Colorado marijuana taxes keep dropping

Colorado’s marijuana producer tax has hit an all-time historically low rate of 43 cents per gram on flowers (bud).

For vertically integrated companies, that 43-cent rate is arrived at by taking the statutory tax rate of 15 percent and multiplying it by per-gram Average Market Rates (AMRs) – market prices. So the nominal percentage-of-price tax is de facto based on weight.  Since market prices keep dropping, taxes do, too.  Which is primitive. Continue reading “Colorado marijuana taxes keep dropping”

Marijuana taxes and testing

As a tax person, I got involved in marijuana policy in 2009, since I figured that prohibition might not stand the test of time – and that whatever replaced prohibition would have revenue for the public. One of the problems with taxing marijuana is that heavy taxation can stifle the legal market, and thereby help the black market.

Well, it turns out that testing marijuana, at least at first, can create the same problem – high prices that consumers pay for legal product.

Here’s what happened in Oregon, according to an official and well-researched California report:

“Legal cannabis prices rise by 27%–39% in the two-month span after testing rules take effect. Revenue falls by $23,500 per dispensary due to supply constraints. Half of legal segment ($187.5 million) shifts back to illegal market. The illegal market grows from 50% to 75% while the legal market falls from 50% to 25%.” Continue reading “Marijuana taxes and testing”

World’s 1st marijuana taxes

The world’s first cannabis taxes were collected in 19th century India, so far as I know, and Dale Gieringer of California NORML, who is way ahead of me on this history, indicates that that is the case.  This chart, from the 1894 Report of the Indian Hemp Drugs Commission, is for Bengal, and shows rupees (currency unit, plus subunits)) per ser (about a kilogram), collected at wholesale.   The Bengal model was followed generally elsewhere in British colonial India.

As in Colorado today with bud and trim, different cannabis products were taxed at different rates.   

currency unit formerly used in India and Pakistan, equal to 1/16 [1] rupee. It was subdivided into 4 paisa or 12 pies (thus there were 64 paise in a rupee and 192 pies)…

Thanks to the National Library of Scotland for posting this public domain material.

Backfilling Cannabis Legalization History

The first footnote in my 2011 State Tax Notes article, Laws to Tax Marijuana, was this:   

1 An extensive list of [marijuana legalization] proposals appears at Richard Evans, ‘‘Cannabis Taxation & Regulation,’’ available at http://cantaxreg.com/, under ‘‘Legalization Proposals’’ (last visited Dec. 7, 2010). This site is probably the most comprehensive compilation of information about laws to tax marijuana.

That link has expired along with cantaxreg.com, so the history would be hard to trace, but Dick Evans graciously provided its contents (updated somewhat) for me to post for all comers in the public domain: Continue reading “Backfilling Cannabis Legalization History”

Speaking to Southeastern Association of Law Schools meeting

Boca Raton, August 6, 2017

Discussion Group: Growing Cannabis Law: When Grass Becomes Cash

Cannabis a/k/a marijuana, grass, pot, weed law-reforms are sprouting throughout the country. Many states now permit restricted medicinal or recreational use, possession, sale, cultivation, and transportation, creating a cash-crop business opportunity. Yet federal law still prohibits cannabis activities Continue reading “Speaking to Southeastern Association of Law Schools meeting”

Testing Marijuana for Pesticides, continued

Here are new proposed testing regulations in California — but now I follow up on a recent post, where I said that while detecting cheating in folks who test marijuana for THC might be tricky, detecting cheating in folks who test marijuana for pesticides would be a snap. Just see if follow-up testing detected any pesticides; if so, start worrying.

But a chemist friend lets me know that there is more to it:

+++++

I differ in the pesticide opinion at the end of the article.

In science, there is no ‘zero’, there is only ‘less than’ or ‘not detected’. Continue reading “Testing Marijuana for Pesticides, continued”

Corva’s attack on cheating on marijuana plant testing

Testing companies gain customers if they can report falsely high THC in cannabis plants — and charge low prices. A friend says she quit the testing business because as an honest tester she was losing business to cheaters.

Thanks to Bob Young of the Seattle Times for brining Dr. Dominic Corva’s write-up to my attention.  (This blog doesn’t have enough readers to scoop him.)

My friend Dr. Corva looks at the cannabis testing problem in Washington.  His full write-up is here: http://cannabisandsocialpolicy.org/taming-thc-inflation-silver-bullet/.

I think Dr. Corva is a smart and conscientious advocate and thought leader, and I’m always interested in what he is thinking.

Dr. Corva’s Proposal:

“Normalize lab results by lab, and require only the percentile of each result to be listed on the package rather than a precise percentage.”

He elaborates on the problem this way: Continue reading “Corva’s attack on cheating on marijuana plant testing”