Marijuana Ballot Initiatives

Why Colorado's Marijuana Legalization Initiative Could Be In Vain

State policy makers need to develop sensible marijuana regulations, not destructive ones.

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On Election Day, voters in Colorado and Washington passed ballot measures legalizing marijuana, setting the stage for a new, legal commercial marijuana market in both states. These electoral victories confirm what polling firms like Gallup had already discovered: A majority of Americans support legalizing marijuana. The "marijuana majority" (a moniker derived from an organization of the same name) now hopes for successful implementation, but it's not the only one.

Cash strapped states no doubt are salivating at the potential deluge of new revenue. (Both measures are unique, so for clarity this piece will focus on Colorado.) The Colorado Center on Law and Policy estimates Colorado's Amendment 64 will generate $60 million annually, a figure that could double after 2017. This fiscal bonanza would come primarily from new tax revenue generated from excise taxes on wholesalers and new state and local sales taxes—but also avoided costs to the criminal justice system.

It would be a mistake for states to think that they can restore fiscal balance by raising revenues from marijuana legalization rather than curbing their spending addiction. That said, these revenues will materialize only if legalization is done right.

Even if the federal government allows the states to go forward unmolested—a big "if" given the Obama administration's demonstrated zeal to bust medicinal marijuana shops—there are a number of regulatory and tax issues that the states must first settle to create a functioning marijuana market. This won't be easy, but it is vitally important that policy makers make the right calls lest the whole legalization movement gets derailed.

On the regulatory front, the key would be to regulate marijuana like alcohol and avoid over-regulation. Many of the regulations are either necessary or unavoidable. These include: preventing minors from buying marijuana, providing consumers with product labeling, and restricting advertising, among other things.

One thorny issue that every legalization effort will confront concerns determining what precisely counts as driving under the influence of marijuana? Colorado's initiative clearly states that driving under the influence will remain illegal and it does not task the state with addressing the issue further. However, some Colorado lawmakers have pushed for automatic convictions for drivers with five nano grams of tetrahydrocannabinol (THC)—the main psychoactive ingredient in marijuana—per milliliter of blood.

But this is problematic given that THC can remain in the user's system in small amounts for days or weeks after consumption. Hence, recreational consumers who are not currently under the influence could be unfairly targeted if policy makers choose crude testing that can't differentiate past use from present intoxication. This is justifiably prompting civil liberty concerns.

Beyond regulation, Colorado policy makers also need to grapple with peculiar wrinkles in their own laws before they can impose excise taxes on marijuana. The initiative authorizes the legislature to enact an excise tax on wholesale marijuana producers of up to 15 percent. The first $40 million of that excise tax revenue is slated for the school capital construction fund annually, a feature that prompted justifiable criticism from the "center-right" coalition. But the Taxpayer's Bill of Rights (TABOR) amendment to the Colorado constitution requires voters to approve all tax increases. Colorado's attorney general has indicated the language in Amendment 64 "did not comply" with TABOR. Hence, separate voter approval of the excise tax is likely, creating some political risk for implementation.

What's more, all of this has to be sorted out by January 2014. That's because if the state fails to start issuing licenses by then as required, the law automatically authorizes local governments to issue their own regulations and licenses after 90 days. It is far from clear whether local governments will be able to navigate implementation if the state can't, but this is an intentional safety valve built into the law to allow the initiative to move forward in case of political intransigence. If it comes to that, the result may be disjointed local regulations that slow the market's development. Confusing or uncertain regulations will discourage entrepreneurs from investing the capital necessary to open new businesses, jeopardizing the expected revenues as well.

Another way in which these revenues might leak out of the state's grasp is if the state fails to establish a proper regulatory and tax framework for legal channels in a timely fashion: The amendment allows adults over 21 to possess one ounce of marijuana and exchange that amount without remuneration. It also allows possession of up to six plants. (This provision was not included in Washington state's initiative.) This opens the door for legal non-revenue generating channels. One could even imagine sophisticated non-profit co-op networks of home growers largely operating off the books.

