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Jay Lauren's Weed, Blood, and Money - April 2019

Jay Lauren's




Cannabis has always been big business in America. In 1607, the year that the first English colonists made landfall on continental North America, Captain Gabriel Archer of the Jamestown colony reported hemp crops already in cultivation among the native Powhatan people of what would become eastern Virginia. Even more interesting, the local variety was better than the English stuff the colonists had brought along for the voyage. As early as 1619, the year before the arrival of the Mayflower at Plymouth Rock, legislators in Virginia passed the first law governing the use of Cannabis in what is now the United States. The act required colonists to continue to plant the inferior English cannabis, duly taxed and transported from England at great cost, in addition to the preferable buds already to be found growing wild and free in the land of opportunity.

Today, 400 years later, cannabis is everywhere, grown, used and passed through commerce in a vast web of personal and business transactions that spans the entirety of North America and beyond. 97.7% of Americans live in a jurisdiction where cannabis use is legal in some form or circumstance, and although it’s impossible to put a dollar value on the entire economic complex of cannabis use, legal and otherwise, most estimates value the national cannabis market at around $50 billion. In other words, a 9% tax on that market could have ended the 2018-2019 federal government shutdown and paid for the president’s beautiful border fence in one year, with a couple hundred million left over for walking-around money. Or I guess it could have filled a couple of potholes and bought some water filters here in Flint.

At this rate, legalization at the national level appears to be all but inevitable.You can consider the example of the same-sex marriage movement. When Massachusetts became the first state to recognize same-sex marriages in 2004, the first leak had sprung from a dam that most of us had always thought indestructible. To those opposed, the idea of legal same-sex marriage in all 50 states was still unimaginable, laughable even. But in 2008, another leak appeared. The next year, two more. The leak became a trickle, the trickle became a torrent, and in 2015 the dam burst. The supreme court ruling in Obergefell v. Hodges struck down the federal ban and dragged the last 15 holdout states into the 21st century to stay.

In 2014, Colorado and Washington became the first two states to legalize recreational Cannabis use. Six new states have joined them in the years since. Now, with the 2020 election looming on the horizon, many of our fine political figures have seized hold of the popular groundswell for legalization like a life preserver. Nearly every declared candidate for the Democratic nomination is endorsing legalization in one form or another, from the OGs like our dear sweet grandpa Bernie, to the bout it like Cory Booker, Kirsten Gillibrand and Elizabeth Warren, who each sponsored the Marijuana Justice Act of 2017, to opportunistic turncoat prosecutors like Kamala Harris and Amy Klobuchar, and even some guy named Pete Buttigieg. I’m pretty sure his name is Pete Buttigieg. On the other end of the spectrum, an incredible 100% of declared Republican candidates (2 out of 2) have spoken in favor of repealing or turning back restrictions on Cannabis use. Former Governor of Massachusetts Bill Weld advances a libertarian argument, while the great Orange King himself is said to have unhorsed his former attorney general Jeff Sessions and reined in that loathsome chipmunk’s destructive and quixotic private war on Cannabis.

And so, finally, through the vast and incomprehensible machinations of our government, lawmakers are once again facing the same question that the House of Burgesses did at Jamestown so long ago: everybody seems to love Cannabis, but how can we make some money on it? The first answer is that they already do. State governments and individual politicians make incredible profits opposing legalization and enforcing draconian, nonsensical drug laws. Big Pharma, alcohol, and tobacco executives continue to offer their greasy money to any politician gutless enough to hassle constituents interested in cheaper, safer alternatives to these industries’ products, the destructive effects of which are for the most part politely ignored. This process is called ‘lobbying’, which means bribery but legal. Not to be out-slimed, the private prison industry happily slides hundreds of thousands a year under the same table. State governments have raked in billions of Federal dollars to be spent on enforcement for the War on Drugs, at taxpayer cost as massive as it is absurd. Individual law enforcement agencies wet their beaks as well, receiving billions of dollars, cool tanks and military assault weapons. These resources are of course vital to their sacred mission to pull you over, “smell marijuana” and steal your car.

Up against a conspiracy so cruel and venal, there’s no need to wonder why Americans have been forced to legalize Cannabis by ballot measures, state by state (except for Vermont) in spite of overwhelming popular support for legalization. But the support for legalization is here, and in a democracy it cannot be ignored. As the movement spreads inexorably across the country, many of these slimy revenue sources will begin to disappear, and they will leave gaping holes in budgets nationwide. Thus, with the inevitable death of a bloody regime of Cannabis enforcement, so too must come the taxes.

Revolution is in the air, and on the ground the facts are a mess. In the months or years after a new ballot measure passes, Cannabis users find themselves in a sort of Wild West period, a transitional stage between prohibition and legality. Anyone can go and re-read a ballot measure, but few can say with authority what’s actually legal and what isn’t, what will be enforced and what will not, or even what the laws will actually look like when a statute finally goes to the books. For that matter, no one can predict what a pig-headed lame duck Governor will do to undermine or hijack the intent behind the ballot on his way out the door. To date, Colorado and Washington are still the only two states to have both a fully-developed legal framework for recreational Cannabis use and enough historical revenue and budget data for meaningful analysis. The money is rolling in, in the hundreds of millions, but it’s a little tricker to pocket than it used to be. For any interested students of politics, here is a brief survey of the ways money can be spent, when you are not protecting profit margins on cancer drugs that cost more money than patients have ever seen in their life.


Colorado

If you can read this, thank a Cannabis user. In the Centennial State, the lion’s share of Cannabis revenues goes to education. The first $40 million of annual Cannabis excise tax money goes to building and maintaining schools. Millions more go directly to the school system; funding educational and social programs, paying teachers, and to drug prevention. There’s no irony here, even before prohibition I could not have graduated from the D.A.R.E program without getting recreational behind the gym first.


Washington

Washington, on the other hand, devotes the majority of its Cannabis revenue to the state Medicaid program, funding health insurance for 1.8 million low-income residents. The next largest piece goes to balance the remainder of the budget, which is the kind of vague language that gives politicians a nice warm feeling deep down inside. The remainder goes to Universities, health programs, research programs, and costs relating to regulation of the Cannabis and liquor industries.


Michigan

In Michigan, sales taxes on marijuana, as with all sales taxes, go first to the state School Aid Fund. This may be the first year since 2009 that payments from that fund will not be shadily diverted to institutions of higher education in a budgetary shell game. Excise taxes go, of course, to law enforcement, as well as to the counties and to municipal governments that allow cannabis facilities. Licensure fees go again to law enforcement and to administrative expenses relating to legalization.

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