In some Utah counties the sell and production of Spice is illegal. It is expected that the drug will soon be banned state wide. Spice is a drug that gives a marijuana like high from a mixture of herbs. According to the article “Bill banning spice being prepared for legislative session” spice currently sells for $13 to $26 a gram in smoke shops.

Illegalizing this drug will greatly increase its price. First, supplies will only be willing to sell the drug at a much higher price because of the added risk of getting caught. Second, in the short run demand might be more inelastic because of the strong dependence on the drug. People will be more willing to pay the higher price because of their dependence.

However, in the long run demand will greatly be reduced because of alternative options. Spice is currently a supplement good to Marijuana. The current demand for Spice is high because it is legal and at a relatively low price compared to Marijuana. Now that Spice is illegal the demand for Marijuana will go up.

1 comment:

Dave said...

-1 on MIA for bad grammar.

My understanding (which could be wrong) is that the "mixture of herbs" is just to give you something to smoke. That the active ingredient is added, and is a synthetic cannabinoid similar to the active ingredient in actual marijuana.

I also question how much of a "dependence" people can have on Spice. Again, my understanding is that clinical evidence shows that any dependence on marijuana is weak or nonexistent.

People may debate that point. They are missing the forest for the trees: there are any number of legal compounds that could be added to Spice to produce dependence.

I agree with the economics of this piece, but I think the case with Spice is substantially worse than the standard libertarian case against prohibition.

The reason is that, once again, law-makers who aren't that bright have created a new problem. Because of concerns about purity of legal drugs, we have developed a pharmaceutical system heavily dependent on the ability to patent individual compounds - provided by legislation. Yet, this same system means that every new and unpatented pharmaceutical is legal until specifically legislated to be illegal.

The problem is worst in Europe. It is very easy for basic chemists to create new alternatives to synthetic psychedelic drugs like Ecstasy. They are creating these faster than they can even be monitored by police, much less enforced against by the judicial system.

Essentially, we are very close to the "Napsterization" of recreational drugs. The whole concept of what's illegal will be moribund after that.