Slog
News & ArtsFriday, February 8, 2013
POT / Olympia Bill to Tax Medical Marijuana Poses Political Dilemma for State Republicans
Posted by Goldy on Fri, Feb 8, 2013 at 9:42 AM
There are few tax increases that are more of a political no-brainer than that proposed in HB 1789, a bill that would impose a 25 percent excise tax on the gross dispensary sales of medical marijuana. With the passage of I-502 it makes zero sense to create two parallel systems of legal marijuana retail, one taxed and regulated and the other not. If anything, the bill doesn't go far enough.
Now, I know there are some objections from within the medical marijuana industry. Of course there are. But I'm not going there in this post. This isn't a post about policy.
My point is that with the passage of I-502, and in the midst of a desperate revenue shortfall—and considering the traditional partisan divide on marijuana legalization—imposing a tax on medical marijuana should be a political no-brainer. And as such, HB 1789 represents an interesting test of Republican principles.
A sizable chunk of the state House and Senate Republican caucuses have signed on to Grover Norquist's pledge to oppose all tax increases at any time for any reason no matter the circumstances. Many other Republican legislators have vocally embraced this anti-tax orthodoxy without actually signing the pledge. But at the same time it is also Republican orthodoxy to oppose the liberalization of our marijuana laws.
So HB 1789 poses a political dilemma for Republicans, as there is zero argument they can make for opposing this tax other than it is one. So, do they stand by their no-new-tax pledge in defiance of all (Republican) logic and reason, thus proving their single-issue ideological rigidity? Or do they vote to approve this reefer tax (a tax that, if it already existed, their caucus would never, ever vote to repeal), thus proving that their absolute opposition to all tax increases isn't really absolute at all?
Think of HB 1789 as a sociological experiment. As sometimes happens in politics, lawmakers are faced with a bill in which their values conflict. How Republicans navigate this paradox will be a window into their psyches, and a demonstration of their willingness to govern.
My guess is that the majority of Republicans will oppose HB 1789 simply because it is a tax, and modern Republicanism is little more than an economic religion that abdicates reason in the name of faith. You might as well ask them to vote to proclaim Satan as their savior. But I sure do hope HB 1789 gets to the floor so we get to find out.
1
Medical marijuana has been a god send for me in my fight against my health issues. I see dozens of doctors, and none of them talk to each other about my different medications, procedures, etc... Mmj takes away my anxiety, helps my pain and allows me to eat for the first time in years. Taxing it is not a political no brainer, it's a tax on the already taxed to death poor in this state. It's adding to the bullshit regressive structure of our tax code in this state. Don't tax our medicine.
2
Marijuana will essentially be an over the counter drug now so there is no point to maintaining the "green card" system, except I suppose as a bulwark against a federal crackdown on the non-medical use. There are plenty of drugs doctors will advise you to use which are available at the drug store and the price is same with a prescription or without.
3
Can it be taxed? Sure.
Is it deductible on your federal income tax as a medical expense? Technically, it should be.
Is it deductible on your federal income tax as a medical expense? Technically, it should be.
4
This is awesome. I'd liked to see the dispensaries taxed to the gills. Greedy little SOBs deserve it. I would liketo propose back taxes too. Oh boo hoo. They gotta sell one of theor 2012 Toyota tundra to pay for it. Let me get the wahmbulance.
5
taxes will be paid by the patients in the end. that's "medicine", bro.
perfect cover for the GOP to oppose the tax.
perfect cover for the GOP to oppose the tax.
6
No. Taxes won't be paid by the patients. Sigh. The dispensary barons buy at $3-4/g. If they mark it up 60% and pay 25% on top of that the gram is only $8.25. Way less than the $10 they chagrined now and taxes get paid!!! Stop playing into this. They are currently robbing you by charging a 300% premium on your meds!!!
7
is there a regulation that would stop them from raising the price to whatever they feel covers a 25% tax? it may be robbery, but what stops them?
8
It would be fair, but then so would provision of a legalized regulated marketplace so we no longer have to live with the charade of "community gardens" end enable the dispensaries to conduct an actual monetary transaction. As it stands, there are no "dispensaries" to tax, and no monetary transactions "legally" takes place. And, by the way, is the Dept. of Revenue prepared to receive payment in cash, as no bank will touch these guys. Lots of questions, with few answers on this one. Certainly, the bill's hopes to have this up and running by August is laughable.
