Tax THC with a CBD offset? Maybe not so fast.
“Studies [the link is to an article with an impressive number of authors] have shown that the THC:CBD ratio also influences the level of psychoactivity experienced by cannabis consumers. For infrequent cannabis consumers, when CBD is present at much higher levels than THC, intoxication is reduced compared to THC alone. Conversely, consumption of THC (8 mg) together with half as much CBD (4 mg) enhances the intoxicating effect, but only for infrequent consumers. In people who frequently consume cannabis, the intoxicating effects of THC don’t change much when combined with CBD. This indicates that the psychoactive effects of cannabis can change based on the THC:CBD ratio in a way that depends on your level of consumption experience.”
That’s from https://www.leafly.com/news/science-tech/the-entourage-effect-does-it-really-exist (which I don’t vouch for or criticize).
Leave aside CBD offsets. Even for a THC tax, I have a lot of questions.
In trying to assign a tax burden, in dollars and cents, to the sale of a particular product, is “intoxication” the negative externality or phenomenon we want to target and burden? “Psychoactivity”? If so, can we measure the phenomenon targeted? That is, can we assign numbers to such a phenomenon?
Maybe not, but even if we can assign numbers to negative externalities, how might those numbers correspond to consumption of the product sold? (This is your tax person looking for an answer in dollars and cents. For tobacco, the externalities seem understandable enough that our weight-based $1.01 per pack federal tax on cigarettes seems to make some sense. Cannabis is trickier.) Is there some level of cannabis intoxication or psychoactivity that’s mostly harmless? (For alcohol use, there seems to be a relatively harmless level of intake for a given day – if it stops there.) What if different consumers, as the article suggests, react differently to different products?
What if instead of “intoxication” or “psychoactivity” we want to burden “impairment”? So far, is there any kind of quantifiable road-side alcohol test analog for cannabis driving impairment that is satisfactory enough to put to rest the use of blood and urine tests – whose main virtue is that they give precise numbers? (Today’s Wall Street Journal goes into detection of impairment by law enforcement. https://www.wsj.com/articles/welcome-to-the-worlds-oddest-pot-party-thrown-by-the-local-police-11663597103?page=1 shows police considering subjects walking in a line, focusing on a close object, counting to 20 (one subject who drank alcohol too skipped from 16 to 19), and using a driving simulator.)
Beyond current impairment (or whatever), how about other problems, like youth use? Tax-targeting sales of products that appeal to youth might look at marketing or something unrelated to THC, but other than the 280E denial of deductions for advertising and marketing expenses, there’s no way to target youth use so far, or is there?
Do certain products (like high-THC products) lead (more than others) to cannabis hyperemesis syndrome?
Do certain products lead (more than others) to substance use disorder in the long run? Can we assign a dollar-and-cent tax burden to sale of a product on the basis of its potential to create negative externalities that may take years to develop? Are high-THC products especially dangerous on this score?
Do certain products lead (more than others) to whatever caused former California Governor Jerry Brown to worry, “how many people can get stoned and still have a great state or a great nation?”?
Do sales of some products deserve a tax break because the products inherently tend to be medical rather than recreational?
What about components beyond delta-9 THC, like delta-8 and THC-O?
Enough questions. Even if we tax alcoholic beverages on the basis of pure ethanol (like the federal tax on spirits), then each milliliter of ethanol bears an identical tax, but doesn’t create identical negative externalities – or even necessarily similar blood alcohol content. If people somewhere are forced, Orwell-style, to have chips inserted in their bodies, maybe some tax authority will try to collect tax on drivers (as a safety measure) or consumers (as a standard sumptuary tax) on the basis of blood alcohol content. But even that science fiction scenario wouldn’t solve the problems with cannabis. I don’t know what we might want to measure, and I don’t know how to measure anything we might want to measure.