Potential tax revenue from a regulated marijuana market: a meaningful revenue source

American Journal of Economics and Sociology, The, Oct, 1994 by Michael R. Caputo, Brian J. Ostrom

D. The Rate of Consumption

How much marijuana was consumed by the users identified in Table 1 was based on the frequency of use estimates from the United States Department of Health and Human Services National Household Survey on Drug Abuse. A pattern of frequency of use by regular users in 1982, 1988, and 1991 is shown in Table 2. The table indicates that in 1982 a regular user engaged in 252.5 uses each year, while for 1988 and 1991 this falls to 116.1 and 111.0 uses per year. The figures for 1988 and 1991 underestimate the number of annual uses for regular users, since the 1988 and 1991 surveys unlike the 1982 survey, do not contain any data on regular users whose frequency of use exceeds one time a day. The heavy users account for almost 60 percent of marijuana consumed by regular users in 1982.

To complete this section, irregular users are brought into the discussion and their use estimated. Each irregular user was assumed to use marijuana six times per year. Even though no empirical evidence could be found to support or refute such an assumption, the frequency of use assumption for irregular users is of little quantitative significance. This is because for all the years except 1988 and 1991, only about 1 percent of total consumption was by irregular users, while for 1988 and 1991, irregular users accounted for about 9 percent and 11 percent of the total consumption of marijuana.

Table 1

Estimated Marijuana Use

                    Ever in Life        In Last Year          In Last Month

Year    Group    % of age    Number   % of age    Number    % of age    Number
                 group       (Mill)   group       (Mill)    group       (Mill)

        12-17    23.00        5.80     7.00        1.77     12.00        3.03
        18-25    52.70       15.87     7.00        2.11     25.20        7.60
1974    26        9.90       11.29     1.80        2.05      2.00        2.28
        Totals   19.50       32.96     3.50        5.93      7.62       12.91

        12-17    22.40        5.59     6.00        1.50     12.30        3.07
        18-25    52.90       16.67    10.00        3.14     25.00        7.88
1976    26       12.90       15.20     1.90        2.24      3.50        4.13
        Totals   21.50       37.46     3.94        6.88      8.65       15.08

        12-17    28.00        6.89     5.70        1.40     16.60        4.09
        18-25    60.00       19.20    11.30        3.62     27.40        8.78
1977    26       15.30       18.37     3.10        3.72      3.30        3.97
        Totals   25.20       44.46     4.95        8.74      9.53       16.84

        12-17    30.90        7.30     7.40        1.75     16.70        3.95
        18-25    68.20       22.71    11.50        3.83     35.40       11.79
1979    26       19.60       25.36     3.00        3.88      6.00        7.78
        Totals   29.70       55.37     5.08        9.46     12.62       23.52

        12-17    26.70        5.87     9.10        2.00     11.50        2.53
        18-25    64.10       21.41    12.90        4.30     27.40        9.15
1982    26       23.00       31.17     4.00        5.42      6.60        8.94
        Totals   30.60       58.45     6.14       11.72     10.80       20.62

        12-17    17.40       3.52     12.60        2.55      6.40        1.30
        18-25    56.40      16.74     27.90        8.28     15.50        4.59
1988    26       30.60      45.49      6.95       10.28      3.84        5.73
        Totals   33.20      65.75     10.60       21.10      5.90       11.62

        12-17    13.00       2.62     10.10        2.03      4.30        0.87
        18-25    50.50      14.39     24.50        6.99     13.00        3.71
1991    26       32.70      50.37      6.60       10.21      3.33        5.13
        Totals   33.20      65.75      9.50       19.24      4.80        9.72