Laughable but Widely Cited Report on the Cost of Legalizing Pot Does Not Even Try to Measure the Cost of Legalizing Pot

"For every dollar gained in tax revenue," the Centennial Institute claims, "Coloradans spent approximately $4.50 to mitigate the effects of legalization."


Centennial Institute

A new report from Colorado Christian University's Centennial Institute claims that "for every dollar gained in tax revenue, Coloradans spent approximately $4.50 to mitigate the effects of [marijuana] legalization." That factoid is already showing up in arguments against legalization, even though it is plainly fallacious.

Centennial Institute Director Jeff Hunt, who is also the university's vice president of public policy, takes the approach favored by anti-pot polemicists, conflating correlation with causation and counting every purported cost to which a number can be attached, no matter how implausibly, while ignoring every benefit except for tax revenue and the increased value of Colorado homes since legalization (which suggests the state has not turned into the drug-addled dystopia predicted by prohibitionists).

Most glaringly, as Paul Danish notes in the Boulder Weekly, Hunt et al. make no attempt to isolate the impact of legalization, which is supposed to be the subject of the report. Instead they tote up supposedly marijuana-related costs without regard to whether they were caused by the change in policy the authors claim to be analyzing.

"The figures, even if accurate, represent the economic and social costs of marijuana use," Danish observes. "But the study's supposed purpose is to identify the economic and social costs attributable to marijuana legalization, which are different [from] the overall costs (real, imaginary or theoretical) of marijuana use generally."

In other words, if you assume (as Hunt et al. do) that marijuana makes people fat and lazy, resulting in $54,833,218 in extra health care costs related to "physical inactivity" each year, you need to estimate what share of those fat and lazy potheads would not be consuming cannabis but for legalization. The fact that Hunt does not even make a gesture in that direction says a lot about his analytical rigor and intellectual honesty.

Does marijuana make people fat and lazy? "People who use marijuana more frequently," Hunt et al. say, "tend to be less physically active." They assume the difference is entirely attributable to marijuana use, as opposed to other ways in which people who consume cannabis might be different, on average, from people who don't. That is like observing that fans of professional wrestling are fatter than people who have never heard of Kenny Omega (I have no idea whether that is true) and concluding that watching WWE matches makes people fat.

Hunt et al. likewise assume that a correlation between marijuana use and dropping out of high school means that marijuana makes people drop out of high school, even though they note that "these figures do not demonstrate causation." Lost productivity related to dropping out of school, which the report puts at $423,362,337.22 (multiplying "marijuana-related drop-outs" in 2016-17 by $334,716.12, "the cost of not completing high school") is the biggest component of the $1.1 billion annual cost that the Centennial Institute attributes to legalization. It is quite a stretch to count a high school dropout's future loss of income as money "spent" by Coloradans in 2017 to "mitigate the effects of legalization," but that is what Hunt et al. do. And as with "physical inactivity," they do not try to estimate how many of those students would have dropped out even if marijuana had never been legalized, even though the whole point of this exercise is to show what a disaster legalization has been.

The second biggest component of the Centennial Institute's legalization bill is marijuana-related hospitalizations and emergency room visits, which the report says cost $381,915,043 in 2015. The number of these cases did rise following legalization, but it is hard to tell how much of that change represents a real increase in problems caused by cannabis consumption. Now that marijuana is legal, people are probably more willing to admit that they use it (as Hunt et al. concede) and to seek help when they run into trouble. Medical staff may also be more likely to note marijuana use in hospital records. But none of that really matters in the Centennial Institute's analysis, because once again the report looks at the total cost, as opposed to the portion that might plausibly be attributed to legalization.

The same goes for traffic accidents, where Hunt et al. not only assume that marijuana was the cause whenever a driver tested positive for THC, regardless of whether he was actually impaired by it at the time of the crash, but also act as if there were no stoned drivers prior to legalization. Even when spending has declined since legalization, as with marijuana arrests and "treatment for marijuana use disorder," Hunt et al. count the current cost as part of the tab for letting Coloradans use cannabis without a doctor's note.

Hunt claims the report is "fair" and takes "a conservative approach to calculating the costs and fees associated with increased marijuana use." In reality, it does not even attempt to calculate the costs associated with increased marijuana use. At best, it calculates the costs associated with marijuana use, period, and the manner in which it does that will not seem fair to anyone who does not already agree with Hunt that legalization is a huge mistake.