The Drug Legalization Lie

This study guide aims to equip policymakers with the tools necessary to oppose those advocating for drug legalization in this country. Wherever drug legalization has occurred, disaster and tragedy have followed. States like Oregon and Colorado have borne the brunt of these policies, which have devastated communities.

What You’ll Learn

The following Study Guide begins with first principles before diving deeper into case studies and policy debriefs. By the end of this Study Guide, you’ll be able to answer the following:

How did we go from medical marijuana to decriminalizing all drugs?
Why are states now beginning to reject marijuana legalization?
What happened to Colorado, and why are states trying to avoid replicating its system, which was once praised?
Why did Oregon roll back Measure 110, which decriminalized possession of all drugs?
Why has Drug legalization has been a public policy failure wherever it has been tried?

This Study Guide was created in partnership with Smart Approaches to Marijuana, a 501(c)(3) whose mission it is to educate citizens on the science of marijuana and to promote health-first, smart policies and attitudes that decrease marijuana use and its consequences.

Part I: The Drug Legalization Myth

Medicine by Ballot?

In 1979, Keith Stroup, the founder of the pro-marijuana group NORML, said, “We will use [medical marijuana] as a red herring to give marijuana a good name.”

Stroup’s vision became a reality. States across the country would go on to pass medical marijuana laws by ballot, starting with California in 1996. It should be no surprise that codifying marijuana as medicine by popular vote hasn’t gone well. Abuse runs rampant within these systems of state-sanctioned drug dealing. Let’s take a quick look:

In 2022, more than 132,000 medical marijuana cards were issued by 17 doctors in Pennsylvania, accounting for over a third of all cards issued that year.
In Michigan, the Office of the Auditor General determined that 18 physicians were responsible for issuing more than 83,000 medical marijuana cardholder certifications in a year and a half.
In Colorado, 83% of medical marijuana dispensaries recommended marijuana to pregnant women.

We Were Lied To

A study by the University of Colorado found that crime rates are up to 1,452% higher in neighborhoods with at least one marijuana dispensary.

In Denver, areas close to dispensaries experienced nearly 85 more property crimes per year on average than areas without a dispensary.

In Colorado, THC is the most frequently detected substance in toxicology reports of youth aged 10-19 who commit suicide. Additionally, 43% of Colorado teens aged 15-19 who commit suicide test positive for THC in their system. That figure rises to 49% for Hispanic youth and 67% for African American youth.

Since 2012, when marijuana was legalized, Colorado has seen a 220% increase in suicides where marijuana is present.

And finally, no, the marijuana black market did not go away after legalization; it got stronger.

Advocates for the drug said that legalization would help bring an end to the marijuana black market. What has actually happened is an explosion in the black market, creating a new norm where foreign drug cartels have made use of the “legal” marijuana market to launder money and set up a legitimate business.

For example, lax medical marijuana laws enabled Chinese drug cartels to purchase farmland under the cover of a legal business. This article describes how four Chinese nationals were executed on a medical marijuana farm in Oklahoma.

It’s not just Oklahoma and Colorado; states like Maine and California have experienced significant increases in foreign drug cartel activity.

The leading marijuana regulator in Maine admitted that the state is granting licenses to foreign criminal organizations. These Chinese marijuana farms are estimated to be valued at $4.37 billion.

WSJ: “Following the legalization of marijuana in many states, Chinese-run marijuana farms have emerged across the U.S. Some are run by investor groups with a commercial growing license.”

Part II: Lessons Learned From Decriminalization

If marijuana legalization is a public policy disaster, imagine how bad decriminalizing all drugs would be.

In 2020, on promises of treatment over incarceration and drug policy reform, Oregon voters approved Ballot Measure 110, which decriminalized all drugs.

In 2024, Oregon’s bicameral Democrat supermajority and progressive Governor repealed it.

In the months after drug decriminalization took effect, chaos and disorder broke out in some of Oregon’s largest cities. Portland, for example, was flooded with drug users, who no longer faced any deterrent for their drug use. Instead of investing in drug prevention, education, and rehabilitation, the state listened to George Soros-backed organizations like the Drug Policy Alliance, who want to see the legalization of all drugs. This caused drug use to become normalized, leading to serious consequences for the people of Oregon.

In “This Is the Pacific Northwest on Drugs,” Charles Fain Lehman explores recent data from Oregon and Washington regarding the effects of drug decriminalization.

These studies found that decriminalizing drug possession caused a rise in violent crimes, property crimes, and overall disorder.

“The results are startling. In both states, the authors find statistically significant increases in total violent crime, murder, robbery, aggravated assault, total property crime, burglary and motor-vehicle theft.”

Daily violent crime rose by 14% in both states, daily property crimes rose by 21% in Washington and 9% in Oregon.

Alongside increases in crime, overdose deaths also skyrocketed following the implementation of Measure 110 in Oregon.

A study published in the Journal of Health Economics found that drug decriminalization in Oregon resulted in a 23% rise in drug overdose deaths in the year it was implemented.

Drug Policy Moving Forward

Of course, there are reasons to be hopeful. In the 2024 elections, three states rejected marijuana legalization, and a fourth rejected psychedelic legalization. Measure 110 was repealed in 2024.

