Could Marijuana and Industrial Hemp Feed our Starving Economy?


January 31, 2009 – Can the legalization of marijuana and hemp in the United Wall StreetStates help to counter the effects of today’s down-turned economy? Is there any reason to believe that the decriminalization of the drug and it’s commercial counterpart could have a positive effect on our nation and our nations current situation? If studies are correct and 1 in 3 people have or are currently smoking marijuana, so why not make it a profitable situation for the country rather than let it continue to drain the country and it’s resources?

There have been over eight million marijuana related arrests in the United States since 1993. Marijuana users have been arrested at the rate of 1 every 38 seconds. Approximately 88% of all marijuana related arrests are for simple possession, not growing, cultivation, manufacturing or distribution.

As President Jimmy Carter acknowledged: “Penalties against drug use should not be more damaging to an individual than the use of the drug itself. Nowhere is this more clear than in the laws against the possession of marijuana in private for personal use.”

More than 700,000 Americans were arrested on marijuana charges last year, and more than 5 million Americans have been arrested for marijuana offenses in the past decade. Almost 90 percent of these arrests are for simple possession, not trafficking or sale. This would appear to be a misapplication of valuable law enforcement resources that should be focused on serious and violent crime. Look at it this way. If the average DEA or Narcotics officers salary is $60,000.00 how much of a savings could quickly be realized simply be reassigning them to tracking down terrorist cells in our country or finding street gangs and larger more organized violent crime families and removing them from society?

Don’t alcohol and tobacco use already cause enough damage to society?
While there are indeed health and societal problems due to the use of alcohol and nicotine, these negative consequences would be amplified if consumption of either substance were prohibited. Think back to the prohibition era. Bootleggers and gangsters ran the streets and crime waves swept the country as these laws forced an underground movement that in some instances involved the local governments of city’s town’s and whole states in a lucrative enterprise that had it’s profits driven ever higher by the laws that were passed to stop it from being available.

Marijuana is already the third most popular recreational drug in America, despite harsh laws against its use. Millions of Americans smoke it responsibly. Our public policies should reflect this reality, not deny it.

The simple fact is marijuana is far less dangerous than alcohol or tobacco yet both remain legal consumables in the United States. Marijuana fails to inflict the types of serious health consequences these two legal drugs cause.

Around 50,000 people die each year from alcohol poisoning. From 2001–2005, there were approximately 79,000 deaths annually attributable to excessive alcohol use. In fact, excessive alcohol use is the 3rd leading lifestyle-related cause of death for people in the United States each year. Similarly, tobacco smoking kills at least 5 million people around the planet every year with about 443,000 U.S. deaths attributable to tobacco each year. Another 8.6 million people have a serious illness caused by tobacco smoking. Have a look at the US CDC Website for the tobacco statistics and alcohol statistics if you want to fact check the tobacco claims.

No one is suggesting we encourage more drug use; simply that we stop arresting responsible marijuana smokers. In recent years, we have significantly reduced the prevalence of drunk driving and tobacco smoking.

We have not achieved these lower levels by prohibiting the use of alcohol and tobacco or by targeting and arresting adults who use alcohol and tobacco responsibly, but through honest educational campaigns. We should apply these same principles to the responsible consumption of marijuana. The negative consequences primarily associated with marijuana, such as an arrest or jail time, are the result of the criminal prohibition of cannabis, not the use of marijuana itself. The jail time threat doesn’t seem to be working at this point.

What about industrial hemp and the value it could add to our economic situation?

Hemp is a distinct variety of the plant species cannabis sativa L. It is a tall, slender fibrous plant similar to flax or kenaf. Farmers worldwide have harvested the crop for the past 12,000 years for fiber and food, and Popular Mechanics once boasted that over 25,000 environmentally friendly products could be derived from hemp.

Unlike recreational marijuana, strains of Cannabis approved for industrial hemp production produce only minute amounts of the psychoactive drug tetrahydrocannabinol(THC), not enough for any physical or psychological effects. Typically, Hemp contains below 0.3% THC, while Cannabis grown for marijuana can contain anywhere from 6 or 7 % to 20% or even more. In addition, hemp possesses a high percentage of the compound cannabidiol (CBD), which has been shown to block the effects of THC. For these reasons, many botanists have dubbed industrial hemp “anti- marijuana.”

More than 30 industrialized nations commercially grow hemp, including the major producers Canada, France, and China. The European Union subsidizes farmers to grow the crop, which is legally recognized as a commercial crop by the United Nations Single Convention on Narcotic Drugs, the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT). Nevertheless, US law forbids farmers from growing hemp without a federal license, and has discouraged all commercial hemp production since the 1950s.

The ability to grow, harvest and find commercial applications for Hemp could create thousands of jobs in the following months. In addition to putting thousands back to work quickly and helping put money back into the pockets of the currently unemployed American, these items could be taxed. That would then allow money to start flowing into the coffers of the local, state and federal revenue offices once again.

