On September 23, 2021, the U.S. House of Representatives passed the SAFE Banking Act (SBA) for the fifth time since 2019. The bill prevents federal authorities from prosecuting financial institutions that serve cannabis businesses operating legally at the state level. The legislation, strategically included as an amendment to the National Defense Authorization Act, still faces uncertain prospects in the Senate where senior Democrats support tying the bill’s approval to more comprehensive cannabis legislation reform.
Marijuana legalization at the federal level would clearly be the first best solution. Cannabis prohibition interferes unduly with individuals’ right to consume substances that cause no harm to others. Enforcing prohibition is also costly to federal taxpayers. State-level experiences with marijuana legalizations, however, should temper exaggerated claims by both marijuana advocates and critics.
Data on legalizations across states hints at no substantial departure from pre-legalization trends in marijuana consumption or prices. Effects on other outcomes, such as suicides, crime, and road safety are either unclear or small. Nevertheless, legalizations have had small but positive budgetary impacts. California now collects over $50 million from marijuana sales monthly.
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