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Kevin Sabet's Marijuana Math Doesn't Add Up

Marijuana ain't alcohol or tobacco. But suppose it was. Colorado has reportedly raked in about $25 million in taxes, licenses and fees. Does anyone seriously claim there has been a quarter billion dollars in social costs in Colorado as a result? That's greater than the annual cost of all high-rise fires in America.
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I watched the debate between Judge Jim Gray and Kevin Sabet on the resolution "Legalizing marijuana saves money and lives," sponsored by the Foundation for Economic Education. Space constraints dictate that I cannot possibly address all of Sabet's mischaracterizations, straw men, lies by omission, and incomparable analogies here. Given that it was about economic education, let's just take a look at his faulty math in three key talking points.

First, we have The Sabet Conjecture. This is where Kevin Sabet points out, truthfully, that for every dollar we bring in from alcohol and tobacco taxes, we lose $10 in social costs. Right, because alcohol and tobacco cause cirrhosis and lung cancer, violence and emphysema, and drunk driving and death.

Marijuana ain't alcohol or tobacco. But suppose it was. Colorado has reportedly raked in about $25 million in taxes, licenses and fees. Does anyone seriously claim there has been a quarter billion dollars in social costs in Colorado as a result? That's greater than the annual cost of all high-rise fires in America.

It's not even a break-even proposition; even if marijuana use cost the same $25 million it brought in, legalization still saved all the money not spent arresting, jailing, trying, supervising, piss-testing, and rehabbing adult marijuana consumers. And let's not forget; legalization doesn't invent marijuana. Most of the same people are smoking marijuana legally now that were smoking illegally before. We haven't invented much of any new costs and we brought in $25 million!

Second, we have something new from Kevin Sabet since the attention to the consequences of poor labeling and dosage restrictions on marijuana-infused edibles in Colorado. Sabet holds up a bag and retrieves from it a brightly colored package of "Strawberry Crunch" and declares this is "Big Marijuana marketing to kids" because "no 50-something hippie wants medicated sodas or Strawberry Crunch weed."

However, within this same debate Sabet offered up two other demographic assertions. He posits that "anybody over the age of eighteen with a pulse can shop at one of these stores." I presume he's referring to the ability of 18-21-year-olds to get a medical marijuana card and shop at dispensaries, since a recent law enforcement sting using undercover underage narcs failed to get even one recreational pot shop to sell to the minor.

Then, in an off-hand remark about medical marijuana, he scoffs that "it was supposed to be about the cancer patients, but it turned out to be about the 31-year-old white male with back pain." I've heard this line of his before; it refers to a demographic survey of California medical marijuana patients some years back. I don't know how "white male" makes even a sarcastic point; what, only black and brown people perform back breaking labor? Would he prefer young men using OxyContin and alcohol for their back pain? No, wait, that's the other Project SAM guy.

But think about all three of those assertions at once. Anyone over 18 who wants it can get it at dispensaries. The average shopper at a dispensary is 31. People over 50 don't want infused products. How is that mathematically and economically possible? If we have population N chock full of 18-21-year olds and the average of N is 31, don't there have to be a whole lot of 50-somethings to balance N's average out? And if that's true, isn't there some reasonable chance those 50-somethings are buying infused sodas and Strawberry Crunch weed?

Worse, those are California averages, a state that has no statewide registry of medical marijuana patients. Colorado does, and their average age of medical marijuana patients is 41. So, absolutely, there are 50-something medical marijuana patients buying infused products!

Finally, Kevin Sabet tries to scare people with the notion that Big Marijuana (the new emerging legal tax-paying, job-creating, law-abiding industry, not the current murderous torturing cartels) must, like Big Alcohol and Big Tobacco, addict the children. After all, they make their money not on the casual user, but the addict. Why, 80 percent of the alcohol and tobacco are used by 20 percent of the users!

Of course, even freshman economics students know this as the Pareto Principle and it applies to damn near every economic activity -- it's not some weird aberration of the drug market.

The problem, of course, is once again, marijuana ain't alcohol or tobacco. As Sabet points out in the debate, it is rare you find someone who tried drugs or alcohol or tobacco after age 21 who became a lifelong consumer. Mostly because, and especially for tobacco, if you try it as an adult, you might feel some effect, but generally it tastes awful and makes you feel nauseous and uncomfortable. Alcohol and tobacco need that teen peer pressure, that allure of cool rebellion, that feeling of invulnerability, to overcome initial rejection of a nasty tasting dangerous product.

Big Marijuana is going to go where the money is and that's not in teenagers who can't get into their stores. It's the 40-, 50-, and 60-somethings who'll realize that marijuana can replace the Tylenol, Ambien and Viagra they've been popping like candy. It's the 20- and 30-somethings finding marijuana can replace the beer, wine and liquor that leave them hung over. And the data bear it out.

According to the National Survey on Drug Use and Health, in 2002 there were 3.9 million teenagers (age 12-17) using marijuana annually. In 2012, that had dropped to 3.4 million. Over that same decade, use by seniors (age 50+) increased from 1.6 million to 4.7 million. This isn't just due to the Baby Boomer demographic bubble that's aging every statistic, however. That teen annual rate dropped from 15.8 percent to 13.5 percent while the senior rate increased from 2.1 percent to 4.6 percent.

So if those Big Marijuana retailers want the growing market, they want the seniors, even more so if you take Sabet's Pareto Principle to heart and look at the frequent consumers. Among monthly marijuana consumers, teens dropped from 2 million to 1.8 million and their rate dropped from 8.2 percent to 7.3 percent, while seniors increased from less than 1 million to 3.1 million with a rate increase from 1.2 percent to 3 percent. That's right, while the senior annual use rate doubled, the senior monthly use rate tripled!

In this decade where Kevin Sabet has decried the normalization, legalizing and commercialization of marijuana, we have 200,000 fewer minor teens using marijuana monthly and half a million fewer using annually. We have about $25 million in tax revenue in just one state in just four months with no appreciable increase in social costs. We have the greatest increase in use among people aged 26 and older, from 7.2 million to 10.8 million. It's just simple math and economics.

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