Cannabis Canopy Taxes – Smooth or Spiky?

Say you wanted to tax marijuana, and you wanted to big business more than small business. Say the tax base you chose was canopy of grow area. There are two good reasons to tax canopy – first, it’s easy to measure (not manipulable); second, you collect up front (no leakage).

You could make your taxes spiky or smooth.

Here’s how to make them spiky:

The tax rate is $1 a square foot if your farm is 5,000 square feet or smaller, and $2 a square foot if the farm is bigger than 5,000 square feet.

Then, if you have 5,000 square feet under cultivation, your tax is $5,000. If you have 5,001 square feet, your tax is $10,002. That’s a marginal rate of $5,002 per square foot for that one extra square foot. That’s a discontinuity (or a “cliff”), and it looks awkward.

Here’s how to make them smooth: Continue reading “Cannabis Canopy Taxes – Smooth or Spiky?”

Two wrongs for the right

Conservatives of various kinds do not like either marijuana or socialism, but they face the conundrum that if legalization is coming, the social model of government ownership is the safest model.  Two wrongs make a right?

John D. Rockefeller, Jr., quoted in the HuffPo piece below, was a conservative economically and socially.  And a teetotaler.  But he studied alcohol Prohibition hard, and came to understand that state alcohol stores were the safest outlet.  Today’s “conservative” opponents of cannabis legalization are unwilling to see the writing on the wall — that legalization is coming.  They’re dead-enders, gambling everything on pushing back the tide.  They Just Say No.  So they’ll get TV ads and flashing neon, and powerful private interests relentlessly pushing legislatures for “Liberalization” — like Big Tobacco and Big Alcohol.

It’s too late for state stores in some states. But not all.  And other countries have a free hand.  Meanwhile, some folks would legalize all drugs.  With for-profit stores selling heroin and methamphetamine?

Continue reading “Two wrongs for the right”

State pot stores are not for everywhere

HuffPo piece (pasted below) drew this response  by “John Thomas”:  “you’re going to have a hard (impossible?) time convincing Colorado, Washington, Oregon, Alaska and the several states that are lined up to re-legalize marijuana next year of that.”

Agreed.  State operations are most likely in states (1) where  people understand the state-store model, like Vermont and maybe someday North Carolina, and (2) where the private industry is not already strong under medical rules.  Except for maybe localities like North Bonneville, Washington.  My impression is that Alaska’s structure would allow localities to own stores.

Meanwhile, the role of the federal government will not be to get into the cannabis business Continue reading “State pot stores are not for everywhere”