NY Marijuana Legalization Study Part 3 of 3

As you recall from my prior blogs this week, the NY study on marijuana legalization basically concluded that it was not a question of whether marijuana should be legalized, but how it should be done.  In part 1 and part 2 of my summary, I went over impacts related to health, criminal justice and public safety and will conclude today with youth and education and implementation.

Youth and Education

Governor Cuomo's Marijuana Legalization Report
NY State’s Marijuana Legalization Report

The section on youth and education with respect to marijuana legalization was pretty short and stark.  If this bothers you, I guess you know where you stand on this issue.

This kind of shocked me, I guess just because it is not what we are used to hearing.  The report says that the educational approach to marijuana for our youth shouldn’t be just say no – but instead – just say later… “Prioritization should be given to an educational approach that emphasizes safety, mitigates potential harm, and suggests that youth delay use.”  Wow.  That really blows my mind.  If it was any other way, our youth would see through the hypocrisy.

  • Marijuana use rates among high school students in Colorado did not change significantly following legalization;
  • Youth should be taught to understand that moderation and self-regulation can mitigate potential harms if they decide not to abstain.

Marijuana Legalization and Impact on Other States

Map of State Marijuana Legalization Policies
Source: Cannabis Compliance, tgunthergroup.com/2-17-cannabis-map/.

 

This was interesting.  This is a no-brainer, but there was an Oregon study that showed that areas that legalize marijuana will sell sizable quantities of marijuana to individuals from neighboring regions.  That’s the whole point of the legalization rush- get to market before the next guy.  The study found that Washington retailers near the Oregon border (Washington legalized first) lost over 40% in sales when Oregon’s legal market opened. So people from Oregon were crossing state lines and traveling to Washington for legal pot and risking a federal felony instead of buying illegal pot in Oregon which was a misdemeanor.

The report emphasizes this point because they conclude that this means that consumers seriously prefer legal, regulated products, maybe due to the variety of products offered or the presence of safety regulations or maybe they just didn’t want to risk dealing with criminals.  This is probably a very key point for anyone in the marijuana business.

Interesting Points:

  • Legalization causes a sharp increase in marijuana possession arrests in border counties;
  • Regulating marijuana has no impact on juvenile marijuana possession arrests but is fully concentrated among adults;
  • If marijuana is not legalized, the cross-border effects in NYS are likely to be substantial, involving numerous counties and municipalities;
  • If NJ legalizes pot and NY and PA do not, an estimated $108.7 million in NJ sales would be made to NY and Pa residents, some for illegal resale;

Local Business people Interested in Marijuana Legalization in NJ:

  • Scott Rudder, president of the New Jersey CannaBusiness Association said that “NJ is in a race to legalize before NY does so it can get the economic benefits.”  He went on to explain “”It would be better if we got off the ground first. Businesses would do better, tax revenue would be greater, jobs would be greater. But that would level out once other states come online.”;
  • Another businessperson, Tara Sargente, owner of Blazin’ Bakery, plans to apply for a license to expand her herbal brownie bakery to have a line of marijuana edibles. She may move to another state if NJ doesn’t act soon;
  • One consideration is the tolls. Even if marijuana is legal in NY first, some in NJ say the illegal market in NJ won’t be hurt because the $15 toll to drive from NJ to NY and back will kill you.

Implementation of  Regulated Marijuana Program

Impact of Taxes and Government Price Setting on Marijuana Legalization

The report is clear that the new system of regulated legal recreational marijuana is a failure if it does not reduce the illegal market.  In the prior analysis I mentioned that the taxes will tell the tale.  If the state enacts high taxes on marijuana, the state will get revenue and the illegal market will still thrive.  If the state really wants to kill the illegal market, the taxes must be low.

“As discussed in the Economic Estimates section of this report, price point is crucial because if it is too high, consumers will not transition from the unregulated market to the regulated market. Decisions will need to be made about where in the production chain excise taxes are placed and to what extent each level of production should be taxed. We recommend that the state begin with low taxation (e.g. between 7 and 10 percent.) “

Some states had initially set high tax rates but had to reduce them after they saw that the taxes were cost-prohibitive.  “Colorado, Washington, and Oregon have all taken steps to reduce their marijuana tax rates,”

Also, the report indicates that the alcohol and tobacco industries must not have any linkage to marijuana at all, although it does not say why.

Implementation and Criminal Marijuana Convictions

The study recommends that NY do something to address prior criminal convictions for marijuana possession. It notes that some states are expunging previous drug-related offenses.  “This will have lasting social justice implications, as there has been disproportionate criminalization of certain racial and ethnic groups.”

The reports conclusion points out some important transition considerations.  A regulated marijuana program must:

  • Contain all necessary safeguards and measures to limit access for individuals under 21;
  • Minimize impaired driving;
  • Provide education and tailored messaging to different populations;
  • Connect people to treatment if needed.

Some Interesting State-to-State Comparisons

Comparative review of state laws legalizing recreational marijuana use shows that:

  • Of the 7 states that have legalized recreational marijuana use – (Alaska, California, Colorado, Mass, Nevada, Oregon and Washington), all states except Washington allow home cultivation of a limited number of plants.  However, Nevada allows it only if you don’t live within 25 miles of a licensed retailer;
  • All states allow local governments to prohibit and regulate marijuana establishments;
  • In all states, employers can restrict or prohibit use, consumption, possession and transfer of marijuana in the workplace;
  • 3 of the states do not allow traditional TV, radio and print advertising and the other 4 allow it, only if the majority of audience is 21 or older.

I hope you enjoyed learning about NY’s study without having to read all 75 pages of it yourself.  I enjoyed bringing it to you in plain English.