Tax and Regulate Marijuana: Be Careful of What You Wish For

Legalize, tax, and regulate marijuana! What a load of BS…

I’ve been fighting the good fight to see cannabis legalized for a while now and I’ve heard many of the arguments for and against. I’ve seen agonizing failure, ignorance, stupidity, and bigotry along with much more when it comes to trying to sway people’s opinion on the subject. Everyone has different tactics, and granted, it takes many different approaches to get people to view the subject in a new light. The “legalize, tax, and regulate” line is one of the most often used, and it’s effective, but at what cost?

It sounds great if you don’t think too much about it. Legalize and tax this plant and it will help our budget problems! First of all, our state and federal governments spend too much money, so if you’re looking for a solution to the budget problems, start looking at cutting some spending. Secondly, it is estimated that once legalized and placed under a tax scheme, it’s only going to generate anywhere from $2.4 to $6.2 billion annually in taxes. No small amount, but nothing compared to the extreme budget shortfalls we face. It will also save us an estimated $7.7 billion per year in enforcement costs.

While legalization is going to save us some money and bring a bit more in while also allowing our judicial system the ability to better focus its resources, it is not some savior for our bloated government budgets.

That’s not the only problem with this taxation idea. Thoughts vary widely on the subject of how much to tax cannabis, but the typical tax figures are placed at roughly $50 per ounce and some even go up to $100. Tacking on costly application and licensing fees costing anywhere from $5,000 to $15,000 a year and who knows what else in regulatory compliance costs. The number of growers are limited and often even if you pay the $5,000 for a license, there’s no guarantee that you will get one.

From an economic standpoint as a consumer, not much will be changing. In fact this sets the stage for a very select few, a new cartel if you will, to come in and take over the market, keeping competitors out, costs high, and quality lower than it should be. So much for getting rid of the black market on this one.

We are going to be strangled by taxes and regulation. Don’t get me wrong, I’ll be glad to see it legalized since the biggest issue here is ending the criminalization and jailing of people for harming absolutely no one. Considering that any sort of legalization would be a “win” at this point, I don’t want crumbs though, I want fair access to the market. We shouldn’t have to pay all of these fees and taxes and jump through all of these regulatory hoops in order to grow and consume a natural plant legally. Anyone, especially the poorest of the poor, should have the chance to grow a crop and sell it if they so desire without being burdened by all of these artificial barriers. They can always grow without the permits, taxes, and fees, but they still face fines and jail time for it.

Cannabis has caused zero, count it, ZERO deaths deaths from its consumption. It is non-toxic, impossible to overdose on, is not physically addictive, does not cause cancer and even shows promise in fighting cancer along with a slew of other facts. It also doesn’t kill brain cells like alcohol does, and a recent study suggests that it may actually foster the growth of new cells. Not to mention all of the medicinal qualities it has. It’s essentially a garden herb, and if it didn’t get you “high” then most people wouldn’t give a damn about it.

That being said, we don’t live in a society that is prepared to process what exactly that information means. Decades of propaganda permeates the minds of just about everyone. There will have to be compromise on this issue for some time to come, and in no way will it be sensible in any true sense of the word. This is why it will be acceptable to have this plant taxed at the normal sales tax rate, and be regulated so that minors will not be able to purchase it. Kids shouldn’t be consuming cannabis unless it’s for a medical reason anyways.

What is not being suggested here is a completely unregulated grow market though. Licenses and limited regulation should be followed by those wishing to become suppliers or distributors. However the fees for the licenses should be very low, low enough that a person can reasonably afford them. The idea is to not restrict access to the market and ensure safe and quality access for both consumers and businesses. Otherwise, people should be able to grow some sort of amount for personal use, and I don’t have a figure for that, but it can be worked out.

Some will say that it should be taxed the same way alcohol and tobacco are, however we supposedly tax those products extra because of their detrimental health effects on society. Cannabis is not associated with any costly health effects, negating the need to tax them as heavily.

