A Virginia lawmaker wants to study the possibility of selling marijuana through state-run liquor stores, but even the resolution’s sponsor thinks the provocative idea will likely go up in smoke.

The proposal by Democratic Del. David Englin of Alexandria to look at the potential revenue impact of selling marijuana at the more than 330 ABC stores in Virginia joins a growing list of recommendations across the country to reform laws regarding the most commonly used illegal drug in the U.S.

Englin, who also has filed a resolution asking the governor to petition the U.S. Drug Enforcement Agency to move marijuana from a Schedule I drug to Schedule II, cites other states with medical marijuana laws and societal changes. He said he’s aiming to bring in more money for the state amid moves to cut funding for core services across Virginia.

“There are respectable members of society out there, secretly smoking marijuana on the side, and the money that they use to buy that is going to criminals,” said Englin, who said he has not smoked and does not use marijuana. “Seems to me that it’d be a better idea to take that money that’s already being spent and use it to benefit the commonwealth.”

"Over the past 50 years international drug treaties have neither prevented the globalization of the illicit production and non-medical use of (illicit) drugs"

Eleven Percent of North Americans Use Cannabis.

Sydney, Australia: An estimated 11 percent of North Americans between the ages of 15 and 64 consume marijuana yearly, according to a research report published in the January 7th edition of the scientific journal The Lancet.

Researchers from the University of Queensland and the University of Melbourne in Australia assessed the global extent of illicit drug use and its impact on health. Authors reported that an estimated 10.7 percent of North Americans consume cannabis annually. By contrast, fewer than five percent of the global population were estimated to have used marijuana in the previous year. Australians reported the highest levels of cannabis use, according to the study.

Regarding the impact of illicit drug use on health, researchers wrote, "On the basis of available evidence, most of the disease burden attributable to illicit drugs is concentrated in problem or dependent drug users, especially people who inject drugs."

Authors recognized, however, that only "a minority of individuals who use illicit drugs become dependent on or inject them" and acknowledged "[T]he risks of cannabis use are much smaller than those of other illicit drugs."

Expenditure on Marijuana under Current Prohibition

The first step in determining the tax revenue under legalization is to estimate current expenditure on marijuana. ONDCP (2001a, Table 1, p.3) estimates that in 2000 U.S. residents spent $10.5 billion on marijuana. This estimate relies on a range of assumptions about the marijuana market, and modification of these assumptions might produce a higher or lower estimate. There is no obvious reason, however, why alternative assumptions would imply a dramatically different estimate of current expenditure on marijuana. This report therefore uses the $10.5 billion figure as the starting point for the revenue estimates presented below.

This report assumes there would be no change in the demand for marijuana.[22] This assumption likely errs in the direction of understating the tax revenue from legalized marijuana, since the penalties for possession potentially deter some persons from consuming. But any increase in demand from legalization would plausibly come from casual users, whose marijuana use would likely be modest. Any increase in use might also come from decreased consumption of alcohol, tobacco or other goods, so increased tax revenue from legal marijuana would be partially offset by decreased tax revenue from other goods. And there might be a forbidden fruit effect from prohibition that tends to offset the demand decreasing effects of penalties for possession. Thus, the assumption of no change in demand is plausible, and it likely biases the estimated tax revenue downward.

Under the assumption that demand does not shift due to legalization, any change in the quantity and price would result from changes in supply conditions. There are two main effects that would operate (Miron 2003a). On the one hand, marijuana suppliers in a legal market would not incur the costs imposed by prohibition, such as the threat of arrest, incarceration, fines, asset seizure, and the like. This means, other things equal, that costs and therefore prices would be lower under legalization. On the other hand, marijuana suppliers in a legal market would bear the costs of tax and regulatory policies that apply to legal goods but that black market suppliers normally avoid.[23] This implies an offset to the cost reductions resulting from legalization. Further, changes in competition and advertising under legalization can potentially yield higher prices than under prohibition.

It is thus an empirical question as to how prices under legalization would compare to prices under current prohibition. The best evidence available on this question comes from comparisons of marijuana prices between the U.S. and the Netherlands. Although marijuana is still technically illegal in the Netherlands, the degree of enforcement is substantially below that in the U.S., and the sale of marijuana in coffee shops is officially tolerated. The regime thus approximates de facto legalization. Existing data suggest that retail prices in the Netherlands are roughly 50-100 percent of U.S. prices.[24] [25]