For decades before many states legalized the recreational use of cannabis, a key argument for doing so went something like this: “Legalize it and then tax it. It’ll be a big source of revenue for states. You can also regulate it so people know their marijuana won’t be tainted.”
Four years after Colorado became the first state to decriminalize the drug, and 20 years after California voters approved it for medicinal uses, voters in the Golden State legalized it for all uses in 2016. Policymakers in the state adopted it as a cash cow, using the tax revenue for social programs.
More permissive attitudes toward the long-clandestine drug led to more states allowing it, to the point that panelists who spoke at the 2019 Unified Wine and Grape Symposium called its legalization “a game-changer” for the wine industry. They said value-added products such as teas, edibles and infusions may appeal to some of the educated, affluent customers that have been drawn to wine.
But a funny thing has happened on the way to the legitimization of weed. In California, the cannabis industry is “on the brink of collapse,” the Times of London reported recently. The reason? Taxes and regulations.
“About 75% of cannabis consumed in the state comes from illegal sources,” the Times reports, citing industry figures. “They blame taxes, too much regulation and a failure to tackle illegal competition, which is free from red tape and able to offer cannabis at much lower prices.”
Industry leaders complain that police do little to stop people who grow a legal product but evade taxes. As retired lawyer John Hinderaker of the blog PowerLine explains, “legal sellers are in somewhat the same position as the taxi companies who tried to get Uber and Lyft banned in various cities.”
Another disadvantage for legal producers is that since marijuana is still federally illegal, many banks still deny services to them, a recent University of California study showed. “Marginalized cannabis communities are missing out on capital,” co-author Keith Taylor said.
Talk of decriminalizing pot has circulated in Congress for years, but many expected it to happen by now. Several bills are in the works this year, but a ban on sales in the District of Columbia was still in a budget plan released on Wednesday, March 9. Is it time for Congress to end the mixed messaging on cannabis?
One suggestion might be for Congress to remove the federal ban but leave the question of legalization up to states, so if states like Idaho and Wyoming don’t want it there, they don’t have to have it.
In any case, we should approach illegal sales as we do bootlegging, which didn’t stop after Prohibition and is still a federal crime. And crack down heavily on the massive amount of pollution and water use from illegal grows.