Mile High Taxes? Denver City Council Considers Additional Tax on Marijuana Sales

7/29/2013

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As the implementation of Colorado’s Amendment 64 continues, the question of how to tax recreational marijuana sales is getting more and more attention. Colorado Governor John Hickenlooper signed two bills into law in May that impose a 15% excise and a 10-15% sales tax on all retail marijuana sales in the state. Now both Denver and Boulder are considering adding their own 5-10% tax hikes to retail sales within their city limits. Both the state and local taxes still have to be approved by voters in November.

While the state taxes, which would tax recreational marijuana at a minimum of 25%, are widely expected to gain voter approval (one of the main arguments for legalization was tax revenue), members of marijuana advocacy groups are concerned that an extra 5-10% tax could cripple the nascent recreational marijuana business community and drive recreational users back to the black market. The irony is that if the extra taxes do indeed drive consumers to the black market, it would reduce the amount of tax money the state anticipates collecting.

Opponents of the city tax also speculate that the new taxes are an opportunistic attempt to raise new funds.

Denver city officials claim that the tax revenue is necessary to fund the enforcement of new regulations pertaining to recreational use. Specifically, the city wants to hire more police officers, park rangers and another city attorney in anticipation of an expanded caseload. Some of the funding would go to mental health programs and campaigns to keep Colorado youths from using recreationally. The Denver city council will vote on whether to add the tax to the November ballot on July 29.

Any approved taxes will go into effect on January 1, 2014. As with all of the actions surrounding the legalization of marijuana for recreational use, only time will tell how these taxes affect legal marijuana sales, the black market and state revenues.

Sources:

http://www.denverpost.com/carroll/ci_23672823/carroll-denvers-wish-list-marijuana-taxes

http://www.denverpost.com/news/marijuana/ci_23644028/how-would-denver-pot-tax-be-used

http://www.dailycamera.com/news/boulder/ci_23673193/boulder-council-backs-5-percent-pot-excisetax

http://www.denverpost.com/breakingnews/ci_23622157/denver-considering-5-tax-pot-salescomparable-cigarette

Photo Credit: Alain Bachellier

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WSLCB Announces Washington Marijuana Surveys

7/03/2013

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The Washington State Liquor Control Board has announced two online surveys, open to the general public, that BOTEC Analysis Corporation will be using to help the board make informed decisions about the existing marijuana consumer base. If you live in Washington, please take a moment to fill them out and contribute to the birth of this industry!

Here is the announcement sent via WSLCB’s ListServ email:

The WSLCB is facilitating a request from BOTEC Analysis Corporation, our contracted marijuana consultants, seeking survey participants for two separate research projects. The more people who participate in each survey the more accurate and refined the results will be. If you are interested in participating the details on each of them is located below:

  • Angela Hawken, a professor of public policy at Pepperdine University and a co-author of “Marijuana Legalization: What Everyone Needs to Know” is studying the economics of cannabis production. To do so, she’s collecting data from cultivators on their operating costs and has built an easily-accessible web survey on the economics of cultivation (http://www.surveymonkey.com/s/DCH6YXK). In particular, she is looking for those cultivators with the business sense and awareness of their books to provide substantive answers. Each respondent improves Dr. Hawken’s model of the cannabis industry by providing more evidence on the actual costs of cannabis production.
  • Beau Kilmer, a research with the RAND Corporation, is working to learn more about cannabis consumption throughout the state.  As part of that task he’s developed a short and confidential survey (no more than 15 minutes for heavy users, less for others) which asks users about how much cannabis they use, what products they use, how much they spend, etc. The survey will be the most detailed yet on cannabis use habits, and is available at www.mjsurvey.org

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Cracked Nutt: Scientist Argues Drugs Should Be Legalized For Research

7/03/2013

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In June Dr. David Nutt made headlines as one of the primary authors of a document that indicted government marijuana research policies stating that the outlaw of substances like marijuana, LSD and MDMA were tantamount to, “the worst case of scientific censorship since the Catholic Church banned the works of Copernicus and Galileo.”

In the paper Nutt, formerly a drug policy advisor to the British government, argues that current government law and regulations restrict what could be meaningful and culturally significant advances in the understanding of controlled substances and how they affect the health and wellbeing of users.

According to Nutt, “laws have never been updated despite scientific advances and growing evidence that many of these drugs are relatively safe.” He also claimed that politics were the main motivation behind the continued restrictions on research.

This claim is based on the assertion in his paper that alcohol and tobacco are significantly more harmful drugs. Of course, alcohol and tobacco are almost universally legal and are backed by large, established industries and major lobbying groups.

Even though Nutt is from the UK, his claims also ring true in the US which, after the recent legalization of the drug by the states of Washington and Colorado, is currently in the middle of a national debate on the merits of legal recreational and medicinal use of the substance.

In the US, if an organization wants to do research on marijuana they need to acquire a license from the Drug Enforcement Agency and get the study approved by the Food and Drug Administration. However, even if a license and approval are obtained researchers still need to actually procure marijuana—something that requires researchers to go through a third agency, the National Institute on Drug Abuse.

