marijuana prohibition costs

Despite legalizing simple possession, marijuana arrests still inflict tens of billions of dollars in economic damage on Americans annually

Marijuana is on the brink of being accepted legally nationwide, but arrests related to the drug still result in massive costs and consequences.

Ten states and Washington, DC have passed laws legalizing marijuana for recreational use. Twenty-three states and Washington, DC have decriminalized small amounts of the drug, meaning it’s no longer a state crime to be found in possession of marijuana. A push to legalize the drug recreationally in New York failed this past Wednesday, but marijuana is close to being legalized in several other states, including Illinois.

The legal marijuana industry could be a multi-billion dollar industry in the US, but for now, it’s actually costing Americans an exorbitant amount of money.

Here, INSIDER breaks down the high costs of marijuana arrests to both the government and law enforcement, and the people who are arrested and charged with possession and distribution crimes.

The cost of police enforcement of marijuana-related crimes is well into the billions

Between 2001 and 2010, police made more than 8.2 million marijuana arrests across the US, according to the American Civil Liberties Union.

Enforcing possession laws that lead to those arrests costs police $3.6 billion every year, reports the ACLU.

At that rate, police spent $4,390 per arrest between 2001 and 2010, or $73,170 per felony conviction. While these costs are relatively clear, the additional costs to someone arrested on possession charges can be more opaque.

Defending a marijuana arrest can cost more than $10,000

But police drug enforcement costs are just one part of the story. The accused must pay to mount a defense, and potentially pay restitution, as well. Even conservative estimates of those costs put the final figure in the billions.

Using the ACLU’s figure of 8.2 million marijuana arrests over ten years, there are around 820,000 marijuana arrests annually.

About 50,000 of those arrests — or 6% — lead to a felony conviction. The rest a re successful defenses, situations where a person pleaded to a misdemeanor charge or charges; or instances where charges are dropped. In any of those situations, defendants are financially liable for directly paying for legal services or, more inevitably, paying some form of restitution or fine in order to have the charge dismissed or reduced.

According to, a website that helps defendants find defense lawyers, hiring a criminal defense lawyer can cost someone between $10,000 and $15,000. “Hourly rates will vary greatly, depending on the relative ability of the lawyer and your personal case circumstances,” LegalMatch said on its website. “Typically, you can expect to pay $150 to $700 an hour for a criminal defense lawyer’s time.”

But on top of lawyer fees, a defendant can expect to pay court fees, and depending on the state and situation, bail fees.

INSIDER asked a number of drug lawyers across the country what they’d encourage a client to prepare for when facing down drug charges. The answers were different all over thanks in part to the patchwork of laws governing cannabis in the US, but invariably extended well into the thousands of dollars.

For a basic misdemeanor possession charge, the quoted figure a person could anticipate spending was about $1,000 to $3,000 on attorney fees, and $1,000 to $2,000 to get through subsequent programs they’d agree to in the course of contesting the misdemeanor.

For a felony distribution charge, the cost jumps to $10,000 in legal fees in states with particularly severe marijuana laws, and $2,500 to $5,000 in states with more lenient laws. Adding in fees for mandatory diversion programs, court fees and other costs, the projected total hit per defendant is between $15,000 and $20,000.

Regularly, reporting on the cost of marijuana has focused on the cost of enforcement, but INSIDER’s analysis of the costs and penalties involved for a defendant show that the financial burden is likely as high or higher for the person arrested than it is for the state.

W hile the ACLU reported a figure of about $4,000 per marijuana case on the enforcement side, the impact directly to the person arrested is anywhere from $2,000 to $20,000.

Based on these numbers, INSIDER estimates that the cost of enforcing and litigating marijuana arrests amounts to billions of dollars every year.

Marijuana arrests wreak havoc on the economy in the big picture

The cost of a marijuana arrest doesn’t end in a courtroom. Arrests have long-term financial affects on individuals and their families. Legalizing marijuana today won’t erase the damage that’s already been done and the large numbers of arrests tied to laws that are no longer in place.And “marijuana legalization,” even in the most progressive sense, typically only involves making misdemeanor possession no longer a crime.

