Marijuana Legalization and Tax: I Was Wrong

For a couple of years, I labored (literally) under the impression that proposals to legalize marijuana might need high revenue to pass.[1]  I got that impression from the repeal of alcohol Prohibition, where “revenue considerations, when joined to the desire to eradicate the evils that grew out of prohibition, . . . gave the repeal movement its powerful motive force, leading finally, on December 5, 1933, to the abandonment of the dry law.”[2]

Well, in November balloting on marijuana legalization, voters in Washington faced a relatively strong tax scheme; voters in Colorado, a relatively weak one.[3]  Both proposals passed with strong majorities; the majority in Washington, 55.44 percent,[4] was only marginally higher than that in Colorado, 54.83 percent.[5]  In press coverage, the level of taxation was pretty much a nonissue.

Meanwhile, in Oregon, a legalization proposal with a nonsensical revenue plan (putting a state monopoly in the hands of marijuana producers) got some 44 percent approval.

Issues other than taxes drove those results.  So the tax card is no ace in the hole.  I was wrong.

More to come . . .

[1] “Laws To Tax Marijuana,” 59 State Tax Notes 251-280 (January 24, 2011), online at and

[2] Tun Yuan Hu, The Liquor Tax in the United States, 1791-1947: A History of the Internal Revenue Taxes Imposed on Distilled Spirits by the Federal Government 63 (New York: Columbia University, Graduate School of Business 1950).

[3] “Gangs, Ganjapreneurs, or Government: Marijuana Revenue up for Grabs,” 66 State Tax Notes 255-269 (October 22, 2012), online at and


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