Tax boom from pot may be short-lived
Get ready for a lot of problems to emerge statewide because of the legalization of recreational marijuana.
The initial result of the law will mean that more people will use the drug, thus putting pressure on hospitals, on the police and on parents who suddenly find their children using marijuana even though they may be too young to legally do so.
Also, expect drug gangs to step up their activities, not stop them. Backers of legalizing the recreational use of marijuana have said that legalization would shut down the gangs that grow and push the stuff now.
But that has not happened in other states, such as Colorado.
Legal marijuana, because it is taxed, is always more expensive than the drug from illegal sources, meaning that a fairly large portion of the drug gangs will continue on their merry ways, discounting the legal vendors’ prices and selling without charging the tax.
The net result of that will be that we will see just as much, if not more illegal activity. That has been the case in Colorado, and is becoming the case in other legal-marijuana states.
Illegal drugs such as heroin and cocaine will enter the market at a faster rate than before, because once people get used to marijuana, they are more likely to want to try out the more potent drugs.
People who follow the law, buy marijuana from legal sources and pay the taxes on it, will quickly notice they are paying more for their highs than those who shop for it on the black market. If they can locate illegal sources without causing much inconvenience or danger to themselves, many of them will leave the legal market and join the numbers buying off the grid, from the bums who were selling the stuff before it was legal and when it was untaxed.
Millions of dollars in new taxes were promised with legalization of marijuana sales, and at first those taxes will materialize as new marijuana users flock to legal stores to do business. But once the newness wears off, the consumers will seek to buy untaxed product, which will be widely available.
The truth of the old saying that if you want less of something, tax it, will become manifest once this syndrome begins.
Promoters of legalizing marijuana promised it could be taxed just like liquor, but that will not be the case. Liquor is a manufactured product, which is inspected and taxed at each phase of production, stored and bottled in bond and regulated at every level of sales.
Marijuana, being a loose plant, is harder to control because the nature of the marijuana distribution system is less formal than, say, tobacco, which like liquor also is manufactured, packaged, sealed and distributed under government supervision, as well as being taxed at all levels.
A lot will have to change in the way marijuana is packaged and marketed before control — and taxation — that is anywhere near to that of liquor or tobacco is established.
Meanwhile, the illegal sources of marijuana will continue to develop while the golden gusher of tax money quickly declines.