The War on Drugs and the True Costs of Cannabis Prohibition

The war on drugs has produced the world’s largest illegal commodities market. The prohibitionists global drug control system has effectively abdicated control of a growing and lucrative trade to violent criminal profiteers — at a cost in enforcement terms estimated to be at least $100 billion per year.

Despite ever increasing monies directed at supply-side enforcement, the illicit drug market has continually expanded, and is now estimated by the UN to generate more than $330 billion a year, (note some estimates are much higher, closer to 500 billion USD) a figure that dwarfs the GDP of many countries. The enormous profits made by criminal drug organizations enables them to undermine governments and state institutions through corruption and intimidation, blur the boundaries between the legal and illegal economies, and threaten the economic stability of entire states and regions.

By now you probably have heard that one of the most significant harms generated from marijuana use is the high cost to both government and to the victims of prohibition. The drastic negative effects on those who are thrust into the penal system from a simple marijuana possession arrest are staggering. Finally, many are realizing the true dangers of marijuana prohibition and speaking out. When everything is carefully weighed and measured, the worst harm that pot could deliver is a jail sentence and the damages incurred once you become a felon. The real irony here is that weed users are ‘put away’ into jail cells and prisons all over the world for using a substance that cannot, by any means, be considered truly dangerous. But we certainly know that prison systems — the world over — are extremely dangerous places.

But consider also the immense waste of taxpayer euros and dollars governments from all over the world need each year in order to prevent their citizens from using mind altering illegal materials. The problems with drug use are varied and complex, but several experts feel that it is normal for humans, as well as numerous other mammals that we share the earth with, to want to alter their consciousness. Psychopharmacologist Dr. Siegel, of UCLA, has written book on it. Dr. Siegel’s book ‘Intoxication: The Universal Drive for Mind-Altering Substances’, addresses this issue in a most fascinating way. I highly recommend reading it.

From Amazon’s description of the book:

History shows that people have always used intoxicants. In every age, in every part of the world, people have pursued intoxication with plants, alcohol, and other mind-altering substances. In fact, this behavior has so much force and persistence that it functions much like our drives for food, sleep, and sex. This “fourth drive,” says psychopharmacologist Ronald K. Siegel, is a natural part of our biology, creating the irrepressible demand for intoxicating substances.

In Intoxication Siegel draws upon his 20 years of groundbreaking research to provide countless examples of the intoxication urge in humans, animals, and even insects.

In his book he has described dozens of creatures that consistently strive for ways to get ‘high’. Such as bears eating fermented berries and even insects that enjoy cannabis.

The point is that once drugs became known to humans (and our furry friends) they have consistently sought their uses in everything from rituals to social events to self-medicating. This isn’t something that we can dis-invent — and it can’t be stopped. It appears to be in our DNA, it’s really quite natural many experts insist.

That’s the simplest, yet incomplete, explanation as to why the ‘drug war’ has been an abject failure. People want to get high and we can’t really stop them from doing it. Governments are finally admitting, at least privately, that it costs a lot of money to prevent people from doing what they are going to do anyway, like using pot. It’s a fool’s errand.

Far too much money is expended that could be used for valuable infrastructure upgrades, or as one author mentioned: if just one year of US interdiction were cancelled, the monies saved — in just that one year — could provide ‘on demand’ drug rehabilitation — for free — for every single inhabitant in America. Of course, although the numbers are different, the same holds true for the UK and the rest of Europe.

If pot were legalized in Europe and North America, the taxes on this titanic amount of euros would pave the roads in gold across all of Europe and the US. Take a close look at the incredible amounts of cash this single plant generates:

(Estimate of Global Retail Cannabis Market) The UNODC (2005) estimates that the world retail market for cannabis was about €125 Billion circa 2003; more than the retail markets for cocaine and opiates combined. The US is believed to be the largest contributor to this estimate, but the exact size of that market is far from settled.

The UNODC’s macro estimates indicate that North America and Western/Central Europe account for 45% and 28% of the world cannabis market, respectively. The UNODC’s input-output model suggests that each past year user in North America consumed 165 grams of cannabis herb at almost €10 per gram. With approximately 25 million past-year users in the US during this time, the UNODC calculations imply that retail cannabis expenditures in the US exceeded €40 billion. This is more than four times the retail estimate generated by the White House’s Office of National Drug Control Policy for 2000. [all monetary values are in €2005] 

So why keep fighting a battle that can never be won? Why not use the saved cash to help those with addiction problems rather than caging them?  Furthermore, the money produced from a well-regulated, taxed, legal drug system would be a godsend to most financially strapped nations, especially those with huge social programs like many member states of the EU. We even have some carefully calculated numbers which help to clarify what could be gained by completely legalizing just marijuana.

Several years ago (2010) a senior lecturer at Harvard University, Jeffrey Miron, studied the likely outcomes of drug (pot) legalization as a solution. What he found was that nearly 9 billion US dollars would be saved on interdiction and law enforcement. Another nearly identical amount would be generated from taxes on legal marijuana purchases. That was six years ago so if you add in the effects of inflation you get roughly 20 billion at current costs.

Jeffery Miron wrote an article describing where he received his inspiration. In it was a similar proposition put forth in a June, 2005 report claiming nearly identical monetary savings, backed by three Nobel Laureates in economics: Dr. Milton Friedman of the Hoover Institute, Dr. George Akerlof of the University of California at Berkeley, and Dr. Vernon Smith of George Mason University. This was recreated as a proposal which currently has over 500 economists backing it.

Here’s the point:

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.

Furthermore, people of color are arrested far more often than Caucasians. Courtrooms, jails, and prisons remain crowded with nonviolent drug offenders all over the planet. In spite of this and with the memory of the last prohibition debacle (alcohol prohibition) still clear in their minds, governments all over the world persist in this wasteful, counterproductive effort. We must now ask why?

CNBC wrote an article ‘How Big is the Marijuana Market’? Although it’s difficult to be certain here’s what they came up with using Jeffrey Miron’s approach.

Based on this data, most demand-based studies put the market at $10-$40 billion. If a sensitivity analysis is applied to consumption and price variables (that is, testing different combinations of price and use), the market can reach as high as $100 billion (in the US).

Jeffrey Miron (producer of the below graph) also mentioned that the more you enforce drug prohibition the more violence you’ll see:

Homicide Rate in US

Note in figure 1, the huge surge in homicides during alcohol prohibition and then again with the ‘war on drugs’. This effect is seen all over the world. Countries such as Mexico and Columbia have experienced ineffable amounts of death and destruction.

The [illicit drug trade] market is broken and requires comprehensive and coordinated reform. Legalizing marijuana use is a step in the right direction, but unless the production and sale of it and other drugs are legal and regulated, not much will change for those who pay the price for the war on drugs.

With the social, financial and moral offenses from the ‘war on drugs’ becoming more apparent, enlightened and forward thinking countries may finally end this disaster that has produced more harms to users than all of the adverse drug effects of all illicit drugs combined.

Dr. Christopher Rasmussen
Dr. Christopher Rasmussen MD,MS, an anesthesiologist with a Master’s degree in traditional Chinese medicine, is a professor, lecturer, seminar provider, and world authority on preventive medicine.For more information on preventive medicine see


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