What Gambling Can Tell Us About Legalizing Marijuana
I am old enough to remember when Nevada was the only state where gambling was legal. In 1931, during the Great Depression, the state legislature had legalized casino gambling as a way to stimulate their economy, create new jobs, and entice more people to the state.
For decades Nevada had a monopoly on casino gambling — that, along with legalizing “no fault” divorces, and later legalizing prostitution — when most states did not offer those options. These factors combined to give Nevada a reputation as a maverick state where people could visit to engage in naughty behavior without legal consequences. “What Happens in Vegas Stays in Vegas.”
The state is expected to legalize the recreational use of marijuana via voter initiative (Question 2) this November, which will further enhance that reputation.
Other states obviously knew that legal gambling was an alternative that might provide an economic boost to their states as well, but the prevailing morality at the time was far too negative towards gambling for elected officials in other states to pursue. It was a time when the religious communities had successfully convinced most Americans that a life of virtue, not vices, was the path to happiness.
But social mores change over time, and as gambling began to be seen as a legitimate form of entertainment, instead of a moral sin, the tax revenue and economic benefits from legal gambling were more attractive. In 1977, by voter initiative, New Jersey legalized casino gambling in Atlantic City, offering an east coast version of Nevada, where gambling hedonists could legally do what they could not yet do in their own states.
And gradually the barriers banning legal gambling began to crumble nationwide, leading to a situation today in which every state has some form of legal gambling, such as state-run lotteries, albeit with strange limitations in some states (e.g., in Missouri it is illegal to gamble on land, but perfectly legal to have casinos on riverboats on the Mississippi and the Missouri rivers, although the boats never leave the shore).
The Balancing Test.
Which leads to the question of why behavior thought by many to be inappropriate (or even morally offensive), can nonetheless sometimes be legalized? Or put another way, when is conduct with the tinge of sinfulness out-weighted by the potential for economic benefits to the states?
I raise that question because of the increasingly profitable side of legal marijuana in the states that have elected to regulate and tax marijuana. As the latest revenue data make clear, legalizing marijuana has been an enormous benefit for the few states that have taken that step, and that fact will be more and more difficult for neighboring states to ignore over the coming years. As we saw with gambling, once the economic benefits of legal marijuana are obvious, the moral opposition will fade and the economic arguments will prevail.
The Latest Data from Colorado and Washington
In Colorado, the first state to get their legal retail outlets up and running on January 1, 2014, the gross sales of marijuana, and the tax revenue to the state, have continued to rise each year. For 2015, licensed marijuana stores in the state totaled an astounding $996,184,788 – just shy of $1 billion dollars, up from $669 million in sales in 2014.
Colorado collected more than $135 million in taxes and fees last year (including $35 million dedicated to school construction), up from $76 million in 2014 (when $13.3 million was raised for schools).
In Washington state, marijuana retail sales reached $322,823,639 in 2015, up from only $30,783,880 in 2014, when retail outlets were open for only a portion of the year. That 2015 sales figure has already been eclipsed in the first seven months of 2016.
The state retail tax revenue for fiscal year 2016 from recreational marijuana sales totaled $30,017,823, while state retail sales taxes from the sale of medical marijuana totaled $5,236,536. Local retail sales tax totaled $11,228,861 from recreational sales, and local retail tax totaled $2,084,323 for medical sales.
These, as Republican presidential nominee Donald Trump might say, are “yugee” numbers, and they are continuing to increase each year, making them more and more difficult to ignore by other states.
Marijuana Legalization is Inevitable
Which brings me to my main point. At a time when several national polls confirm that between 55 and 61 percent of the entire country now favor full legalization, it is difficult to argue that marijuana smoking is, any longer, considered immoral behavior. Sure, there are pockets of fundamental moralists to whom anything pleasurable will always be suspect behavior, including sex, drugs, and rock-and-roll. But this puritanical perspective is finding less and less support each year, and when balanced with the economic windfall that results when a state legalizes marijuana, it simply cannot prevail.
Today a majority of Americans under 65 support marijuana legalization, particularly younger adults: 71 percent of adults under 35 think marijuana use should be legal, a jump of 10 points since last year. The demographics are clear and unstoppable, as younger voters replace those over 65.
Just as all states now have some form of legal gambling, within a few short years, all states will offer some form of legal marijuana. It’s the smart thing to do; it’s the right thing to do; and it’s inevitable in a democracy, when most people want it.
This column originally ran on ATTN:
The Secretary of State’s office has confirmed that initiative proponents, The Campaign to Regulate Marijuana like Alcohol, submitted a sufficient number of signatures from registered voters to qualify the measure for the November ballot. A Maricopa County judge has also dismissed a lawsuit that sought to prohibit the measure from going before voters, although initiative opponents may seek to further litigate the matter before the state Supreme Court.
