Marijuana Grow Quotas

At the moment when marijuana is legalized, demand for growing licenses or quotas will exceed supply, right?

At some point, someone will have to say who gets them.  Who will say?  And how?  

And once the decider decides, what appeals will be allowed?  If appeals are allowed, to whom?

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FDR’s wealth sharing in the tobacco program said government agents decided, and no appeals were allowed.

It’s not a model to follow, but a proof of concept. 

Allocating grow quotas on the basis of claimed prior acreage might not withstand the modern version of Due Process, and anyway, we don’t have a class to favor on that basis..

“Prosperity Road: the New Deal, tobacco, and North Carolina,” by Anthony J. Badger, describes the process.

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Late 1933 into 1934:

Growers had to vote the program in every year.  It based quotas on a rolling average production history. County agents took farmers’ reports of historic production of tobacco.

So the government’s agents had to evaluate whether claims of historic growing were exaggerated.

“[M]ost growers overestimated.” P91 County agents negotiated and adjusted amounts allowed. “Few were able to bring the production records that might have solved the problem.” 91

One practice, by at least one agent, was to list allotments publicly in local stores “and inviting neighbors secretly to inform him in their neighbors were overestimating.”

Once quotas were allocated, “It was a troublesome and time consuming task to measure some 500,000 fields in the cotton and tobacco counties of North Carolina. In a tobacco county like Nash or Pitt as many as ninety compliance supervisors were employed.” 92

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Production during the years 1931-33 was to be the base for tobacco allotments.

Nonsigning farmers got no payments, and paid a tax of 25 percent on their tobacco sales. That rate was chosen by the U.S. Secretary of Agriculture. p 73

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Digital technology ought to facilitate sharing the wealth — instead of among farmers, among registered voters, say.

NC Senate candidate’s marijuana-biz texting partner irritates California activist

Being in the marijuana revenue policy business, I subscribe to a California marijuana newsletter put out by Brett Stone, an activist who has provided me (and others) a lot of useful information over the years.

Here’s an opinion piece he just posted about the North Carolina Senate race, with the title “DPFCA_NEWS: California cannabis strategist Arlene Guzman Todd caught up in NC Democratic Senate candidate sexting and sexual relationship scandal – claims ‘He knows (that I) can tank his campaign.’”:

“Passing along an item that might be of interest to some readers on the list. News reports are that a LA based cannabis marketing and public relations executive, Arlene Guzman Todd who works for Potnt (website @ https://www.potnt.com/about-us/our-team/ ) where she is listed as a management team member is involved in a sexting and sexual relationship scandal with the Democratic candidate for US Senator in North Carolina. She works with a few well known cannabis businesses. Their clients include HelloMD and Jim McAlpine of 420 Games.

“I wonder how a cannabis business can continue to do business with Potnt knowing that one of their employees, Arlene Guzman Todd, is threatening to take down the campaign of the democratic challenger for US Senator in North Carolina, one of the tightest and most watched races currently with the democrats having a real shot at replacing a republican senator unless this scandal creates problems so close to the election. Has anyone ever heard of this woman or done business with her? 

“Story is making a lot of noise in North Carolina but not a peep here in California or Los Angeles where she is based and lives so I put together a few articles for those who may be interested in reading about it. IMO she is a snake in the grass, no pun intended. 

“Some of the articles have been updated with some headlines changed but the information is still there. They say the greatest disinfectant is sunlight so here’s some sunshine for you Ms. Todd.”

[He attached easy-to-find articles from News & Observer, and AP.]

But I wonder if a boycott might not drive her to sabotage the campaign (as she has reportedly threatened to do).  That is, if supporters of the Democratic candidate in North Carolina go against her, she might retaliate.  Just wondering – I have no idea.   But then how could she retaliate and harm Cunningham further? Posting photos? That would make her seem small, I think. She can hardly retaliate against Cunningham at this point, I think.

A typical boycott aims to change the behavior of the boycottee going forward. What change in Ms. Todd’s behavior might this boycott encourage? I’m not sure what she could do at this point to make it right.

Book income and Swift’s swaggering stud tax

Book income tax is a tax on enterprises who tell people they are profitable.  That’s worth something.  Cost of enforcement is negligible. Maybe taxpayers will stop seeing overstating earnings as a costfree ploy.

A nominal or low tax on book income, in addition to the standard income tax, corresponds to Jonathan Swift’s notion in Gulliver’s Travels:

When it came to “Ways and Means of raising Money,” in Part 3 of Gulliver’s Travels, among other things, Jonathan Swift suggested, instead of juries, letting the taxpayer himself assess tax, on the honor system. Here’s one example: the “highest Tax was upon Men who are the greatest Favourites of the other Sex, and the Assessments, according to the Number and Nature of the Favours they have received; for which, they are allowed to be their own Vouchers.” Decode the olde English, and you’ve got a tax on either promiscuity or boastful lies about sex — a “Swaggering Stud” tax.

https://www.huffpost.com/entry/taxes-cannabis-gulliver-j_b_7761696

So corporations are either profitable to benefit of shareholders or they’re exaggerating. Either way, a tax seems OK. Adjust the regular tax rate down if people want.

If you follow Swift, book income should be a free-standing tax, not an alternative alternative minimum tax.

Marijuana monopoly = Small government

Government marijuana monopoly makes government’s slush fund tiny. Passing out licenses makes it enormous.

So, ironically, government monopoly marijuana retailing keeps government power down, which libertarians should applaud.

Yes, government monopoly marijuana retailing is less efficient, to the detriment of consumers, but many are willing to take less-than-perfect-competition as part of a deal where they stop being arrested.

Government monopoly marijuana retailing is uniquely positioned for temptation goods where some folks want to slow them down. You may call them control freaks, but they vote. Other industries should stay private, especially restaurants, groceries, and farms, as the Soviet experience has shown. For those businesses, and for businesses like them, there’s no plausible argument for limiting licenses.

Trump’s taxes

Hearing how little taxes Trump paid, Trumpistas don’t say, “Who cares?”  They say, “Bravo.”  Yet another middle finger to the Establishment and the dreaded Giant of the federal government. 

Anti-Trumpers, disappointed that they have so far found no Smoking Gun of tax evasion (which is illegal), but only exploitive-but-maybe-legal tax avoidance, still detect moral failure on Trump’s part.  Not a good citizen, Cadet Bone-Spurs-style.

Tax people may see something else – incompetence.  A meme of tax practice is the client so intent on avoiding taxes that he distorts his businesses and makes bad decisions.  Yes, taxpayers can zero out of tax obligations if that’s their goal, but that’s a weird and self-defeating goal.  Here’s an analogy: In the marijuana biz, growers can distort plant chemistry to achieve ultra-high percentages of THC content, but to the detriment of the plant – like a muscle-bound athlete who overdoes it.  And to the detriment of the smoker, who misses out on other cannabinoids and on terpenes — the whole Entourage Effect — lost in the quest for the wrong goal.  

So maybe Trump tried so hard to beat taxes that he caused himself actual business harm – and real losses, rather than manufactured ones.