The 35% THC discontinuity in Illinois’s cannabis tax

Illinois draws a bright line for THC potency:  Cannabis with adjusted THC of 35% or less bears a 10% tax rate; cannabis rated over 35% bears a tax rate of 25%.  (Infused products are treated separately, and taxed at 20%.)

https://www2.illinois.gov/IISNews/19996-Adult_Use_Cannabis_Legislation.pdf;https://www2.illinois.gov/IISNews/20242-Summary_of_HB_1438__The_Cannabis_Regulation_and_Tax_Act.pdf

There’s a lot to dislike about the Illinois tax plan — especially its reliance on old-fashioned ad valorem (price-based) taxation — doomed to decrease as prices do, and subject to price manipulation.

But its 35% bright line might be sensible.  Illinois apparently established its tiers as proxies:  The low taxed tier (≤ 35%) apparently corresponds to flower and other raw plant material;  the high-tax tier  (> 35%) corresponds to [sublinguals ???? and] dabs and other processed cannabis that is not infused.

This conclusion reflects the view that raw plant material with THC content over 35 percent is likely both rare enough to freakish and less than optimal in producing intoxication (like the stereotype of a muscle-bound strong man who cannot manage to bend over to lift weights). Continue reading The 35% THC discontinuity in Illinois’s cannabis tax

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Phony tax increase in Harris-Nadler Marijuana Bill

This is PRELIMINARY look at revenue from the Marijuana Opportunity Reinvestment and Expungement Act, or MORE Act.  Comments welcomed. UPDATES will appear at the top here.

The bill calls for a token 5 percent ad valorem tax on recreational marijuana only, with medical cannabis exempted.  It then purports to spend the money that tax brings in.  But Oops.  At the same time, but by descheduling the drug, the bill repeals the current 280E rule disallowing deductions for the expenses of selling cannabis.

Here’s what Carl Davis of ITEP authorized me to post:

“This bill sure looks like a net tax cut to me. Continue reading Phony tax increase in Harris-Nadler Marijuana Bill

Taxing raw cannabis by THC content

Eventually, sampling error, deliberate or unavoidable, the killer problem with a THC tax on unprocessed marijuana, could fade as science and technology advance. Sampling could yield to full disclosure if science can reveal the precise chemical make-up of every gram we want to tax.  That precision may seem far-fetched, but perhaps no more than X-rays, MRIs, and astronomical spectroscopy — figuring out what is in stars — might have seemed to our ancestors, not so long ago.  One day, if a device can scan a flower and reveal all, THC taxation may seem unobjectionable.

THC taxation is unobjectionable now, or soon, for homogeneous concentrates.

 

Cannabis Revenue Slides from Paris

Here are slides from my panel presentation at the Ecole d’économie de Paris (Paris School of Economics) May 24 2019:  Paris 24 mai 2019 for the International Society for the Study of Drug Policy, http://www.issdp.org.

They include this song, to the tune of “Dear Abby” by John Prine:

Dear Public Officials who legalize weed:
Don’t miss out on revenue your people need.
A price-based percentage tax won’t be secure
‘Cause prices will tumble as markets mature.
The “liberty movement” wants taxes to fall.
But vanishing “price” taxes undermine y’all.

Price taxes vanish.

To the relief of the audience, I did not sing.

And here’s the wrap-up:
Law enforcement is critical.
Taxing only by price is weak.
Don’t try to tax flower by THC.
Big Business is coming (vs. Social Equity).
Government sales are better than taxes.

The State of Lousiana sells marijuana

Federal illegality is not preventing the State of Louisiana from possessing and selling marijuana.  Maybe Berkeley and Oakland are too politically blue to get away with it, but that little municipal cannabis store in Washington State has been selling openly since March 2015.  Louisiana is about to start sales.

Here’s a long quote about how flagship Louisiana State University is “touching the plant,” from an official LSU website.

In 2015, the Louisiana Legislature passed the Alison Neustrom Act, which paved the way for the production, recommendation, and use of therapeutic cannabis.

The LSU AgCenter is operating its Therapeutic Cannabis Program under one of the two licenses in Louisiana. Continue reading The State of Lousiana sells marijuana

Vermont

A friend in Vermont tells me the Legislature there insists on taxing cannabis solely by price.  Many people think Vermonters are so shrewd and some Southerners just might be a little slow, but price-only taxation is sillier than anything North Carolina has done since turning down 90 percent matching funds for Medicaid expansion.

Leafly article on Cannabis Tax — en français

I’m not sure this is authorized:  https://thc.legal/opinion-il-existe-un-meilleur-moyen-de-taxer-le-cannabis-legal/

But I can’t quarrel with the end note: “Le point de vue exprimé dans cet article n’engage que son auteur trop cool.”  Hahaha.

Une traduction robotique? Continue reading Leafly article on Cannabis Tax — en français