Don’t Bogart that Revenue Stream, My Friend

The Rhode Island Senate has ordered a study of the legalization of marijuana. Would that the goal was merely to adjust our illicit drug use ranking by reclassifying one of the drugs. Alas, they specifically voted

to explore how much Rhode Island might collect in revenue if it were to make all sales of marijuana legal and impose a “sin tax” of $35 per ounce.

The main problem, of course, is big picture. Rather than looking for extreme sources of revenue, the General Assembly needs to continue focusing on the reduction of expenditures on the state and local levels. Two areas most urgently, though not exclusively, requiring attention are mandates for cities and towns and public pensions. (Pension reform measures included in the 2010 budget were a good step but by no means the end of the journey.)
Secondly, however, think of the proposed revenue source itself. More specifically, consider the health risks associated with it.
Shouldn’t it raise a red flag about our budgeting and mandate policies that we are now looking to expand revenue opportunities in the area of behavior that is physically harmful to human beings?

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Damien Baldino
11 years ago

Marijuana should be decriminalized, but looking at it as a revenue generator is a mistake. I really doubt that drug dealers are going to start keeping records for the state. Those who purchase it would probably also try to buy it from someone who wouldn’t charge the $35 tax. I wouldn’t expect much revenue.
As far as the health risks, that shouldn’t be a concern. The government already makes money from cigarettes and gambling, marijuana really isn’t much of a leap.

Patrick
Patrick
11 years ago

Imagine the touristt spot that RI will be if both pot and prostitution are legal. Vegas meets Amsterdam!

Ken
Ken
11 years ago

Damien
If marijuana is legalized the drug dealers would be out of business.One
of the turf farms in south county could
switch products and with automation the stuff could be grown for pennies a pound.It is a weed and is very easy to grow,no fertilizer needed.The drug dealers could not compete,just like small farmers in Mexico cant compete with our mega-farms in California

Damien Baldino
11 years ago

Ken,
They could if they weren’t charging a tax. Think about cigarettes: RI charges a high tax, while many southern states charge a low tax, so some indivduals buy cigarettes in low tax states and sell them in high tax states.
By the way, I know there are several states that have decriminalized marijuana, but as far as I know, none have legalized marijuana. Wouldn’t that be a violation of federal law? I assume the Obama administration will look the other way on medical marijuana, but I would think that legalization would raise some separate issues.

David
David
11 years ago

I agree with Damien. This proposal is symptomatic of the state’s tendency to seek revenue from the vices and addictions of its citizens rather than deal with out of contolspending. Furthermore, as Damien points out, there already exists a tax-free distribution network for marijuana. Those of a libertarian bent are liable to be severely disappointed if the General Assembly legalizes marijuana in the interest of taxing it since the state is always most oppressive when it is protecting its lifeblood. Marijuana enforcement is currently a low priority as befits a relatively harmless drug. But when it becomes a revenue source, look to the authorities to crack down mightily on any people who sell or consume marijuana without paying the tax.

Mario
Mario
11 years ago

I wish I were surprised that GA is wasting its time investigating get rich quick schemes instead of something productive.
This particular scheme (like the magical highway tolls) can’t work. The Supreme Court has already ruled in Gonzales v. Raich that Federal laws trump state laws in marijuana cultivation and possession, so anyone paying the tax would be committing a Federal crime. Since the state would have to keep records at all points of the distribution to enforce the tax, the people engaged in the distribution would have to be monumentally stupid to take part. And this isn’t something that the Feds could ignore, like they do with most medical marijuana cases (which are also illegal); the drugs would very easily leak into surrounding states, and they would force the Feds to take action. Even petitioning Congress for some sort of waiver from the drug laws wouldn’t work for the same reason. Even Ken’s point about advanced cultivation bringing the cost way down makes no sense. For one, Damien is completely right that bringing the cost of cultivation down doesn’t effect its competitiveness if it is simultaneously taxed to death. Second, most marijuana is already grown on bulk industrial farms — you’re fooling yourself if you think every ounce is grown in tiny basement apartments — and RI is not exactly well-suited to that particular plant, so any gains from cutting distribution costs is lost in the inefficiency of growing the plant where it doesn’t want to be.
There are only two ways to legalize marijuana in the US — get the Supreme Court to overturn Gonzales v. Raich or get Congress to legalize it nationally.

Phil
Phil
11 years ago

Most high level pot is grown indoors year round using lights and watering systems even in states with favorable climates. Production of this high potency pot requires more energy but sells for much more than the outdoor variety. Law enforcement has used energy companies records that red flag unusually high energy use for residential usage. California growers have increasingly sought out legitimate businesses for rental space to avoid notice. The feds have backed off the compassion centers but have not in the production areas of that state.
If Rhode Island legalized pot and wanted to tax production I would be asking where the line was forming to pay.

OldTimeLefty
11 years ago

Irresistable logic that’s easy to listen to and understand from Prof. Bob Marley:
CHORUS) LEGALIZE IT
DON’T CRITICIZE IT
LEGALIZE IT YEA-AH YEA-AH
AND I WILL ADVERTIZE IT
SOME CALL IT TAMJEE
SOME CALL IT THE WEED
SOME CALL IT MARIJUANA
SOME OF THEM CALL IT GANJA
NEVER MIND, GOT TO…
(CHORUS)
SINGERS SMOKE IT
AND PLAYERS OF INSTRUMENT, TOO
LEGALIZE IT, YEA-AH YEA-AH
THAT’S THE BEST THING YOU CAN DO
DOCTORS SMOKE IT
NURSES SMOKE IT
JUDGES SMOKE IT
EVEN LAWYER, TOO
SO YOU’VE GOT TO…
(CHORUS)
IT’S GOOD FOR THE FLU
GOOD FOR ASTHMA
GOOD FOR TUBERCULOSIS
EVEN NUMARA THROMBOSIS
GO TO…
(CHORUS)
BIRDS EAT IT
ANTS LOVE IT
FOWLS EAT IT
GOATS LOVE TO PLAY WITH IT
SO YOU’VE GOT TO
(CHORUS)
OldTimeLefty

bobc
bobc
11 years ago

OTL,
Yea mon.

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