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Marijuana Legalization Legislation Coming This Month in Pennsylvania Could Hold $1B Economic Impact

Daylin Leach, right, chats with the state's next Attorney General, Kathleen Kane
Daylin Leach, right, chats with the state's next Attorney General, Kathleen Kane

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Marijuana will be legal in Pennsylvania. It's merely a matter of when, says State Senator Daylin Leach (D-17), who is preparing to introduce legislation later this month that would legalize marijuana.
 
"This will be legal in 20 years," says Leach, who represents parts of Delaware and Montgomery Counties. Last Friday he issued a memorandum broadly outlining the costs of continued marijuana prohibition and a roadmap toward legalization in the more foreseeable future. 

"I don't believe this is a fringe issue. It's a major economic issue and a major moral issue."
 
While Leach is the first to admit this legislation will face an uphill battle, the economic gains from legalizing pot are potentially enormous and the timing seems as ripe as it has been considering recent successful legalization measures in Washington and Colorado.

A $1 Billion Pull
Leach says it's difficult to estimate an overall statewide economic impact because taxation levels have not been established and it's unclear how many marijuana users there are in Pennsylvania. However, Leach indicated taxation would come at a high level because of marijuana's low production costs and was confident in saying he is anticipating an impact that approaches $1 billion. That takes into account some $325 million spent on more than 25,000 arrests in 2006 (an average year) and potential monies from taxes and related industry, as well as harder-to-track savings like when a young person has to drop out of college because of a minor marijuana conviction.

"This will create a huge, new industry, from the growers to the distributors to whatever retail outlet we ultimately choose," says Leach. "It's sort of a no-brainer in terms of economic benfit."

Drug policy expert Jonathan Caulkins, a Heinz College professor at Carnegie Mellon University in Pittsburgh, urges caution when projecting such numbers, citing factors like bloated arrest costs and potential tax avoidance practices that would make the actual economic impact much more modest.
 
Caulkins also says that marijuana users, socio-economically, are middle-of-the-road when compared to other drug users, and that about 60 percent of marijuana use comes from people with a high school education or less. Alcohol ranks on the higher end of the socio-economic ladder and cocaine ranks on the lower end of the spectrum, according to Caulkins.

"The devil can be in the details in how these things are written," he says. "To think about it from the perspective of how a dynamic, creative, entrepreneurial industry would try to respond to opportunities it creates is a worthwhile thing to do."
 
Leach's initial plan is to regulate marijuana like alcohol and plug it into the state's network of wine and spirit stores, as well as licensed beer distributors. That would be a first, and potentially troublesome, according to Caulkins. He says it would put state employees who work at the distribution centers in the crosshairs of prosecution as long as marijuana is illegal at the federal level. The ambiguity on the issue from Washington D.C. and President Obama also makes any projections dicey.

Nonetheless, treating pot like booze was part of the plan in Oregon, already one of 19 states that permit medical marijuana and which saw legalization on the November ballot narrowly defeated largely because of insufficient funding and campaign organization.

Caulkins says legalization would radically transform how marijuana is produced and distributed. Economic activity in a legalized scenario would likely center on branding (craft growers like craft brewers) and bundling (selling marijuana alongside coffee and baked goods at a cafe), he says, while large-scale producers would likely reign. 

The State of the State
Despite the potential economic impact, mainstream media across the state is largely dismissing the legislation as having zero chance of passage.

Most initial reports are citing past polls that indicate public support for medical marijuana (80 percent) and outright legalization (only 33 percent) and requisite commentary from Terry Madonna, the well-known political science guru from Franklin & Marshall. One important point about the latter figure on outright legalization -- that was from a 2010 poll and an increase from 22 percent two years prior. It's not hard to imagine that figure might now be hovering around 50 percent, especially with the recent developments in Colorado and Washington. 
 
Those states, however, had its residents vote on the issue. Getting politicians to line up around legalization is another story, but Leach believes gaining the support of consistent conservatives who are staunch advocates of personal liberty and law enforcement officials who are increasingly strapped for time and resources could make a difference.

Leach points out that in Philadelphia, marijuana is effectively decriminalized when it comes to small amounts. Less than three months on the job, District Attorney Seth Williams announced in April, 2010 that his office would divert marijuana possession cases involving 30 grams or less from the court system to a new program that processes them quicker and spits them out with a clean record. That saved the DA's office $2 million in its first 12 months.

Moving the Arguments Forward
Leach has already been on the losing end on one of two bills for medical marijuana in Pennsylvania that died in committee in the last two years. In his recent memo, Leach cites many standard points of fact for total legalization:
 
- Marijuana is less dangerous then beer, less risky than children's cough syrup and less addictive than chocolate.
- Marijuana never killed anybody and its prohibition causes far more societal harm than its properties
- The extreme cost of prohibition.
 
"Marijuana was the most prescribed drug in America before 1937," says Leach. "The anecdotal evidence and literature (for ending its prohibition) are overwhelming."

Caulkins calls Leach's argument a "classic presentation for marijuana legislation," but believes Leach's assertion that marijuana prohibition has created violent turf wars somewhat misrepresents the magnitude of the issue, and that other illegal drugs like cocaine and methamphetamines are the primary contributors to associated violent crime in Pennsylvania.
 
Caulkins makes himself available to state and federal policymakers around the subject of sound drug policy. When asked how he might advise Pennsylvania lawmakers, he says patience is a virtue. He believes waiting to see how things play out in Washington State, Colorado, California and in Washington, D.C. will best position marijuana legalization legislation for success.
 
"There's a difference between the cutting edge and bleeding edge," says Caulkins. "Let someone else be on the bleeding edge."

JOE PETRUCCI is managing editor of Keystone Edge. Send feedback here.
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