Tobacco Legalization Impacts on the Economy and Society
Numerous economic and societal benefits and concerns have accompanied the legalization of tobacco in the United States. Among the significant economic benefits related to the legalization of tobacco is increased government revenue. Through the legalization of tobacco, the United States government has been able to commercialize and regulate tobacco sales by imposing taxes on tobacco production and sale. In 2013, the United States government collected approximately $2.1 billion from the sale of tobacco.[1] However, tobacco has become one of the most heavily regulated and taxed products across the United States. Different states in the United States have imposed a federal excise tax on cigarette packs at an average rate of $2.82 per pack. Federal excise tax varies from state to state, ranging between $0.17 (the lowest in Missouri) and $4.50 (the highest in Washington, DC).[2] Increasing taxation on tobacco products due to legalization has allowed the government to collect significant revenues. As of 2022, the United States government collected approximately $11.26 billion from tobacco taxation thanks to its legalization.[3] Apart from the direct economic impacts, the legalization of tobacco has also resulted in indirect economic benefits such as providing jobs. The previous research highlights that tobacco has provided directly tobacco-dependent employment, such as farming and manufacturing.[4] Besides, the legalization of tobacco has resulted in the creation of tobacco product wholesale and retail businesses.
Despite the notable economic impacts, considerable negative societal consequences have been associated with the legalization of tobacco. The existing literature illustrates that even though the legalization of smoking has helped the United States government raise revenue, it has imposed severe ramifications on society. Smoking tobacco has been associated with significant health costs, which may cut fiscal spending.[5] The legalization of tobacco has been associated with increased smoking which heightens the risks of critical illnesses at an older age. The available evidence illustrates that young tobacco smokers are likely to die prematurely because of smoking tobacco. Despite providing job opportunities to many individuals, the legalization of tobacco has negatively impacted society by reducing life expectancy due to chronic smoking, “compared to never smokers, life expectancy among current smokers is shortened by ten years.”[6] Because of the legalization of tobacco, individuals can now smoke freely, but this has come with health consequences such as asthma, myocardial infarctions, chronic pulmonary complications, and heart disease. The normalization of tobacco consumption due to its legality has potentially influenced young generations to indulge in the act. In this regard, it is undeniable that the legalization of tobacco has positively impacted the economy and society. However, the negative side of tobacco legalization cannot be overlooked to gain a more comprehensive picture regarding the impact of legalizing tobacco on the economy and society.
Netherland’s Tolerance Policy of Soft Drugs
The Netherlands has made a substantial distinction between hard and soft drugs. On the one hand, hard drugs in the Netherlands imply products such as cocaine, amphetamines, and heroin, posing significant health risks. On the contrary, soft drugs entail cannabinoids (marijuana and hashish), whose health impact is less meaningful than hard drugs. In this regard, the Netherlands is relatively tolerant of soft drugs. This implies that selling soft drugs in small quantities within coffee shops is allowed, and no prosecution can be undertaken for this offence. The Netherlands’ tolerance policy on soft drugs has resulted in economic and societal impacts. First and foremost, the Netherlands’ tolerance policy on soft drugs has increased government revenue generation. The regulated sale of cannabinoids in licensed coffee shops has boosted the tax revenue collected by the Dutch government. As illustrated in the previous literature, the taxation of cannabinoids has ensured that “society gains from a new source of government income and reduced consumption.”[7] However, concerns have been issued that society suffers from law enforcement costs. Nevertheless, it is essential to understand that law enforcement costs are a one-time event and thus pose no severe ramifications for society.