9
Not that it matters, but taxing "medical" marijuana shows that "medical marijuana" was always a fig leaf. It's always been recreational, and now the state wants to tax the "medical" marijuana at the "dispensaries" because they are afraid of competition with the legal cartel established by I-502.
I think it's kinda funny, myself. Here you have a bunch of hipsters who think it's cool to pay $15 a gram for something that costs a dime a gram to grow, or would cost a dime a gram if it were actually legal. Fools and their money are easily separated, including hipster fools.
I think it's kinda funny, myself. Here you have a bunch of hipsters who think it's cool to pay $15 a gram for something that costs a dime a gram to grow, or would cost a dime a gram if it were actually legal. Fools and their money are easily separated, including hipster fools.
10
I estimate that to grow quality cannabis that it costs about $1.25-1.75 per gram of something you can only sell for $3. And that's under I-502. Unless you think growers grow for free or security isn't needed then it gets cheaper but buddy growers aren't free lawyers aren't cheap and power to power a couple hundred 1000 watt lights isn't a minor expense.
11
#10, the security is needed because pot is illegal. If it was just as legal as beer and you could buy seeds and starter plants at the local nursery or through the mail, the growing cost would be a dime a gram. It's been well documented by the Rand Corp., but you've got a whole bunch of stoners who are for all kinds of reasons heavily invested in the idea that marijuana is hard to grow.
The truth is completely different. There are some ins and outs to growing it, but nothing very difficult. And most of those issues (such as sexing the plants) would be solved if it were legal. You'd simply go to this or that nursery, or through the mail, and buy feminized seeds. But look, you're not going to want to believe me because it would really destroy a bunch of illusions for you to do it.
All I can say is that I didn't make any of this up. Others have documented it. What's coming down in Washington State is a far cry from legalized pot. You'll be paying $15 a gram to a state monopoly, and your possession limit will go down not up. If that makes you happy, who am I to interfere?
The truth is completely different. There are some ins and outs to growing it, but nothing very difficult. And most of those issues (such as sexing the plants) would be solved if it were legal. You'd simply go to this or that nursery, or through the mail, and buy feminized seeds. But look, you're not going to want to believe me because it would really destroy a bunch of illusions for you to do it.
All I can say is that I didn't make any of this up. Others have documented it. What's coming down in Washington State is a far cry from legalized pot. You'll be paying $15 a gram to a state monopoly, and your possession limit will go down not up. If that makes you happy, who am I to interfere?
13
#12, because it's not medicine and everyone knows it. The certification system has always been a joke, so the overwhelming majority of medical certificates are for stoners. Given that truth, the state knows that if they have one heavily taxed, highly regulated I-502 cartel sitting next to an untaxed "dispensary" network, the "dispensary" system will have a gigantic cost advantage. This will immediately translate into a price advantage, and the I-502 system will get approximately zero business.
Even in the vastly overpriced "dispensaries," a regular customer pays considerably less than $10 a gram, after all the various incentives offered at the stores. The state wants to charge $15 a gram and up. The minute this all gets up and running, the "dispensaries" will cut their prices even further, and "poof!" goes the state cartel.
This is a preventive reaction. The state knows it's all recreational, and wants to bring the "dispensaries" into its cartel. I expect them to succeed, but I then expect the traditional distribution sources -- the illegal sellers -- to step right up to the plate and undercut the state in the "illicit" market.
You've got a commodity whose basic growing cost is a dime a gram. When it's illegal, the cost goes to maybe $2 a gram, including distribution. Dealer gets it for $4-$5, marks it up double. There might not even have to be any margin compression on the illegal side to put serious pressure on the state. One thing we can safely predict is that Washington State's marijuana system is going to be a national laughingstock.
All kinds of balloons are going to get punctured as they try to implement this laughable charade.
Even in the vastly overpriced "dispensaries," a regular customer pays considerably less than $10 a gram, after all the various incentives offered at the stores. The state wants to charge $15 a gram and up. The minute this all gets up and running, the "dispensaries" will cut their prices even further, and "poof!" goes the state cartel.