But there are also illegal channels to worry about if taxes are too high or regulations are too burdensome. Then, despite legalization, it will be hard to dislodge the existing black market which has everything in place, including production, supply chain management, and distribution—all of which already puts legitimate businesses at a distinct disadvantage.

Colorado and Washington's marijuana legalization initiatives are huge steps forward toward a sensible drug policy that ends the horrible damage that the drug war has inflicted on the liberty and property of Americans engaged in an activity that hurts no one. They also hold the promise of opening up new revenue streams while reducing spending on drug enforcement, which is especially appealing to policy makers in a down economy.

All of this will be jeopardized if Colorado and Washington officials botch implementation. But if they develop sensible regulations and create a functioning marijuana market, they will become models for the rest of the country. The stakes couldn't be higher—for them and everyone else.

An earlier version of this article appeared at Real Clear Markets.

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  1. Many of the regulations are either necessary or unavoidable. These include: preventing minors from buying marijuana, providing consumers with product labeling, and restricting advertising, among other things.

    For a magazine called Reason

    1. Product labelling, for pot? Here’s the sum total of the needed label:

      “This is ___ grams of marijuana.”

      WTF else do you need?

      1. Well, I could see an analysis of the active chemical content being useful and interesting, but it’s not as if someone is going to die if they get some stronger than expected.

      2. I want the THC/CBD ratio. (Giggle vs. Couch-lock).

        CBD has been shown to have great therapeutic potency but it has practically been bred out of most strains. 🙁

  2. a big “if” given the Obama administration’s demonstrated zeal to bust medicinal marijuana shops

    I have no idea what you are talking about (that is, if I only watched major news outlets, like your typical voter). Yesterday CNN did a big piece on recreational MJ laws kicking in. There were three mentions of antagonistic federal decisions or actions “under the Bush administration” and an interview with Bush AG Gonzales giving the three ways the Feds could step in and basically imprison harmless individual users. The only mention of Obama was the suggestion (shown over a tape of smiling and waving O) that, something the Bush administration didn’t think of, leaving Colorado and Washington alone and respecting state decisions.

    It really doesn’t matter what the truth is or what happens anymore, even on “neutral” CNN. Just remember: Obama good on all things, anything bad you hear about: Boooosh.

    1. Yes, watching that one piece on a corporate media outlet which failed to mention Obama means that you have now learned everything there is to know. You are now the arbiter of “truth.”

      I just Googled Obama and marijuana and the first page is essentially all hits about the president’s/administration’s/DOJ’s planned responses. Granted, none of them are CNN, so…

    2. Another easy way to guess what the administration’s response will be to look at the war on marijuana it has prosecuted for the past 4 years.

      When states made marijuana use legal FOR CANCER PATIENTS, the administration went ballistic (no, literally, guns were involved). How do you think they are going to react to saying that pot is now legal for ANYone?

      1. Why Obama will visit, spark up with the locals and insist they hold their choom hit until it is totally absorbed.

      2. I think their rxn will be less, because saying mj is medicine was more threatening to them.

  3. Am I in some strange “wurst” loop if I point out that there’s nothing worth commenting on here?

    1. Hey, it said there were no comments when it loaded, well after 1:54.

  4. It also allows possession of up to six plants. (This provision was not included in Washington state’s initiative.) This opens the door for legal non-revenue generating channels.

    If every person who smokes weed, or wants some easy income, grew the maximum 6 plants, the legislature could kiss off getting any tax income at all from this. Yay!

  5. “In vain?” That language really is not borne out in the article. I assumed it would be about how the federal bootheel will grind the life out of the CO/WA marijuana movement…that would be in vain.

    Whether one of the two states fails to do a good job implementing the tax provisions and licencing of the act would be…mildly disappointing?

    And does Reason (or Real Clear Markets) really consider the CO legislature FAILING TO TAX or IMPLEMENT A LICENSING SYSTEM a loss, let alone a “vain” effort at legalization?

