Update on marijuana regulation – #11
Legalization of marijuana in Colorado and Washington is a natural experiment to see what happens when the government lays heavy regulation on a brand new industry. It is also a natural experiment on how to handle an entire industry that moves from the shadows into the lawful world.
10/25 – The Feed – Colorado Thinks Twice on Pot? – Legalization in Colorado passed 55-44. Recent survey says 50% of people in survey think it wasn’t such a great idea.
Current prediction is the state will fall $20M short of the tax revenue forecast. That is one of the unintended consequences I expect to see and think it will be discussed a lot.
Edibles make up 45% of the legal market.
1/4/14 – The Feed – Pot Policy is Really Complicated – Missed this article when it ran. In summary (perhaps too condensed), here is the argument for legalization:
The argument here is that legalizing marijuana would significantly reduce drug related crime and prison time without bringing any other seriously bad effects.
There are serious complexities with legalizing marijuana. The heavy-handed regulation and exorbitant taxes will complicate the complexities.
Pricing is a major issue. From the article, one sentence that wraps up multiple angles of the heavy-handed regs:
For example, a key question is how Colorado should set the prices for legal pot. Set it too low, and cheap Colorado weed could help prop up the black market in other states (this is called “diversion”), but set it too high and people will prefer to buy from the black market in Colorado.
A serious problem, which will likely be quite unsettling to libertarians, is that full legalization will still require ongoing enforcement of the drug laws.
My fear is we may have the worst of every side of legalization: continuing “war on drugs” that the libertarians do such a great job of calling attention to, severe shortfalls of tax revenue, implementation turmoil, conflict with federal drug laws, conflict with federal tax laws, and downside issues of increased use in general and increased use amongst youth.
I fear there is already a spillover of legal marijuana into neighboring states and those states with direct airline connections.
No telling what other unintended consequences may surface.
I will continue to monitor.