This is a preventive reaction. The state knows it's all recreational, and wants to bring the "dispensaries" into its cartel. I expect them to succeed, but I then expect the traditional distribution sources -- the illegal sellers -- to step right up to the plate and undercut the state in the "illicit" market.
You've got a commodity whose basic growing cost is a dime a gram. When it's illegal, the cost goes to maybe $2 a gram, including distribution. Dealer gets it for $4-$5, marks it up double. There might not even have to be any margin compression on the illegal side to put serious pressure on the state. One thing we can safely predict is that Washington State's marijuana system is going to be a national laughingstock.
All kinds of balloons are going to get punctured as they try to implement this laughable charade.
14
"Economic religion that abdicates reason in the name of faith."
Isn't that socialism?
Goldstein is so greedy for state money he wants to tax the medication used by patients with chronic diseases.
You may say that republicans believe in Satan David Goldstein, but it looks like you are the one who belongs in hell.
Isn't that socialism?
Goldstein is so greedy for state money he wants to tax the medication used by patients with chronic diseases.
You may say that republicans believe in Satan David Goldstein, but it looks like you are the one who belongs in hell.
15
#14, marijuana is not medication. Never has been. Or, to put it differently, for every person who's got an arguably legitimate medical reason, there are 100 phony certifications. Everyone knows it. The "dispensaries" aren't a medical channel. They are a competing channel for the distribution of recreational marijuana, but with a far lower cost structure.
The state has to shut down the "dispsenaries," or at least take steps to eliminate their cost advantage. The really fun part of all this is that, usually, this is the kind of thing you'd see between two rival cartels, like Mexican Druggies #1 and Columbian Cartel #2. But here you've got Washington Cartel #1 vs. Washington Cartel #2, one of which was government protected until the government decided they wanted to extract more loot out of it.
The funniest part will be what'll happen once this I-502 structure goes into place, and the Mexican Druggies #1 and Columbian Cartel #2 swiftly and efficiently cut off I-502's nuts the old fashioned way. In the end: Hardly any customers in the I-502 stores. No "dispensaries." Most people get their dope from the friendly dealer. Tax revenue? Zero, or damned close. Laughs all around.
Leave it to the stoners of Seattle to totally fuck it up.
The state has to shut down the "dispsenaries," or at least take steps to eliminate their cost advantage. The really fun part of all this is that, usually, this is the kind of thing you'd see between two rival cartels, like Mexican Druggies #1 and Columbian Cartel #2. But here you've got Washington Cartel #1 vs. Washington Cartel #2, one of which was government protected until the government decided they wanted to extract more loot out of it.
The funniest part will be what'll happen once this I-502 structure goes into place, and the Mexican Druggies #1 and Columbian Cartel #2 swiftly and efficiently cut off I-502's nuts the old fashioned way. In the end: Hardly any customers in the I-502 stores. No "dispensaries." Most people get their dope from the friendly dealer. Tax revenue? Zero, or damned close. Laughs all around.
Leave it to the stoners of Seattle to totally fuck it up.
16
By the way, Goldy's claim of a "desperate revenue shortfall" is a lie. We have money for a new arena, for a new seawall, for a new 520 bridge complete with bike and pedestrian path that won't be used, a streetcar study, a new tunnel, the Broadway street car, the light rail. We've got plenty of money here.
And remember all those promises from the I-502 people about how it wouldn't impact medical marijuana? That was another lie. But what are some lies between friends, right?
And remember all those promises from the I-502 people about how it wouldn't impact medical marijuana? That was another lie. But what are some lies between friends, right?
19
I'm against raising the taxes at the "dispensaries," by the way. The I-502 backers had every chance to combine the systems and levy a single tax rate. They didn't do it. The legislature should therefore leave it alone. Let the stoners live with what they've created. Now, either way the whole thing will collapse, but if I were a Republican I'd stand back and keep my hands off and let Econ 101 take its course.
20
And if I were a dope smoker, I'd be sitting there and asking why the hell my recreational drug isn't treated just like beer, which anyone can make at home if they want? Marijuana can only said to be "legal" if anyone is permitted to grow their own without interference, which would include free trade in seeds and starter plants.
The only reason the I-502 people didn't include it in their bill is because they weren't interested in legalizing pot. They wanted the state to replace the Mexicans as the go-to cartel. It was never anything more than another liberal tax scheme. At least we'll all get to laugh our asses off when those state cartel stores get virtually no business because everyone's going to their dealer's half-price sale.
