Disappointment in Potlandia
The permissive states line up to enact killer taxes on marijuana
Curing cancer and eliminating heart disease would be nice, but what the government — federal, state and local — would like most of all is a new source of revenue, i.e., something new to tax.
Several of the states where marijuana was legalized think they’ve found one: Preserve the potheads, for theirs is the solution to declining tax revenue.
The legislature in Massachusetts, which long ago earned the appellation “Taxachusetts,” is considering changes to a voter-approved recreational marijuana law that raise the taxes on pot, which voters made respectable, or at least legal, in November. It was originally taxed at a collective rate of 12 percent, through excise, sales and other levies. If the state House and Senate agree, and Gov. Charlie Baker, a Republican, signs it, the collective tax would rise to 28 percent.
But it’s actually to be even higher, once the revenue bureaucrats get through figuring out all the way to “enhance” the higher taxes. Pothead advocates say the latest version of the legislative proposal puts a 21.75 percent tax on sales of marijuana between wholesalers and retailers, and another 28 percent tax on sales from retailers to customers.
That’s a whopper of an increase that critics say would prevent legalized marijuana laws from doing what they were supposed to do, and putting the black market in charge of the trade again. “It’s very, very dangerous because it encourages the illicit market, the very thing voters decided in November they didn’t want to see anymore,” Jim Borghesani, a spokesman for the “Yes on 4,” the successful ballot proposal, tells MassLive.com. “They wanted to take marijuana commerce away from the illicit market. … What this House version does is pretty much give the industry back to the drug dealers.”
Recreational marijuana advocates want the current tax rate to stay the same, at least until the pot industry can get up and running. Since much of the tax bill, like most tax legislation, was written and debated behind closed doors, pot advocates call the tax proposal a sneak attack on the will of the voters.
But you don’t have to be a professional tea reader to read these tea leaves. (Orange pekoe will do.) Puffers in the Bay State can bank on it that taxes on marijuana sales will go up, and they’ll pay dearly for their sunken eyes and vacant stares into space.
Other states where marijuana is legal are watching what happens in Taxachusetts. Collective marijuana tax rates range now from 17 percent in Oregon to 25 percent in Alaska, 39 percent in Colorado to 37 percent in the state of Washington.
With a concession to the real world where addiction is costly to everyone, the proposal to dramatically raise the tax rate in Massachusetts mandates that the first $10 million raised must be earmarked for “substance-abuse prevention” and treatment programs. Advertising pot would be restricted. Radio, television and billboard advertising would be prohibited unless advertisers could prove that 71.6 percent of the target audience is over 21 years old, neon signs would be banned in pot shops, and no lighted sign could be illuminated from 30 minutes before sunset until closing time. Drug dealers of all kinds work best in the dark.