May 04, 2009

Is Marijuana Legalization a Big Government Plot?

“€œShould it be legal? Yes. Do we want it legal? No.”€ This counterintuitive wisdom on marijuana legalization comes from “€œCharlie,”€ a colorful, sixty-something marijuana entrepreneur working out of Boston’s Shawmut. From behind a Pancho Villa-mustache, “€œMark,”€ a colleague with three decades in the business, concurs: “€œEvery time I go over to Hempfest, I chant: “€˜Keep Marijuana Illegal!”€™”€

The greater the involvement in the marijuana industry, the greater the apprehension there is toward legalization. This flies in the face of the conventional wisdom of the grass-smoking grassroots. “€œLegalize It!”€ goes the ubiquitous mantra at rallies and upon car bumpers. But in Massachusetts, where last November the voters overwhelming opted to decriminalize possession of an ounce or less of marijuana, full legalization stands to drive freelance pot dealers such as Charlie and Mark further underground”€”and drive the price of the product sky high.

Legalize It? Forgive them, for they know not what they do.

What are stoners smoking that makes them advocate less available, more expensive, and highly bureaucratized marijuana? That’s the question provoked by any sober reading of the various proposals to legalize marijuana. 

And marijuana legalization is certainly eliciting a more sober look than it ever has. When President Barack Obama opened-up a town-hall style meeting in March to the Internet, questions about marijuana legalization outnumbered every other topic. His attorney general, Eric Holder, announced in February that federal raids on pot dispensaries in the Golden State would cease under the new administration. Time magazine recently weighed in on the hot topic, asking “€œCan Marijuana Help Rescue California’s Economy?”€ and dropping the question mark in a subsequent piece entitled “€œWhy Legalizing Marijuana Makes Sense.”€

It makes sense in the way that a conversation about the sound of colors makes sense”€”when high. Marijuana can”€™t rescue California’s economy for the obvious reason that it is already an integral part of California’s economy. Making it legal, given the widespread availability of the drug, will do very little to fuel the state’s economic engine. If anything, legalization will further hamstring productivity by hampering an industry with the destructive power of external rules, regulations, and taxation that is currently free from such burdens.

Time notes that marijuana is already California’s top cash crop and that its legalization would be a boon for the state’s government: “€œThe state’s tax collectors estimate the bill would bring in about $1.3 billion a year in much needed revenue, offsetting some of the billions of dollars in service cuts and spending reductions outlined in the recently approved state budget.”€ Headline aside, nothing within the article indicates how merely changing the legal status of an already accessible product would lift California (and not just its government) out of recession. Joe Klein’s “€œWhy Legalizing Marijuana Makes Sense”€ similarly emphasizes that “€œthere is an enormous potential windfall in the taxation of marijuana…. A 10% pot tax would yield $1.4 billion in California alone.”€

The sponsor of California’s “€œMarijuana Control, Regulation, and Education Act“€ is known for fathering the ordinance that forces businesses doing business with San Francisco to give benefits to the partners of homosexual employees and a citywide program of socialized medicine. “€œWith the state in the midst of an historic economic crisis, the move towards regulating and taxing marijuana is simply common sense,”€ Assemblyman Tom Ammiano tellingly claims, adding that his “€œlegislation would generate much needed revenue for the state.”€ Rather than a principled stand for freedom, legalization has become the hobby horse of frustrated statists anxious for power over one of the last remaining industries free from Big Brother’s guiding hand and a cut of profits that are currently out of their grasp. It stands as exhibit A for the proposition that any fundamentally good idea quickly transforms into a bad idea once championed by the friends of big government.

In a period of bailouts, nationalization of corporations, and diverse schemes to tax strippers, sodas, and cigarettes, marijuana legalization isn”€™t a libertarian outlier but, at least how it has taken shape as proposed legislation in Massachusetts and California, very much in keeping with the statist drift of the times. A clue indicating that marijuana legalization is a Trojan Horse is that its legislative and Fourth Estate advocates neither look like Jerry Garcia nor sound like Ron Paul. Proof of the legislation’s wolf-in-sheep’s-clothing nature comes from the text of the bills aiming to legalize marijuana. 

In Massachusetts, an “€œAct to Regulate and Tax the Cannabis Industry,”€ a more instructive phrase than the euphemistic “€œpot legalization,”€ is currently before the Great and General Court on Beacon Hill, not far from where Mark and Charlie ply their trade. As its name suggests, the act proposes to tax, regulate, and bureaucratize the underground marijuana economy. 