The only reason the I-502 people didn't include it in their bill is because they weren't interested in legalizing pot. They wanted the state to replace the Mexicans as the go-to cartel. It was never anything more than another liberal tax scheme. At least we'll all get to laugh our asses off when those state cartel stores get virtually no business because everyone's going to their dealer's half-price sale.
21
Unbrainwashed: save that shit for your tea bagger buddies.
Herb is legal and you better get used to bikes and respect them by giving 3 feet when passing.
Herb is legal and you better get used to bikes and respect them by giving 3 feet when passing.
23
Unbrainwashed, your economic analysis is solid except for one major flaw: you're assuming the state sets prices. It doesn't. The state only sets the tax rate; the licensed and privately owned and operated growers, processors (edible-makers, e.g.), and retailers will set prices through good old-fashioned competition. Prices are going to start heading in the direction suggested by that RAND paper. Street dealers and unlicensed growers are still going to be risking arrest and prosecution, but they won't be able to charge a prohibition premium. Dispensaries, which are illegal but currently tolerated due to lack of adequate access for legitimate patients, will have to comply with 502 or close up shop.
24
As I've mentioned elsewhere, I began using medical marijuana to deal with severe, chronic pain from osteoarthritis & fibromyalgia, almost three years ago- as a last resort. I did so with the blessing of my orthopedic surgeon & my rheumatologist.
If I didn't need it, I wouldn't use it.
The argument the legislators that want to tax medical marijuana 25%, is that people who want to use it recreationally, will wangle medical prescriptions to save money.
That seems to indicate a need for greater oversight on the prescribing practitioners & dispensaries, which I am AOK with, not a mandate to tax medication at 25%.
The other argument the state reps are using is that an over the counter device that a physician suggests is taxable, however this logic also doesn't make sense to me.
Physicians generally will write a prescription for something like a leg brace,( to use my own example), and not only is that covered mostly by insurance, but the deductible is NOT taxable.
I think it is immoral to attempt to make money off the afflictions of others.
If I didn't need it, I wouldn't use it.
The argument the legislators that want to tax medical marijuana 25%, is that people who want to use it recreationally, will wangle medical prescriptions to save money.
That seems to indicate a need for greater oversight on the prescribing practitioners & dispensaries, which I am AOK with, not a mandate to tax medication at 25%.
The other argument the state reps are using is that an over the counter device that a physician suggests is taxable, however this logic also doesn't make sense to me.
Physicians generally will write a prescription for something like a leg brace,( to use my own example), and not only is that covered mostly by insurance, but the deductible is NOT taxable.
I think it is immoral to attempt to make money off the afflictions of others.
25
First things first. #24, no one in the debate gives a flying fuck about you, your condition, or your pain. Not Goldy, not the dispensaries, not the I-502 backers, not the Legislature. They never have cared, and they never will care. That's a very harsh message, but it's true. That handful of people for whom marijuana may well be medicine are, always have been, and always will be mere pawns on someone else's chessboard. Period.
#23, it's immaterial whether or not the state directly sets prices. The I-502 framework is essentially fascist. It puts the state government in charge of certifying and protecting its chosen partners, and extracting a gigantic tax. It's right out of the national socialist playbook, minus the concentration camps except for those who try to compete. This is why Goldy and the Stranger, who imagine themselves to be liberal but are quite literally fascists, support the idea so much.
But hey, that's realpolitik. And all we're ripping off is a bunch of idiot stoners, who are generally too stupid to find the Doritos, so why not? The real question to me, as I laugh about it all, is why anyone actually thinks the scheme will work when there is such an enormous amount of daylight between production cost and selling price.
The state cartel wants to capture in taxes what the illegal cartels capture in profits. Both the "dispensaries" and the illegal cartels already undercut the forthcoming state cartel, which imagines it can jack up dope prices by at least 50% over what they are now. It's going to be amusing either way on the issue of whether or not the Republicans in the Legislature collaborate with the stoner Democrats in rolling up the "dispensaries" into the fascist cartel, but in economic terms it won't matter.
