does the united states government make more money from marijuana being illegal in arrests and arrest fees like probation and court costs than it would if it was legal and sold it shops across the nation

In short, no. Economists and government reports consistently find that the United States government (and state governments) would make significantly more money from legalization than it currently does through arrests and court fees.

While the "business" of prohibition generates revenue through fines and fees, the cost of enforcement usually far outweighs what the government collects from those being arrested.

1. The Cost of Prohibition vs. Revenue from Fines

Currently, the "revenue" from marijuana being illegal comes from court costs, probation fees, and fines. However, this is largely viewed as a "net loss" for the following reasons:

• Enforcement Costs: It is estimated that federal, state, and local governments spend roughly $6 billion to $10 billion annually on police, courts, and corrections to enforce marijuana laws.

• Minimal Recovery: Arrest fees and court costs rarely cover the actual expense of the police hours, public defenders, and jail space required to process an arrest.

• Lost Productivity: Criminal records for possession often prevent people from working or advancing in their careers, which reduces the overall income tax the government can collect from those individuals over their lifetimes.

2. The Revenue from Legalization

In contrast, legal marijuana has proven to be a massive "net gain" for the states that have implemented it.¹

• Direct Tax Revenue: As of late 2025, states that have legalized recreational marijuana have collectively generated over $25 billion in tax revenue.² In 2024 alone, states brought in over $4.4 billion from adult-use sales.

• Federal Potential: The Tax Foundation and other groups estimate that federal legalization could generate an additional $7 billion to $28 billion per year in federal tax revenue from business taxes, payroll taxes, and excise taxes.

• Economic Growth: Legalization creates a new industry with hundreds of thousands of jobs, all of which contribute to the economy through payroll and corporate taxes.

Financial Comparison at a Glance

Feature	Marijuana Illegal (Prohibition)	Marijuana Legal (Regulated)
Primary Revenue	Fines, court fees, probation costs	Excise taxes, sales taxes, business taxes
Primary Cost	Policing, jail, court administration	Regulation and licensing oversight
Budget Impact	Net Loss: High enforcement costs exceed fine revenue	Net Gain: Tax revenue far exceeds regulatory costs
Economic Impact	High "black market" untaxed profits	New jobs and legal business growth

Recent Developments

Interestingly, as of December 2024–2025, federal policy has shifted toward rescheduling marijuana (from Schedule I to Schedule III).³ This move is expected to be a major "tax windfall" for the government and businesses because it allows cannabis companies to finally deduct standard business expenses, leading to a more profitable—and therefore more taxable—industry.⁴

Note on Government Intent: While the math shows legalization is more profitable, the debate often persists because of concerns over public health costs (e.g., addiction treatment or road safety) and social impact, which some argue could offset the tax gains.

Would you like me to look into how specific states (like Colorado or California) have used their marijuana tax revenue for things like schools or infrastructure?