Federal Reserve Bank of Kansas City Finds Economic Costs of THC Drug Legalization Outweigh Gains

“Substance Use Disorders, Chronic Homelessness, and Arrests increased by 17%, 35% and 13% respectively.”

(WASHINGTON, DC) – Smart Approaches to Marijuana (SAM) President Dr. Kevin Sabet, a former White House drug policy advisor to Presidents Clinton, Bush, and Obama, released the following statement today in response to a new research paper released by the Federal Reserve Bank of Kansas City, which examined the economic benefits and social costs of legalizing today’s commercialized marijuana drug products. 

Among the report’s key findings, “post-legalization… substance use disorders, chronic homelessness, and arrests increased by 17, 35, and 13 percent, respectively…” The report continued, “… economic gains are very low compared to social costs.” The report further detailed that “the estimate for overall arrests shows that legalization of the drug significantly increased total arrests by 465 arrests per capita per year, a 12.8 percent increase relative to the mean arrest rate without legalization… [and] legalization increased both violent and property crime related arrests by 18 and 15 percent relative to the meant arrest rate under no legalization.”

“The Federal Reserve’s report backs up what we have cautioned all along that while the industry wants people to think that marijuana is harmless and doesn’t come with costs, those claims are a lie,” said Dr. Kevin Sabet. 

“Putting more drugs into communities is bad, plain and simple. It’s bad economics, a threat to public safety, terrible for human health, it exacerbates homelessness and is the furthest thing from social justice. Drug normalization and the commercialization of these dangerous drugs, especially the high-potency THC products, is directly linked with making our communities less safe,” Sabet said. 

The report further found that: 

1. Legalization increases violent and property crime related arrests by 18% and 16%, respectively.

2. Drug offense arrests only decrease 8% post-legalization.

3. DUI arrests and disorderly conduct arrests increase 10% and 18% post-legalization, respectively.

4. Legalization does not decrease alcohol, tobacco, or illicit drug use.

5. Legalization increases past-year adult substance use disorder by 17%.

The report also highlighted how legalization increases substance use disorder. “Heavy users of cannabis might become addicted, or the use of cannabis can be a gateway for the use of other more addictive illicit substances.” The report suggests that while the addiction rate increases post-legalization, it becomes larger and more significant over time, and also serving as a gateway to use of more addictive illicit substances.

Sabet added, “This report adds to a mountain of new data on the harms of today’s THC drug products. Policymakers across the country are failing their constituents by not recognizing that Big Marijuana is a big problem. Our leaders in Washington should heed this warning as they consider legislation to help expand the marijuana industry and any rescheduling of the drug. Lawmakers at the local level should also recognize that voters won’t forget who is responsible for selling out their communities to drug profiteers bankrolled by Wall Street investors and big business.”