Legalization of Recreational Marijuana †Free Samples to Students

Question: Discuss about the Legalization of Recreational Marijuana. Answer: Introduction: Marijuana one of the globally acknowledged illicit drugs is derived from Cannabis sativa a plant originating in South Asia and Central Asia. The mixture of dried flower and shredded leaves of the plant is used as the marijuana drug. It is one of a kind psychoactive drug that is usually consumed by hand rolling them into joints or by putting it into special cigars called blunt (www.drugabuse.gov 2017). The chemical component present in Marijuana is known as Cannabinoid comes with several benefits like preventing Alzheimer, reducing aggression, protecting brain and even preventing the proliferation of cancer cells. Legislation of Marijuana: Colorado and Washington D.C. have long back legalized the use of marijuana in 2012 for recreational purpose and medicinal purpose. In the year 2016, the state of California got its first law passed in favour of legalizing this plant through its Proposition 64. The state through California Proposition 64 tried to bring a change in the existing legalization thereby legalizing the use of marijuana amongst adults (Ferner and Wing, 2016). The law was passed with 57.13% votes in favour of it. According to this law, consumption has been legalized amongst youths aged 21 years and more in their home or in licensed areas (Abcarian 2016). The impact of such legalization in the demand and supply of the commodity and on the revenue generated from legalization has been discussed below: The figure above shows the short-run demand and supply of marijuana after legalization. Prior to legalization many people who wanted to purchase this drug were unable to do so due to the high cost associated with it through black market. Hence, with the legalization of Marijuana in California, it is expected that more people are going to opt for it and as a result there is going to be a shift in the demand for the good. In contrary since it is a short run phenomenon hence, the supply cannot be increased overnight. This is because supply occurs with time lag. Therefore, prior to legalization the equilibrium demand and supply were P1 and Q1 respectively. After legalization, the demand curve is going to shift outward to D2 from D1 whereas there is no change in the supply curve. Hence, the new equilibrium price and quantity is P2 and Q2 respectively. There has been a rise in price of marijuana as well as rise in quantity demanded. Comparison of Elasticity of Demand: The marijuana was legalized with imposition of high volume of tax. The impact of tax on the demand and supply depends on the elasticity of the demand. In other words, the responsiveness of demand based on the change in price is known as elasticity. In the figure above S is the supply curve which is constant in the short run. The responsiveness of the demand has been shown under two parts, one with elastic and other with inelastic demand. D- elastic and D- inelastic are the two demand curve. The initial equilibrium is at P1 and Q1 respectively. Effect on Elastic demand Curve: The imposition of tax decreases the quantity demanded by a large volume as shown by the green dotted line. This is due to the fact that people are not ready to pay such a big price for this drug. As quantity demanded decreases to a large extent, the government is unable to fetch a large share of revenue. Effect on Inelastic Demand: Under this situation, the people are ready to buy marijuana even at higher cost. Hence by imposing per unit tax on the drug, the government can earn a huge volume of revenue from the incident. Impact of recreational Marijuana on Tax Revenue from Tobacco: Statistical data suggests that as much as 42% of the high school goers in US have used marijuana and amongst them 13% of the student uses it regularly. Hence according to Gottilieb and Munson (2016), the legalization of marijuana can be beneficial for the government of U.S. as they can now expect to earn more revenue from it. On other hand, with the increase in demand for marijuana there is going to be a decrease in the consumption of tobacco and thereby less amount of revenue is generated from it. The diagram below explains the same Marijuana and tobacco are substitute goods serving the same purpose of fulfilling addiction. Hence with legalization of marijuana as the consumption of it increases the demand for tobacco got reduced. In the graph above, intersection of D1 and S gives the initial level of tobacco consumption and the green box shows the total volume of revenue generated from it. As demand decreased and the curve shifted to D2, the volume of tax now earned from tobacco got reduced as shown by the red box in the diagram. Conclusion: The essay can be summed up by stating that marijuana is the processed part of Cannbis that has many beneficial effects. Still in most of the countries in the world it has not been legalized under the state legislature. California took a revolutionary step in legalizing the same. Though the plant has been used as an illicit drug but legalizing them is going to help the people of that nation in acquiring them easily. Legalization would remove the fear amongst the youth in purchasing them along with easing the access of the same and thereby are less likely to fall under the trap of drug dealers. This is because in order to establish themselves amongst peers, youths are more likely to try out things that are restricted or thought of as a social taboo. On other hand, if the benefits and the adverse effect of the weed can be demonstrated amongst the youths through street play, orientation courses in high schools and so on, then they are less likely to misuse marijuana. It can be concluded by stating that there has been a growing demand for the legalization of marijuana in different states of the US and in other parts of the world. Hence, there is an upcoming opportunity in terms of business involving marijuana. References: Abcarian, R. (2016).Is marijuana legalization in California the beginning of the end of the war on weed?. [online] latimes.com. Available at: https://www.latimes.com/local/abcarian/la-me-yir-abcarian-essay-12252016-story.html [Accessed 28 Apr. 2017]. Drugabuse.gov. (2017).Marijuana. [online] Available at: https://www.drugabuse.gov/publications/drugfacts/marijuana [Accessed 28 Apr. 2017]. Ferner, M. and Wing, N. (2016).California Votes To Legalize Marijuana, Paving The Way For A Nationwide Push. [online] Huffington Post India. Available at: https://www.huffingtonpost.in/entry/california-marijuana-vote_us_5821f68be4b0e80b02ccdc28 [Accessed 28 Apr. 2017]. Gottlieb, L. and Munson, M., 2016. Insurance Issues Raised by the Legalization of Recreational Marijuana.The Brief,46(1), p.34.