It appears that public sentiment on drugs is also changing. A 2024 Gallup poll found that most Americans now view marijuana’s effect on society and users as negative, a significant shift from years prior.

Additionally, a 2022 Emerson Poll found that only 38% of Americans support legalizing and commercializing marijuana when given a wide range of options to choose from, including medical use and decriminalization.

In short, drugs are messy. Attempts to regulate and isolate their harms have universally failed. Policy should seek to eradicate their prevalence while providing as many options for treatment and recovery as possible.

Part III: Policy Case Studies

As debates around drug policy continue, lawmakers are weighing different approaches to prevention, regulation, and enforcement. The following examples explore major policy initiatives under consideration.

The “Hemp Loophole”

The 2018 Farm Bill legalized hemp, a plant identical to marijuana, but containing no more than 0.3% Delta-9 THC by dry-weight basis. Congress intended for hemp to be non-intoxicating, but useful for industrial purposes like making rope or clothing.

Almost overnight, two loopholes in the language were exploited, leading to the sale of high-potency THC candy products to kids in gas stations across America. First, Congress didn’t anticipate the creation of synthetic THC compounds not accounted for in the Farm Bill, such as Delta-8 THC. These products, made by boiling CBD (a non-intoxicating cannabinoid) in battery acid or pool chemicals, are laced into kid-friendly products. They’re even sold in states that have not legalized marijuana, because they are technically federally legal “hemp.”

Second, Congress didn’t realize that the 0.3% allows for large amounts of Delta-9 THC naturally derived from hemp to exist on the market. Take a THC beverage, for example. A standard 12oz can of Coke weighs approximately 384 grams. The 0.3% limit would permit a whopping 1152mg of hemp-derived Delta-9 THC to be laced into a beverage of that size. The standard dose of THC that gets most users high is 5mg.

Since the 2024, an amendment led by Rep. Mary Miller to prohibit all hemp-derived THC has been included in bills like the House 2024 Farm Bill, House FY25 Ag/FDA Appropriations, and both House and Senate FY26 Ag/FDA Appropriations. After years of member education, there is finally widespread support for getting this gas station marijuana off the shelves and out of the hands of kids.

Marijuana Rescheduling

Big Marijuana has spent millions of dollars trying to get marijuana moved from Schedule I to Schedule III. This potential move, initiated under the Biden Administration, isn’t based on science. Instead, it’s a politically motivated play designed to move toward full legalization and give the marijuana industry a multi-billion-dollar tax break.

Arguments for rescheduling marijuana are often based on a misunderstanding of what it means for a drug to be in Schedule I, II, III, IV, or V. For example, many who argue that marijuana should be rescheduled often point out that marijuana is in the same schedule as heroin. But drug scheduling is not a harm index. Drugs aren’t scheduled based on their potential to cause fatal overdose. According to the Controlled Substances Act, drug classification balances two metrics: a drug’s potential for abuse and its medical value.

Schedule I drugs are drugs that have a high potential for abuse and lack accepted medical use. Marijuana falls into this category. Among myriad other health concerns, CDC has found that 30% of marijuana users develop marijuana use disorder. The addiction rate of marijuana, alone, gives it a higher potential for abuse than many other Schedule I drugs, such as LSD.

Further, the entire marijuana plant is never going to be approved for medical use. While individual components of marijuana have been approved by the FDA in specific forms for specific use cases (such as Epidiolex, which is pure CBD), smoking a joint will never be deemed safe or effective.

When the Biden Administration recommended marijuana be reclassified, they were fitting a square peg through a round hole. The FDA recommendation was littered with flaws, which SAM pointed out and corrected in our rescheduling analysis.

Contrary to popular belief, rescheduling won’t reduce criminal penalties for marijuana nor will it significantly increase research capabilities (Schedule I drugs, including marijuana, are able to be researched). Why does the industry want Schedule III so bad, then? It’s simple: a major tax break.

Rescheduling marijuana to Schedule III would exempt the commercial marijuana industry from IRS Section 280E, a provision that bars businesses trafficking Schedule I or II drugs from writing off business expenses on their taxes. The massive increase in profit that will result will directly fuel the expansion of Big Marijuana, permitting the industry to write off expenses for things like marketing marijuana. Economic estimates predict the marijuana industry will save over $2 billion per year if rescheduling occurs and 280E no longer applies.

The good news is that the push to reschedule as slowed in the Trump Administration, despite an initial endorsement from the President in 2024. Congress has also pushed for a SAM-authored solution to mitigate the worst harms of rescheduling if the policy did make it across the finish line.

Part IV: Legislative Examples

The No Deductions for Marijuana Businesses Act (H.R.1447, S.471)

In response to the marijuana rescheduling threat, SAM drafted and pitched the No Deductions for Marijuana Businesses Act to members of Congress. The bill is a prophylactic measure against 280E tax relief; it adds marijuana by name to the IRS provision, effectively preventing a tax cut no matter where marijuana is placed on the drug schedule.

