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
Stephen@iCarter.com