The Washington State Office of Financial Management (OFM) has finally released it's much anticipated report on the Marijuana Legalization Initiative, I-502. (link to report at the end of this article)
While it claims that the state could see a financial windfall in the billions from the taxation and regulation of cannabis, it also warns of some very serious consequences and the possibility of zero revenue.
Steve Sarich, a well known Seattle area medical marijuana and anti-I-502 activist sued the Office last month, stating the early numbers being used "are so far off it's incredulous."
He and the other activists that joined the lawsuit demanded a new report that included all the risks, including possible results from federal lawsuits.
That report came out on Friday (August 10).
When I asked him about it, he responded with the following:
"It will either bring in $0 or $2,000,000,000. Do you really need a degree to come up with numbers like this or just Vanna White spinning a big wheel with random numbers on it."
"The new report is more embarassing than the last."
"The revenue assumptions are based on the state stores owning 100% of the market for marijuana in Washington. This would never happen regardless of any of the state regulations, pricing, or criminal penalties."
"New York is losing millions of dollars in tax money on cigarettes because of the black market that's developed there because the state raised the tax on a pack of cigarettes by $1."
"What have we NOT learned about the relationship between over-taxation and the development of black markets? Is the OFM totally unfamiliar with this basic economic principle? Why would they ever assume that the state stores would control 100% of the market? Boeing doesn't own 100% of the airplane market here in Washington!"
It's hard to argue with his logic.
After reading over the 502s language and this report, I do not like it. 502 threatens patients by subjecting us to DUID charges that have no defense in court based on a 5 nanogram limit in the blood.
We all know regular cannabis smokers and patients, especially the ones that use the concentrated oils, will test well over that because of their tolerance levels, yet will show no signs of impairment while driving.
502 also threatens to close down our medical collective gardens section under RCW 59.61a of state law.
The weakest and most ill among us in the medical community are most at risk because of their dependence on the collective gardening provision in the law.
They are too ill to grow their own and don't need the added burden of being raided or robbed, like I was.
"Collective gardens" replaced the dispensary model in 2011 because of Governor Christine Gregoire's veto of the tax and regulate sections in a medical medical marijuana bill signed into law.
However not all collectives have acted like most dispensaries. Some cities have allowed for different interpretations and collect tax revenue,
Some have been collective gatherings that don't charge each other money.
Most follow state and local laws and both styles have given cannabis free to an increasingly large number of patients too sick and poor to pay for it.
That practice will likely end under a TAX/REGULATE system and will have to come though unlicensed and unregulated gardens.
Sponsors and other supporters claim 502 to be legalization, but careful reading of it shows it is decriminalization. The OFM report agrees with this point.
502 will not help you on possession charges if you have black market cannabis.
Currently in Washington State, the age group that is arrested for possession more than any other is 15-19 year olds.
502 does not protect this age group from the harm of arrest and incarceration. It actually makes it harder on teens by prioritizing the law against them, including zero tolerance for DUIDs.
This fiscal impact report states quite correctly that the enforcement sections will come into effect way before the TAX/REGULATE parts, which is years off, if ever.
The TAX/REGULATE sections of 502 have a good chance of being challenged and thrown out, but the enforcement side stays in effect.
The tax/regulate scheme will not work at eliminating black market sales because the prices relied on to give you these numbers are based on a $12 per gram average price to the end consumer.
The black market can produce it cheaper and at a higher quality than what would likely come from a state run system where the grower only makes $3 per gram.
At the price, the grower will be forced to grow outdoors to keep costs where he might make a profit. That's after $1200 for licesning fees the first year, $1000 per year thereafter, plus random product testing fees, garden/farm equipment costs, payroll AND a 25% tax on the sale to the processor.
Oh yeah, plus the courts just ruled that cannabis growers can't deduct expenses on their taxes.
In the OFM report, the state makes a clear warning that the feds might allow the TAX/REGULATE scheme to go through in order to let people self-incriminate because getting a license to grow, process or sell can be used as evidence against you in federal court.
Even if you don't end up with Federal charges against you, chances are good you'll end up in a situation like the local Wenatchee clubs last month and most famously, Harborside Health Center in Oakland, CA where they go after assets and buildings.
My stating these opinions on public forums has resulted in people stating that I am not in favor of legalization. They could not be further from the truth. If every person had the right to grow their own plants, then cops and robbers won't give a damn about mine.
If 502 had solid patient protections, left out the per se "zero tolerance" DUID section and harder penalties on our young adults and allowed for personal grows, I would be voting yes.
True legalization will require removing/rescheduling it from the state controlled substances list and let people grow their own for all uses of the cannabis plant, not just medical and recreational. Industrial hemp production needs to begin yesterday!
502 does not address either of these key issues on the cannabis plant. The federal changes will come, but that does not prevent it from happening in our state first.
