Regulating & Taxing Marijuana

Serving Stoners?

106 Million Americans Have Used Marijuana

Pew Research Center

53% of Americans

16+ States Will Likely Have Regulated Marijuana By Late 2017

Regulating Marijuana Legal Age Driving Under the Influence Home Cultivation Local Control Allow local bans? Existing Medical Marijuana Businesses First dibs on adult use licenses? Dual licensing?

Regulating Marijuana Who Gets Licenses? Vertical Integration Types of Businesses: Retail stores Wholesale growers Product manufacturers Testing facilities Possibly separate distributors

Tax Structures Ad Valorum (percentage-based) tax: Colorado, Washington Weight-Based Tax, wholesale level: Alaska, New Hampshire, Maryland, Rhode Island

Regulatory Agencies Liquor Commission/Alcohol Control Board (Alaska, New Hampshire — retailers only, Vermont, Washington State) Revenue Department (Colorado, also regulates liquor and tobacco) Business Regulation (Rhode Island, also regulates liquor) Comptroller (Maryland) Agriculture (New Hampshire — cultivators only)

U.S. Department of Justice Guidance August 2013 memo by Deputy A.G. James Cole DOJ focusing enforcement activity on eight priority areas, leaves other areas to states Rests on expectation states will enact strong regulatory systems; the federal government may challenge regulatory systems that are not robust Applies to civil and criminal investigations Does not provide a legal defense

Eight Federal Priority Areas Preventing … Distribution to minors Revenue from going to criminal enterprises Diversion to states that prohibit marijuana State-legal marijuana from being a cover for illicit activities Violence or firearms in marijuana cultivation Drugged driving and adverse public health Cultivation on public lands Marijuana possession on federal lands

Federal Memos on Banking Criminal Prosecution: “…if a financial institution or individual offers services to a marijuana-related business whose activities do not implicate any of the eight priority factors, prosecution for these offenses may not be appropriate.” Regulatory Compliance: Created three new classes of marijuana-specific Suspicious Activity Reports “Marijuana limited,” filed every 120 days ”Marijuana priority,” for red flags "Marijuana termination,” when the account is terminated for serious red flags

Congressional legislation in 2014 (which won’t be enacted until later) Bill removing federal penalties from those complying with state marijuana laws (H.R. 1523) Bill to treat marijuana like alcohol, with licensing (H.R. 499) Bill to fix banking problems (H.R. 2652) Bill to fix 280E tax problem (H.R. 2240)

Reasons to Regulate Marijuana Marijuana prohibition does not work Prohibition fuels criminal organizations and violence Fiscal: $30 billion dollar industry, governments are missing out on billions in tax revenue New legal industry, legitimate jobs Diverting law enforcement from serious crimes Hypocrisy

Marijuana is Safer The U.S. Center for Disease Control reports: Deaths caused by use of alcohol annually: 37,000 No category for marijuana deaths Alcohol is associated with: Violence and aggressive behavior Domestic abuse and sexual assault Marijuana is NOT

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