Thursday, May 16, 2019 12:17 am
Pritzker on pot
There's a better way than this
With less than a month left in the legislative session, Pritzker unveiled a trial balloon, a bill most everyone acknowledges needs tweaks. Tweakers likely will start by eliminating home grow, given neither cops nor weed companies like the idea of just anyone producing pot.
In theory, this should be an easy issue, one that could have been dispensed with early on. Polls show that most Americans believe marijuana should be legal. Pritzker says that legalization is about social equity, but that’s politics talking. It’s about money – from aspirin to heroin, selling drugs always has been about money, and marijuana is no different.
Colorado and Washington, the states with the most experience doing this, keep it simple. Both states have among the highest pot taxes in the nation. Neither state charges much to set up a pot business. In Washington, the application fee for a license to grow or sell pot costs $250, with the annual license fee set at less than $1,500. Fees are higher in Colorado, but still nowhere near fees contained in Pritzker’s bill.
The free market is a beautiful thing, as residents of Washington and Colorado can attest. In both states, per-capita tax revenue from pot surpassed $40 last year, highest in the nation. The Illinois weed market is bigger, if only because more people live here. With a 26.25 percent excise tax, the state would collect $505 million a year, according to a 2018 report from the Illinois Economic Policy Institute, which noted that other estimates have ranged from $350 million to $700 million. But taxes under the Pritzker plan would be lower than in the study.
With taxes based on potency, Illinois would collect less than half what Washington does from an ounce of bud – the retail tax here would range from 10 to 25 percent, with a 7 percent wholesale levy. Illinois would charge fees into the six figures for cultivation and retail licenses and use scoring systems to determine which applicants would get a limited number of permits. Nine state agencies would have a hand in regulating and taxing pot. There would be an incubator program for pot businesses that might otherwise not be able to afford startup costs, echoing Pritzker’s founding of 1871, the Chicago high-tech incubator, before he became governor.
If you like committees and annual reports, you’ll love Pritzker’s 522-page bill, which creates the Adult Use Cannabis Health Advisory Committee, a 25-member body that would include, among others, an ob-gyn, “a representative of an organization focusing on cannabis-related policy,” whatever that is, and “a representative of an organization focusing on the civil liberties of individuals who reside in Illinois,” which I’m guessing would be the ACLU. The state would establish a second board to divvy up millions of pot dollars in disadvantaged communities deemed to have suffered from the war on drugs. The Department of Agriculture, the Department of Financial and Professional Regulation and Illinois State Police each would issue annual reports.
After the state pays expenses, less than half of pot taxes would go to the general fund and paying overdue bills. Competing interests would be addressed, with a quarter of collections allocated for social and economic development programs in communities deemed to have suffered from the war on drugs and eight percent reserved for the Law Enforcement Training and Standards Board, which trains cops to fight the drug war.
Perhaps more than any other state where pot is legal, Illinois would rely on regulations and high fees to limit the number of marijuana businesses in what could prove one of the nation’s largest markets. That doesn’t seem right, unless you’re a nationwide cannabis company, and they’ve been flocking here. Why not set low fees and let capitalism take its course, with a residency requirement for license holders so that money spent in Illinois stays in Illinois? That would preclude out-of-state profiteers, but Washington state does exactly that while raking in green.
There are other issues in Pritzker’s bill, notably mass expungement of marijuana convictions, including misdemeanors and felonies involving possession of up to a pound. While House Speaker Michael Madigan, D-All Powerful, has noted misgivings, this seems fair and, certainly in the case of misdemeanors, doable. It is also, the wise guys say, crucial: Without expungement, Pritzker doesn’t have the votes.
Fine. But expungement needn’t hinge on creating a market rigged in favor of corporations that can afford lobbyists. Legislators should pass expungement provisions and legalize pot while they’re at it, then demand a better regulatory bill, one that contains rosier prospects for taxpayers and isn’t predicated on the notion that you already must be rich to make money in the marijuana business. Vermont has done the marijuana two-step, with legislators last year legalizing weed while failing to adopt a regulatory system, which they’re working on now. Yes, legal pot would be a good thing, but we can do better than this, and if it takes another year, so be it.