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Marijuana (Kaplan)

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Submitted By krallen1987
Words 475
Pages 2
a. What will happen to existing supply avenues?
Black market for marijuana will still exist due to sales tax and legal business operation cost, background investigations, licensing and regulations. Most people already selling Marijuana on the streets will most likely not want to go through the ordeal of requirements that will be implemented by the government. I think it will be business as usual for most black market operations.

b. Will legalization significantly change demand? How?
It is anticipated that 665,000 Coloradans will use recreational marijuana in 2014 now that it’s legal.
This number does not include those that continue to buy black market weed. Tony Nitti (2013)
It is estimated that the average user will smoke 3.53 ounces in 2014. This puts total anticipated consumption at 2.3 million ounces for 2014. Tony Nitti (2013)
I believe that the demand would increase in the short-term, as the penalties for being caught with marijuana go down. I personally don’t smoke marijuana because it is illegal in Arizona for recreational use. With that being said I don’t use or buy it because of the consequences if I were to get caught with it. However, if it were to become legal for recreational use I would consider smoking it every now and again. I feel a lot of people who are not able to use marijuana now do to the penalties of losing their job or even freedom would be open to using marijuana if it were to become legal for recreational use. As far as the long term effect it is hard to determining to me at this point.

c. Would one expect prices to change significantly? How?
No, I don’t believe the prices will change. It is already marketable on the streets at its going rates. If the dispensaries tried to increase the price they would just be putting themselves out of business and with their overhead they really can’t afford to lower the price either.

d. What would be the costs and benefits to governments, both in changes in enforcement requirements and in potential tax revenue?
Based on an estimated total market for recreational marijuana of $605 million, the various taxes would produce over $130 million in revenue in 2014 alone. Tony Natti (2013)
This is based on a staggering 32.9% in excise and sales taxing on a single life-cycle
The government would defiantly benefit from the legalization of marijuana and it already has in states that already legalized marijuana.
As far as enforcement the Marijuana Enforcement Division (MED) is tasked with licensing and regulating the Medical and Retail Marijuana industries. The DEA will still enforce consumptions laws, age laws and operation while under the influence laws. Of course it will still cost our tax dollars to insure that these laws are passed and implemented through law enforcement.

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