The bill was introduced in February by House Budget Chairman Jodey Arrington and Senator James Lankford. It currently has 10 House co-sponsors, ranging from House GOP Conference Vice Chair Blake Moore to House Freedom Caucus Chair Andy Harris. In the Senate, Budget Committee member Pete Ricketts is a co-sponsor.

Oppose SAFE Banking (H.R.2891, S.2860 – 118^th Congress)

The SAFE Banking Act (or SAFER Banking Act), aims to grant the state-legal marijuana industry access to the U.S. financial system, supercharging the commercialization of an addiction-for-profit industry overnight. The industry falsely argues that marijuana dispensaries don’t accept credit cards and are thus targets for crime because of the cash-only nature of their transactions. In reality, the bill exacerbates public health risks and provides cover for organized crime and drug cartels.

SAFE Banking is a major accelerant for commercialization:

When Canada legalized marijuana nationwide, the first institutional investors were Big Tobacco, Big Alcohol, and Big Pharma. These addiction-for-profit industries don’t have the same foothold in the American marijuana industry because investing in illicit activity is risky. The SAFE Banking Act would derisk billions of dollars of corporate investment in marijuana, commercializing the industry overnight.

The marijuana industry already has access to banking, and cash isn’t the driver of crime:

According to U.S. Treasury Department FinCen data, 816 banks and credit unions offered financial services to the marijuana industry in the fourth quarter of 2024.
Businesses like Safe Harbor Financial exist with the sole purpose of connecting pot shops with FDIC-insured banking platforms. Safe Harbor has processed more than $12 billion in marijuana-related funds.
A 2025 YouGov poll found that 62% of people who purchase marijuana have used payment methods other than cash.
90% of financial and product losses for dispensaries are committed by employees.
Many dispensary robberies target product, not cash. Think about it: would a criminal be more likely to steal marijuana that’s easily accessible in a store or cash that is likely stored off-site in a safe? Jewelry stores accept credit card payments, yet they still get robbed because they sell valuable products with high black market value.

SAFE Banking would aid drug cartels and facilitate money laundering:

The bill would make it extremely difficult for banks to differentiate between large bundles of cash generated from the sale of state-legal marijuana and cash derived from the sale of illicit, highly dangerous drugs such as heroin, fentanyl, or methamphetamine.
Granting banking access could provide drug cartels with the cover of legitimacy enabling them to deposit large sums of cash made from the sale of deadly drugs.
The bill allows state-sanctioned marijuana businesses to obtain banking access. We know that many of the Chinese drug cartels growing marijuana have already obtained state business licenses through fraud schemes.

Part V: Myth vs. Fact

MYTH: Legalizing marijuana (or all drugs) is necessary to end the mass incarceration of Americans arrested for simple possession.

FACT: Despite claims made by drug legalization advocates, historically, incarceration rates for simple drug possession alone have remained low. For marijuana, the figures are practically nonexistent. Take the data from 1997, when no state had legalized recreational marijuana and when drug-related incarceration was reaching a peak. Then, just 2.7% of incarcerated individuals in the state system were charged with marijuana-related offenses, with 1.6% for marijuana alone, 0.7% for possession only, and just 0.3% being first-time offenders for marijuana possession.

These figures align with federal incarceration rates as well. Most drug defendants tried federally were convicted of drug trafficking rather than possession. In 2001, only 186 people received sentences for simple possession, and just 63 served time for their charges.

MYTH: Medical Marijuana is considered a legitimate medical treatment.

FACT: States that have legalized medical marijuana have done so without the approval of the FDA. Approving medicine by ballot measure is a mistake, as these decisions should be left up to experts, not drug legalizers and their corporate sponsors.

Today, there are FDA-approved medications like Marinol, which contains an isolated component found in the plant. Marinol comes in pill form and is sometimes prescribed for nausea and appetite stimulation. Importantly, Marinol is prescribed by a doctor, dispensed by a pharmacy, and subject to appropriate regulations. This, of course, is in contrast to the “medical marijuana” that can be bought from dispensaries, where you are often given medical advice from a 25-year-old budtender with no medical background or training.

Smoking, especially highly potent marijuana, is not a proper delivery method. Other methods, like edibles, also do not guarantee a consistent dose. What’s more, non-FDA-approved marijuana should not be promoted as medicine. The regulatory process exists to ensure that Americans receive safe and effective medications.

MYTH: The best way to address the drug crisis in this country is to make it easier for drug addicts to use drugs.

FACT: You might not believe this, but many advocate for extreme forms of “harm reduction,” which is the idea that drug policies should be designed not to make it harder to do drugs, but easier.

Advocates for extreme harm reduction support policies like safe injection sites, which create areas for drug users to “safely” use drugs, either by providing them with needles, pipes, or other delivery methods. Many cities in this country have experimented with these sites, but as we predicted, the results were disastrous.

Some harm reductionists go even further and argue that the government should not only provide needles and pipes but also the drugs themselves, emphasizing that a safe supply of drugs is essential.

If you want more: Extended Myth vs. Fact

A special thanks to the team at Smart Approaches to Marijuana including Iman Lohrasbi, Jaime Ballew Zerbe, Jordan Davidson, and Luke Niforatos for their work and dedication in producing this Study Guide. Follow their work here.