Today marijuana is of the most common used drugs around. Much debate has been given to whether the substance should be legalized or not. Legalizing marijuana would benefit the country as a whole. Millions of tax dollars go into the drug war each year. Law enforcement officers risk their lives everyday in order to apprehend the countries" many marijuana dealers. Marijuana is a perfect example of market failure where lack of information has caused many false pretenses to be place on the substance. A government-regulated marijuana that would be produced in a market of pure competition would cut government spending and actually bring revenue in from taxes and other fees. .
If a firm in a competitive market structure produced marijuana, allocative, technical, and distributive efficiency would ensue. Being that the firm knows the demand for marijuana, they would produce at a rate that is what the consumer wants. Due to marijuana's similarity to cigarettes, technical efficiency would be insured because large corporations such as Philip Morris would have to change very little of their production process to distribute marijuana joints all over America along with their other brands of cigarettes. Because all efficiencies are insured due to the fact that hemp is just like a cigarette, competitive market firms would be able to increase .
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revenue relatively easy. This increased revenue will guarantee that the market for hemp will stay efficient.
Marijuana operates today in an illegal competitive market. If legalized, the chance of oligopoly by a major tobacco producer is a legitimate threat. Large companies have the resources that many street dealers don't have. A large amount of street dealers produce marijuana inside small rooms and buildings for two reasons: 1. The dealer deals mainly in urban areas where land that would be able to be cultivated is extremely scarce. 2. The cultivation of marijuana is extremely illegal and monitored by the government extensively.