Municipal marijuana monopoly? Delegated?

One way to get revenue from marijuana, maybe the best way, is to have a government monopoly temper the profit motive.  Professor Rob Mikos says state monopolies make no sense, because having the state do the selling of marijuana puts it in direct violation of federal law.  Now a small town in Washington is thinking of doing the selling itself.

Maybe the federal government would come after North Bonneville, pop. 1,005.  But my friend Harry Levine asks what if a state or local government set up an authority, like the TVA (or the Fayetteville Public Works Commission), or what if a couple of local jurisdictions set up an entity among themselves, like the Port of New York Authority or the RDU Airport Authority – and government then licensed that entity to do the selling?  Would the federal government treat the government-sponsored entity worse than a private seller doing the same thing?  Why should it?

The federal government could shut that entity down, sure, but U.S. attorneys threatened  to shut down state workers in a regulatory scheme — but they didn’t:

“[T}he U.S. attorneys for Washington state, Mike Orsmby and Jenny Durkan, said in a letter to the governor on April 14 that marijuana use is still a federal crime and anyone helping make that use possible, such as a state employee at a patient registry, could be prosecuted.”

They haven’t carried out that threat.  Why should we be totally sure that the federal government would shut down a state-sponsored monopoly?

If states or municipalities can make this cautious sponsored monopoly approach work, the demand for tax policy folks will shrink even below the current level (since governments don’t need a tax scheme if they control sales).   Not good for me.

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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