Op-ed from director of economic studies at the Cato Institute and Department of Economics at Harvard University
Sen. Cory Booker, D-N.J., has recently introduced legislation to legalize marijuana at the federal level. His bill will no doubt inspire the standard criticisms, one of which is that legalization does not eliminate the black market. Kevin Sabet, director of the Drug Policy Institute, claims that “[e]ven under legalization, there’s a black market.” This view contains a kernel of truth, but it misses the bigger picture.
Most consumers prefer, other things equal, to purchase from legal suppliers. This allows them to resolve disagreements about quality, service, and payment with lawsuits or by reporting to private and public watchdogs; it facilitates repeat shopping from a high-quality seller, and it avoids the risks of adulterated or excessively potent goods. Thus despite the costs created by…
