Tax has been called the “Swiss Army Knife of public policy.” In the two states where recreational marijuana is legal, medical marijuana patients don’t pay tax on what they buy. That’s one way of providing relief to sick people. Berkeley, California, is considering another way. The New York Times reports: “marijuana dispensaries will have to set aside 2 percent of their product — which must be of equivalent quality to the marijuana they’re selling at market prices — and give it free to city residents with incomes below $32,000.”
The Times concludes: “If marijuana is legalized, federally regulated and integrated into the regular medical system, a local set-aside system like Berkeley’s won’t be necessary. Until then, the city’s wacky-sounding free marijuana plan will serve as a useful workaround.”
Medical marijuana, free of excise tax, accounts for 60 percent of total marijuana sales in Colorado. Taxed recreational marijuana accounts for 40 percent. It’s trivially easy for folks to claim medical need and avoid tax. There must be a better way.
The Denver Post editorializes:
What if they opened up retail marijuana stores and nobody came?
OK, that hasn’t happened in Colorado. We exaggerate. But the point is that something unexpected has occurred in terms of marijuana sales during the first six months of retail stores: Medical marijuana purchases have held strong and easily outpaced the numbers for retail sales, which are way behind projections.
And if that trend holds for the entire year, it will present state officials with a challenge: How to prod a portion of those medical marijuana users into the retail market where they almost certainly belong.
Medical marijuana privileges should be confined to genuine patients, particularly now that the retail option exists, and not to those merely seeking a break on price because the taxes are lower.
The Center for New Revenue 