How to Legalize Pot

Marijuana!
Marijuana! (Photo credit: JohnathanLobel)

 

The NY Times recently had an Op-Ed based on an interview with Mark Kleiman about his plan for implementing Washington’s new pot policy. (They voted to legalize it last fall.):

 

If you read the proposal Kleiman’s team submitted to Washington State, you may be a little boggled by the complexities of turning an illicit herb into a regulated, safe, consumer-friendly business. Among the things on the to-do list: certifying labs to test for potency and contamination. (Pot can contain, among other nasty things, pesticides, molds and salmonella.) Devising rules on labeling, so users know what they’re getting. Hiring inspectors, to make sure the sellers comply. Establishing limits on advertising, because you don’t want allowing to become promoting. And all these rules must account not just for smoking but for pot pastries, pot candies, pot-infused beverages, pot lozenges, pot ice cream, pot vapor inhalers.

One of the selling points of legalization is that states can take a cut of what will be, according to estimates, a $35 billion to $45 billion industry and earmark some of these new tax revenues for good causes. It’s the same tactic used to win public approval of lotteries — and with the same danger: that some worthy government function comes to depend on creating more addicts. And how do you divvy up the revenues? How much goes to offset health consequences? How much goes to enforcement? How do you calibrate taxes so the price of pot is high enough to discourage excessive use, but not so high that a cheap black market arises? All this regulating is almost enough to take the fun out of drugs.

 

 

 

“look at alcohol!”

Edited copy of Image:The Brewer designed and e...
Edited copy of Image:The Brewer designed and engraved in the Sixteenth. Century by J Amman.png (Photo credit: Wikipedia)

I frequently find myself in discussions about drug policy. I feel strongly that incarcerating people for possession is stupid and wrong, but I’m reluctant to legalize drugs. (I think there are a lot of options in between.) In these discussions, I inevitably hear someone say, “Look at alcohol. It’s way worse and it’s legal!” My response is always, “Exactly. Look at alcohol. It’s a public health and public safety disaster.”

Mark Kleiman points out that higher alcohol taxes would reduce battery, burglary and murder. The problem? The power of the alcohol industry’s lobby. Michigan has been incredibly revenue starved and we haven’t raised the beer tax since 1966. And, the beer tax is a flat tax per barrel, so there haven’t even been any increases in revenues because of inflation.

From a recent Kleiman interview [emphasis min]:

Matthews: No, of course not, single-malt all the way. But how much power do the spirits companies have? It seems like they’d fight any price increase.

Kleiman: Much power. The spirits guys are not really important because they’re not the real market. The real problem is beer. The beer guys are powerful. It’s two thirds of the market. Not only do they have heavy campaign contributions to politicians, because they’re state regulated and thus have a stake in state politics, but customers don’t dislike their beer company, so if they get a political message from the beer company, they’ll respond.

Contrast that with tobacco, with a smaller number of lower status users who hate their providers. The cigarette companies have absolutely no luck mobilizing smokers. Smokers hate tobacco companies. It’s easy to say it’s just a tax on responsible drinking until you do the math. It would cost a typical beer drinker $36 a year. The man who’d get hit is the 10 beer a day drinker, and he’s the guy we want to hit.

Taxation is just about the perfect way to control alcohol use. It’s not complete, because you need controls for the real problem drinkers. But if we tripled the alcohol tax it would reduce homicide by 6 percent. And you’re not putting anybody in jail. But instead we spend our time talking about doing marijuana testing for welfare recipients.

This is your culture on pot

Medical Cannabis Growing Operation in Oakland,...
(Photo credit: Blazenhoff)

Keith Humphreys and Mark Kleiman offer some great commentary on marijuana legalization and what a legal marijuana market might look like.

First, Humphreys:

About eighty percent of the market is “commercial grade” cannabis, which has a THC content of about 5% and sells for $70 to $230 per ounce, depending on how far a buyer is from the producing farm and in what amount he or she buys. If that level of potency and price surprises you, you are probably an observer or participant in the small, nationally unrepresentative marijuana “upmarket“.

The reason for the current dominance of commercial grade pot is simple: It’s an inexpensive product for a price-sensitive population.

But, he argues price would likely drop and …

The cannabis-using population would experience a vast increase in average drug potency. Caulkins and colleagues estimate that in the past 15 years, average potency of marijuana in the U.S. has doubled. But after legalization, with the 80% commercial grade market share being almost completely supplanted by sinsemilla, average potency would roughly triple very rapidly.

This increase in exposure to highly potent cannabis is one of the mechanisms through which legalization would result in a higher prevalence of addiction (Some of the other mechanisms are discussed here). It at first seems reasonable to assume that experienced users would simply titrate their dose of higher-potency pot, making higher or lower doses equivalent from a biological viewpoint. But surprisingly, laboratory studies of experienced marijuana users show that they are in fact poor at judging the potency of cannabis.

Kleiman isn’t so certain. Here are a few of his reasons. Read the entire post for the rest of his thinking:

  • Even if high-potency product were legal, it could be heavily taxed, as whiskey is heavily taxed compared to beer.
  • In the current illicit market, “quality” and “potency” are conflated in consumers’ minds. Post-legalization, …THC could be extracted from the vegetable matter and used to “fortify” pot to any desired potency. That may push consumers’ ideas of “quality” away from potency and toward other factors.
  • Unlike alcoholic beverages, which mostly contain only a single psychoactive, cannabis contains a mix. Some consumers will want lower-THC, higher-CBD product.

Alcohol remains our one experiment with legalization of an intoxicant. Two-thirds of the alcohol consumed in the U.S. is taken in the form of beer rather than higher-potency forms.

As is so often the case, the answer here is “Hard to say; it depends.”