It's Just a Matter of Time Before Pot Becomes Legal Everywhere
Photo Credit: Shutterstock.com/Yellowj
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Tens of thousands of people throughout the nation today will buy cannabis. The difference is that in Colorado, these transactions will be legal, regulated and taxed. The product will be of known quality and potency, and the cannabis seller will not be a blackmarket dealer, but rather a paid employee of a licensed business explicitly authorized to engage in such transactions. Finally, the profits from these transactions will bring fiscal benefits to the local community, not the blackmarket economy.
Such is the new commonsense reality in Colorado, where for the first time in modern history, a US state is regulating cannabis as a legal commodity to anyone age 21 or older. Beginning on the first day of the new year, dozens of state and locally licensed cannabis retailers opened for business, engaging in hundreds of thousands of dollars of state-authorized cannabis sales. Colorado’s retail rollout was front-page news both nationally and internationally—and with good reason.
Day 1 of cannabis sales went off largely without a hitch, with even ardent opponents of the policy conceding that the event marked a “milestone” rather than a nadir for marijuana policy—and it generated an estimated quarter of a million dollars in state tax revenue. As Green Wednesday quickly morphed into just another typical Thursday, the media continued to report that, by and large, there was little to report. Forty-eight hours into the era of legal pot sales, it appeared that most everyone, from the consumer to the seller, was satisfied with the past days’ events.
And why wouldn’t they be? In recent weeks, state regulators have licensed hundreds of businesses to engage in various aspects of cannabis commerce, from the plant’s commercial cultivation and retail sale to the production and testing of cannabis-infused products. Dozens of those facilities were open for business on January 1 and dozens more expect to open their doors in the weeks to come. In short, the genie is out of the bottle and it isn’t going back in.
So how does the new system work? It’s rather straightforward. Adults over the age of 21 have a legal right under state law to possess and grow limited quantities of cannabis, as authorized by the passage of a 2012 statewide initiative (Amendment 64). Commercial enterprises that wish to engage in retail cannabis sales or production must apply and receive state and local permission (licensure) to do so. (While several municipalities within the state have acted to bar the establishment of canna-businesses, several others, such as Denver, now explicitly authorize them.)
Consumers who wish to obtain cannabis from retail outlets are limited to purchases of no more than one ounce at one time and patrons must pay a special cannabis excise tax (approximately 25 percent) on top of existing state sales tax. (Colorado voters approved the tax in a separate 2013 vote. Funding from this special tax is earmarked to pay for public school construction.) Out-of-state patrons are limited to purchases of no more than one-quarter of an ounce of cannabis at one time.
As for state-licensed medical cannabis consumers, little has changed. They can continue to obtain marijuana from licensed dispensaries (some of which are also now providing cannabis to the broader market as well), but they are exempt from paying taxes on their transactions. They can also freely engage in home cultivation. (State licensed dispensaries, which under existing law were required to produce some 70 percent of the cannabis they dispensed, are allowed a one-time transfer of product to their new recreational outlets under the state’s new commercial regulations.) At present, cannabis consumption is limited to private establishments, though the violation of this provision is punishable by merely a civil fine.
Will this new cannabis reality in Colorado (and the pending reality in Washington) result in a federal blowback? At present, all signs indicate no. In August, Deputy Attorney General James Cole issued a three-page memorandum affirming that the Justice Department would not interfere in the state’s efforts to regulate cannabis sales (a position he reaffirmed in testimony before Congress in September). Despite the massive media focus on the Centennial State in recent days, members of Congress—including its most ardent drug warriors—have largely remained mum on the issue.