In February, when I began writing Cannabis Commerce in the USA, free enterprise — cannabis style — was in full swing. And things were really swinging in my neighborhood, South Denver. Places like Santa Monica, CA, had a head start, but we were catching up, if not surpassing them, in dispensaries per capita. I couldn’t wait to write about it.
People in the industry, whose lives had previously felt anywhere from restricted to persecuted — trapped in a world they didn’t create — could start fresh. They could work in the wide-open, expansive, exciting field of cannabis commerce. Their kids, spouses, and parents often worked alongside them. Inspiration was in the air.
The retail section was particularly on fire.
That was before Los Angeles city and Colorado state legislators decided the fledgling industry needed a whole lot more regulation and a whole lot more fees. Which it did. However, the way the changes are written, they’ll probably just roll off the deep-pocketed players, the ones who were able to afford well-connected attorneys who gave them plenty of advance warning.
Unfortunately, smaller players will be left gasping for air. Big fish will swallow little fish which can’t afford the fees. As a result, forty percent of dispensaries and collectives may no longer be able to continue as independent entities.
This is a highly-prejudiced crackdown against a thriving segment of the retail economy. Rogue segment or not, the pot shops have been cranking out the sales tax.
The lowest blows issued in both states were the establishment, or reestablishment, of regulations concerning how many feet from schools and daycare centers dispensaries can operate.
The “1,000 Foot Rule,” in Colorado, and the “500 Foot Rule,” now on the books in LA County, top the bill for hypocrisy. The ruse of “protecting innocent children” is, in reality, a mechanism to restrict and “weed out” the amount of dispensaries and collectives that can operate in a locality.
Hmm. Just how much of a problem have toddlers toddling out of preschool and into dispensaries really been? Do they really need to be restrained from making a beeline from nursery to dispensary? Have lots of them repurposed their milk money to buy forty-five cents worth of hash oil? Are receptionists behind bulletproof glass windows too baked to card pig-tailed four-year olds? Is this actually a problem in our communities?
I think not.
Meanwhile, anyone or their dog who lives one foot away from a school or a preschool can throw a “kegger” any day of the week. If these folks and their beer-bellied buddies chain-smoke in front of the same impressionable preschoolers, no problemo.
Getting back to those fees, the City of Denver has decreed there now will be:
- An as-yet unnamed annual state fee to license a dispensary, in addition to the city licensing fee of $3,000.
- An as-yet unnamed state fee to cultivate marijuana to sell in dispensaries — and, oh by the way, dispensaries must now grow 70% of their product, which puts growers and caregivers at risk.
- An as-yet unnamed state fee to sell edibles.
Very view businesses can operate under the dagger of “as-yet unnamed” state fees.
Which stores get to absorb the impact of this legislative ingenuity? Cannabis stores. Shoemakers weren’t assessed a special tax to sell sandals. Grocery stores weren’t ordered to grow 70% of their own cauliflower. Liquor stores weren’t assessed $5,000 fees for the privilege of selling beef jerky by the cash registers.
Yet these types of taxes, fees, and regulations were imposed on dispensaries by the State of Colorado – and they had less than two months to comply or die!
There’s way more rules, and more fees, but those provide a pretty good sampling. And the taste is bitter indeed for dispensaries with empty war chests.
I know — why, all of a sudden, am I upset about fees? Aren’t I the guy who’s obsessed more about how much cannatax could be collected in a legal, regulated society than any one else on the face of the earth? Guilty as charged. So, where do I get off complaining about fees?
While it’s true that I’ve pointed out many fees and lost taxes that even an overachiever like Jon Gettman missed, I’ve never called for an assessment of weird and unusual fees and taxes that chop companies down at the knees! It’s not the concept of collecting fees that I have a problem with, it’s the reality of introducing fees so large they force hardworking dispensaries out of business I find distressing.
Taxes and fees can’t be collected from concerns forced out of business by local and state regulators.
I was talking about taxing cannabis basically like alcohol and tobacco, albeit with a much lower “sin tax” rate, due to its medicinal properties. That was plenty of tax money right there — $67 billion, conservatively, in the USA alone.
And I’ve consistently called for “uniform access” from Washington to prevent local and state regulators from running amok. The present situation is analogous to the civil rights situation in the 60’s — despite having a national Civil Rights Act in force, states and localities like Selma, Alabama could still decide who could vote and who couldn’t vote. I think we know which races could and couldn’t vote in Selma. If then-President Johnson hadn’t laid down the law for Alabama Governor George Wallace, Afro-Americans still couldn’t vote there.
Similar guidance from President Obama on the pressing issue of marijuana prohibition would be welcome. A basic civil liberty is being violated — and even conservatives know it.
When you get down to it, there’s not a huge difference between herbal rights and civil rights.
Obama’s concept of letting states and localities work out marijuana issues themselves invites endless legislative wheel-spinning. It produces constant upheaval for people trying to get on with their lives.
The President’s campaign pledge to establish millions of jobs in the energy field has not materialized. Meanwhile, local and state regulators slash cannajobs on his watch.
Why not release the choke collar on a growth industry ready, willing, and able to contribute to the GDP, instead of driving a stake through its heart?
When’s that march on Washington, again?
Comments from NORML director Allen St. Pierre:
Thanks for your email and article…
“Medical cannabis is a political boxed canyon that creates absurd legal, social and economic disparities—while trying to legitimize itself as a modern medicine. But, this is no great surprise to history buffs as alcohol prohibition was also made increasingly farcical by the issuance of hundreds of thousands of ‘permits’ (or in today’s parlance ‘medical recommendation’) to be exempt from prohibition laws under the guise of medical use.
Today, there are arguably as many negative consequences to being a lawful medical cannabis patient or provider as it was to be African American prior to the Civil Rights Act.
‘Jim Crow’ lives today in medical cannabis patients being treated like second class citizens (patients can be fired from employment for lawful use of medical cannabis; medical cannabis patients can be denied their Second Amendment right to bear arms; medical cannabis patients can have their children removed; medical cannabis patients can be denied drivers licenses and security clearances; and medical cannabis patients are regularly denied organ transplants) and medical cannabis dispensaries are being fleeced for unusually large ‘fees’ and face blatantly discriminatory business license processes and zoning harassment.
The only legal ‘silver bullet’ that addresses most of the concerns of both cannabis consumers and the government is ending cannabis prohibition outright. Otherwise, almost a million cannabis consumers will continue to be arrested annually and medical cannabis patients/providers will continue to be legally discriminated against.”
Allen St. Pierre
Member, Board of Directors
NORML / NORML Foundation