Industrial hemp has many uses, including paper, textiles, biodegradable plastics, construction, health food, and fuel. It is one of the fastest growing bio-masses known, and one of the earliest domesticated plants known. It may be environmentally helpful, for example hemp requires fewer pesticides, no herbicides, controls erosion of the topsoil, and produces oxygen. Furthermore, hemp can be used to replace many potentially harmful products, such as tree paper (the processing of which uses chlorine bleach, which results in the waste product polychlorinated dibensodioxins, popularly known as dioxins, which are carcinogenic, and contribute to deforestation), cosmetics, and plastics, most of which are petroleum-based and do not decompose easily. Mercedes-Benz uses a “bio-composite” composed principally of hemp fiber for the manufacture of interior panels in some of its automobiles.

New technology has allowed for more environmentally-friendly paper production from wood pulp, though the production of wood pulp paper still claims to be one of the highest CO2 emissions by industry.

In 1916, USDA Bulletin No. 404, reported that one acre of cannabis hemp, in annual rotation over a 20-year period, would produce as much pulp for paper as 4.1 acres (17,000 m2) of trees being cut down over the same 20-year period. This process would use only 1/4 to 1/7 as much polluting sulfur-based acid chemicals to break down the glue-like lignin that binds the fibers of the pulp, or none at all using soda ash. The problem of dioxin contamination of rivers is avoided in the hemp paper making process, which does not need to use chlorine bleach (as the wood pulp paper making process requires) but instead safely substitutes hydrogen peroxide in the bleaching process…If the new (1916) hemp pulp paper process were legal today, it would soon replace about 70% of all wood pulp paper, including computer printout paper, corrugated boxes and paper bags.

The bulletin lists increased production capacity and superior quality among the advantages of using hemp hurds for pulp. Lyster writes in Bulletin No. 404, Every tract of 10,000 acres which is devoted to hemp raising year by year is equivalent to a sustained pulp producing capacity of 40,500 acres of average wood-pulp lands. An acre of hemp produces four times as much pulp as an acre of trees.

The use of hemp for fiber production has declined sharply over the last two centuries, but before the industrial revolution, hemp was a popular fiber because it is strong and grows quickly; it produces 250% more fiber than cotton and 600% more fiber than flax when grown on the same land.

Hemp can be used as a “mop crop” to clear impurities out of waste water, such as sewage effluent, excessive phosphorus from chicken litter, or other unwanted substances or chemicals. Eco-technologist Dr. Keith Bolton from Southern Cross University in Lismore, New South Wales, Australia, is a leading researcher in this area. Hemp is being used to clean contaminants at Chernobyl nuclear disaster site.

Biodiesel simple Biofuels such as bio-diesel and alcohol fuel can be made from the oils in hemp seeds and stalks, and the fermentation of the plant as a whole, respectively.

Henry Ford grew industrial hemp on his estate after 1937, possibly to prove the cheapness of methanol production at Iron Mountain. He made plastic cars with wheat straw, hemp and sisal. (Popular Mechanics, Dec. 1941, “Pinch Hitters for Defense.”) Filtered hemp oil can be used directly to power diesels. In 1892, Rudolph Diesel invented the diesel engine, which he intended to fuel “by a variety of fuels, especially vegetable and seed oils.”

Every industrialized country in the world, excluding the United States, produces industrial hemp.

The Economics of Legalization

Marijuana prohibition costs the U.S. government and taxpayers billions of dollars annually.

The societal costs of propagandizing against marijuana and marijuana law reform, funding anti-marijuana ‘science’, interdicting marijuana, eradicating domestically grown marijuana and industrial hemp, law enforcement, prosecuting and incarcerating marijuana smokers costs U.S. taxpayers nearly $12 billion annually.

Replacing marijuana prohibition with a system of legal regulation would save approximately $7.7 billion in government expenditures on prohibition enforcement, $2.4 billion at the federal level and $5.3 billion at the state and local levels.

It is the self-evident truth that marijuana prohibition, an utterly failed public policy, costs taxpayers too much and delivers few discernible social benefits.

As President Jimmy Carter told Congress in 1977:

“The National Commission on Marijuana and Abuse concluded years ago that marijuana use should be decriminalized, and I believe it is time to implement those basic recommendations.

Therefore, I support legislation amending federal law to eliminate all Federal criminal penalties for the possession of up to one ounce of marijuana.”

That was back in 1977. How far have we come over the past 33 years?

If the $113 billion spent on marijuana were spent on other(legal)consumer goods, it would produce revenue in the form of income taxes, taxes on corporate profits, and social security taxes.

The recovery of the American economic situation would move ahead quickly as farming operations could start to move forward, transportation operations such as trucking and rail could start to see a resurgence, retail and textile operations would see an uptick in the profit and large scale scientific companies could start to see the true value of marijuana as they could start to design hybrid (not that the independent underground society has not done this already) plants and species that could have far reaching implications for the medical and commercial applications.

The effect that legalization of marijuana and hemp could have here in the United States far outweighs the normal American stereotype of the Christian moral agenda. We could quickly get a large number of Americans out of jail and quickly get the numbers of the unemployed decreased.

A solid majority of the American public now agree that responsible marijuana smokers should not be treated like criminals. Eight out of ten Americans support the medical use of marijuana, and nearly 3 out of 4 Americans support a fine-only (no jail) for recreational smokers. Roughly 50% of Americans now favor legalizing and taxing marijuana.

