Marijuana legalization in the US has no clear positives or negatives, concludes the Cato Institute

Marijuana legalization in the US has no clear positives or negatives, concludes the Cato Institute
Source: Nick Adams, Reuters
The research finds there are neither robust positives nor clear negatives associated with legalization.

In February, the Cato Institute, a libertarian think tank, released an analysis of marijuana legalization and the subsequent ripple effects of the policy. This analysis updated a related study from 2018 with additional statistics gathered from states across the country. In the two years since the original study was published, more data points have provided a fuller picture of legalizations’ impact.

In broad strokes, libertarianism is a political philosophy that advocates for individual freedoms and against government overreach. As such, libertarian politicians generally favor the legalization of marijuana (and other drugs) as a matter of individual choice. Nonetheless, the Cato Institute’s analysis is not a full-throated endorsement of legalization.

In fact, the research finds there are neither robust positives nor clear negatives associated with legalization, with the analysis concluding, “the strong claims made by both advocates and critics are substantially overstated and in some cases entirely without support from existing legalizations.”

The effect of state marijuana legalizations

The Cato Institute’s analysis, entitled “The Effect of State Marijuana Legalizations: 2021 Update,” provides a detailed examination of various claims by both supporters of legalization and those who opposed the policy.

As the paper explains, there isn’t a clean, simple political divide on these issues. There are Democrats and Republicans who oppose legalization. At the same time, Libertarians generally align with Republicans, particularly in the Senate where the self-described libertarian, Senator Rand Paul, is a member of the GOP.

“Advocates,” the Cato Institute’s paper states, “suggest that legalization reduces crime, raises tax revenue, lowers criminal justice expenditures, improves public health, increases traffic safety, and stimulates the economy.”

In contrast, “Critics argue that legalization spurs marijuana and other drug or alcohol use, increases crime, diminishes traffic safety, harms public health, and lowers teen educational achievement.”

The Cato Institute puts those claims to the test by looking at the related trends in the states where marijuana has been legalized for recreational use and comparing them to the country overall. The first two such states were Colorado and Washington in 2012 but since then nine other states have followed suit, including, most recently, Illinois in 2020.

These are the primary findings from the Cato Institute’s analysis of marijuana legalization.

Marijuana and other substance use

This is, the paper contends, the most important factor to consider, because all other side effects of legalization are reliant on the policy increasing the use of marijuana. “If increases are minimal, then the other effects of legalization are also likely to be minimal since ancillary effects depend on use.”

The findings of the Cato Institute indicate the rise in marijuana use does correlate with legalization, but direct causation is unsubstantiated: “Legalizing states display higher and increasing rates of use prevalence, but these patterns existed prior to legalization.” In other words, the relevant states were already experiencing increased usage, which perhaps led to legalization, not the other way around.

Additionally, “The available data show no obvious effect of legalization on youth marijuana use,” countering one of the main arguments of opponents who fear marijuana legalization will have an adverse effect on young people.

Opponents also argue that increased use of marijuana will lead to increased use of other, harder drugs like cocaine, with people often claiming marijuana is a “gateway drug.” However, the Cato Institute found no evidence of this, stating, “These data suggest no clear relationship between marijuana legalization and cocaine use.”

As a counterpoint to one of the common arguments of legalization proponents, though, there was no definitive link between increased marijuana use in the relevant states and decreased alcohol use. It is believed people will drink less alcohol if marijuana is legal (a net positive since marijuana is considered safer than alcohol), but the trends did not support this belief.

Health and suicide

The health benefits of marijuana are often touted as a reason to legalize it and, in the United States, more than half of all states have now legalized marijuana for medical purposes.

The Cato Institute’s analysis explains that, while there are studies that show marijuana can be beneficial as a treatment for mental disorders (i.e., depression, bipolar disorder) and physical pain, the research also suggests there is a link between marijuana use and increased mental health problems. At this point, though, the research cannot definitively prove using marijuana is the cause of mental health issues.

While some research has shown a casual link between marijuana and lower rates of suicide, the Cato Institute finds causation cannot be determined. Still, the paper states, “medical marijuana, as a less risky pain reliever, may help lessen the rate of drug deaths and suicides.”


The link between drugs and crime have long been a political debate, with US policy since the 1970s being guided by the no-tolerance strategies of the so-called “War on Drugs.” Advocates of marijuana legalization say the policy would decrease crime and free police to focus on more serious crimes. Opponents argue that marijuana use increases violent tendencies and aggression.

The trends found no evidence that legalization led to increased crime rates. In fact, on average, the states that legalized marijuana saw a decrease in violent crime almost exactly in proportion to the country as a whole. Since recreational legalization started in 2012, the nine relevant states have dropped slightly below the national average for violent crime, though only just.

Road safety

As the paper explains, there are two contradicting arguments about what effect marijuana legalization will have on road safety:

“One holds that legalization increases traffic accidents by increasing drug use and, consequently, incidences of driving under the influence. This hypothesis presumes that marijuana impairs driving ability. A contrasting view is that legalization may improve traffic safety if enough would‐​be drunken drivers substitute marijuana for alcohol, which some studies say impairs driving ability even more.”

In Oregon, the analysis found, fatality rates have increased since legalization, but on average, the nine states have seen a fatality rate almost perfectly aligned with the national average (which has been declining since the 90s).

Economic outcomes

Advocates for legalizing marijuana believe the policy will have a positive effect on the economies of the states because it will create a new avenue of legal commerce and potentially entice people to move to the state. The Cato Institute expresses skepticism about these claims, explaining, “marijuana commerce is a small part of the overall economy.”

Indeed, the study found the economic impact was minimal, though it did exist.

“Marijuana production and commerce do employ many thousands of people,” the paper states, “but the employment gains seen in the wake of legalization are still modest compared with the overall size of each state’s workforce.” Furthermore, “any resulting growth in population has been small and is unlikely to cause noticeable increases in housing prices or total economic output.”

Budgetary outcomes

“One area where marijuana legalization has a significant impact is through increasing state tax revenue,” the Cato Institute states, giving support to one of the key arguments of legalization advocates.

“Colorado now collects almost $20 million per month from recreational marijuana alone. In 2015, the state generated a total of $135 million in recreational marijuana revenue. These figures exceed some pre‐​legalization forecasts … A similar story unfolded in Washington, where recreational marijuana generated approximately $70 million in tax revenue in the first year of sales—double the original revenue forecast.”

Similar increases in tax revenue were also seen in Oregon and California. The authors caution, though, that if recreational use was legalized across the board, those large jumps in revenue would probably be tempered as more states spread the wealth, so to speak.


Neither legalization advocates nor opponents are likely to find much in the Cato Institute’s latest analysis to highlight. The findings generally come to the same conclusion across almost all related trends: legalization had a negligible effect.

“The data so far,” the paper concludes, “provide little support for the strong claims about legalization made by either opponents or supporters; the notable exception is tax revenue, which has exceeded some expectations.”

Still, the Cato Institute points out that “adverse consequences” are essentially entirely absent, meaning that even if legalizing marijuana doesn’t provide any direct benefits, it also doesn’t have any obvious downsides. And it would decriminalize an activity that millions of Americans participate in regularly.

Have a tip or story? Get in touch with our reporters at