Yesterday, Mark Kleiman, a California-based professor who occasionally discusses drug policy, wrote about the shifting tides on marijuana:
Obviously, this isn’t something the Obama Administration is going to jump on, but I wouldn’t be surprised to see a big move late in a second Obama term or sometime in the term of his successor (assuming the Democrats keep winning elections). If I had to quote odds, I’d say about even money on legalization within fifteen years. As with the repeal of alcohol prohibition and the creeping legalization of gambling, I’d expect it to be presented at least in part as a revenue-raising measure.
And today, a member of the California State Assembly, Tom Ammiano, introduced a bill to do just that. His bill would regulate sales of marijuana the same as alcohol, with a 21 year old age limit and fairly substantial ($50 per ounce) taxes on both growers and sellers.
While I’m not optimistic that this particular bill will pass, I think that legalization is bound to happen on the west coast well within fifteen years. As Kleiman predicted, though, it’s being presented in part as a revenue-raising measure:
It also has the backing of Betty Yee, who chairs the state Board of Equalization, which collects taxes in California. An analysis by the agency concluded the state would collect $1.3 billion a year in tax revenue and a $50-an-ounce levy on retail sales if marijuana were legal.
But the next part in that article is the subject of more heated debate:
The analysis also concluded that legalizing marijuana would drop its street value by 50 percent and increase consumption of the substance by 40 percent.
Kleiman tends to agree with the latter part of that assessment:
Substantively, I’m not a big fan of legalization on the alcohol model; a legal pot industry, like the legal booze and gambling industries, would depend for the bulk of its sales on excessive use, which would provide a strong incentive for the marketing effort to aim at creating and maintaining addiction. (Cannabis abuse is somewhat less common, and tends to be somewhat less long-lasting, than alcohol abuse, and the physiological and behavioral effects tend to be less dramatic, but about 11% of those who smoke a fifth lifetime joint go on to a period of heavy daily use measured in months.) So I’d expect outright legalization to lead to a substantial increase in the prevalence of cannabis-related drug abuse disorder: I’d regard an increase of only 50% as a pleasant surprise, and if I had to guess I’d guess at something like a doubling.
Bruce Mirken from the Marijuana Policy Project disagrees:
A spokesman for the Marijuana Policy Project, which advocates for reform in marijuana laws and is backing Ammiano’s proposal, said any expected increase in consumption is a “false notion.”
“They are making an intuitive assumption that a lot of people make that really does not have that much evidence behind it,” said Bruce Mirken, the group’s spokesman
Mirken is absolutely correct here. Anyone who confidently says that marijuana abuse (or even marijuana use) will go up substantially in an environment where sales are legal is far more certain than they should be.
The first problematic assumption that leads to that unwarranted certainty is a belief there are large numbers of people in California who would start using marijuana if only it were sold legally. I’ve certainly met people (generally older people) who’ve used marijuana in the past, but have found it difficult to obtain due to its illegality, and who would probably buy it if it were legal. So in that respect, I could see an increase in use. However, this is a subset of the population who has already proven to be extremely unlikely to develop problems with marijuana abuse.
Young people, on the other hand, don’t have problems finding marijuana. The idea that marijuana prohibition is actually working as a firewall to keep young people from obtaining it is utterly ridiculous. Establishing a legal market with an age restriction of 21 will actually make it harder for young people to obtain it than it is now (although it likely still won’t be that hard). Because abuse problems are most profound in people who begin using it early, there’s a logical basis to expect abuse problems to decline in a post-Prohibition environment. One could also look towards Holland, where sales of marijuana to adults have been allowed for over 30 years, yet the use of marijuana among teens there is far lower than it is here.
Again, there are a lot of factors at play here, but my own guess is that in whatever state legalizes marijuana first, use will go up by less than 10%, and the prevalence of abuse will stay about the same or go down. Marijuana abuse, as a societal problem, will still remain miniscule when compared to harder drugs like meth, or even alcohol.
