SAM releases report asserting Connecticut would face cost from marijuana legalization double projected tax revenues
Much has been said about the revenue that marijuana legalization might bring to Connecticut. Few, however, discuss the costs of such a policy. Omitting costs is a critical oversight: no policy or business plan would be complete without discussing both sides of the balance sheet.
Although a full cost accounting of marijuana legalization would be impossible at present, enough data exists to make rough-and-ready estimates of certain likely direct and short-term costs, such as:
1. Administrative and enforcement costs for regulators
2. Increased drugged-driving fatalities
3. Increased drugged-driving injuries
4. Increased property damage to vehicles related to drugged driving
5. Short-term health costs
a. More emergency room visits for marijuana poisonings
b. Injuries from marijuana-concentrate extraction lab explosions/fires
6. Increased rates of homelessness
7. Workplace costs
a. Increased absenteeism
b. More workplace accidents among full-time employees
Initial approximations of these preliminary costs indicate that it is unlikely that revenues from legalization would ever exceed its costs. This report concludes that even a conservative cost estimate limited to only the issues above would cost Connecticut approximately $216 million in 2020, which would be the third year of legalization if the policy was implemented in 2018. (According to data from the Connecticut General Assembly’s Office of Fiscal Analysis, the legalization program will only be fully operational in its third year of operation.)
Such costs exceed, by more than 90 percent, the maximum projected official revenue estimate of $113.6 million for the third year of the proposed legalization program. (These costs are almost 300 percent of the minimum revenue estimate of $54.4 million, but to be conservative, this report uses the maximum estimate.)