforcement officials have captured pot with a THC content as high as 37%. That means today's marijuana is significantly more addictive, and more dangerous.

People are unlikely to die from overindulgence, but they can suffer serious side effects, including erratic behavior. A California group fighting legalization reports on its website that young people are six times more likely to develop psychosis and four times more likely to suffer delusions if they smoke pot. It's right. A new study from Northwestern University links daily teen pot smoking with schizophrenia.

As worrisome, the study says that high-potency THC can cause fatal brain damage to a fetus as early as two weeks into development – before the mother even knows she's pregnant. Even low-intensity pot has been found to cause birth defects.

The impact on young people is most concerning -- indeed, the new laws still prohibit those under 21 from buying weed. Even 85% of Colorado parents agreed that "marijuana can have strong negative consequences on the still-developing brains of teenagers, and…. that marijuana use at a young age can hurt performance in school and impact a young person's future," according to a recent survey.

Supporters of legal pot argue that kids already smoke marijuana; they claim changing the law will have little impact. That seems questionable. If the state says it's okay for adults, the message is that it is safe, like alcohol. As with booze and cigarettes, once weed is commonplace in homes, more kids will indulge.

Larry Kudlow, who has battled addiction for years, recently described young people showing up for 12-step programs, many of whom started out getting hooked on pot. He quotes the AMA advisory that "early cannabis use is related to later substance-use disorders." Indeed, studies have shown that while only 9% of weed users become addicted, the figure jumps to one in six for people who begin consuming pot as teens, and to as high as 25-50% for those who smoke daily.

Most frightening are the findings of a 25-year study that showed early use leading to lost IQ points. Dr. Madeline Meier, who co-authored the report, is quoted on the website for the National Institute on Drug Abuse saying, "The eight-point decline observed among the most persistent adolescent-onset users would move an individual who started at the 50th percentile with an IQ of 100 to the 29th percentile." The report noted that the damage is not reversible; even those who gave up the habit later on suffered impairment. Is this really what we want for our children?

The Financial Times published an editorial recently celebrating the "brave new world" of marijuana legalization. They cite three reasons for their enthusiasm. The first is the folly of spending $50 billion yearly in the US on "anti-drug efforts," even though half of Americans support legalization. Challenging that assertion is that the White House claims we spend only $9 billion on drug-related enforcement; another $10 billion goes to drug education and treatment, which is unlikely to drop if pot is legal.

The cost of trying to prevent pot consumption is significant. My guess is that some middle ground, which lessens the penalties for possession and reduces enforcement expenses, is available. Further, I would suggest that two-thirds of people under 30 favoring legal pot does not necessarily require a policy change. Last month, Rasmussen reported that 81% of Americans favor repealing or changing Obamacare -- clearly, the majority does not always rule.

Second, The Financial Times noted that prohibition creates profits for organized crime; if the drug were legal (and cheaper, presumably), criminals would not have much to gain from illegal sales and smuggling. That seems reasonable, except that states want to heavily tax the product, which will drive the cost up. Consider the illegal trade in cigarettes – driven by taxation.

In New York, which has the highest tax on cigarettes in the nation (of course), some 61% of sales are smuggled in from other states. Plenty of criminal activity there.

The Financial Times also hypes the potential windfall available to the states from taxing pot – which they point out could be used to "raise awareness about the dangers of drug use…and improve the rehabilitation of addicts." Come again?

Editor's Note: This article by Liz Peek originally appeared on The Fiscal Times.

For more from The Fiscal Times:

7 Barely-Legal Pot Products from a Budding Industry

Why Legalizing Marijuana Is a Smart Fiscal Move

11 Companies That Won 2013

Follow The Fiscal Times on Twitter @TheFiscalTimes.
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