Criminalizing an act that provides weak signals about a person's productivity and character can dilute the stigma attached to having a criminal record. This reduces the deterrence of serious crimes that do provide strong signals regarding the offender's character. Over-criminalization occurs when the costs associated with reduced deterrence due to stigma dilution off-set potential benefits associated with criminalizing the less harmful act. Identifying conditions under which stigma dilution is likely and comparatively costly allows the determination of factors that affect the desirability of (de)criminalizing various acts. These factors are discussed in the context of marijuana possession offenses to illustrate how over-criminalization may reduce social welfare. The normative desirability of various practices in criminal law are also discussed vis-à-vis their impacts on stigma dilution.