Who Would Be the Winners and Losers If Cannabis Had Never Been Prohibited?
If prohibition had never taken hold, an entire century of agronomic innovation, medical research and industrial substitution would have unfolded differently. Below is a breakdown of who would have come out ahead — and who stood to lose the most.
Part I & II
Winners & Losers
- The environment — less water, nutrients and chemicals for more biomass with wider utility; superior carbon capture and soil remediation; a superior paper feedstock to timber (4x the biomass, 4x the carbon capture of trees); hemp fibers displace less eco-friendly cotton and synthetic petrochemical fibers.
- US Farmers — of the 90+ million acres currently planted in corn, roughly one-third (30 million acres) goes to subsidy-dependent ethanol. Converting those 30 million acres from corn (~$600/acre) to hemp (~$3,000/acre) implies an incremental revenue boost of about $72 billion. Decreased corn, soy and wheat acreage would also boost prices for those remaining crops.
- Farm equipment manufacturers — the tough hemp stalk is difficult to cut and process, requiring new harvesting and decorticating equipment plus an aftermarket servicing business.
- US rural-based manufacturing — hempseed oil and protein-meal processing would likely be dominated by the large grain traders (Archer Daniels Midland, Bunge, Cargill, Louis Dreyfus), but heavy fiber and biomass require local processing rather than shipping overseas.
- Consumers' health & pocketbook — the threat of cannabinoid substitution caps pharmaceutical pricing power; cannabinoids can treat conditions current medicine doesn't address well; synthetic cannabinoids are cheaper to produce than many phytocannabinoid-derived drugs.
- People incarcerated for marijuana — decades of enforcement resulted in outsized incarceration for a substance that, absent prohibition, would have been treated as an ordinary agricultural crop.
- Pharmaceutical industry — nearly $100 billion in revenues at risk across drug categories that phytocannabinoids can substitute for or complement.
- Timber industry — the same 1916 USDA Bulletin No. 404 finding (Dewey & Merrill) that hemp yields 4x the pulp of an equivalent acreage of pulpwood forest.
- Cotton industry — hemp offers superior yield and lower input-cost economics, and hemp fabric is stronger, more durable, better insulating and more absorbent than cotton.
- Agricultural chemicals — hemp needs meaningfully less herbicide and pesticide than existing cash crops.
- Petrochemicals & synthetic fiber manufacturers — hemp fiber competes directly with petrochemical-derived synthetics, and hemp hurd is a viable bioplastic feedstock. BMW's i3, for example, uses hemp-derived biocomposite interior insulation.
- Alcohol, brewers & distillers — cannabis could take meaningful market share from alcohol. Constellation Brands, for one, "overpaid on a disastrous investment in Canopy Growth."
- Drug enforcement industry — police unions, the DEA, private prisons and prison guard unions. Some police departments report as much as 35% of their budget derived from asset seizures tied to drug busts, the majority of which involve marijuana. Historically, roughly half of anti-legalization campaign funding has come from police and prison guard unions.
"The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional facilities to house them."
Pharmaceutical categories at risk of cannabinoid substitution
Total addressable market across six categories: $97.4 billion — often rounded to "~$100 billion" in narrative summaries of cannabinoid substitution risk.
| Metric | Industrial Hemp | Cotton | Corn | Soybeans | Wheat |
|---|---|---|---|---|---|
| Planting seeds / acre | Fiber 40–50 lbs; Grain 18–23 lbs | 10 lbs | 10 lbs | 50 lbs | 100 lbs |
| Nitrogen (lbs/acre) | 100 | 100 | 158 | 190 | 113 |
| Phosphorus (lbs/acre) | 40 | 45 | 65 | 40 | 33 |
| Potassium (lbs/acre) | 60 | 220 | 48 | 70 | 30 |
| Water (gal/acre) | 366,000 | 490,000 | 435,000 | 245,000 | 270,000 |
| Pesticides (lbs/acre) | 0.2 | 5.8 | 0.30 | 0.30 | 0.34 |
| Herbicides (lbs/acre) | Minimal to none | 1.10 | 1.20 | 1.00 | 0.54 |
| Yield per acre | Fiber grow: 6,250 lbs Dry Hurd + 1,600 lbs fiber; Grain grow: 850 lbs hempseed + 2,100 lbs Dry Hurd + 560 lbs fiber | 880 lbs fiber + 1,000 lbs seeds | 175 bu / 9,800 lbs | 50 bu / 3,000 lbs | 50 bu / 3,000 lbs |
2018 illicit drug use, age 12 or older
Marijuana accounted for 43.5 million users (82% of the 53.2 million total 2018 illicit drug users); prescription opiate misuse accounted for 9.9 million users (19%). Remaining categories (Rx sedative misuse, hallucinogens, cocaine, Rx stimulant misuse, inhalants, methamphetamine, heroin) are shown in descending order without precise published values. Note: categories are not mutually exclusive. Source: U.S. Department of Health & Human Services, 2018 National Survey on Drug Use and Health.
Legalization hasn't driven teen use higher
A common argument against legalization is that it will increase teen marijuana use. The data doesn't bear this out. Past-year marijuana use among 12-to-17-year-olds has been essentially flat — even declining — over the same period that state-level legalization spread across the country.
Past-year marijuana use, ages 12–17 (2002–2018)
Source: U.S. Department of Health & Human Services; Results from the 2018 National Survey on Drug Use and Health.
The 2018 Washington State Healthy Youth Survey concluded that "rates of teen marijuana use have remained steady, despite the changing landscape" following the state's 2012 legalization of recreational cannabis. In Colorado, the Department of Public Health & Environment's biannual survey found teen cannabis use actually declined from 22% in 2011 to 21.2% in 2015 — after the state legalized recreational marijuana in 2012.
Want to see the full applications breakdown?
Revenue-per-acre economics, cultivation comparisons, and every industrial end-market for the plant.
Read Part I