Up in Smoke

The Legalization of Marijuana

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Americans have changed their minds about pot. In less than a generation, public opinion has turned against the drug laws that banned marijuana, a historic shift in attitudes away from prohibition and penalties. In four U.S. states and the District of Columbia, pot is now legal for recreational use, driving the debate about how it should best be regulated, consumed and taxed as it gains acceptance across the U.S. and in other countries.

The Situation

Voters in Oregon, Alaska and the District of Columbia approved recreational use of marijuana in ballot measures in 2014, after residents of Washington and Colorado led the way two years earlier. Since 2013, a number of polls have shown that a majority of Americans think pot should be legal. In 1969 — the year of Woodstock — just 12 percent agreed, pointing to a generational shift that’s propelling acceptance of other trends like same-sex marriage. Though marijuana is still an illegal substance under U.S. federal law, the Justice Department said it won’t challenge the state statutes, removing a key obstacle. Shops in Colorado opened their doors in January 2014, selling joints and pot-laced consumables like chocolates and mints to long lines of customers, including tourists. Washington began sales six months later. Legal weed generated an estimated $2 billion in sales in the U.S. in 2014. Voters in Nevada will vote on a pot ballot measure in 2016, and those in Arizona, Maine, Massachusetts and California — the largest state by population — are considering referendums as well. Uruguay became the first country to legalize marijuana in 2013, defying an international drug treaty. The Latin American nation’s president urged bigger countries to reconsider their strategy in the drug war. Mayors in the Netherlands, which has tolerated pot smoking in its coffee shops since the 1970s, called on the Dutch government to start regulating growers and sellers, mirroring the U.S. approach.

Sources: Gallup, General Social Survey, Pew Research
Sources: Gallup, General Social Survey, Pew Research

The Background

Cannabis has been used since ancient times for its fiber in addition to its medicinal and mood-altering effects. It was effectively outlawed in the U.S. in the 1930s, at about the same time that a 13-year prohibition on alcohol was overturned through a constitutional amendment. Pot was demonized by the 1936 black-and-white cult film “Reefer Madness,” a cautionary tale of corrupted teens. Support for legalization in the U.S. grew after states began permitting medical use of the plant to treat pain and nausea in patients with AIDS and cancer. California was the first state to allow it in 1996 and now 23 do. Chronic use of marijuana can lead to addiction and increases the risk of bronchitis and schizophrenia, along with anxiety and depression, according to the U.S. National Institute on Drug Abuse. Studies have also shown that heavy use can impair brain function.

The Argument

Advocates in the U.S. successfully compared pot with alcohol, arguing that legalization would allow for better monitoring of an industry that has long existed underground. It also provides tax revenue, and Colorado collected $66.5 million in the first 14 months. The growing number of Americans who acknowledge that they have smoked pot include President Barack Obama, who has spoken out about how poor and minority kids account for a disproportionate share of those punished for its use. About half a million people were arrested for marijuana possession in the U.S. in 2012, about the same number as for all violent crimes combined. Nineteen U.S. states and several countries have passed laws decriminalizing possession, so that getting caught with a small amount is treated as a minor offense. Critics say easing marijuana laws exposes children and teenagers to the drug and could lead to an increase in drugged driving. Even with wider acceptance in the U.S., the clash of federal and state laws creates uncertainty over what’s legal and where. Banks in the U.S. are left in a gray area about whether they can provide accounts to the burgeoning legal pot industry and still comply with federal laws.

The Reference Shelf

  • Bloomberg Markets magazine discovered an investor frenzy for marijuana-related products.
  • A map of shops licensed to sell marijuana for recreational use in Denver.
  • U.S Justice Department memo from August 2013 on marijuana enforcement policy.
  • Details on the state of Washington’s implementation of legal marijuana use, and the same from Colorado.
  • Website of NORML and the Marijuana Policy Project, two advocacy groups for legalization.
  • U.S. National Institute on Drug Abuse website on marijuana.
  • Bloomberg compiled a ranking of companies prospering from the marijuana business.

First Published March 11, 2014

To contact the writer of this QuickTake:

Alison Vekshin in San Francisco at avekshin@bloomberg.net

To contact the editor responsible for this QuickTake:

Lisa Beyer at lbeyer3@bloomberg.net