public support for marijuana legalization has grown substantially. The consumption of recreational marijuana has been legalized in Uruguay, Canada, and several US states.
In addition, many European countries, most US states, and Thailand have passed laws that allow the consumption of cannabis for medical reasons.
Given the growth in public support, it is important to arrive at a better understanding of the welfare consequences of marijuana legalization.
In the United States, California was the first state to pass a medical marijuana law in 1996. These laws allow patients with a prescription from a doctor to consume marijuana.
The laws also legalize the whole supply chain, allowing small-to-medium scale farmers to grow cannabis, so that it can be sold in marijuana dispensaries. More than two decades later, 33 states and the District of Columbia have followed suit.
Such laws allow researchers to study the systemic effect of marijuana on crime. It appears that medical marijuana laws can reduce violent crime, dramatically, at least in US counties that border Mexico.
Earlier drug decriminalization policies in the Netherlands, and several US states decriminalized the consumption, but not the supply chain. Medical marijuana laws are the first policy to decriminalize the consumption, distribution, and small- and medium scale production of the drug.
By legalizing the supply chain, these laws take away the business of marijuana from organized crime.
Prior to the increase in medical marijuana legalization laws, marijuana had been a lucrative crop for Mexican drug cartels, since the drug is easily cultivated in the Mexican climate.
The cartels could grow it themselves and ship it to the US with small declines in quality due to transport and storage. At the same time, the cartels are known to contribute to large-scale systemic drug violence in the United States, especially in the region close to the Mexican border.
The cartels would use violence to protect their territories and shipments on both the Mexican and the US side of the border.
However, with the introduction of legal marijuana the playing field changed. Marijuana produced in the US tends to be fresher. Given the legality, there is more variety of types, and there is no risk of prosecution for those who are qualified for the use and production. Suddenly, the Mexican cartels had difficulties competing and in making profits in the marijuana market because the demand for illegal marijuana started to decrease. We find evidence that the reduction in the profitability in the marijuana market results in a drop in drug-related violent crime.
When a state at the Mexican border legalizes marijuana for medical consumption, the violent crime rate decreases by 13 percent on average.
Whenever inland states introduce such laws, violent crime in the nearest border state decreases, as smuggling routes leading to the state become less profitable. The strongest reduction of crime is in counties closest to the Mexican border, with 200 less violent crimes per year as is illustrated in the figure.
The figure shows that the negative effect on crime diminishes as a county is located farther away from the Mexican border. The crimes most strongly affected are robberies and homicides.
Murders related to the drug trade decrease by a staggering 41 percent.
Policymakers resort to policing and enforcement strategies in the effort to reduce drug violence. These strategies include militarized deployment, killing and apprehension of cartel leaders.
However, several studies show that these interventions are counterproductive; they escalate rather than curb violence. Instead, policymakers could focus on reducing the profitability of drug trafficking.
An unexpected benefit of medical marijuana laws is that they reduce violent crime related to drug trafficking.