If a November ballot measure passes, California will become the first jurisdiction in the world to
legalize the production of marijuana. The Rand Corporation examined the potential economic impact of legalization.
The Rand study concludes that legalization would drive down the price of marijuana by 80 percent. Beau Kilmer, co-director of Rand’s Drug Policy Research Center, says the price drop mirrors the drops in risk of growing and selling pot. Consumption would rise — although Kilmer says it’s unclear by how much.
"For some folks, it will be this change in stigma, thus could be more advertising, more promotion, so just for that we’d expect consumption to increase. But you also have to think about these large price effects. When the price drops, we know that consumers are sensitive to the price, they’re going to consume more."
Legalizing pot won’t create a lot of new jobs. And it could increase drug violence in the short term. Rand researchers say California’s legal supply of pot would cut into the trade of Mexican drug cartels.