Legalization of marijuana in Washington and Colorado is expected to drive prices down, resulting in an increase in the total number of pot users, says the United Nation's 2014 World Drug Report.
The cost of cannabis production is said to decrease with legalization, putting a downward pressure on prices. According to the UN report, for every 10% drop in the cost of marijuana, there will be a 3% rise in cannabis users, including a 3% to 5% increase in youths trying cannabis for the first time. With growing acceptance of marijuana, the report says the number of cannabis-related hospitalizations has increased as well. Between 2006 and 2010, there was a 59% jump in marijuana-related emergency visits as well as a 14% increase in cannabis-related treatment admissions.
Though the legal sale of cannabis will provide additional revenue to state coffers, Washington and Colorado have incurred significant costs to regulate the industry and prevent abuse of the drug, the report found. According to some experts, drug cartels have lost close to $3 billion in revenue due to the legalization of cannabis in those two states. The decline of prices in the U.S. could also spill over to Mexico, further driving down the going rate of the drug.
However, the report notes that Washington and Colorado make up a very small percentage of the cannabis market, so the overall impact on cartels appears to be modest, especially around other drug markets, including cocaine, heroin, and methamphetamine.