5. An Industry-Financed Fund
from marijuana profits to pay for the damage legal marijuana will do, so that taxpayers won’t have to pick up the tab.

Why is this needed?
Who should pay for the problems marijuana will cause? Taxpayers? Or the industry that causes those problems?

Our experience with alcohol and tobacco points the way. For every $1 that federal and state governments take in from alcohol taxes, they must spend more than $12 of taxpayers’ money on health care and law enforcement. (1)

To date, the alcohol industry has not been held accountable for the damage it does to people. Taxpayers foot the bill directly by financing emergency services, law enforcement, hospitals, the criminal justice system, publicly funded treatment, research, and other health care costs. Taxpayers also pay indirectly because their auto insurance and health insurance rates are significantly higher that they would otherwise be. Contributing no share of these costs, the alcohol industry just makes more money.

Until recently, like the alcohol industry, the tobacco industry bore little financial responsibility for cleaning up the mess its products make. Taxpayers paid billions to take care of the damage. That began to change in the 1990s when states realized they were paying out more money in public-health costs and Medicaid costs to treat tobacco-related diseases than they were able to raise in tobacco taxes. State Attorneys General in 46 states sued the tobacco industry to recover those costs.

In the Master Tobacco Settlement Agreement of 1998, the tobacco industry agreed:

  • To end its marketing to youth.
  • To reimburse states in perpetuity for a portion of their Medicaid costs.
  • To establish and finance an independent nonprofit organization, the American Legacy Foundation, to discourage youth smoking and help smokers quit.
  • And won an exemption from class-action lawsuits brought by those harmed by tobacco.

If marijuana is legalized, money will be needed for:

  • Research in the states and communities that legalize marijuana to determine if use increases and to what extent
  • Research to learn what kinds of social and health problems legal marijuana will cause
  • Prevention efforts to reduce use
  • Treatment services to treat marijuana abuse and addiction
  • Health care services to treat marijuana-related diseases, both physical and mental
  • Law enforcement services to maintain public safety

This provision will establish a fund that will be drawn from marijuana industry profits and administered by an independent body, with no representation from any industry that sells addictive drugs, to pay for these costs.

1. “Tax Facts.” Tax Policy Center.  See also Harwood H (2000). “Updating estimates of the economic costs of alcohol abuse in the Unites States: estimates, update methods, and data.” Report prepared for the National Institute on Alcoholism and Alcohol Abuse.


Copyright 2011 by National Families in Action. All rights reserved. Last updated: