In the last several years, marijuana legalization has gone from a fringe issue treated as a joke or third rail to a mainstream, enacted policy in parts of the country. Broadly, the change seems to be driven by growing recognition of the general failure and costs of the drug war; growing understanding and acceptance of the medical uses of marijuana; and generational culture change.

In 2012, Colorado and Washington became the first states to fully legalize marijuana for all purposes for adults over age 21; in 2014, Alaska and Oregon followed. A number of cities, including Washington, DC, and New York City, have decriminalized cannabis, giving out tickets rather than arresting offenders.

Metropolitan area-level survey data from the US Substance Abuse and Mental Health Services Administration, collected between 2005 and 2010, before any of the full legalization measures passed, suggests that it’s no accident that these are the regions that are leading on the issue. Seattle, Portland, and Denver were all among the metropolitan areas with the greatest reported use of marijuana in the last year, ranging from 13.9 percent in Seattle to 16.5 percent in Denver. (No Alaska metropolitan area was included in the survey.) By contrast, the national average was 10.7 percent.


California, home to the city with the highest reported use—San Francisco, at 17 percent—hasn’t fully legalized marijuana, but it has legalized it for medical purposes, with rather lax standards for receiving a prescription. Meanwhile, the metro areas with the lowest reported use tend to be in the Plains or Southeast (with the notable exceptions of Atlanta and Nashville), with Houston registering the lowest rate of marijuana use, at 7.9 percent.

At City Observatory, we generally focus on issues of urban planning, housing, and transportation, but there are a number of reasons for policymakers and stakeholders to treat marijuana legalization as more than a novelty.

Perhaps the most appealing for the straightedge lawmaker is simply cash. In the last fiscal year, Colorado collected nearly $70 million in tax revenue from marijuana sales—versus just $42 million from alcohol sales. Next door, the Grand Canyon Institute has estimated that a similar measure could collect $62 million a year in tax revenue for Arizona. Nor is the benefit limited to the public sector; far from it—the medical marijuana industry in California is now selling $2.7 billion a year. In fact, there’s already evidence that early-adopter states are creating path dependencies that may anchor a potentially massive industry in their jurisdictions. Companies that developed industry-specific knowledge and skills in Colorado, for example, are now in prime position to capitalize on states that legalized marijuana later.

There is also a kind of Tiebout sorting issue to think about. State and local policies like marijuana legalization can serve as signals about a place’s values and cultural profile for potential migrants and businesses, even those who aren’t most directly affected by the policy itself. The most recent example is the law passed in North Carolina that, among other things, required transgender residents to use bathrooms according to the gender on their birth certificate. The law set off such an intense backlash, including threats of economic boycotts, that the state’s governor began trying to soften some of its provisions less than a month after its passage. Indiana’s “Religious Freedom Restoration Act,” which permitted discrimination by private businesses on the grounds of sexual orientation, cost the state at least $60 million in convention business alone. With businesses increasingly chasing high-value employees, state and local officials may want to watch to see if marijuana legalization has any effect on the location choices of this cohort of the “young and restless,” or others. (Of course, part of Tiebout sorting is that people have different preferences—so perhaps this is an argument against legalization for places looking to attract or retain more socially conservative, or older, residents.)

Finally, the connection between the war on drugs and economic opportunity has been well explored by researchers and advocates. People who are arrested, even for nonviolent drug possession offenses, find themselves at a severe disadvantage in future employment searches. Moreover, studies have shown that arrests for drug possession are concentrated in low-income neighborhoods, and neighborhoods whose residents are primarily people of color, even when drug use is no higher in these communities than elsewhere. In other words, drug arrests act as a drag on opportunity with a strong economic, social, and spatial bias—with direct implications for those who are concerned about the intersection of urban geography and inequality.

Obviously, we’re still a long way from figuring out the ideal drug policy—but there’s an increasing consensus that the status quo isn’t it. Marijuana is one front on which cities’ and states’ often-heralded, sometimes-overblown status as policy laboratories could bear real fruit.