Sure, a state marijuana monopoly would be federally illegal.   I used to think it would be bulletproof as a practical matter, in light of Louisiana’s experiment.   But President Trump might pick on states that he disfavors, as he does with California localities and ICE. https://www.msn.com/en-us/news/politics/ar-AA1GMkuT

Louisiana’s two land grant state universities had a state monopoly to produce medical marijuana for years before private industry shoved them aside.  Here’s a photo from the HBCU, whose inclusion in legislation may have helped with social equity concerns:

https://www.subr.edu/news/southern-launch-thc-line-of-medical-marijuana-products

In a 2013 North Carolina poll, state marijuana sales beat private sales by 3-to-1.  The full poll with cross-tabs is at https://newrevenue.org/wp-content/uploads/2013/03/nc-marijuana-polling-march-2013.pdf.  Not only do monopolies work best for public health, avoid all kinds of litigation by disappointed license applicants, maximize public revenue, and allow nimble pricing (unburdened by inflexible taxes) to compete with the illicit market; as our Stanford friend Keith Humphreys says, in light of the poor track record of social equity licensing, “In general retail monopolies (that’s where the industry still produces the product; the state sells it) have a better record of hiring diverse employees than do private companies.”   

President Trump might leave state marijuana sales in Red-State New Hampshire alone, but he might pick on North Carolina, with our Democratic Governor. It’s about how much risk a state wants to face.

“Pat Oglesby Appointed to Marijuana Legalization Commission

“The governor of NC, Josh Stein, has come out in favor of marijuana legalization and formed a commission, on which my co-teacher, Pat Oglesby, has been tapped to serve, to study the issue and make recommendations.

“This is an outstanding choice! Pat knows more about marijuana legalization, taxation, licensing, and related issues than anyone I know. We co-taught a course, Cannabis Legalization, at UVA Law that was a huge success, due to Pat’s knowledge and connections to industry experts, regulators, and researchers (and to our excellent students, of course).

“The official press release is here, which includes the full list of commission appointees.”

That’s from University of Virgina law Professor Kim Krawiec. https://www.thefacultylounge.org/2025/06/pat-oglesby-appointed-to-marijuana-legalization-commission.html. I hope I can be useful and live up to her expectations.

From the National Cannabis Policy Summit in D.C. April 28, 2025.

The cannabis tax and markets panel at starts at about the 10’55’’ mark; there’s very weak audio until about 16’40”. Closed captioning may help.

I say, Pre-tax cannabis prices go down over time. What about tax burdens set from the start to go up over time, like NJ and NM?

Grover: “It’s a dirty trick by politicians to have tax increases take place when they’re not in office.” 32′ mark.

What if the best way to tax cannabis is by potency, by applying a tax rate to measured quantities of intoxicants, like  of THC?  Two hard questions loom. Should the same per-milligram tax rate apply to intoxicants in various forms of cannabis products like raw plant material (like flower) and concentrates and edibles? And what tax rates should apply to cannabinoids other than delta-9 THC, like delta-8 and delta-10?  

For the second question (Let’s say the best way to tax cannabis is by potency, by applying a tax rate to measured quantities of intoxicants, like  of THC?  What tax rates should apply to compounds other than delta-9 THC, like delta-8 and delta-10 and HHC, based on relative intoxicating power?) here’s a quick answer (that I in no way vouch for, because no one knows) from perplexity.ai, based apparently on https://therichardrosereport.com/cannasearch-daily-news/:

To design an effective cannabis potency tax framework that accounts for different intoxicating compounds like delta-8, delta-9, delta-10 THC, and HHC, tax rates should reflect their relative psychoactive strength and metabolic impacts. Here’s a science-based approach informed by current research and existing tax models:

Relative Intoxicating Power & Tax Multipliers

*Multipliers adjust tax rates based on compound strength compared to delta-9

In 2009, I was a 62-year old lawyer looking for a pro bono project.  My career in law at its high point was designing tax laws for Congress — writing laws to bring in revenue — as a staffer for the Joint Committee on Taxation and then the U.S. Senate Finance Committee.

I started with marijuana taxation back then for several reasons. 

1 . I didn’t think people should get arrested for possession. Taxation is the main reason and sometimes the only reason that some voters and representatives want to move beyond prohibition.

