(Updated) Why is the U.S. government cracking down on medical marijuana, a $1.7 billion business — and one of the few that seems to be thriving in a moribund economy?
In early October, the Justice Department announced that it would be targeting medical-marijuana dispensaries in California. Calling large dispensaries “profiteers” that “hijacked” the state’s medical-marijuana law, “motivated not by compassion but by money,” California’s four U.S. Attorneys announced the arrests of two major dispensary owners and a lawyer they accused of making millions from growing the drug.
It was a reversal of President Obama’s campaign promise to end the previous Administration’s legal pursuit of medical marijuana. Although Obama’s Justice Department had previously abided by a memo that said prosecuting marijuana providers and patients who followed state law was not an “efficient use of federal resources,” over the summer, the Administration changed tack, expressing concern about “an increase in the scope of commercial cultivation, sale, distribution and use of marijuana for purported medical purposes.” It began sending letters to dispensaries and their landlords threatening forfeiture of the properties if marijuana sales did not stop.
The IRS has also begun a crackdown on California dispensaries. It claims that the dispensaries owe back taxes because their business deductions were illegal. In addition, the Bureau of Alcohol, Tobacco and Firearms recently warned gun dealers to not sell to users of medical marijuana.
Ironically, national support for medical marijuana is at a high, at about 70%, and more and more advocates are calling for total legalization of the drug. For the first time ever, Gallup found last week that more Americans support making marijuana use legal: 50% of Americans support legalization, with 46% opposed. That’s up from just 12% in favor in 1969.
Support for legalization is even higher in younger age groups: 62% of those ages 18 to 29 want legal marijuana, while just 31% of those over 65 favor changing the current law. As boomers and even-more-weed-friendly Gen Xers age, pro-legalization sentiment continues to grow.
Add to that support for legalization from the California Medical Association, the state’s largest group representing doctors, with some 35,000 members. In this context, medical marijuana doesn’t seem like a crime voters are clamoring to prosecute.
The federal crackdown isn’t likely to affect marijuana consumption, either. Studies repeatedly find little effect of law-enforcement spending on demand for drugs. Indeed, a recent marijuana price analysis by a collective of geographers called The Floating Sheep (you can’t make this stuff up!) — based on crowd-sourced data on the street value of marijuana by quantity, quality and location — found no correlation between the local cost of marijuana and the number of arrests for dealing or possession in the state.
Rather, price is correlated with location. As the Atlantic‘s Richard Florida describes it:
Their main finding is that marijuana prices rise the further a location is from the major center of production. Decreased supply leads to a rise in transportation costs and risk. Clearly pot prices are as low as they are in the Pacific Northwest and Florida for the same reasons that potatoes are cheap in Idaho and corn is cheap in Iowa — because they’re close to the source, the places where the product is either grown, imported, processed, or all three.
(Incidentally, the nationwide average for an ounce of high-quality smoke is $377.02.)
It seems unlikely that spending scarce federal dollars during a recession on a medical-marijuana crackdown is going to win any awards for “efficient” use of government resources from either the right or the left. In fact, I seem to recall that there’s a Senate committee desperately seeking quick budget cuts. In view of these facts, do you think they should slash schools, meals for seniors, health care spending, cancer research, unemployment benefits, firefighter or police salaries — or the war on medical marijuana?
Correction [Oct. 25]: The original version of this post misstated that the size of the medical-marijuana market was $1.7 billion in California; that estimate is for the entire U.S.