Fake News is a label thrown about by anyone at everyone who presents a view different from the egocentric agenda a party is wanting to promote. In this now entrenched utterly subjective ‘journalistic arena’, confirmation bias is the only research tool used when crafting one's ‘unassailable’ position of ‘rightness’. Any contrary data and even facts are ignored, dismissed; or worse still, buried by emotive diatribes awash with sound-byte memes ranted and chanted by those who think they control the ‘microphone’ in the public square.

There are few places this has happened more (in a policy space at least) than with cannabis.

One of the single most significant ‘justifiers’ of legalizing this, now completely unnatural product, was it’s potential to generate an entire new stream of revenue. Not only will legalizing and commercializing this drug reduce law enforcement costs, it will increase an ever burgeoning cornucopia of excess revenue that will be used to educate and rehabilitate. Even beyond that, the state of Colarodo had boasted it would build new schools and increased recreational services for their communities.

However, NONE of this has happened. And we are heading for a decade of this experiement being in play. The first couple of years saw fits and starts and the ever-easy caveat of ‘well, we expected the revenue stream to be slow as we start this new experiment, but in no time at all, the fount of cannabis cash would gush forth its ‘green gold’!

Tax cuts are planned to shore up this failing 'legal weed' market! Not an increase, but decrease in revenue stream.

On top of that Pot Protagonists didn’t expect (or at least didn’t talk about) the new level of enforcement. No, not the increase policing around criminal outcomes due the increased use of this psychotropic toxin; not the increased policing of breaches and harms in road safety. Those costs alone have eclipised any 'savings' from policing use of the product. No, we are talking about the ‘enforcement’ that is licensing and regulation for this new addiction for profit industry. Remember under prohibition few of these costs and liabilities existed, and certainly not the ever increasing financial burden of bureaucracy!

The following two quick snap shots reveal yet more of what any sober-minded non drug-using person understood. The wilful ignorance and in many instances bltantant mocking of the many warnings tabled by the prevention sector are ‘producing’ and increasing the mess this ‘progress’ was supposed to fix.

The US now has Three Marijuana Markets and the one that was supposed to ‘help’ is the one in crisis! 

See Then There were Three – Marijuana Markets paper

Tax Foundation (US) – Marijuana Legalization and Taxes: Lessons for Other States from Colorado and Washington

• Colorado, Washington, and Oregon have all taken steps to reduce their marijuana tax rates, with Alaska considering it, after initial rates of 30 percent or more did not reduce the black market sufficiently. More recent ballot initiative proposals across the country propose rates between 10 and 25 percent.
• Tax rates on final retail sales have proven the most workable form of taxation. Other forms of taxation that have been proposed, such as taxing marijuana flowers at a certain dollar amount, taxing at the processor or producer level rather than the retail level, or taxing products by their level of THC, have faced practical implementation difficulties.
• Medical marijuana is usually more loosely regulated and less taxed than recreational marijuana. In Washington, moving non-medical sales to the retail market has proven difficult given the enormous differentials in tax rates and regulatory structure, and officials there wish the two systems had been tackled simultaneously.
• While the revenue can be in the tens or even hundreds of millions of dollars, it takes a lead time to develop. Revenues started out slowly in Colorado and Washington, as consumers became familiar with the new system and after state and local authorities spent time and money setting up new frameworks and regulatory infrastructure. ¹
•  Gov. Gavin Newsom on Friday proposed a temporary tax cut for the state’s struggling legal marijuana industry, but businesses said it falls far short of what’s needed to revive a foundering pot economy.
• Broad legal sales began in California in 2018, but the industry has been burdened by hefty taxes that can approach 50% in some areas, costly regulation and competition from a flourishing illegal marketplace, which industry analysts estimate is at least twice the size of the legal one.
• Meanwhile, a glut of cannabis from corporate-scale farms has sent wholesale prices into a tailspin, leaving some growers unable to make a profit. California was once envisioned as a national model for legal sales, but industry leaders warned Newsom – a Democrat – in December that the state’s licensed industry was verging on collapse and needed immediate tax relief and a swift expansion of retail outlets to survive.
• If the state isn’t taking in enough cannabis tax money to support a range of education, law enforcement and other programs — a total of $670 million each year — the excise tax could be stepped up to cover that gap as soon as January 2024, though not necessarily to the 19% level. Additionally the state is putting up a one-time $150 million stream of funds to help cover those costs. ²

References

1. https://taxfoundation.org/marijuana-taxes-lessons-colorado-washington/
2. https://sacramento.cbslocal.com/2022/05/13/newsom-california-pot-industry-tax-cut-proposal/

Research and Communication Team – Dalgarno Institute