Existing data and revenue estimates suggest that legalizing marijuana would be a net positive for the state of Maryland, producing significant economic activity while posing, at worst, a limited public health risk. Economic benefits range from increased revenues to decreased law enforcement costs and potentially resurrecting now idle industrial properties for marijuana cultivation. Additionally, there is limited evidence legalization would substantially increase impaired driving on Maryland roads or lead to harms associated with increased teenage use.

Potential for Increased Revenues to the General Fund

Two bills being considered in the General Assembly – one in the House of Delegates and one in the Senate – would legalize marijuana for recreational use, while taxing and regulating its production and sale. While neither of these bills are accompanied by a fiscal note (an analysis of the economic impact of a piece of legislation), the fiscal note attached to last year’s marijuana legalization bills estimated an additional $134.6 million in annual general fund revenues for Maryland after the first year, offset by approximately $2 million in initial implementation costs to the state.


The revenue estimate is based on self-reported marijuana usage rates of Marylanders from national surveys that may underreport usage since some people do not want to admit to engaging in an illegal activity. “ may be a lower number than we expect because are self-reported, and a lot of people won’t reveal their marijuana use, and also the potential for marijuana tourism,” said Rachelle Yeung, the Maryland political director for the Marijuana Policy Project, an advocacy organization working to change marijuana prohibition laws throughout the country.

As last year’s fiscal note points out, the revenue estimate could be exaggerated if fewer entrepreneurs than anticipated enter the newly legalized market. Because marijuana production and sale is against federal law, any business expenses incurred in establishing a marijuana operation cannot be claimed on federal income tax returns. Additionally the entire investment could be compromised if the federal government changes its current “wait and see” attitude towards states’ legalization decisions.

Colorado, one of two states that legalized marijuana for recreational use, has not suffered this chilling effect, says Yeung. He noted that Colorado has issued 16,000 occupational licenses, the licenses required for participation in any direct aspect of the production or sale of marijuana. “That’s 16,000 jobs created directly by the marijuana industry, and that doesn’t even account for all the secondary sectors that benefit from these businesses. Because just like any other industry, marijuana businesses need administrative support like accountants, lawyers, technical consultants, construction workers to help build up the cultivation centers, so there are a lot of other collateral sectors that are being impacted by this policy as well, in addition to tourism which helps boost local economies,” said Yeung.

Potential for Reduced Costs to Law Enforcement

Marijuana legalization could affect law enforcement costs to the state, not with savings, instead allowing the state to shift law enforcement resources to other priorities. Last year’s fiscal note indicates legalization would significantly reduce the Maryland Office of the Public Defender’ (OPD) caseloads. According to Ricardo Flores, government relations director for OPD, marijuana cases make up about 10 percent of the OPD’s entire caseload. “Because we have been underfunded for many, many years, the public defender’s caseloads are far above what they should be,” said Flores. “Basically what that means is, in extreme cases like in Prince George’s County, our district court attorneys are taking on about twice as many cases as they should. So, for the public defender to see a net gain in resources and for the state to save money by not allocating a certain amount of money to the public defender each budget year, we would have to have enough work to start laying people off. And 10 percent of our case loads, when our case loads are already twice what they should be, are clearly not enough.”

Flores did point out, however, that OPD supports the legalization measure because it would allow public defenders to focus on charges and offenses that are more serious, an effect that would extend to court and other law enforcement budgets as well.

According to the Maryland branch of the ACLU, in 2010 the state spent $106 million enforcing marijuana possession laws. With legalization, those resources could be shifted to other law enforcement priorities, including improved training for police to better detect impaired drivers, one of the major public safety concerns accompanying the legalization debate.

According to Neill Franklin, executive director of Law Enforcement Against Prohibition, a coalition of law enforcement professionals opposed to the war on drugs, while all police officers receive basic training in how to spot impaired drivers, there is a more extensive training available to produce what are known as drug recognition experts.

“A drug recognition expert is extensive training for a police officer that takes them to another level in identifying whether or not someone’s under the influence of something that will impair their ability to operate a motor vehicle or heavy machinery, whatever the case may be,” said Franklin. “You can tell whether they’re under the influence of a depressant or a stimulant, there’s certain types of tests you do . . . and you become really good at making that determination.”

