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OPINION: Forget More GE Tax – Let’s Tax THC

January 17, 2014, 4:40 PM HST
* Updated January 20, 5:57 PM
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If Hawai`i politics in 2013 were all about gay marriage and GMO, 2014 could shape up to be a battle over a less-inspired, more familiar topic:

Taxes. Feeling sleepy yet?

But while Hawai`i lawmakers wrestle with each other over TAT revenues, GE and pension taxes, residents and visitors of another state are willingly (we dare say joyfully) coughing up millions of dollars in laid back “stimulus” funding.

Mile-High, Indeed

“Whoa.”

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Those were likely the first words uttered by sticker-shocked would-be stoners who lined up for hours at the dawn of the new year to shop at one of Colorado’s 130+ pot dispensaries (75% of which are located in Denver).

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Rocky Mountain voters had approved the recreational use of marijuana back in late 2012, allowing existing medical marijuana dispensaries to begin the sale this year of up to one ounce of commercial ganja to residents, and up to a quarter of an ounce for visitors.

For the less nimble-fingered among you, one ounce = approximately 60 modest joints (or 20 dragons).

Denver’s sudden christening as the world capital of cannabis has had, not surprisingly, a not-so-wee impact on supply.

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Price at the counter as of early January? Up to $500 per ounce, considerably more than the old black market average.

State authorities expect combined wholesale and retail sales to top $600 million in 2014. The full economic impact is of course much greater, once you factor in snack foods.

Medicinal pot users will soon be allowed up to 7 mature plants per patient in Hawaii.

Medicinal pot users will soon be allowed up to seven mature plants per patient in Hawaii.

But seriously, depending on how much of that figure is driven by tourism, the overall benefit to Colorado’s economy could prove enviable.

That’s in part thanks to a more recently rolled piece of legislation: the combined 25% in state taxes voters chose to level on sales of recreational pot. But the revenues don’t end there … individual counties are also free to build a stash for themselves. Boulder for one, is taking full advantage, levying an additional 10% tax locally.

Fresh Baked Legislation

Colorado’s weed shortage is of course a function of the status it enjoys as America’s only recreational destination for cannabis, an honor bound to be short-lived.

Washington state has already approved similar rules, and states like Oregon and Alaska are expected to push for legalization efforts of their own.

Although Hawai`i legislators don’t seem fired up over pushing for legalization at present, House Speaker Joe Souki did advocate for the opening of medical marijuana dispensaries during his opening remarks at the start of this year’s legislative session.

House Speaker Joe Souki. Photo by Wendy Osher, Maui Now.

House Speaker Joe Souki. Photo by Wendy Osher, Maui Now.

Souki has said he hopes to ease legal access to cannabis for the state’s more than 12,000 registered medicinal users who are currently allowed only to grow a limited number of plants but not purchase any marijuana, including seeds.

Apart from making weed more accessible to people physically incapable of growing and harvesting plants, the dispensaries could actually make legalizing marijuana for recreational use (and purchase) much easier in the future.

Allowing a well-regulated distribution system (complete with retail dispensaries) to develop for medicinal users would not only show the public what life would look like if weed were legalized, it would also allow lawmakers an easy path toward taxing the substance if for-profit recreational enterprises were allowed to bloom.

If Colorado’s taxing experiment is a success, more states are sure to follow in its smoke-trails. Being a part of an early, select club of state governments willing to take a deep breath and relax restrictions on the sale of cannabis could pay off in big ways for the aloha state, thanks to the simple realities of supply and demand that are on full display in Denver.

Rather squabbling over GE and TAT, our lawmakers should consider cracking open a window for some THC.

It might just make all these budget battles more … relaxed.

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