    Besides, whether or not the state ever issues a license, users can still grow their own. Prosecution of individuals carrying a small amount of weed would be fruitless. (Places run by guys like Joe Arpaio excepted.)
    Sure, it would be great if there were marijuana shops on every block where there’s a bar and state coffers filled to the brim with pot money (wait, what?), but the personal use/growth alone would radically change the drug war in any state, whether or not the state drops the ball on the taxing and licensing provisions.

    1. agreed – decent article with a dunder-headed headline…

      the belief that legalization will yield great gobs of tax money is probably a pipe dream…that doesn’t make legalization any less important

  6. The amendment allows adults over 21 to possess one ounce of marijuana and exchange that amount without remuneration. It also allows possession of up to six plants.

    Why not “The amendment allows people over 18 to possess 2.3 kilograms of marijuana and exchange that amount with remuneration. It also allows possession of up to 1.8 hectares of plants”?

    Anyone have pointers to analyses by Top. Men. that yielded the numbers in the amendment?

    1. No one’s really been able to explain the 18 vs 21 distinction, a peculiar US trait.. you can smoke tobacco at 18, but MJ (and only up to certain limits) at 21.. And I’ve once gotten a ridiculous government ad on reason about stopping “teen” drinking, meaning those under 21.

      1. When I was a youngin’ you could drink at 18.I think you were supposed to be 16 to smoke but you could buy cigs almost anywhere at 12.Hell, I used to buy beer and go into bars at 15 and up with no fake ID. The worst that could happen is they wouldn’t sell it to you at the store or they’d ask you to leave the bar.

        Kids just don’t realize how tough they have it these days.

    2. You can go to war and kill but you can’t drink alcohol. Nobody can beat that logic.

    3. Anyone have pointers to analyses by Top. Men. that yielded the numbers in the amendment?

      No, but these numbers are clearly idiotic.

      Anyone who has ever seen the result of any marijuana grow should know that 6 plants is going to yield a fuck ton more than 1 fucking ounce. The law is set to fail before it even begins.

  7. The stakes couldn’t be higher?for them and everyone else.

    Unless there’s certain death involved, the stakes could most certainly be higher.

  8. Terrorism!

    Two University of Colorado students are facing multiple felony charges after campus police say they provided marijuana-laced brownies to unsuspecting classmates and their professor on Friday, sending three to the hospital and sickening five others.

    The two students ? Thomas Ricardo Cunningham, 21, and Mary Elizabeth Essa, 19 ? were arrested Saturday night on suspicion of second-degree assault, inducing the consumption of controlled substances by fraudulent means, conspiracy to commit second-degree assault and conspiracy to induce the consumption of controlled substances by fraudulent means.

    All four charges are felonies.

    1. hospitalization and sickening, you’re fucking kidding me?

      1. Brownies can be insanely strong. No it’s not going to do any real harm, but it can be unpleasant.

    2. You know, there should probably be some sort of sanction against drugging people without their knowledge. Not saying it ought to be felonious, but I know I’d be pissed. A civil solution is probably correct here. Seeing as the prof got some of the brownies I’m guessing it wasn’t the sort of situation where everyone involved should have known what was up.

      I could definitely see seeking medical attention if I were drugged and had no idea what was happening.

      1. I don’t see a problem with criminal charges. The extra special-enhancement for the “controlled substance” is a problem. I bet if they had dosed them with some OTC drug (a laxative might be an amusing choice), the charges would be much less severe, even though the potential for harm would probably be worse.

  9. Yes, there already is functioning market for weed which is probably one of the reasons why the initiatives passed. Reason is arguing for regulation which is nothing more than tools used by big business to crush the little guy? Medical marijuana already drove my neighbor out of business which led to him working full time which also led to his kids getting off Medicaid. Damn you legalization.

    Hey, finally registered now I can add my own personal snark.

  10. there should probably be some sort of sanction against drugging people without their knowledge. Not saying it ought to be felonious, but I know I’d be pissed. A civil solution is probably correct here.

    I agree completely.

    If the school decides to boot the two of them, I have no complaint.

