Despite I-502, illegal pot threatens to undercut legal

The News TribuneApril 3, 2013 

‘Legalize it and tax it,” went the mantra of marijuana advocates trying to mainstream the drug. Washingtonians got the legalization part when they passed Initiative 502; they may not see much of the tax part.

The Liquor Control Board’s new pot consultant, Mark Kleiman, has thrown icy water on giddy projections that the state might collect hundreds of billions of dollars from taxes on legal sales of marijuana.

That’s not likely, Kleiman said, for several reasons. Chief among them is the criminal black market in pot that will continue to lurk in the background – the same black market I-502 was supposed to marginalize.

The well-meaning authors of the initiative believed that stoners would flock to newly created retail stores once those were licensed up by the board. In the voters pamphlet, backers of I-502 claimed legal sales would generate “over a half billion dollars annually” in state revenues to help fund health care, education and “drug prevention programs that work.”

Earmarking revenues to medical care, schools and drug education was part of the selling job. But better enforcement should have been part of that package. Legal marijuana could easily be a bust without someone getting serious about illegal marijuana.

Kleiman, a UCLA authority on drug policy, told TVW last week that the taxes will probably fall far short of the supporters’ claims – less than half of the state’s original high end estimate of $450 million a year.

One reason is the “medical” marijuana dispensaries some cities – especially Seattle – have allowed to operate openly and in great numbers. State law forbade the sale of marijuana across the board before I-502 took effect, and it continues to forbid sales without licenses from the Liquor Control Board.

Yet some jurisdictions continue to turn a blind eye to the dispensaries. The conflict with I-502 is obvious: The legal retail stores licensed under the initiative will have to compete with illegal and unlicensed dispensaries.

Many dispensaries have operated as fronts for trafficking recreational pot, typically to drug seekers who got authorization from quacks.

But soon the recreational users – and legitimate users, for that matter – will be able to buy legally from legal outlets. The dispensaries will have lost their ostensible reason to exist. If the state and local governments don’t shut them down, Washington will wind up with parallel systems.

The same goes for old-fashioned criminal traffickers. They, too, will undercut the licensed stores. The legitimate retailers will have to lower their prices, which will both encourage more marijuana usage and squeeze those ballyhooed tax revenues.

We’d love to see I-502 come through on its promises. But it won’t unless cities uniformly and effectively enforce the ban on unlicensed sales. The prospect of that happening in this state seems remote.

The idea behind the initiative was to replace illegality with legality, and reduce the use of marijuana. But the measure may wind up reducing the stigma and cost of the drug as the black market continues to boom – the worst of both worlds.

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