Further regulation will only serve to increase the costs for consumers of the plant and make it unreasonably hard to enter into the market as a business. We need a new industry that will employ people and present new opportunities for success. However these taxation and regulation schemes currently on everyone’s minds will only serve to make a select few a whole lot of money at everyone else’s expense. By granting essentially what amounts to a monopoly or cartel status by limiting who can enter into the market, people are going to get ripped off for lack of competition and choice.

This is what causes so many other problems elsewhere in our society. Is that what we want?

By: Stephen Carter



Filed under Contributors, Stephen Carter

9 responses to “Tax and Regulate Marijuana: Be Careful of What You Wish For

  1. No Soup for You!

    Why don’t you take a gander at tobacco cigarettes for a comparable.

    They seem to be doing just fine in selling their death sticks, in spite of taxes, regulations, lawsuits, etc.

    You’re a case of wanting your cake and eating it too. Buck up or shut down and get an office job.


  2. Stephen, you’re putting the cart before the horse. Don’t worry about perceived injustices in the taxation of it yet. The truth is, even if they taxed $100 per joint, having legalized pot is a good thing for everyone who smokes. It means ending the so called drug war which means that even if you only want to buy through the black market, the way everyone does now, it is going to be cheaper. It means that if I have a bag of it in my car and get pulled over I have absolutely nothing to worry about. It means ending (or at least significantly reducing) unfair testing for jobs. It means millions of jobs in the hemp market. It means the US taking its place as the worlds number one producer of hemp. It means giving people another legal alternative to alcohol (which is the cause of so many problems I can’t count them all).


    • Stephen Carter

      Oh I definitely understand all of that. I’d be happy with a medical marijuana system here in Texas as I would benefit greatly from it. Lessening restrictions is going to make things a lot better no matter what.

      This is more of a forward thinking, long term article though. I’m looking out to the future on this one.


  3. Ged Mitchell

    Stephen, I liked your article in as much as I have never even thought of the implications of cannabis being taxed; you have given me something to think about. I wish the USA would hurry up with this change in the law because, over here in the UK, it takes us about 10 years to catch up on what the USA is doing. Every point you have put forward can relate directly to the UK too.
    Having said that it would be better to start off somewhere than no where at all. Every government, around the world, of whatever political make-up would jump at a chance to draw in more taxes and I suspect that you may be right in some of your fears but get the laws changed first and then fight for fairness after the law has changed.


  4. I with you on a lot of this but you forget one thing: the tax revenue increases, and the budget outlay decreases, that come from not arresting, processing and warehousing 800,000 weed smokers a year. Plus, all the professionals who would regain their licenses and mulitply their incomes. I don’ t think it changes your bottom line point, but you should refer to it because it’s not a small set of factors.



  5. What I don’t like about medical marijuan producers: they are becoming rapacious greed monsters. They fight broader legalization because that would mean we could all grow our own and cut them out of the market. While I appreciate smugglers and those who risk their freedom to serve the weed market (and they earn those black market prices with the risk they take with their asses), fat and safe medical growers who fear no prosecution (I know– the FEDS) are still charging over $200 an oz for a fucking WEED.


  6. Henry Douglas

    “By granting essential what amounts to a monopoly or cartel status by limited who can enter into the market, people are going to get ripped off for lack of competition and choice. ”

    Were you smoking, before your English grammar class? This sentence contains 2 severe flaws. the correct words are “essentially,” and “limiting.” Do not give the opposition ANYTHING to hang an argument on!! Obama used the Alinsky playbook to get elected, and so must this movement, to achieve success. Remember, don’t offend the middle class, look, act, and above all, express yourself impressively.


  7. I’m really impressed with your writing skills as welll
    as with tthe layout on your blog. Is tthis a paid theme or did you customize it
    yourself? Either way keep up the nice quality writing, it
    is rare to see a nice blog like this one these days.


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