Marijuana farmers, retailers, and importers would all have to fork over four-figure licensing fees annually, further inflating the price of pot. Far from a tribute to alleviate state harassment, the protection fee actually guarantees paperwork, invites audits, and introduces bureaucracy into a heretofore black-market industry. “€œEvery licensee shall, on or before the twentieth day of each calendar month, file with the authority, on a form prescribed by it, a report under the penalties of perjury, stating the amount of cannabis sold by such licensee in the commonwealth during the preceding calendar month and such report shall contain or be accompanied by such further information as the authority shall require,”€ the act decrees.

Potent cannabis, including high-THC pot, sinsemilla, and hashish, would be taxed at $250 an ounce. An incredulous Charlie asks, “€œFor an ounce? Two-hundred-fifty dollars for an ounce? That’s so outta sight. Who’s going to even bother to buy it? Maybe $250 per pound.”€ Under the proposed legislation, marijuana containing lower percentages of THC would be taxed at lesser amounts. The reefer most commonly smoked would be taxed at $150 an ounce, increasing the price of each joint by nearly $6.

“€œYou”€™re talking about doubling the price,”€ explains Mark. “€œIf you could buy a product for $50, why would you go to the store and pay $100. It’s got to be in the same ballpark. Otherwise, why would anyone go [to a licensed store]?”€ Put another way, underground dealers would flourish in competition with licensed head shops burdened not only with taxation levels that approach the product’s street value, but with licensing fees, paperwork, and the normal costs associated with operating an above-ground business, such as insurance and rent for retail space.

A bud bureaucracy, dubbed the Cannabis Control Authority, would act as a quasi-judiciary/legislature/executive on all matters marijuana. Seven gubernatorial appointees, serving for seven-year terms at salaries 20 percent of the governor’s, would comprise the board. It would issue and revoke licenses, make rules, collect taxes, subpoena witnesses, and even refer to the courts for sixty days of jail time those who don”€™t cooperate with them”€”a penalty harsher than just about any marijuana-smoking scofflaw received before decriminalization went into effect on January 2. With an FBI investigation charging several high-profile Boston politicians with bribery in connection to meting out prized liquor licenses, it’s not difficult to see the marijuana trade going to pot once elected crooks get involved.

And small businessmen Mark and Charlie have no plans to open up their life’s work to elected crooks. “€œIf you had to pay the licensing fee, it wouldn”€™t necessarily be cost prohibitive,”€ Mark concedes. “€œBut with the taxes, your clientele is going to disappear. A lot of people would just balk at paying that.”€ Instead of patronizing overpriced, state-licensed dealers, legalization would perversely orient pot smokers toward the same underground dealers, like Mark and Charlie, that they have always relied on for ounces, quarter bags, and mere joints.

This is perhaps why under “€œlegalization,”€ unsanctioned pot growing and selling would be penalized so heavily. As with the Massachusetts state lottery, the state wants a monopoly on a vice it punishes harshly when commercialized by freelancers. As with cigarettes, the state wants a majority cut of the profits as it castigates the companies doing the work behind the unhealthy product.

By opening up arable land to marijuana cultivation, Mark believes that marijuana legalization could increase the supply and thereby lead to a drop in prices. But with the proposed taxes eclipsing the outright cost of marijuana to suppliers like Mark and Charlie, there is no scenario by which the legalization plan could possibly make marijuana cheaper. Legalization, then, would strangely mean less freedom for the tens of millions of Americans who smoke, sell, or grow pot. If “€œlegalization”€ is a cant way of saying “€œgovernment intrusion,”€ what marijuana policy should anti-statists embrace? 

Decriminalization, that happy limbo where stoners need fear neither jail nor the tax man, may not be the ideal. But, as enlightened pot enthusiasts have learned in Massachusetts since January 2, it is as good as real gets. Even in the unlikely event that the police catch every pot smoker with an ounce of marijuana once a year, the $100 ticket each smoker would receive under decriminalization would be far less than the tax paid to the state for a single ounce of weed purchased under legalization. Rather than a means to legalization, decriminalization is the end.

Free from the state’s criminal justice system and its internal revenue service, stoners in marijuana-decriminalized Massachusetts experience the best of both worlds and the worst of neither. It’s easy to imagine, particularly after the bong has been passed, a cannabis utopia where the state validates the stoner’s pastime by legalization but leaves him alone to pursue his happiness without bureaucracy, regulations, licensing boards, taxes, and paperwork interfering. But after the haze clears, as Bay State weed smokers are discovering, decriminalization turns out to be as good as it gets. 


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