April 7, 2020

The Weed Windfall

By Stephen Tuttle | Jan. 13, 2018

United States Attorney General Jeff Sessions has had just about enough of all this legal and medical weed business.

Sessions has revoked Obama administration instructions to federal prosecutors and law enforcement to avoid prosecutions of legal marijuana or medical marijuana in states where allowed. They had been instructed to focus interdiction and prosecution efforts on more dangerous drugs, violent drug cartels, and wholesale marijuana black market operations.

Instead, Sessions told federal prosecutors, essentially, to do as they wish in states with legal or medical pot. His reasoning is that, after all, selling or possessing any marijuana is still a federal crime. In fact, the feds classify marijuana as a Schedule 1 drug, the same as cocaine, heroin, and other provably dangerous drugs.

It would be easy pickings for some federal prosecutors. Eight states have now legalized recreational use of weed, and it is, or will be, sold openly in licensed stores. Another 21 states allow some form of medical marijuana sales, and those facilities are also right out in the open. No undercover work or wire taps required; just walk in the door and start making arrests on federal warrants.  

It might not be that easy. There is a lot of tax revenue at stake. 

Colorado, which legalized in 2012 and started sales in 2014, has raised $500 million in taxes and fees, and has more marijuana dispensaries than it has Starbucks. Washington state, which also legalized in 2012 and started selling in 2013, has raised $1 billion in taxes and fees, and it expects to realize another $375 million next year. 

Alaska, which approved legalization in 2015 and started legal sales in October of 2016, has already raised nearly $4 million. Nevada anticipates $20 million in revenue, Oregon raises $85 million. Neither Maine nor Massachusetts have yet begun sales, but both are eager for the tax windfall.

California is where the real money will flow. They anticipate marijuana sales will reach $5.1 billion next year (more than beer sales), and the state will have collected more than $1.4 billion in taxes and fees by 2021.

Despite the obvious headaches, legalized marijuana has become a revenue gold mine for those states allowing it. The pressure on their federal prosecutors to leave them alone will be immense.

There is a middle-ground solution here that starts with the Drug Enforcement Administration recognizing that marijuana is not the same as illegal opioids and downgrading it from a Schedule 1 drug which, by definition, has no medical value and a high potential for abuse. 

There is not yet research proving marijuana is addictive or a gateway to other illegal drugs. It is certainly less habit forming than any other Schedule 1 drug. Opiod overdoses now kill more than 30,000 Americans annually. There has been one possible marijuana overdose death in human history. Which seems more prone to abuse? 

Medical science has already shown, in peer reviewed published research, that marijuana reduces eye pressure associated with glaucoma and relieves some types of nerve pain. It's also been shown to mitigate nausea and enhance appetite, especially in those undergoing certain types of chemotherapy. And a cannabis ingredient has been effective in relieving some childhood seizure disorders. In no case is it a magic cure by itself, but there is certainly proven medical use.

(Despite anecdotal evidence aplenty, there is not yet peer-reviewed research establishing marijuana as helping victims of post-traumatic stress disorder.)   

Reclassifying the “killer weed” that doesn't kill would free federal prosecutors to focus on the illegal drug scourges that actually do.

There are some problems.

We still have no reasonable standard for what constitutes marijuana impairment when driving, and we need one. Marijuana slows reflexes and reaction time and can impair judgment. But Michigan's current standard of “any amount” is wildly unreasonable and can result in felony convictions for someone not impaired at all. Law enforcement and science need to figure it out.

We also know pot is not good for kids whose brains and bodies are still developing. Penalties for sales to minors should be severe and enforced.  

There is also a cost issue. States, in their enthusiasm for new tax revenue, have added blizzards of taxes and fees to legal weed. It is now typically more expensive than black market weed and that's a system that won't work. Like in any business, regular customers become the backbone. If Joe Toker can buy his weed from his underground dealer for half the cost of the legal stuff, he won't ever become a customer; the black market they'd like to eliminate will continue to thrive. 

Legal marijuana is likely here to stay, regardless of Jeff Sessions. The question becomes how best to regulate it, fairly tax it, develop a reasonable impairment test, and keep it away from kids. Continuing to criminalize it is just dopey.


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