3 Arguments for and Against Legalizing Marijuana

Markets Motley Fool

There's arguably no industry in the U.S. that's growing at a faster, more consistent pace than legal marijuana. Marijuana Business Daily's latest report, "Marijuana Business Factbook 2017," predicts legal sales growth in the U.S. of 30% this year, 45% in 2018, and 300% as an aggregate between 2016 and 2021 to about a $17 billion market. Not surprisingly, this growth has been instrumental in attracting investment dollars to the space.

Continue Reading Below

However, that doesn't mean the federal government has budged one iota on its view of marijuana. The drug remains categorized as Schedule I at the federal level, meaning it has no recognized medical benefits and is wholly illegal, just like LSD and heroin. Despite this view, the debate rages on over whether marijuana should be legal. Solid arguments can be made from both sides of the aisle. Read on for three reasons legalizing marijuana makes sense, as well as three reasons keeping it as a Schedule I drug is the best course of action.

Three reasons marijuana should be legal

Let's first have a look at some of the convincing arguments for why legalization makes sense.

1. A majority of the public favors legalization

Polls have pretty consistently shown that a majority of the public wants marijuana to be legal. Gallup's October 2016 poll  and CBS News' April 2017 poll  found 60% and 61%, respectively, support legal marijuana  throughout the United States. A separate poll from Quinnipiac University in April of this year found support for legalizing medical cannabis at an overwhelming 94%, compared with 5% who opposed the idea. 

Continue Reading Below

Congress is supposed to represent the will of the people. Therefore, if lawmakers fail to make changes to cannabis' scheduling on Capitol Hill that align with the will of the public, these elected officials could run the risk of being voted out of office. It's unclear if marijuana is a strong enough standalone topic for voters to consider not voting for an incumbent candidate, but as support for pot shifts higher, it becomes an increasingly more likely.

2. Clinical data suggests it can help improve patient quality of life

Second, it would be difficult to deny that marijuana hasn't demonstrated positive benefits in university-run and Food and Drug Administration-approved clinical studies. For instance, a study published in the American Public Health Association just this past week found that since Colorado has legalized recreational cannabis, the percentage of opioid-related deaths has declined by 6.5%. That halted a 14-year trend of an increasing number of opioid-related deaths in the state. The study suggests that cannabis may be an alternative to pain-fighting opioids, and a much safer one at that. 

In terms of clinical studies, GW Pharmaceuticals (NASDAQ: GWPH) is looking to be a pioneer of cannabinoid-based drug development. Its lead drug, Epidiolex, is an oral cannabidiol-based drug (cannabidiol is the non-psychoactive component of cannabis) that easily met its primary endpoint of a statistically significant reduction in seizure frequency for two rare types of childhood-onset epilepsy, Dravet syndrome and Lennox-Gastaut syndrome. In particular, GW Pharmaceuticals' drug reduced seizure frequency in Dravet syndrome patients by 39% from the baseline.

Legalizing cannabis could mean game-changing medical discoveries for certain ailments, and broader access for patients.

3. It's a potentially new source of revenue and jobs

Legalizing marijuana could also be a boon for the economy and individual states. According to a report released earlier this year from New Frontier Data, the cannabis industry will have created an estimated 283,422 jobs by the year 2020. That's more jobs than will have been created by the manufacturing sector, utility sector, or even government sector, based on employment projections from the Bureau of Labor Statistics. Since the U.S. economy is heavily driven by consumption, more jobs should yield more disposable income for consumers.

Legalizing marijuana also opens up a new source of revenue for the states, and perhaps even the federal government. To be clear, tax revenue derived from the sale of medical and recreational weed wouldn't singlehandedly close massive budget deficits -- but it'd be a welcome start. In Colorado, for example, nearly $200 million in tax revenue was collected in 2016 on just over $1.3 billion in legal sales. California's recreational-pot industry, when up and running, might wind up generating $1 billion or more annually in tax revenue.

Three reasons marijuana should remain illegal

Now that you understand why legalization might work, let's look at the various reasons the current federal scheduling might make more sense.

1. Clinical data also suggests concerns

The interesting thing about clinical data is that it swings both ways in the argument over legalization. While there have been studies that have shown promise, marijuana use has also been shown in some university-run studies to be dangerous. For instance, a study published by Northwestern University in the journal Hippocampus showed, through MRIs, an oddly shaped hippocampus in adolescents who'd used marijuana heavily at ages 16 or 17 for a period of three years. The hippocampus is the region of the brain most responsible for short- and long-term memory. Not surprisingly, there was also an accompanied average long-term memory test score reduction of 18% for heavy users compared with those who'd not used marijuana before. 

In other words, there's genuine concern that younger adults could see their brains adversely affected if they use marijuana, and there's a greater concern that not enough is known about the long-term impacts on the brain, lungs, and other critical organs to make a call to legalize.

2. There aren't adequate parameters to police marijuana use

Another key argument against legalization ties into regulating the drug. As an example, the U.S. has a well-defined line in the sand when it comes to driving under the influence of alcohol. If you're under a blood-alcohol content (BAC) of 0.08%, you may or may not be arrested for driving impaired. If your BAC is 0.08% or over, you're going for a ride downtown whether you want to or not. The parameters are cut-and-dried. Those same parameters simply don't exist when it comes to marijuana, which makes enforcement a nightmare.

There's pretty solid evidence that marijuana adversely affects one's ability to drive, although some studies have shown that it's less dangerous than being impaired by alcohol. Nevertheless, there is no set level of THC, the psychoactive component of cannabis, that determines whether you're over or under the limit for being impaired. Making this call even more difficult is that THC can stay in the bloodstream for days or weeks, meaning getting an accurate reading of impairment, and determining when marijuana was used, involves some guesswork. Those folks against legalization argue that a lack of proper regulations and parameters are enough evidence to keep marijuana illegal.

3. Environmental and electric grid drains could be enormous

Lastly, there are serious concerns about what could happen to our nation's electric grid and the environment if the government gave marijuana the green light. For instance, a 2012 study from scientist Evan Mills, Ph.D., at the Lawrence Berkeley National Laboratory found that legal indoor marijuana growing farms were accounting for 1% of our nation's electricity usage, totaling about $6 billion a year. As a reminder, this total electrical usage figure came before eight states legalized recreational marijuana and a handful of others legalized medical cannabis. If pot were legalized, it's possible that electrical demands for growing cannabis crops, from lighting to temperature needs via air-conditioning systems, could overwhelm the nation's electric grids. 

There are also concerns that outdoor marijuana grow farms may adversely affect the local environment, including wildlife.

Now that you've heard the arguments from both sides, where do you stand on marijuana?

10 stocks we like better than GW Pharmaceuticals
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and GW Pharmaceuticals wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of October 9, 2017

Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.