Proposition 205 permits adults to legally possess (up to one ounce of marijuana flowers and/or five grams of marijuana concentrates) and cultivate marijuana (up to six plants) for their own personal use, and establishes licensing for its commercial production and retail sale. Commercial, for-profit sales of cannabis will be subject to taxation, while non-commercial exchanges of marijuana will not be taxed.
Similar adult use measures will appear on the ballot this November in California, Maine, Massachusetts, and Nevada. Voters in Arkansas, Florida, Montana, and North Dakota will also decide on medical use measures this fall. A Missouri statewide initiative seeking to regulate the plant’s medicinal use is in litigation.
A summary of 2016 statewide ballot measures and their status is online here.
Jordan Person, executive director of the Denver Chapter of the National Organization for the Reform of Marijuana Laws (NORML) submitted roughly 8,000 signatures this week to Denver’s Election Division with the hope of qualifying the Responsible Use Initiative for this November’s ballot. Relying on the hard work and dedication of more than twenty grassroots activists, the Denver NORML team worked tirelessly for more than three months educating voters on the issue and collecting signatures throughout the city. The campaign needs a total of 4,726 valid signatures to qualify for the ballot.
“I could not be more proud of the grassroots movement Denver NORML has created. Our volunteers sacrificed every moment they could to work hard for this campaign.” Person said. “It was an easy choice for most because of how much they believe in the initiative they are fighting for. As we go through this interim period of waiting, hoping and preparing we look forward to the future with excitement.”
If certified for the ballot, Denver voters will be among the first in the nation to decide whether to regulate legal private marijuana clubs for adults 21 and over.
Officials with Denver Elections have 25 days to verify the campaign’s signatures. Regardless of the outcome, this has been a groundbreaking effort to normalize the consumption of marijuana in America.
In addition to Denver NORML’s Responsible Use Campaign, voters in the city might also have the opportunity to vote on a similar, yet more limited proposal that would restrict consumers to vaping in predesignated areas.
Approximately two in three California voters support the establishment of a state-regulated retail market for the sale of marijuana to adults, according to polling data compiled by the Institute of Government Studies at the University of California, Berkeley.
Sixty-four percent of respondents agree, “Marijuana should be legal for adults to purchase and use recreationally, with government regulations similar to the regulation of alcohol.”
Support is strongest among those between the ages 18 to 24 (75 percent), Democrats (74 percent), African Americans (72 percent), those between the ages of 25 to 34 (71 percent), and Latino voters (69 percent). Among voters over 65 years of age, 58 percent back legalization.
The polling data bodes well for the passage of California’s Proposition 64 this November. The statewide initiative permit adults to legally grow (up to six plants) and possess personal use quantities of cannabis (up to one ounce of flower and/or up to eight grams of concentrate) while also licensing commercial cannabis production and retail sales. The measure prohibits localities from taking actions to infringe upon adults’ ability to possess and cultivate cannabis for non-commercial purposes. The initiative language specifies that it is not intended to “repeal, affect, restrict, or preempt … laws pertaining to the Compassionate Use Act of 1996.” Proposition 64 is endorsed by the ACLU of California, the California Democratic Party, the California Medical Association, California Lt. Gov. Gavin Newsom, the California NAACP, the Drug Policy Alliance, Students for Sensible Drug Policy, and NORML.
Voters in Arizona, Maine, Massachusetts, and Nevada will similarly decide on adult use measures in November. Voters in Arkansas, Florida, Missouri, Montana, and North Dakota are expected to also decide on medical use measures this fall.
A summary of 2016 statewide ballot measures and their status is online here.
A three-judge panel of the US Court of Appeals for the 9th Circuit, covering nine western states, earlier this week ruled unanimously that the Department of Justice is barred by federal law from prosecuting medical marijuana businesses if those businesses are operating in compliance with state law.
This decision came in an appeal in which the court had consolidated ten different cases from California and Washington, in which the defendants — growers and dispensaries — had argued that their federal indictments should be dismissed because of a current ban, enacted by Congress in 2014, on the use of federal funds to prosecute state-compliant medical marijuana activities. Known as the Rohrabacher-Farr Amendment, the language of the enactment said federal funds could not be used to prevent states from “implementing their own state laws that authorize the use, distribution, possession or cultivation of medical marijuana.”
The Department of Justice had argued the ban only precluded their interference with the state governments, and did not ban federal prosecutions against individual defendants. The Court of Appeals rejected this argument, and remanded the cases back to the US District Courts for an evidentiary hearing to determine if the individual defendants had in fact acted in compliance with their state medical marijuana laws.
Judge Diarmuid O’Scannlain, writing for the panel, did warn in his opinion that Congress could restore funding to prosecute these cases “tomorrow, a year from now, or four years from now, and the government could then prosecute individuals who committed offenses while the government lacked funding.”