    I just thought it was grotesque that they were charged with multiple felonies.

    1. i just want to know how they were able to get enouh weed into the brownies yet no one was able to detect the taste.

      1. Since they have apparently developed strains that will grow in Antartica, since I was last around weed, they probalby also now have strains that cannot be tasted in brownies. They also have strains, I have heard, that makes the consumer invisible and able to teleport to remote destinations by using a common TV remote.

      2. There are a lot of drug-naive kids out there in college. I was one of them. In many respects, I still am – I don’t have any clue what the primary or secondary effects of pot, coke, heroin, meth, or ecstasy, (really anything but tobacco and alcohol) are like. I doubt I could tell pot smoke from tobacco smoke at a distance. I suppose if you added enough sugar to the batter you could wipe out whatever foreign flavor the weed adds – adding sugar seems to work for most of the food industry.

        1. Dude, you have never smelled pot smoke? What planet do you live on?

          1. I didn’t grow up with an interest in drugs* (NTTAWWT, necessarily). I still don’t have one. Then I went to a service academy for college, and it’s an ungood idea to tempt the urinalysis system even if you do want to get high.

            *I know alcohol and tobacco are drugs, but I don’t use them that way. I drink alcoholic beverages for the flavor – I actually hate the effect alcohol has on me, so I keep my usage below the rate where I actually feel them. Same goes for my yearly-or-so cigar. My understanding of other drugs is that the effects are the whole point of using them. I’m not trying to preach here, I just want to try and clearly explain my thoughts.

            1. I don’t think an interest in drugs would be necessary for that. I have smoked pot a few times, but not in more than 20 years now.

              But I would think the odds of making it through high school and college without having ever smelled pot smoke, must be astronomical. Maybe you smelled it and didn’t realize it. But the smell is very distinctive, you can’t miss it.

              1. We absolutely had people deal in high school, but it was mostly party drugs. I’m pretty sure at our traditional senior event (where the seniors smoke cigars on the last day of school) I knew several guys who doctored their smokes (though of course with over a hundred guys lighting up who could tell?).

                You would have had to be ridiculously stupid to get stoned on my college campus. The punishment was bad enough just for having booze in your dorm. I’m almost certain I never encountered pot smoke there.

                One time at scout camp we had an assistant scoutmaster who was a corrections officer or a sherriff’s deputy, and he once said he could smell it from a neighboring campsite. But my sense of smell has never been that good, and I certainly didn’t have the experience to pick it out of the smell of multiple campfires.

                1. xeno-

                  Damn, I’m now officially old

                  On the very first day of my freshman yr of HS(Sept 1978), the “administration” made a special announcement over the “loudspeakers” that they would no longer ignore the people smoking marijuana in the ‘dugouts’ of the two baseball fields behind the school.

                  There was a railroad track less than 20 feet past the baseball fields- and at lunchtime on that first day of high school, there were 150-200 people sitting along the rails of the train tracks smoking dope (suburban Columbus, Ohio, about 1400 students overall).

                  And nothing else happened.

              2. At my highshcool you could smell pot all over the place, all the time. The bathrooms reeked constantly and someone would often light up at assemblies in the gym, leading to the assistant principal clearing the bleachers in an attempt to figure out who was smoking, or at least stop it.Sullum often points out the class before me, 1979 had the highest percentage and heaviest users ever recorded in nationwide surveys I think my class of 1980 was 2nd or 3rd.

                1. You guys are certainly older than me; I graduated high school in 2001.

                2. Same here, pot everywhere, you couldn’t really avoid it.

            2. Oh, and there is nothing wrong with making smart choices, and avoiding drugs completely, including alcohol, is probably the smartest choice.

              I just totally defend the individuals right to make the choice. But I would never advise anyone to use drugs or alcohol.

              I am sure my weight would be a lot closer to where it should be if I didn’t drink so much damn beer. Problem is I not only love the taste, but the effect also.

              1. Yeah, me too. I mean, hell, the way I see it, the only reason there’s something wrong with it is if it eats up too much of your life, or if you’re doing it to escape facing something that you ought to be facing.