The Netherlands’ tolerance policy on soft drugs has decriminalized the consumption and possession of “legal” drugs, thus mitigating the burden on the judicial and law enforcement system. As demonstrated in the previous research, the soft drugs tolerance policy has “decriminalised the personal possession and use of cannabis for adults.”[8] Therefore, with the tolerance policy, the Netherlands has moved away from prosecuting individuals using and possessing soft drugs, resulting in notable implications concerning public resources and the criminal justice system’s effectiveness. With such a policy, the Netherlands has categorized the consumption of soft drugs as a public health concern, not an illegal issue. Doing this has reduced the stigma related to the consumption of soft drugs by making society more compassionate. Through the soft drugs tolerance policy, the Netherlands ensured that cannabinoids could only be sold in licensed coffee shops, thus eliminating the black market. Notably, coffee shops must adhere to strict safety and health regulations, “coffee shops are allowed to operate under strict licensing conditions.”[9] The regulations introduced through the soft drugs tolerance policy have ensured that the drugs readily available in the market align with quality standards.
Unregulated cannabinoids have notable health risks to consumers, which may extend to long-term health implications. Nevertheless, introducing quality controls alongside comprehensive testing protocols has ensured that the Dutch government has eliminated risks associated with unregulated drugs, leading to a healthier society. Most importantly, reducing crimes is a notable benefit the Netherlands has experienced due to its soft drug tolerance policy. Through decriminalizing soft drug consumption and possession, Netherlands’ tolerance policy on soft drugs has undermined the profits of the black market. This move has weakened criminals’ economic incentives to finance illegal trades. Typically, most crimes involve drug trade normalizing the possession and consumption of soft drugs has eliminated drug-related violence. The emerging theme from the above analysis is that the legalization of drugs has resulted in both positive and negative impacts on the economy and society.
Bibliography
Boermans, Martijn A. “An Economic Perspective on the Legalisation Debate: The Dutch Case.” Amsterdam Law Forum 2, no. 4 (2010), 29. doi:10.37974/alf.146.
DeCicca, Philip, Donald Kenkel, and Michael F. Lovenheim. “The Economics of Tobacco Regulation: A Comprehensive Review.” Journal of Economic Literature 60, no. 3 (2022), 883-970. doi:10.1257/jel.20201482.
National Cancer Institute. “Monograph 21. The Economics of Tobacco and Tobacco Control.” n.d. https://cancercontrol.cancer.gov/sites/default/files/2020-06/m21_15.pdf.
Rolles, Steve. “Cannabis policy in the Netherlands: moving forwards not backwards.” 2014. https://www.unodc.org/documents/ungass2016/Contributions/Civil/Transform-Drug-Policy-Foundation/Cannabis-policy-in-the-Netherlands.pdf.
Statista Research Department. “U.S. tobacco tax revenues and forecast 2000-2028.” Statista. Last modified 2023. https://www.statista.com/statistics/248964/revenues-from-tobacco-tax-and-forecast-in-the-us/#:~:text=In%202022%2C%20revenues%20from%20tobacco,trillion%20U.S.%20dollars%20in%202022
Tiffin, Norman H. “Why do we still permit tobacco use?” 2015.
[1] Norman H. Tiffin, “Why do we still permit tobacco use?,” 2015, 85.
[2] Philip DeCicca, Donald Kenkel, and Michael F. Lovenheim, “The Economics of Tobacco Regulation: A Comprehensive Review,” Journal of Economic Literature 60, no. 3 (2022): 883, doi:10.1257/jel.20201482
[3] Statista Research Department, “U.S. tobacco tax revenues and forecast 2000-2028,” Statista, last modified 2023.
[4] National Cancer Institute, “Monograph 21. The Economics of Tobacco and Tobacco Control,” n.d., 547.
[5] DeCicca, Kenkel, and Lovenheim, “The Economics of Tobacco Regulation: A Comprehensive Review,” 890.
[6] DeCicca, Kenkel, and Lovenheim, “The Economics of Tobacco Regulation: A Comprehensive Review,” 890.
[7] Martijn A. Boermans, “An Economic Perspective on the Legalisation Debate: The Dutch Case,” Amsterdam Law Forum 2, no. 4 (2010): 33, doi:10.37974/alf.146
[8] Steve Rolles, “Cannabis policy in the Netherlands: moving forwards not backwards,” 2014, 1.
[9] Rolles, “Cannabis policy in the Netherlands: moving forwards not backwards,” 1.
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