As Maryland’s lawmakers delve into the nuances of whether to legalize marijuana for recreational use, they’re learning that they have a lot of details to figure out.
A joint House of Delegates-Senate work group on legalization met Monday for the second time, as members build up their knowledge of the drug before recommending whether — and how — it should be further legalized.
The group is meeting between now and the start of the next legislative session in January, with the goal of developing recommendations. Lawmakers could consider passing a law that would legalize the drug for recreational use by adults, or they could send the question to Maryland voters in a referendum on the 2020 ballot.
Here are some facts that lawmakers learned about the legal pot industry from experts at the latest meeting.
It’s difficult to tell how much money the state could make from legal marijuana.
There are only a handful of states with legal marijuana markets, and only a couple that have more than a few years of experience. So, it’s difficult to rely on data from those states to predict how big a retail industry could be in Maryland, and how much money the state could take in in taxes.
“This is going to take four or five years before there’s a significant revenue that could be forecasted,” said William Tilburg, director of policy for the Natalie M. LaPrade Maryland Medical Cannabis Commission.
Tilburg cited a report from the Pew Charitable Trusts that cautioned that marijuana revenues can be unpredictable.
Marijuana tax revenue could be gobbled up by expenses.
Establishing and regulating a retail marijuana market comes at a cost to state and local governments.
It’s likely that multiple agencies would be involved in vetting and licensing marijuana businesses, collecting the taxes, ensuring the safety and quality of the product, enforcing regulations, training police in identifying drug-impaired drivers, and educating children and others about the risks of marijuana use.
Tilburg pointed to Colorado, where the first year of legalized marijuana brought in $266 million in taxes — but the state spent $75 million on related regulation, enforcement, education and public health programs. Likewise, California had $300 million in marijuana revenue to the state, but expenses of $129 million.
“There are significant costs associated with running these programs,” Tilburg said.
Some states allow local towns and counties to block marijuana businesses from opening.
Several states allow local governments to opt out of having marijuana businesses in their jurisdiction, said Mathew R. Swinburne, associate director of the Network for Public Health Law. Those local governments can block the businesses by legislation or a voter initiative.
Maine offers the opposite path: Marijuana businesses can open in a local jurisdiction only if that jurisdiction passes a measure permitting them.
John Hudak, a senior fellow with the Brookings Institution, said counties that refuse marijuana businesses also may, as a consequence, give up some tax revenue. That loss could come even though they’d still have residents using the drug with its attendant consequences, such as impaired driving, and would still need to educate the public.
“Rationally, it would make sense to embrace it,” Hudak said, so local governments have money available to respond to challenges associated with legalization.
‘Gifting’ marijuana could be an issue.
Washington, D.C., has legal marijuana, but the federal government has blocked the district from allowing a retail market to open up. So, entrepreneurs have found a way around that, Swinburne said.
The District of Columbia, like most states with legal marijuana, allows for a certain amount of marijuana to be given to a person for free. An industry has sprung up where businesses charge a large price tag for a product of nominal value — $80 for a T-shirt, for example — and the customer receives a “gift” of a certain amount of marijuana, Swinburne said.
A similar system emerged in Vermont, but that state’s attorney general shut it down, Swinburne said.
Maryland Policy & Politics
Equity is a concern.
Some lawmakers and legalization advocates have promoted legalization as an opportunity to rectify racial disparities from past marijuana law enforcement.
Marijuana enforcement has typically adversely affected people of color, who are more likely than white people to to be arrested for drug possession, hindering employment and other opportunities.
If marijuana is legalized, lawmakers likely would address how to allow people with minor drug possessions to get their court record cleared. They would also consider how to encourage minority business participation in the industry. That’s something that’s been a challenge in Maryland’s medical cannabis industry.
Hudak said the first few states that legalized marijuana did not talk much about social justice and racial justice related to marijuana, but the issue is growing in importance.
“This is an area that I think is exciting, in terms of the public policy conversation focusing on an important part of what has happened in this nation’s past,” Hudak said.
Swinburne offered Illinois as a possible model for addressing racial equity issues. Illinois will automatically expunge the records of minor marijuana convictions and arrests that didn’t result in convictions, while other records will need a request from the individual or a prosecutor. Illinois also is setting up a low-interest loan program for “social equity applicants" who have drug arrests or live in an area with a high number of drug arrests.