                I didn’t go out that much, then I got married after college. Making smart choices was pretty easy, though I still manage to do stupid things like the time I blacked out so bad the person I was with called an ambulance. You only have to wake up in the ER in a diaper once before you figure things out, I tell you what.

                1. Got any photos of that? 🙂

                  My first hangover was in Russia. On a college foreign-study program, with the professor right there. (She was great about it.)

  11. TLPB-

    I think the felony charges are quite appropriate.

    I see no difference between a ‘spiked’ brownie and the “cream of mushroom soup” from “Fight Club”- and I’ve been smoking pot for over 35 years.

  12. Meh. Haven’t we been here before? Ok, so let’s speculate some more on what the feds are gonna do, and how it plays out. So I will, at the risk of being both redundant and wrong, say once more:

    Feds will be assholes about this, because well, they are assholes. They will also lose in the end and pot stays legal in CO and WA followed by more states legalizing.

    And to answer the talk about CNN, that is obvious also. The Obama admin will pull out every sort of ugly, sneaky, and probably both illegal and unconstitutional tactic that they can to stop legal cannabis in states, and when it fails, CNN, MSNBC and all the other puppets of the proglodyte will proclaim Obama the great evolved savior of the legal pot movement.

    1. Takes a multi-million dollar vacation on the tax-payers dime, campaigns on the rich needing to do their fair share.

  13. Great article. CO is poised to define working legal regulation of marijuana in the US, and has included taxation and remuneration to growers as well as personal cultivation. There are many issues at stake–federal verses state’s rights, personal rights, civil liberties. I’ll be watching closely to see how it all plays out. I think it’s the beginning of the end of marijuana prohibition in the US.

  14. I think it’s the beginning of the end of marijuana prohibition in the US

    It is, and it will be a huge and very underrated victory for liberty. But I think we need to be very aware that after the feds lose this battle, they will try to regroup and continue their WOD through Obamacare. They will just say, ok, you can have your drugs, but we are going to punish you for it, relentlessly, with every punitive measure we can dream up.

  15. Those dudes seem to know what they are talking about over there. Wow.

    http://www.GotzAnon.tk

  16. “But this is problematic given that THC can remain in the user’s system in small amounts for days or weeks after consumption. Hence, recreational consumers who are not currently under the influence could be unfairly targeted if policy makers choose crude testing that can’t differentiate past use from present intoxication. This is justifiably prompting civil liberty concerns.”

    This is not true. Most drug tests given by employers actually don’t look for THC, but its metabolites. Those are the chemicals that remain for weeks. THC leaves the blood when the user no longer feels intoxicated. The driving limit is for THC itself.

    The more serious problem is that 5 nanograms may be too low. People who are regular smokers may not be impaired by a typical dose of cannabis, but will be unfairly punished if a cop wants to test them.

    Cannabis doesn’t make people lose their motor control like alcohol.

    1. “It is far from clear whether local governments will be able to navigate implementation if the state can’t”

      Parts of this article struck me as a little bit fluffing for the State, but this part swallowed the whole load.

      Is this Reason or The New Republic?

    2. The problem is, I think, that there are many opportunities for error in writing the regs. The cheap ‘n’ easy tests are for metabolites which stick around for weeks. The danger is that the regs will be written for the typical cheap ‘n’ easy test, leading to loads of people getting busted who weren’t impaired at all.

      As with so much else, we have substituted laws against an inanimate object (in effect driving with blood alcohol, pot chemicals/metabolites) for laws against an activity or behavior (driving while impaired).

    3. I don’t think there is much evidence for pot making people less safe drivers anyway. I’m really not concerned at all about stoned drivers on the road. I’m much more nervous about people with young children in the back seat.

      How about having to demonstrate actual impairment to convict someone of DUI?

  17. If we legalize weed, what will happen to all those dealers who can’t get jobs in the real world?

  18. earned that one “Sharon Levy” cares more for boot licking than the Hip sohbet odalar? & cinsel sohbet

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