Franklin notes that such training is expensive, but argues that the revenue generated by the taxation and regulation of marijuana could cover its costs, to say nothing of resources that could be reallocated by the removal of marijuana possession enforcement as a law enforcement priority.

Concerns About Impaired Driving May be Overstated

Existing data on how marijuana consumption impairs driving suggests that shifting resources to combat driving under the influence of marijuana may not be the most effective use of state dollars. A recent study by the National Highway Traffic Safety Administration (NHTSA), titled {Drug and Alcohol Crash Risk}shows that when controlling for demographic factors known to increase the risk of being in a crash drivers under the influence of marijuana are at almost no increased risk for being involved in a traffic accident. The study also shows that at the .05 blood alcohol level (below the standard legal limit of .08), a driver’s risk of being involved in an accident doubles. “This finding suggests that these demographic variables may have co-varied with use and accounted for most of the increased crash risk. For example, if the THC-positive drivers were predominantly young males, their apparent crash risk may have been related to age and gender rather than use of THC,” says the report.

Long-term Economic Effect of Arrests, Incarceration Could be Obviated for Many

Other economic considerations are included in the debate as well, though their direct economic impact on the state are more difficult to quantify. A 2010 study by the Center for Economic and Policy Research, titled {Ex-offenders and the Labor Market}, estimated that ex-offenders “lower overall employment rates as much as 0.8 to 0.9 percentage points; male employment rates, as much as 1.5 to 1.7 percentage points; and those of less-educated men as much as 6.1 to 6.9 percentage points.”

“These employment losses hit ex-offenders hardest, but also impose a substantial cost on the U.S. economy in the form of lost output of goods and services. In GDP terms, we estimate that in 2008 these employment losses cost the country $57 to $65 billion per year,” reads the study.

Last month, Del. Curt Anderson (D-Baltimore City), speaking at a press conference on the state’s legalization efforts, noted that Baltimore City saw 6,500 marijuana arrests in 2013 (5,400 were arrests of African Americans), all persons whose future earnings and economic contributions to the state could be limited by that arrest record and any subsequent convictions.

Relieving that number of people annually from the specter of diminished economic potential could prove an economic boon to the city and the state. Another benefit, points out Yeung, is that industrial properties that have been idle for years could be repurposed for marijuana cultivation, giving new life to the ghosts of an industrial economy that once thrived in the Baltimore area.

New Revenues Could Fund Expanded Research into Effect of Marijuana Use on Teens

One final area receiving attention in the legalization debate is the increased potential for teenagers to access the drug in a legal market. In a recent policy statement, the American Academy of Pediatrics (AAP) said, “The adverse effects of marijuana have been well documented, and studies have demonstrated the potential negative consequences of short- and long-term recreational use of marijuana in adolescents. . . . impaired short term memory and decreased concentration, attention span, and problem solving, which clearly interfere with learning. Alterations in motor control, coordination, judgment, reaction time, and tracking ability have also been documented; these may contribute to unintentional deaths and injuries among adolescents (especially those associated with motor vehicles if adolescents drive while intoxicated by marijuana).Negative health effects on lung function associated with smoking marijuana have also been documented, and studies linking marijuana use with higher rates of psychosis in patients with a predisposition to schizophrenia have recently been published, raising concerns about longer-term psychiatric effects.”

The NHTSA’s analysis would seem to call into question the AAP’s position on marijuana risks related to driving, and a September report by the Center on Juvenile and Criminal Justice examining California’s experience with marijuana decriminalization found that “marijuana decriminalization in California has not resulted in harmful consequences for teenagers, such as increased crime, drug overdose, driving under the influence, or school dropout. In fact, California teenagers showed improvements in all risk areas after reform.”

While the debate over the potentially harmful effects of marijuana on youth may not be settled, the AAP’s policy statement charts a middle-path on the issue. While the AAP opposes legalization efforts due to concerns about impacts on adolescent health, revenues generated by the legalization of marijuana should be used to fund research into this area in order to drive effective policy.