The biggest question for me is how the legal market will develop, and how we’ll deal with things like advertising and taxation. The tax being proposed in the California bill is pretty big. An ounce generally doesn’t cost more than $300 on the black market, so a $50 tax on that is not chump change, especially if legalization cuts the black market prices in half. Would that drive people back to the black market? Or would the growers (who have a history of begging to be taxed) be happy to yield a big chunk of their potential profit in exchange for legal status? I have no idea.
Kleiman, on the other hand, wants to take a different approach:
So I continue to favor a “grow your own” policy, under which it would be legal to grow, possess, and use cannabis and to give it away, but illegal to sell it. Of course there would be sales, and law enforcement agencies would properly mostly ignore those sales. But there wouldn’t be billboards.
There are a couple of very big problems with this proposal. Scott Morgan discusses some of the problems here. Another major reason why this approach won’t work is because it’s not trivial to grow high quality marijuana. It’s much more than just throwing some seeds in dirt and putting it under a light. It’s arguably far harder and more time consuming than homebrewing beer. And if you’re just growing for yourself, you’d end up spending a lot of money just to produce a single plant. People would naturally gravitate towards larger scale growers and distributors who know how to produce a higher quality product. It’s an unrealistic proposal, and it’s not at all clear why Kleiman thinks we can’t allow sales but just ban certain types of advertising.
At the end of Kleiman’s post, though, there’s something that he and I agree on:
I just hope the sellers are required to measure the cannabinoid profiles of their products and put those measurements on the label.
Ending prohibition doesn’t have to be synonymous with unfettered free markets. It should be about smart regulations for an activity that millions of Americans are going to partake in whether it’s legal or not. I hope that as we move closer to the post-Prohibition world, we begin to think about (and study) the real effects of setting up newly legal markets in various ways.
[Deleted — off topic, see HA Comment Policy]
While the web is far more complicated than this, i would propose a value added tax at some apparently miniscule percent (under 5%) on the sales at each level. The proposed $50 dollars only punishes the distributor/retailer while a value added tax reminds those on the entire chain that they share the responsibility of providing something of value to the consumer. Creating a legal environment would reduce the wholesale prices (while maintaining the agriculture costs of production), and would promote differentiation of source use material at the retail end. Those that can only use the edible form would pay for the taxes on the processing as well as the inventory control, while those that rely solely on the purchasing of grams and ounces (a vaster majority) would bolster the lower value tax per/item through massive exchange.
This isn’t all that complicated to generate, and certainly would move the “green” economy that already exists (in CA it is quite literally billions of dollars) into the mainstream, at a time when it would be inordinately profitable. A VAT would also keep the wholesale prices higher as the costs of production would be taxable (as sales taxes), and that would be passed on to the consumer along the chain directly.
Count me as one of the oldsters who would probably resume use if marijuana were legal. I quit many years ago when I realized that it put me to sleep. Now that I’m old enough to need some help falling asleep, I’d certainly look into marijuana as a sleeping aid if it were legal.
Are you overestimating the actual demand for high quality? Hard to grow? They call it “weed” for a reason. When I was a kid, regular users had expectations for a certain leval of being high, and they smoked enough to get them to that point and then stopped. Higher quality meant only that you smoked less of it.
Things might well have changed since then, but I haven’t heard about it. Of course if professional growers specialized in specific strains that were high in the cannabidiols that supposedly promote the “sleepy” effect, I’d probably pay extra to get it.
Wouldn’t the price fall dramatically as farmers ripped out orchards on the East Side to plant vast acreages of pot. Then the Dept. of Agr. would have to step in to save them from themselves and mandate acreage set-asides or conservation buffers as they do with some other crops. Perhaps boutique growers would emerge as the snobby vintners have, but there would still be the volume producers, Rossi comes to mind. Oh wait! that is Carlo Rossi not Dino. Well maybe Dino would get in on it as he needs something to keep himself occupied.
Interesting economics discussion. I wonder .. are y’all assuming that the crop will be made in America?”
