August 5, 2014 at 2:07 pm #11892nd SmokerKeymaster
The New York Times article titled Rules for the Marijuana Market goes on to talk about what may happen with the weed prohibition and taxes. Here are some experts from the article:
The experiences of Colorado and Washington, where sales of recreational marijuana started this year, will prove instructive. While there are important differences in their approaches, both states have licensed businesses to grow, process and sell marijuana while imposing strict rules and high taxes on them. Other states that legalize will probably adopt a similar model, because it resembles how the federal and state governments regulate tobacco and alcohol.
Policy makers trying to regulate the drug will face challenges similar to the ones American lawmakers faced at the end of Prohibition in 1933. Like alcohol during Prohibition, marijuana is widely available across the United States today. But it will become much more accessible after legalization, when businesses engaged in its production and sale no longer operate in the black market nor engage in violence. The pretax price of the drug could fall by 90 percent after legalization, according to Robert MacCoun, a law professor at Stanford, and fellow researchers. Moreover, marijuana businesses will have a financial incentive to get a broad population to use the drug regularly. A recent report prepared for the Colorado Department of Revenue concluded that nearly 90 percent of the demand for marijuana in the state this year would come from only 30 percent of users, those who use the drug 21 to 31 days a month.
Regulators will have to design policies that allow licensed businesses to undercut the illegal market but keep prices high enough so dependence on the drug does not increase a lot. One important way to curb use is to tax marijuana heavily, following the post-Prohibition template of replacing criminalization with regulation and taxes. Colorado and Washington have imposed high tax rates that are based on price, much like existing sales taxes. But Mark Kleiman, a public policy professor at the University of California, Los Angeles, rightly warns that those taxes will lose their bite when prices inevitably decline as marijuana businesses become more efficient at production. A better approach would be to tax the drug based on its potency — which can be measured in various ways, including by the amount of the component THC in a batch — and increase the rate over time to keep up with inflation.
Lawmakers should not repeat the mistakes they made on alcohol in recent years, taxing it too lightly and allowing the industry to become highly concentrated. (Just two companies control about 75 percent of the American beer market today.) Federal excise taxes on alcohol are levied at fixed rates by volume; there are different rates for liquor, wine and beer. For example, the tax on a 31-gallon barrel of beer is $18, or 5 cents per 12-ounce can. But those tax rates were last increased in 1991, even though the Consumer Price Index has increased 75 percent since then. Most states have also kept their excise taxes steady in recent years, in part because of the heavy lobbying and big money of the beverage industry. The median state excise tax on beer is 20 cents per gallon, or about 2 cents per 12-ounce can.
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States with an existing medical marijuana market will also have to make sure that users are not abusing it to evade taxes. In Colorado, for example, there are more than 111,000 people with medical marijuana cards. Those users can buy the drug at much lower tax rates than people buying recreational marijuana; in Denver, cardholders pay combined city and state taxes of 7.62 percent, compared with the 21.12 percent in taxes paid by recreational users.
And a marijuana focused website / business places a full page ad in the New York Times and is written about by Geekwire’s Taylor Soper titled Yelp for marijuana’ startup Leafly places full-page ad in Sunday New York Times.
Welcome to 2014, where you can buy legal marijuana and pot-related startups are advertising in the New York Times.
Seattle-based Leafly, a marijuana strain resource that won GeekWire’s App of the Year award in May, is placing a full-page ad in Sunday’s edition of The New York Times tomorrow. This marks the first time that the Times has run an advertisement from a cannabis company.
The ad will run just as the Times’ week-long in-depth editorial series on marijuana, which supported national legalization, comes to an end. It’s also timely given the Compassionate Care Act, which made New York the 23rd state to legalize medical marijuana and was signed by Gov. Andrew Cuomo on July 7.
Leafly’s ad features the tagline “Just Say Know,” and encourages medical marijuana patients to check out Leafly’s database of more than 800 different cannabis strains and products, in addition to information related to dispensaries. The marketing move comes on the heels of Leafly’s full-page ad in the Seattle Times that ran on the same day Washington opened sales for recreational marijuana last month.
“We got a lot of good feedback from that Seattle Times ad, and this is kind of a continuation of that,” Leafly co-founder Cy Scott said. “Combined with the New York Times’ editorial position, it made a lot of sense to publish an ad with them to raise awareness about Leafly.”
Ballsy maneuver and I applaud Leafly and the New York Times for running the ad! Our website has been banned from certain network while trying to run ad campaigns because the nature of our business – even though it is legal where we operate.
- This topic was modified 6 years, 5 months ago by 2nd Smoker.
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