For those that say, yeah but this legalizes now, we'll work the problems later...
Well, we passed medical cannabis laws in 1998 in our state and we still don't have arrest protection for patients in 2012.
The governor vetoed the TAX/REGULATE sections of the last medical cannabis law because of federal laws. Both candidates for governor will not support 502 for the very same reasons.
If you think the sponsors of 502 are cannabis user friendly, then I ask you to take a look at these words from one of the key spokespersons, John McKay, former United States attorney in Seattle...
"...we should give serious consideration to heavy regulation and taxation of the marijuana industry (an industry that is very real and dangerously underground). We should limit pot's content of the active ingredient THC (tetrahydrocannabinol), regulate its sale to adults who are dumb enough to want it and maintain criminal penalties for sales, possession or use by minors, drivers and boaters."
"As my law-enforcement colleagues know well from chasing bootleggers and mobsters, this new regulatory and criminal approach will still require many years of intensive investigation and enforcement before organized criminal elements are driven from the vast marijuana market. DEA and its law-enforcement partners must therefore remain well equipped and staffed to accomplish this task: to protect our families from truly dangerous drugs and to drive drug cartels, gangs and dope dealers from our society."
Finally, I was at a meeting where Allison Holcomb, the initiatives main author, told a group in Seattle that it will not be legal to share your cannabis.
Not even passing a joint around with friends out of your "legal" ounce is allowed under 502. You could still have your door busted down and your dog shot in a botched raid caused by nosey neighbors who smell pot and calls the cops. A husband and wife can still have their kids taken away and could still face charges of collective possession of having two ounces in the house.
It's all a matter of legal interpretation and the courts will figure it all out in the end when innocent people are dragged into it. If you are rich enough to afford the best lawyers, you might be able to come out with a win and set a good precedent that protects all Washington Citizens from unjust cannabis laws. Maybe you will have a jury that understands the concept of "jury nullification".
Does that sound like less enforcement?
Does that sound like legalization to you?
Read the initiative and the OFM report and tell me what you think.
No matter which way you stand on this issue, please check out and sign the Cannabis Child Protection Act of 2012 Protect Children from the effects of the Cannabis economy and get Marijuana OUT of our schools! A much safer plan that will eliminate most of the federal threats and other negative aspects of 502 if passed, but it will need your signature before November! http://www.cannabischildprotectionact.org/
I-502 Final Initiative http://www.newapproachwa.org/sites/newapproachwa.org/files/I-502%20bookmarked.pdf
Office of Financial Management Risk Assessment Report on I-502: http://www.ofm.wa.gov/initiatives/2012/502_fiscal_impact.pdf
New Approach Washington - Official website for 502 http://www.newapproachwa.org/
No on I-502 - official website http://www.nooni502.com
"Steve Sarich and the Office of Financial Management Square Off over Cost of I-502" http://blogs.seattleweekly.com/dailyweekly/2012/07/pot_activist_steve_sarich_and.php
Do Δ9-Tetrahydrocannabinol Concentrations Indicate Recent Use in Chronic Cannabis Users? National Center for Biotechnology Information http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2784185/
Marijuana in Washington Arrests, Usage, and Related Data http://www.drugscience.org/States/WA/WA.pdf
Governor vetoes pot bill, vows to work for solution http://cloud.media.wenatcheeworld.com/uploads/epaper/2011/05/01/ww_20110501_a003.pdf
RCW 69.51A.085 Collective gardens http://apps.leg.wa.gov/rcw/default.aspx?cite=69.51A.085
"Medical marijuana tax deductions for businesses not valid, court rules" http://newyork.newsday.com/news/health/medical-marijuana-tax-deductions-for-businesses-not-valid-court-rules-1.3885270
Wenatchee-area marijuana shops close due to letter http://www.wenatcheeworld.com/news/2012/jul/31/Wenatchee-area-marijuana-shops-close/
"Federal crackdown targets Oakland marijuana" http://www.sacbee.com/2012/07/13/4628158/federal-crackdown-targets-oakland.html
2012 Governor Candidates Inslee and McKenna against 502: http://blog.seattlepi.com/seattlepolitics/category/marijuana-legalization/
John McKay article http://seattletimes.nwsource.com/html/opinion/2012804422_guest05mckay.html
Marijuana laws: Jurors should nullify low-level marijuana charges http://articles.baltimoresun.com/2011-12-27/news/bs-ed-nullification-20111227_1_jury-nullification-marijuana-drug-war
Town Square: I-502 Debate 4/20/2012 http://www.seattlechannel.org/videos/video.asp?ID=5211225
Cannabis Child Protection Act of 2012 http://www.cannabischildprotectionact.org/ http://www.sos.wa.gov/_assets/elections/initiatives/FinalText_248.pdf