2.   I’m a tax and spend Democrat.  That last reason makes industry people and even activists nervous, but OK.

3. It was fun to think about. The field was wide open. No tax professionals were studying it — industry didn’t really exist to study it, and tax academics turn up their noses at marijuana taxation because they think both excise taxes and subnational taxes are not important. The top people in drug policy were interested, but they had only a nodding acquaintance with tax policy.

4. I figured that possession would get legal, and that commerce was sure to follow, and so was taxation.  Marijuana tax policy would get interesting.

By the spring of 2010, I went to Massachusetts at the invitation of NORML board member Dick Evans to speak to a legislative committee about taxing marijuana.  In January 2011, State Tax Notes published 25,000 words – “Laws to Tax Marijuana.”  https://newrevenue.org/wp-content/uploads/2014/08/laws-to-tax-marijuana-published-version-in-state-tax-notes.pdf.  

It has lots of discussion about the tax base but very little about the tax burden, except for this kind of thing:  “Tax rates on marijuana need to be low at first to gain advantage in the inevitable price war against bootleggers.  As taxing authorities win that war, they can raise rates and generate more revenue.”

Oh, and in 2009, Obama had said, “Yes we can,” and I figured marijuana taxation could be my little part.

For the nonpartisan Texas Lyceum: 10-minute panel talk, 15 slides: Marijuana, revenue, and hemp

At my age, now that A.I. is taking over proofreading, I feel like a good thing I can do is to set the record straight.  For instance, the Tax Foundation’s tax piece of its cannabis posting, https://taxfoundation.org/blog/states-act-2-0-federal-cannabis-reform/, has incorrect information, as of August 12.  (I wrote an author August 8 and haven’t heard back.) 

It has this:

Hemp THC is wide open in North Carolina. The public and the Legislature hardly notice; the professional prohibitionists know about it but aren’t raising a finger.

The clip is under three minutes. I come in shortly after the one minute mark.

https://www.wral.com/video/nc-lawmakers-consider-next-steps-to-legalize-medical-marijuana/21498062/

(Draft statutory language is at the bottom.)

“Hemp-derived consumables” in HB563, https://www.ncleg.gov/Sessions/2023/Bills/House/PDF/H563v5.pdf

We can and should tax these hemp products.

Taxing by percentage of price is weak.

Taxing by weight of THC is better than taxing by price.

Hemp drugs: Hearing June 12, 2024, 2 EDT in North Carolina Senate Judiciary Committee

Mr. Chairman, Thank you.  

My name is Pat Oglesby.  I’m a lawyer with the Center for New Revenue in Chapel Hill.  I was a staffer for the nonpartisan Joint Congressional Committee on Taxation, and  I’ve been a paid advisor to several states on cannabis tax policy.  

As you’re discovering, hemp-derived cannabinoids create both costs and externalities.  That’s why North Carolina should tax these substances – ideally by THC content – as part of a comprehensive cannabis strategy. 

Louisiana, Minnesota, Tennessee, and West Virginia are four states that already collect extra excise taxes on these substances.  Those taxes range from 3 percent to 11 percent of retail price.

But that’s just one approach. An alternative and more effective tax is one being used in Connecticut, Illinois, and all Canadian provinces. They tax legalized cannabis products by the volume of THC they contain. This THC tax aims straight at the target you want to hit.

Whichever taxes you choose — taxes based on price or taxes based on THC levels — there’s a risk of overdoing it.  If you tax too heavily, illicit sellers will bypass the tax and you won’t get the revenue you hope for.  I don’t work for industry, but I do know that other states have learned this lesson the hard way: Overtaxing backfires.  

The journey you’re on won’t be easy. But please know that I will do what I can to help.  You can find me at http://www.newrevenue.org.

We can expect that when the Legislature bans substances like Tianeptine or “gas station heroin,” then copycat drugs will pop up, maybe with a molecule in a complex organic compound changed here or there. 

To go beyond listing dangerous drugs that are out there already, Texas and other states have enacted catch-all language that would list or cover “whack-a-mole” new drugs that people would discover or invent.  

New psychoactive substances like Tianeptine or “gas station heroin” are popping up in North Carolina, and our Legislature is struggling with the problem.  https://www.wbtv.com/2024/02/14/nc-lawmakers-working-ban-gas-station-drug-that-mimics-effects-opioids/

But as soon as the Legislature bans substances, copycat drugs pop up, maybe with a molecule in a complex organic compound changed here or there.

To go beyond listing dangerous drugs that are out there already, I’m trying to find catch-all language that would list or cover “whack-a-mole” new drugs that people would discover or invent.