Washington State Unsure If Stoners or Drunks Are Better For the Economy

Nearly two years after marijuana was legalized in Washington State, we've got the first-ever government-mandated study into whether or not allowing the people to smoke reefer is going to cause the state to become a wasteland of potheads and jam band enthusiasts. The results? Inconclusive!

One thing that is very clear, and has been clear from the get-go, is that legal weed is transforming the economics of both Colorado and Washington—and will change the economics in other places that have legalized marijuana, such as Oregon and Washington, DC. According to a report released this week by the Washington State Institute for Public Policy, weed retail shops sold $33.2 million worth of marijuana in June, and, wow, look at these graphs:

It makes sense that more stores = more money, but these two graphs suggest that the legal weed industry is still just taking off, and it seems as though demand for weed hasn't tapered off at all since the first shops opened. The Washington State Liquor and Cannabis board estimates that the state has collected $64 million in taxes on weed sales so far this year on $259 million worth of total sales.

The big question, from both sides of the legal weed debate, is what effect all this weed is having on the minds of various youths and regular ol' people. From an outsider's perspective, marijuana legalization does not seem to have caused major unrest and malaise in Washington, but I haven't been there recently, so I suppose the situation could have devolved into some sort of stoner comedy bit, or worse.

That marijuana legalization would have unintended and possibly (but not necessarily) negative effects on the populous is the reason why the state has required the think tank to do a deep dive on the subject in 2015, 2017, 2022, and 2032.

Understandably, lots of people are very interested in the "outcome" part of the report, which will "identify causal effects of the law." Unfortunately, the group says it's not ready to make any calls one way or the other, which is bad news for lobbyists and moralizers on both sides of the debate, who will be forced to refresh their internet browsers for two more years.

"It is too early in the history of [the law] to evaluate outcomes. [The] second report is due September 1, 2017 and will include initial results of the outcome analyses described in this section," the group wrote.

As that quote alludes to, the report is not totally useless, as we now know the types of outcomes regulators are looking for. In 2017, researchers say they will know more about whether regulated and taxed weed is causing or contributing to the following:

• Increased (or decreased) use of weed, alcohol, and other drugs
• Physical and mental health problems
• Traffic accidents and fatalities
• Arrests, convictions, and sanctions involving weed and alcohol
• Standardized test scores, high school graduation, and other school discipline issues
• Workplace accidents, injuries, and absenteeism

The report will also look at whether state tax revenues have increased, law enforcement costs have gone down, and "ripple effects" on the economy that weed may have had.

Interestingly, the group posits that, though the state is (and this is not a direct quote) making bank on legal weed sales, it's possible that weed regulation could ultimately be a net negative, economically speaking. The think tank suggests it's possible (but does not make a call one way or another) that people are smoking more weed instead of drinking alcohol, which is also taxed at a very high rate.

Such an impact—and again, there is not yet any evidence to suggest this is actually the case—would have far-reaching effects: "If cannabis use increases, and cannabis tends to be used instead of alcohol (rather than in combination), the effect of [legalization] could be negative—jobs, wages, and indirect and induced impacts of the cannabis industry would be outweighed by decreases in the same quantities in the alcohol industry," the think tank wrote.

Whether it's a bad or good thing to have a state filled with people who like to smoke pot instead of get drunk is a value judgment best left for another blog post, but I'm sure you can make arguments either way.

This is all very fascinating, of course, and it's what happens when you take an industry that was illegal for so long and bring it under the government's regulatory wing. So, laugh all you want at these long, dry reports, but legal weed is an experiment, after all, so it's worth collecting as much data as we can.