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Introduction <br /> Decriminalization of marijuana is a policy that reduces the punishment for possession <br /> of marijuana to a civi] fine rather than a criminal offense. Trafficking and se]ling, or <br /> distributing to minors, remain subject to standazd criminal punishments. <br /> Decriminalization is apolicy that has been substantially discussed nationally. A number <br /> of states have decriminalized mazijuana possession. <br /> <br /> y' In contrast, legalization would decriminalize both possession and sale of mazijuana <br /> and replace them with a system of regulation and possible taxation. There is also a <br /> substantial literature on legalization of vazious drugs although no state or national <br /> government has actually legalized marijuana. <br /> This study addresses three issues related to marijuana decriminalization, and <br /> <br /> " legalization. First, what savings from legalization or decriminalization can be expected to <br /> occur in state and local budgets. Second, in the case of legalization, what tax revenues <br /> could be projected. Third, what would be the impact of these measures on marijuana use. <br /> The United States, like other countries, has chosen to regulate some substances that <br /> aze addictive, or potentially addictive, such as cigarettes and alcohol, and ban others. ~ <br /> Regulation uses taxes, minimum age requirements, other restrictions on use, and <br /> education about harmful effects in order to limit the potential damage these goods can do. <br /> Bans involve outlawing the use of certain substances. Taxation and bans both raise the <br /> price of these substances; taxation directly raises the price, while bans limit supply. In <br /> <br /> r addition, bans create black markets, encourage illegal activities, and may result in harm <br /> to innocent victims? <br /> ,r <br /> ~ Potentially addictive means a relatively small part of the population can become <br /> addicted to a substance. Alcoholism, for example, is recognized as a disease, and those <br /> addicted to alcohol represent a small percentage of those that consume alcohol on the <br /> order of 15 percent. The addictive nature of marijuana is questionable. Those who <br /> support its continued ban claim that it is a "gateway drug" whose use leads to more <br /> hazmful drugs; although recent reseazch disputes that theory. <br /> z This discussion follows that of Michael Grossman, "Individual Behaviors and <br /> Substance Use the Role of Price," National Bureau of Economic Research Working <br /> ,R Paper 1048. <br /> r <br /> 1 <br /> <br /> s <br /> <br />