Month: May 2022

California’s illegal cannabis market is thriving because state taxes there are too high, says a Reason article to which my friend Dr. Dale Gieringer, head of California NORML for decades, recently wrote a Foreword. Dale points out other causes, too, like costs of regulation, lack of licenses, local taxes, and a huge legacy market.

I wrote Dale to say that weak enforcement of laws against tax evasion, too, must be a major problem in California, and that no tax burden is low enough to marginalize the illegal market if marijuana tax evasion is winked at, as in California, where the crime is a misdemeanor, and the only penalty to fear, apparently, is a $500 fine (or getting water and power cut off). What, I asked, about the statutory penalty of six months in jail – is that actually happening?

Here’s Dale’s reply, which he authorized me to quote:

Pat –

  With regards to what’s happening in California, no one is going to jail for pot.  But they’re not going to jail for robbery and assault either.   

  There are so many illegal dispensaries in LA that the cops rarely try to bust them.  And if they do, there’s not much they can forfeit.  The culprits rarely have much money with which to pay fines.

   There are bills in the legislature to raise the penalties for illegal cultivation, but I wouldn’t expect them to have much impact.  We’ve been there before.  The state tried unsuccessfully for forty years to end the trade that way. 

Sharing marijuana wealth may not amount to much, but it’s a start.  

Sharing wealth is ordinarily extremely hard, because it involves taking wealth away from rich people, who are inordinately influential.  Sharing cannabis wealth in the move from illegality to legality is much easier, since no one owns the wealth yet.  

Start with state sales, as North Carolina does with liquor, not just to share the wealth, but to temper the profit motive for selling a tricky drug.  

Our boldest and most risk-tolerant capitalists and entrepreneurs envision unlimited upside if they stoke demand for weed.  Let’s nudge them to work on other tasks.

The federal government is threatening to confuse a confused state marijuana tax scenario even further.  Here are some 4,000 dense words warning of uncertainty and traps ahead. After the first version with footnotes, there’s a link to a different version with endnotes.

Click to access the-federal-shake-up-of-americas-marijuana-taxes-endnotes-links-1.pdf