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Wednesday, November 30, 2005


Denver's High-100

Earlier this month, Denver voters passed Initiative 100, entitled the "Alcohol-Marijuana Equalization Initiative" 54-46. Despite the fact that it really ends up being irrelevant because state laws (generally) supercede city laws, and despite views such as Denver Post Columnist Cindy Rodriguez that 'potheads' are too burnt out to make sense of the law (her article at http://denverpost.com/search/ci_3192138), I found the whole exercise of regulation and taxation of the marijuana industry intriguing.

Though Rodriguez may say things such as "...if you're a stoner it's easy to get confused", she then quoted Mason Tvert as envisioning "a system of tax and regulation where private people are licensed to grow and sell." Personally, I found that to be a great vision - and I'm not even a pothead.

America has a long history of making certain vices legal for consumption, and therefore taxation and regulation. Alcohol is the prime example, but then there's cocaine (Coca-Cola, anyone?), hemp (legal during World War II, it is now illegal to grow in the U.S.), and at least in Nevada, prostitution. Even something as controversial as abortion is okayed. On the other hand, the government also has a long tradition of declaring very private acts among consenting adults as "illegal". If I get confused at all, its because of the schizophrenic laws brought down from on high.

I will admit that I have a bias in believing that marijuana is less harmful individually and socially than alcohol is, and I do understand the initiative to bestow cannabis with the same status of alcohol (even though this initiative covered only private, in-home use). With that in mind, I wonder if it wouldn't in fact be more wise to legalize and regulate that industry, and subject it to taxation. Although the number one crop in North Carolina is officially tobacco, the number one cash crop is illicit marijuana - why shouldn't they pay taxes too? Anti-marijuana proponents might even consider that one of the effects of a tax is to lower consumption of a good; so if growers and distributors were taxed, and passed the tax on to the consumer, the effect may actually be desirous. I'm figuring that the burden of the tax would then lie on the consumer, because believe it or not, a pothead's need is fairly inelastic. Also, I'm not considering here the "moral" concerns - quite frankly I don't think that American society is prepared to handle the additional child-rearing responsibility that comes with such freedoms.

From an economic standpoint, is this policy sound?

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