U nlawful sale of marijuana often remains a severe felony, and incarceration or serious criminal charges has devastating life-long financial impacts.

Of those arrested for marijuana possession, 90% have no prior conviction. And given felony distribution of marijuana remains a crime, tens of thousands of Americans per year are still currently incurring felony convictions, and potentially spend a period of time in jail or in prison, related to marijuana.

So how many people are still seeing a lifetime of financial penalties thanks to marijuana? We can make a conservative estimate by looking only at those felony marijuana convictions, the roughly 50,000 per year per the ACLU numbers.

How do we measure the cost for them?

In the 2002 study “The Impact of Incarceration on Wage Mobility and Inequality,” researcher Bruce Western found that incarceration can permanently alter an individual’s life course, disrupt key life transitions, and destroy access to steady employment. Incarceration can also hugely impact future economic stability and wage earning. The study looked at young men who were incarcerated in prison or jail between 1979 and 1998.

According to Western’s study, the loss of earnings occurs partially because wages increase at a slower rate following an incarceration. Not only are wages essentially frozen when someone is put in jail, incarceration causes a reduction in the rate of wage growth over the course of a lifetime by about 30%. Western also found that a criminal record — regardless of the crime related to the record — reduces callbacks from prospective employers by around 50%.

The average lifetime earnings of an American high school graduate is about $1.53 million. For those with a felony record, based on Western’s research we’d estimate that number decreases by a fifth, a $306,000 loss in lifetime earnings.

This amounts to tens of billions of dollars in lost income due to marijuana distribution convictions and their corresponding prison sentences. Even if we go so far as to assume that 20% of those convicted are repeat offenders — 10,000 of the 50,000 annual arrests — that still results in billions of dollars in lost wages.

INSIDER estimates that around $12 billion worth of long-term lifetime economic damage is being inflicted each year.

And that only accounts for the felony convictions. There are additional economic damages linked to misdemeanor convictions, lost time at work, and lost employment due to incarceration, which are possibly even more substantial given they’re an order of magnitude more common.

Given the $3.6 billion spent enforcing, the $12 billion or more in lifetime economic losses, and the multiple billions spent defending or making recompense for the offenses, a conservative estimate of at least $100 billion is lost through marijuana enforcement every five to six years.

That still doesn’t take into account the economic damage passed on to children

According to a Stanford University study, parental income is the single largest determinant of a child’s own eventual income, so when parents lose thousands of dollars due to felony convictions, their children are also affected.

The $306,000 loss in lifetime earnings isn’t just a loss to the arrested individual — that loss trickles down through their families, and often transfers from generation to generation.

That lifetime loss in income is more than enough to knock an individual down the income percentile, which can have an outsized effect on the life of the child.

A 2015 report from the Pew Foundation, titled ” Economic Mobility in the United States ,” found that children raised at the 90th percentile economically will likely have family incomes that are three times more than children who were raised at the 10th percentile.

Sheldon Danziger, president of the Russell Sage Foundation, told Pew in 2015: “Over recent decades, the rising income and wealth of affluent parents have allowed them to increase investments in their children, from day care through college. At the same time, wages have stagnated for most workers and low-income families have struggled to pay for routine expenses.”

Legalization still has a long way to go

The numbers of people incarcerated and experiencing the after-effects of marijuana-related offenses are staggering, especially considering the radical shift in public opinion and policy around the drug. Part of that has to do with the enforcement, and over-enforcement of drug laws — and the ways those laws disproportionately impact communities of color.

In New York State, for example, possession of less than 25 grams of marijuana has been decriminalized since 1977. Yet New York still arrests around 50,000 people a year for “possessing marijuana in public view,” according to the Drug Policy Alliance.

And, though marijuana consumption is generally the same across all demographic groups, black and Latino people are disproportionately targeted by police for posession. Nationally, black people are four times more likely than white people to be arrested for possession, reports the Drug Policy Alliance.

