The Legal Marijuana Business Will Be as Complicated and Confusing as Everything Else in California
A flood of local initiatives introduced in response to state vote.
It seems likely that Californians in November will vote to legalize the recreational use of marijuana, along with a massive raft of state regulation and taxation schemes. We bribe our government to secure permission to do what we want with our own bodies. Go figure.
In any event, the regulations don’t stop on the state level. Proposition 64—the initiative that will legalize recreational growth, manufacture, possession, and use—also permits municipalities to set up their own regulations, just like they do for most other businesses.
So in preparation for the likelihood that Prop. 64 passes, there are a whole bunch of municipalities that are putting up local regulations for vote as well. Brooke Edwards Staggs at the Orange County Register looked through the filings and determined that there were 62 marijuana-related local measures under consideration in California cities and counties. She notes the complex issues cities are facing:
Should cities welcome marijuana dispensaries but not farms, or vice versa? Should their fees be fixed or increase over time? Should they tax marijuana patients less than those who just want to get high? Would that encourage continued abuse of the medical system?
Some initiatives would place caps on the number of dispensaries permitted. Some propose additional local tax rates that vary wildly. One county (Sierra County) wants to ban commercial cultivation entirely.
Obviously, the possibility of cities making money off of marijuana sales is heavily influencing this rush of new regulation (maybe that explains the sudden lack of resistance to seriously curtailing police civil asset forfeiture in California). The state would add a 15 percent sales tax, plus a tax on cultivation, plus whatever municipalities convince voters to approve. San Jacinto council members say they want to make the tax very high in order to discourage the marijuana industry from settling in their city.
That’s a misguided idea, because what actually happens when taxes get extremely high on a product people want to consume is that you get the same kind of black market you’d get if you banned it entirely. Not for nothing do states with very high cigarette taxes also struggle with black markets for cigarettes that require police intervention and enforcement (with sometimes terrible outcomes). Is a pot shop worse for the city than the shadowy way people in San Jacinto get marijuana now, or is the problem that the city’s leadership can’t just pretend it’s not there?