I see another issue. The pharmacology of pot is pretty well known. If “pot” is legalized, wouldn’t the logical next step to legalize THC? Does that elad to other products …brownies?
Imagine Lee operating a bakery!
Wow, good comments, thanks! And thanks to whichever admin removed Cynical’s attempt to derail the thread. Much appreciated.
@2
I tend to think you’re right about the taxes here. Exactly what is being taxed at $50 per ounce is hard to determine from the news articles I’ve seen (and yes, I have not read the proposed bill yet). If it’s on the wholesaling (large amounts being moved with a huge margin), it probably won’t matter too much. If it’s on retail sales, that could potentially create a situation where a buyer can easily avoid the tax by buying from an unlicensed grower. If I have time today, I’ll look through the bill and post an update.
@3
Are you overestimating the actual demand for high quality? Hard to grow? They call it “weed” for a reason.
That’s a good question. We’re certainly at a point now where people grow particular strains that have more specific effects on the body and mind than ever before. I haven’t seen “weed” since college. Even here in Washington, I’ve been able to buy stuff where I’ve known the actual strain (medical marijuana patients can generally do this now already). In a legal market though, I expect there to be low-THC alternatives to these mega-powerful strains that exist now (kind of the equivalent of light beer). :)
@4
Wouldn’t the price fall dramatically as farmers ripped out orchards on the East Side to plant vast acreages of pot.
Absolutely. Although Mexican gangs are already doing that today. :)
I think large scale grows like that will have trouble competing with the quality of smaller grows with more care put into the product, but it’s hard to tell. It may end up being the same parallel as local microbrews vs. Budweiser. We’ll see…
@5
No question a MaryJane Bakery would be a solid economic model…better than blogging or newspaper ownership.
Consider the power of the small entrepreneur. A $50 tax on one ounce, people buy a 1/4 oz for, say, $20 post legalization; tax would be $12.50 for a final price at the pot emporium of $32.50 – still nearly half the current street price.
Growing would not have the hassles of surreptitiousness, nor the haphazard myriad of grow techniques. There would be room for crafting certain strains, certain breeds and, like microbrews and craft wines, a certain branding of quality. This would keep the price far lower than black market produce.
Legal weed would lose its allure to the young people. There’s no rebellion in smoking weed that’s legal. you’d still have those who do, but, like cigarettes and alcohol, adding a layer of restriction (front counter of the shop) would make it harder.
Also, consider the Mexican drug lords. They don’t grow pot for the joy and activism of marijuana. They are in it for the money. Take that away and they have no reason to participate. Considering their loss of income should legalization become real, I wouldn’t put it past the Mexican Mafia to start contributing to the opposition. Funnel some of those millions in drug profits to anti-legalization causes now before the deed is done.
Wow, these are all valid arguments for legalization. These are all arguments that my friends and I made in high school. Granted we were probably high at the time.
Could it be that elected officials who have dabbled in drugs are finally starting to outnumber those who haven’t?
Off topic aside on Mexican street gangs…I saw the “18th St” tag painted on a pizza place in Issaquah. Puh-leaze. There are no 18th Streeters in Issaquah! Go practice your soccer or the violin you poseur! 18th St! My Ass!
Marijuana .. innovation…
Assuming legalization is for THC and NOT just weed, hows about some creativity? Howsabout a line of products?
MJ Chewing Gum
Chocolates with MJ filling
MaryJam
Are marijuana leaves chewable? Can they be used as salad? Imagine
BigMac Deluxe with really special sauce
Bacon Weed and Tomato sandwiches
Sushi wrapped in weed
Dolmathes with weed
Fried MJ in garlic sauce?????
And finally how about opening a chain of Pot Parlors?
In Japan, Fugo (puffer fish) is legal food. Not here because of fear that a clumsy butcher would nick the liver and tetradotoxin is d-e-a-d-l-y. BUT … In Japan they have Fugo Gouses where everything, even the cookies, is made from Fugo. So .. the POT Parlous would sell MJ ine very form possible from soup to licquer.