5. Model 3: Full Legalization of Marijuana Production, Sale and Use within a Competitive Market System The economic fundamentals remain the same as those described in model two, where both the supply and use of marijuana are legalized. This approach will result in the elimination of all non-monetary costs for both the user and the supplier,245 thus triggering an upward shift of the demand curve and an increase in the demand for the product, at a given price. This will be accompanied by a downward shift of the supply curve, which in turn leads to a fall in the price due to the virtual disappearance of those indirect, non-monetary costs, reinforced by competition among suppliers. The major difference between model 3 and model 2 is that unlike in model 2 where the government sets the price and quantity of the product, in this model, the price and quantity are determined by the forces of demand and supply. Legalization within the Competitive Market Experience This is a popular model of marijuana legalization. Possibly the most known cases of this approach are that of Washington State and Colorado in the United States of America. Voters in Washington State approved the initiative (502) to legalize the sale and use of recreational marijuana in 2012, however, the actual sale of the product did not commence until July 2014.[26] Similarly, Colorado’s legislation was passed in 2012 and sale began in January 2014.[27] The United States of America has a total of 9 States and Washington DC [28] that have legalized recreational use of marijuana. Other places around the world where recreational use of marijuana is legal include The Netherlands, Spain, and Uruguay. These jurisdictions/countries all have varying marijuana regulations, but most have similar restrictions and taxation approaches which are meant to raise revenues. Whereas there are regulations governing how marijuana is sold, produced and consumed, the quantity supplied, demanded and the selling price are primarily determined by market forces, which have likely led to different outcomes when compared to the other models. Prevalence Since the legalization of marijuana in Washington State, the data suggest that its prevalence in terms of usage has increased. Regular use by persons between ages 18-24 years has increased from 11% in 2011 to 15% in 2015. Of the children between ages 12-17 years, marijuana use prevalence is increasing faster than the national average, moving from 9.45% in 2011-2012 to 10.06 % in 20132014. By way of comparison, the national average in the USA for that same age-group fell from 7.55% to 7.22% over the same period. The overall trend is also similar. Marijuana use prevalence jumped 2.58 percentage points over the same period, with an average change per period of 11.92% [29]. Changes in prevalence in Colorado were a little more significant; increasing to 12.56% in the 2013-2014 period from 10.57% in the 2011-2012 period for the 12-17 years age group. Likewise, overall prevalence moved from 10.41% to 14.93%, an increase of 4.52 percentage points over the period 2011-2014. Moreover, average changes per period were 9.53% and 19.76% for the 11-17 years age group and overall, respectively [29]. Accidents and other Legal Consequences In Washington State, the percentage of traffic fatalities where the driver tested positive for recent marijuana use more than doubled in the year recreational marijuana sales began (2014)), increasing from 10.8% in 2013 to 22.19% in 2014[29]. In Colorado, marijuana-related traffic deaths where the driver tested positive for marijuana rose from 55 deaths in 2013 to 125 deaths in 2016, a 127% increase[30]. Still, other reports indicate a contrasting overall outcome, for example, the Colorado Department of Transportation reported a fall in overall traffic fatalities in 2014, a year after the full legalization of marijuana in the State of Colorado. According to the Department, within the first 11 months of 2014 there was a 3% decrease in the overall traffic fatalities ([31]In Washington State, that
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This holds true as long as production and consumption occur in the legal market, as it is possible to have a parallel black market alongside the legal market.
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