Introduction

Marijuana legalization is a hot topic throughout the country, as some states have legalized the use of marijuana for medical and recreational use. So far there have been 10 states that have legalized marijuana for recreational and medical use according to the (map of marijuana legality). The rest of the country is either on the fence or have no plans of legalizing marijuana use as a whole. Many reasons contribute to the issue, whether it is economic or ethical, however for this research we will focus on the economic impact that legalization of marijuana has had on the previous states in terms of GDP. In my research, GDP will be our dependent variable and legalization status will be our independent variable. We will be measuring GDP in terms of percentage growth in order to measure the rate that GDP is growing for the states that have either legalized or have not done so in order to measure the true impact of legalization. Measuring in terms of pure output will yield biased results due to some states naturally producing more GDP than others.

The issue of marijuana legalization in the U.S. has major implications on both incarcerations cost and tax revenue by the government. Some research has estimated that the United States government spends “$9.2 million every day to incarcerate people charged with drug related offenses” (American Progress, Pearl). According to the federal bureau of prisons, drug offenses account for 45.4% of the number of inmates in U.S. prisons (BOP).  Looking into the incarceration rates in America, Drug related incarceration reported 1,429,299 new incarcerations in 2018 for possession of drugs, with 608,775 due to marijuana possession. The statistics indicates that a major portion of the cost of drug related incarceration for possession can be due to the high incarceration for marijuana possession. The data clearly indicates that drug incarceration is a major issue in the United States, with a strong proportion of this coming from marijuana use. The issue is one of prevalence for the United States government because of the potential to save with less incarceration for possession.

On the other end of the spectrum marijuana legalization is driven by the potential revenue that governments can gain from taxes. In Canada the legalization of marijuana saw increased tax revenue of $186 million Canadian dollars ($140 million US dollars) (Reuters). Now of course Canada is not the United States and the figures reported by Canada would be much more different in the U