Why? Because even a unified Washington State Marijuana Cartel, backed by law and its anti-competitive rules enforced by police, courts, and prisons, wouldn't address the underlying issue, which is that cost and price gap. If the state were to roll up the "dispensaries" into its cartel with Republican help, all it would do is remove the "dispensaries" as a competitive threat. True, it would require those few genuine "medical marijuana" users to pay 50% more for their "medicine" or find an illegal dealer, but like I told #24, who cares?
A rolled-up, unified state dope cartel would compete against the illegals. The state cartel will sell at $15 a gram (they'll have to, or their tax dream will collapse), against illegal operators whose basic product cost, delivered, is no more than $2 a gram and probably less. The state cartel really, really wants every last nickel, and will not cut its $15 price. They'll be a sitting duck for flexible illegal operators, which in addition to the Mexicans and Columbians will include those who continue to operate "community gardens" and skim from them, along with the many and sundry ways of importing dope from Oregon, where prices are dropping like a rock.
So, #23, I don't think my analysis changes in the absence of a formal state price-setting mechanism. What will happen, though, is that the state cartel (and the fascist dreams of Goldy, the Stranger, and others) will be doomed before it starts. Yes, dope smokers will be forced to go to illegal dealers. There will be more criminal prosecutions. More costs, more jail time. Genuine marijuana patients who are too sick to go to the street will pay more. But really, did anyone ever give a shit?
More...
#23, it's immaterial whether or not the state directly sets prices. The I-502 framework is essentially fascist. It puts the state government in charge of certifying and protecting its chosen partners, and extracting a gigantic tax. It's right out of the national socialist playbook, minus the concentration camps except for those who try to compete. This is why Goldy and the Stranger, who imagine themselves to be liberal but are quite literally fascists, support the idea so much.
But hey, that's realpolitik. And all we're ripping off is a bunch of idiot stoners, who are generally too stupid to find the Doritos, so why not? The real question to me, as I laugh about it all, is why anyone actually thinks the scheme will work when there is such an enormous amount of daylight between production cost and selling price.
The state cartel wants to capture in taxes what the illegal cartels capture in profits. Both the "dispensaries" and the illegal cartels already undercut the forthcoming state cartel, which imagines it can jack up dope prices by at least 50% over what they are now. It's going to be amusing either way on the issue of whether or not the Republicans in the Legislature collaborate with the stoner Democrats in rolling up the "dispensaries" into the fascist cartel, but in economic terms it won't matter.
Why? Because even a unified Washington State Marijuana Cartel, backed by law and its anti-competitive rules enforced by police, courts, and prisons, wouldn't address the underlying issue, which is that cost and price gap. If the state were to roll up the "dispensaries" into its cartel with Republican help, all it would do is remove the "dispensaries" as a competitive threat. True, it would require those few genuine "medical marijuana" users to pay 50% more for their "medicine" or find an illegal dealer, but like I told #24, who cares?
A rolled-up, unified state dope cartel would compete against the illegals. The state cartel will sell at $15 a gram (they'll have to, or their tax dream will collapse), against illegal operators whose basic product cost, delivered, is no more than $2 a gram and probably less. The state cartel really, really wants every last nickel, and will not cut its $15 price. They'll be a sitting duck for flexible illegal operators, which in addition to the Mexicans and Columbians will include those who continue to operate "community gardens" and skim from them, along with the many and sundry ways of importing dope from Oregon, where prices are dropping like a rock.
So, #23, I don't think my analysis changes in the absence of a formal state price-setting mechanism. What will happen, though, is that the state cartel (and the fascist dreams of Goldy, the Stranger, and others) will be doomed before it starts. Yes, dope smokers will be forced to go to illegal dealers. There will be more criminal prosecutions. More costs, more jail time. Genuine marijuana patients who are too sick to go to the street will pay more. But really, did anyone ever give a shit?
26
There is plenty of precedent for this fascist cartel. The state and federal governments have been successful in the gambling cartel, and have done pretty well in alcohol and cigarettes.
The reason marijuana is so different is that were talking about an agricultural commodity that's very easy and cheap for an individual to produce, as opposed to a manufactured product that is either fairly difficult (alcohol) or very difficult (cigarettes) for an individual to produce on his own. Gambling is in a different category; it needs a big network to function, which puts the government in a good position to interfere with its competition.