These arrests have a huge impact on who gets to profit from the legalization of marijuana. Dispensaries are currently legal in 33 states and Washington DC. A 2017 study from Marijuana Business Daily found that 81% of marijuana business owners were white, while just 5.7% are Latino, and 4.3% are black. These statistics are likely impacted by the fact that people with drug felony convictions are prohibited from owning dispensaries. Now that there is legal money to be made in the marijuana business, large swaths of the people most impacted by marijuana laws are being excluded from those opportunities.

Marijuana has still not been decriminalized in around a third of the country, though several states, including Ohio, Illinois, and North Carolina, have reduced penalties and pursuance of marijuana charges.

Working on expunging past marijuana convictions is something the ACLU has pushed for in the past. Thus far, California, Colorado, Maryland, New Hampshire, and Oregon have all created policies to help those convicted of some marijuana crimes — including possession and cultivation — have their records expunged or hidden.

“Automatic expungement has to be an inextricable, central part of any legalization proposal the Legislature considers.” ACLU-NJ Executive Director Amol Sinha said in 2018. “Forcing people to bear the consequences of a criminal conviction for an offense that’s no longer considered a crime simply prolongs the injustices of the failed, discriminatory drug war.”

The legal marijuana industry could be a multi-billion dollar industry for the United States, but for now, it's actually costing Americans billions.

Hundreds of Economists: Marijuana Prohibition Costs Billions, Legalization Would Earn Billions

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Over 300 economists, including three Nobel Laureates, recently signed a petition that encourages the president, Congress, governors and state legislatures to carefully consider marijuana legalization in America. The petition draws attention to an article by Harvard economist Jeffrey Miron, whose findings highlight the substantial cost-savings our government could incur if it were to tax and regulate marijuana, rather than needlessly spending billions of dollars enforcing its prohibition.

Miron predicts that legalizing marijuana would save $7.7 billion per year in government expenditure on enforcement, in addition to generating $2.4 billion annually if taxed like most consumer goods, or $6 billion per year if taxed similarly to alcohol and tobacco. The economists signing the petition note that the budgetary implications of marijuana prohibition are just one of many factors to be considered, but declare it essential that these findings become a serious part of the national decriminalization discussion.

The advantages of marijuana legalization extend far beyond an opportunity to make a dent in our federal deficit. The criminalization of marijuana is one of the many fights in the War on Drugs that has failed miserably. And while it’s tempting to associate only the harder, “scarier” drugs with this botched crusade, the fact remains that marijuana prohibition is very much a part of the battle. The federal government has even classified marijuana as a Schedule 1 substance (its most serious category of substances), placing it in a more dangerous category than cocaine. More than 800,000 people are arrested for marijuana use and possession each year, and 46 percent of all drug prosecutions across the country are for marijuana possession. Yet this costly and time-consuming targeting of marijuana users by law enforcement and lawmakers has done little to quell use of the drug.

The criminalization of marijuana has not only resulted in a startlingly high number of arrests, it also reflects the devastating disparate racial impact of the War on Drugs. Despite ample evidence that marijuana is used more frequently by white people, Blacks and Latinos account for a grossly disproportionate percentage of the 800,000 people arrested annually for marijuana use and possession. These convictions hinder one’s ability to find or keep employment, vote or gain access to affordable housing. The fact that these hard-to-shake consequences – bad enough as they are — are suffered more frequently by a demographic that uses marijuana less makes our current policies toward marijuana all the more unfair, unwise and unacceptable.

Our marijuana policies have proven ineffective, expensive and discriminatory. Our courtrooms, jails and prisons remain crowded with nonviolent drug offenders. And yet, the government persists in its costly, racist and counterproductive criminalization of marijuana. We learned our lesson decades ago with alcohol prohibition; it is long overdue for us to do the same with marijuana prohibition. In the face of Miron’s new report, and its support from hundreds of economists, we are hopeful that not only will the national conversation surrounding marijuana change, but so will our disastrous policies.

Over 300 economists, including three Nobel Laureates, recently signed a petition that encourages the president, Congress, governors and state legislatures to carefully consider marijuana legalization in America. ]]>