WSJ: Colorado’s Pot Experiment

Americans have had their experiment with prohibition and are saying no.  Not necessarily saying yes to drugs as this article implies.

The following article was published by the Wall Street Journal January 3, 2014:

On New Year’s Day, Sean Azzariti, a former Marine who did two tours in Iraq, became the first American in a century to buy pot legally, as Colorado’s state-licensed marijuana stores opened for business. Thus began a great social and economic experiment in drug legalization—but also with any luck a federalist education for the other states wondering whether to follow.

In 2012, voters in Colorado approved a state constitutional amendment ending the prohibition of growing, selling or consuming cannabis, and by all accounts the Jan. 1 transition was seamless. Thousands of residents and drug tourists lined up outside three dozen outlets to be part of the precedent (and presumably the afterparty). The stores used to be medical marijuana dispensaries and so were already set with inventory, retail space, staff and customers. They simply hung up a new shingle.

Yale School of Medicine physician Sam Wilkinson on the Colorado law that legalizes recreational marijuana use. Photos: AP

As in 19 other states, “medicinal” use has been legal in Colorado since 2000, though the distinction with recreational consumption was always mostly notional. About 3% of Coloradans have marijuana cards and can supply most anyone who wants to get high. The irony is a pack of cigarettes is probably harder to obtain than a joint or drug-laced baked goods, which sums up the politics of Boulder.

Yet regulating commercial sale like alcohol and permitting recreational use outright for the general public is still an important legal and cultural passage. Under Colorado’s rules, any resident over age 21 can buy up to an ounce per transaction, while visitors are limited to a quarter-ounce. An ounce is enough for about 60 joints. Cash only, please.

People are allowed to smoke on private property but not in public. Zoning laws let some communities keep out the pot business if they prefer, such as Colorado Springs, so about three-quarters of the 136 licenses issued so far are for the Denver area.

Cannabis prices climbed slightly on opening day as demand outstripped supply, but they could decline over time. Marijuana is expensive only because of prohibition; there’s a reason it’s called “weed.” Competition may transform what is now both an in-state cottage business and a transnational criminal market, and prices will find an equilibrium like any other commodity.

Colorado imposes a 25% markup using sales taxes for wholesale processors and store fronts, on top of other state and local taxes. Legalization advocates predict a revenue windfall, but that won’t accrue if underlying pretax prices plunge.

Taxes and regulations are also difficult to enforce because of the left-over black market and the fact that marijuana is so cheap and easy to grow. Plants are inherently harder to control than liquor: Moonshine excepted, few people are distilling their own spirits in their garage, and unlike a keg, a bag of pot can be slipped into a pocket or glove compartment.

Low prices, advertising, the perseverance of the underground marijuana economy and the general social normalization of marijuana use will naturally encourage more consumption, which carries troubling implications for young people and problem users who smoke all the time. States ought to monitor changes in Colorado’s rates of marijuana-related crime and delinquency, teenage use, drug dependence and addiction, and accidents on the roads or ski slopes. Some adults seem to be able to smoke responsibly, but like alcohol the effects of pot on the juvenile brain are not benign.

A line waits outside the Cannabis Club on Main Street in downtown Breckenridge, Colo., for an 8 a.m. opening of the store, Wednesday Jan. 1, 2014. Associated Press

Marijuana possession remains a federal crime until Congress changes the Controlled Substances Act, which is supposed to trump state law. But the Obama Administration is suspending enforcement to allow Colorado to undertake its experiment, with Washington state to follow later this year.

The feds say they’ll intervene if governments can’t prevent distribution to minors or trafficking across state borders, but those are both inevitable and no one should expect that Attorney General Eric Holder‘s troops will arrest people as they cross into Utah. Those are President Obama’s voters.

The larger question is whether the benefits exceed the costs to U.S. society. On top of tax receipts, the legalizers promise to build more schools and roads as resources are shifted away from law enforcement and imprisonment. That’s almost certainly oversold because few marijuana users end up in jail today and no one knows the costs of more drug use. Legalizers also invoke individual liberty, even if the only places liberals support less government are in personal behavior and national-security surveillance.

Marijuana politics are changing, especially in California, the West and New England, but the consequences of legalization are unknowable in advance. Perhaps the gains will be everything the stoners claim, though bong-inspired visions tend to be defeated by reality.

Colorado and Washington voters may come to regret their decision if they notice a surge in drug use, or more violence, or a generation of underdeveloped young people. Legalization, once achieved, will be hard to reverse. Better, then, to let Colorado go first, and watch what happens.

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