The I-502 scheme will start with great fanfare. You'll have the various media outlets flocking to write their fawning stories, but it will quickly become apparent that not many customers are flocking to pay $15 a gram for something their friendly dealer will sell for $10 a gram or less.
But one thing will have changed. The state government will have legalized recreational use. Over time, this will make it impossible to justify the prohibition of personal cultivation. Once those barriers really come down, that's when the masses of stoners will have their 10-cent grams. Between now and then, the #24s of the world will pay way too much, and the state will engage in increasingly desperate, comical, and brutal methods of establishing and enforcing the fascist cartel that the Goldys of the world so ardently desire.
Along the way, the rest of us will at least be able to have a laugh as the usual cast of hypocritical assholes does what they do best: try to make a dollar out of 99 cents.
The reason marijuana is so different is that were talking about an agricultural commodity that's very easy and cheap for an individual to produce, as opposed to a manufactured product that is either fairly difficult (alcohol) or very difficult (cigarettes) for an individual to produce on his own. Gambling is in a different category; it needs a big network to function, which puts the government in a good position to interfere with its competition.
The I-502 scheme will start with great fanfare. You'll have the various media outlets flocking to write their fawning stories, but it will quickly become apparent that not many customers are flocking to pay $15 a gram for something their friendly dealer will sell for $10 a gram or less.
But one thing will have changed. The state government will have legalized recreational use. Over time, this will make it impossible to justify the prohibition of personal cultivation. Once those barriers really come down, that's when the masses of stoners will have their 10-cent grams. Between now and then, the #24s of the world will pay way too much, and the state will engage in increasingly desperate, comical, and brutal methods of establishing and enforcing the fascist cartel that the Goldys of the world so ardently desire.
Along the way, the rest of us will at least be able to have a laugh as the usual cast of hypocritical assholes does what they do best: try to make a dollar out of 99 cents.
27
Unbrainwashed: did you really just post eleven comments in a day? It's good to see the anti-502 zealots are still prolific. I agree that the world will end if I pay $15 per gram of pot!
28
Whoever wrote this article knows nothing about medical cannabis. I understand the focus of the article is intended to be about the inherent dilema Republicans may find themselves in but making a flippant comment such as taxing the sick and dying being a "no brainer" just show's the lack of subject knowledge the writer has. Personally when someone dosnt bother to do thier research or show's an utter lack of knowledge I'm not going to listen to or believe anything they say, nor am I going to respect them as a journalist.
29
#27, that's the funny thing. I have such a mixed feeling about it. Part of me totally approves of the state totally screwing the potheads, and laughs my ass off about you thinking that this is progress. The other part of me is a logical economic and political thinker, and is offended by the cheesy fraud of it all.
#28, you really need to understand that no one has ever once cared about the handful of people for whom marijuana might be the best medicine. Why would you expect anyone to have a conscience attack now, anyway?
#28, you really need to understand that no one has ever once cared about the handful of people for whom marijuana might be the best medicine. Why would you expect anyone to have a conscience attack now, anyway?
30
If maijuana is clasified as a medicene for people with medical cards.... as with all medicenes ....there is no tax accessed to meds
Advertisement
Most Commented on Slog
-
All You Motherfuckers Complaining That aPodments Are Too Small at 200 Square Feet by Dominic Holden
-
SL Letter of the Day: Did You Think I Was Going To Tell You Not To Come Out? (PLUS: Help Free Kate!) by Dan Savage
-
Rightwing Anti-Gay French Activist Commits Suicide at Notre Dame Cathedral by Dan Savage
-
Spoiled Rotten: Star Trek Into Darkness by Paul Constant
-
There Are No Atheists In Foxholes by Dan Savage
-
America's Epidemic of Toddler-on-Toddler Gun Violence Continues by Goldy
-
Well-Regulated Beaverton Militia Accidentally Fires Shot into Neighbor's Bedroom by Goldy
-
Saint Genet Re-Creates "Shoot" by Brendan Kiley
-
Dutch Artist Turns Dead Cat into Remote-Controlled Helicopter by Bethany Jean Clement
-
SL Letter of the Day: Have You Ever Heard of...? by Dan Savage
Stranger Personals
The Stranger
RSSSeattle Art & Performance Quarterly
A complete guide to Seattle's current art, film, dance, and theater season.
Facebook
Twitter
Comments (30) RSS