But in a Town Hall style meeting with questions posed both from online sources and from a live audience on March 26, 2009 AT “OPEN FOR QUESTIONS” TOWN HALL from the White House East Room the President stated that he did not agree with the idea of legalizing marijuana and hemp to bolster the American economy.

THE PRESIDENT: Three point five million people voted. I have to say that there was one question that was voted on that ranked fairly high and that was whether legalizing marijuana would improve the economy — (laughter) — and job creation. And I don’t know what this says about the online audience — (laughter) — but I just want — I don’t want people to think that — this was a fairly popular question; we want to make sure that it was answered. The answer is, no, I don’t think that is a good strategy — (laughter) — to grow our economy. (Applause.)

Denver and Breckenridge Colorado have now decriminalized drug paraphernalia, and allow recreational marijuana use. Buying, selling or growing marijuana will remain illegal in Breckenridge as will smoking or displaying it in public. It has just been decriminalized. Residents of Breckenridge voted by a three to one margin in November in favour of the change. Supporters said they wanted to send a message to local police to stop arresting small-time cannabis smokers.

It will be interesting to see how rapidly Breckenridge will now prosper on the news that the first step has been taken.

Mexico has gone a little bit further in an effort to move forward. Mexico on Monday, August 24, 2009 eliminated crimes for possession of small amounts of marijuana, LSD, heroin, methamphetamine, and cocaine substances. Now individuals can possess up to a half-gram of cocaine and 40 grams of marijuana. The reasoning behind this change was that crackdowns didn’t seem to reduce the violence and deaths from the war on drugs.

In the United States, twelve states have legalized medical marijuana for use with a doctor’s permission and a medical prescription card or ID. Several states have now decriminalized the possession of small amounts of marijuana.

United States cannabis laws.

States with medical cannabis laws (14)

While keeping in mind that any state law in conflict with federal law is a non-valid law, the following states have taken legal action on a state level.

In Alaska, cannabis was decidedly legal (under state, but not federal, law) for in-home, personal use under the Ravin vs. State ruling of 1975. This ruling allowed up to two ounces (57 g) of cannabis and cultivation of fewer than 25 plants for these purposes. A 1991 voter ballot initiative recriminalized marijuana possession, but when that law was eventually challenged in 2004, the Alaska courts upheld the Ravin ruling, saying the popular vote could not trump the state constitution. However, federal prosecutions under the CSA can be brought in Federal Court, and federal courts applying federal law are not bound by state court precedent. As such, federal courts in Alaska will recognize that possession of any quantity of marijuana remains illegal in Alaska under federal law.

The cost of the war against marijuana

It is well known that Americans illegally consume about 31 million pounds of marijuana every year at an estimated retail cost of $3,570 per pound.

That adds up to an expenditure of nearly $111 billion annually, all of it going into an underground economy that remains untaxed by the federal government.

According to the federal Office of Management and Budget 28.7% of the gross domestic product ends up in government’s hands as tax revenue.

The underground economic diversion of money into the marijuana market subsequently costs the government $31.7 billion annually in tax revenue that should be generated from the transactions if they were conducted legally.

Marijuana arrests account for 5.54% of all arrests in the United States, which spends $193 billion annually on its criminal justice system. As such, marijuana arrests account for $10.7 billion annually in criminal justice expenses. The average prisoner costs the taxpayers $33,615 a year to imprison and each one on average costs $9,412 just for their health benefits.

The FBI says that marijuana crimes account for 45.6% of all drug arrests.

Add it all up, and marijuana prohibition costs the US roughly $41.8 billion every year according to a 2007 estimate by public policy researcher Jon B. Gettman, Ph.D.

You could effectively forgo the costs of marijuana enforcement and deploy your policing assets elsewhere.

Max Chaiken, a graduating economics major at Brown wrote a senior thesis which finds that “a legally taxed and regulated marijuana market could generate upwards of $200 billion annually in excise tax revenues for the federal government.” The thesis is dated April 17, 2009 and can be reviewed here.

Last November, U.S. law enforcement made its 20 millionth marijuana arrest since 1965. Yet today, almost 90 percent of teens report that pot is “fairly easy” or “very easy” to obtain, and nearly one out of two graduating high-school seniors admit to having tried it. Ask 3 of the most recent Presidents if they have seen or tried it.

That’s all well and good, but didn’t we make this stuff illegal for a good reason in the first place?

The decision of the United States Congress to pass the 1937 Marijuana Tax Act was based in part on testimony derived from articles in newspapers owned by William Randolph Hearst, who, some authors stress, had significant financial interests in the forest industry, which manufactured his newsprint. Source.

Other Articles on Hemp and the Economy:

Why Can’t We Grow Hemp in America? For the Economy! For the Environment!

Could Marijuana and Industrial Hemp Feed our Starving Economy?

Solution Found for Failing Economy: Cannabis

Can Hemp Save the Economy?

The Case for Hemp-America has Handed this Profitable Market to Other Nations

Time to put Hemp to Use


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