However, procuring marijuana has proven extremely difficult for researchers (which is hardly surprising considering the institute defines its relationship with drugs in terms of “abuse”). In large part, the difficulty comes from marijuana’s classification as a Schedule I controlled substance by the Controlled Substances Act. Per the Act, Schedule I substances A) have a high potential for abuse, B) have no accepted medical use in the US and C) lack accepted safety for use of the drug under medical supervision.

In particular, the legalization by certain states of marijuana for medicinal use come in clear conflict with points B and C of the Schedule I definition. By legalizing marijuana for medicinal use states are clearly stating their objections to the classification.

It isn’t clear what the future holds in regard to marijuana research. However, one thing is clear—in light of recent legalization efforts and the growing support for legalization in the US marijuana research has never been more important.

Source:

http://www.policymic.com/articles/48301/marijuana-legalization-scientists-say-pot-mdma-and-lsd-should-be-legalized-for-further-research

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Coffee Pot: The “Starbucks” of Marijuana?

7/03/2013

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On May 30th, former Microsoft employee Jamen Shively held a press conference to announce his acquisition of the Northwest Patient Resource Center and intention to build what at first would be a national and then an international retail cannabis brand around his company Diego Pellicer.

With former Mexican President Vicente Fox at his right hand to lend legitimacy for his project, Shively spoke about what he called a “unique” historical context, stating “The Berlin wall of the prohibition of cannabis is weak…and it is crumbling as we speak.”

Fox, who is not involved in the project with Diego Pellicer, said that Shively’s actions were the beginning of a “path to change” that he sees as eventually freeing his nation from the influence of rich and powerful drug lords.

Public reaction has been mixed, with some embracing what has been called the Starbucks of cannabis and others cautiously pointing out that such a large scale enterprise is likely to draw unwanted attention from the US government, which still considers the possession and sale of marijuana as a violation of federal law. To date, the US government has tended to leave small marijuana operations that follow state law unprosecuted, but they have targeted large dispensaries and co-ops.

There are also legal questions that remain to be answered. The Department of Justice hasn’t come out with an official policy on how to handle marijuana distribution in states where it is legal. Attorney General Eric Holder has promised an answer, but it is unclear when a decision will be made. Additionally, while Washington and Colorado have recently passed laws legalizing both medicinal and recreational use of marijuana, state laws require that related monies not cross state lines – something that is problematic when trying to establish a national brand.

Shively hasn’t gone into detail on how Diego Pellicer will clear legal hurdles, but maintains that he wants to create a “prosperous and safe” industry in accordance with the law. At the press conference John Davis, CEO of the Northwest Patient Resource Center stated that he and his partners are intent to “show how it can work.”

Regardless of one’s position on creating what Shively has dubbed “Big Marijuana” the legal challenges that Diego Pellicer will face will be instructive to both large and small marijuana distributors. Smaller distributors tend to be wary of Big Marijuana; however Big Marijuana will also likely end up spending large amounts of money on legal costs, helping to establish the legal framework for distribution and potentially shielding smaller distributors from excessive legal fees.

Sources:

http://www.huffingtonpost.com/2013/06/18/jamen-shively-diego-pellicer_n_3454815.html

http://www.businessinsider.com/ex-microsoft-builds-marijuana-empire-2013-5

http://diegopellicer.com/

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New timeline for WSLCB recreational marijuana draft rules

6/11/2013

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Yesterday, June 10, the Washington State Liquor Control Board (WSLCB) in Olympia released
the following dates for filing its recreational marijuana draft rules:

June 19, 2013 – Board work session on proposed rules.
July 3, 2013 – Board files official draft rules (CR 102) with the state Code Reviser.
August 7, 2013 – Public hearing on draft rules.
August 14, 2013 – Board adopts rules.
September 14, 2013 – Effective date for rules, and
September 14, 2013 – WSLCB begins accepting applications for all license types.

Until now, the WSLCB would not list specific dates; rather, the previous timeline merely addressed milestones for forming the draft’s rules as falling early, middle, or late in the last of the summer months.  The draft itself is designed to cover all aspects of legal marijuana entrepreneurship: it outlines the prerequisites for obtaining a license to grow commercially, the level of security expected for marijuana retail businesses, the type of photo ID’s marijuana stores will accept, and even how to properly handle cannabis-plant composting.  Needless to say, the WSLCB has a myriad of factors to consider, and the future of the industry depends on the decisions made in the coming months.

The draft’s first cut of rules was released on May 16, 2013, and the period of public input terminated yesterday with the release of the new timeline. According to the agency, they have received substantial written input from both public and private organizations, demonstrating the future marijuana industry’s concern with the draft’s development.

WSLCB Director Rick Garza says, according to a recent WSLCB email announcement,

“In keeping with our goal of an open and transparent process for drafting the rules, we’re going to take an additional two weeks to consider the last-minute input we’ve received.  The Board was prepared to issue the rules on June 19; however, it’s our responsibility to carefully review and consider the comments we received.”

The WSLCB, alongside the state of Colorado, must now look to the future when continuing further with the draft, as the rules they design will govern the world’s only fully-functional, fully-legal system of growing, processing, and retailing recreational marijuana.

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