Example Out West

According to The Los Angeles Times, in the two-plus years that recreational marijuana use was made broadly legal, an expected tax windfall has not materialized. This is because a huge black market sprang up after a majority of California cities chose not to allow pot shops. On top of that, legal sellers say, state, county, and local sales taxes, which can reach higher than 30 percent, nearly price legitimate shops out of the recreational market. Able to underprice legitimate sellers, untaxed home-delivery services quickly stepped in. 

As far as cultivation goes, California’s example is not so good either. Burdensome licensing rules have thwarted many farmers who would otherwise take part. And because of the vibrant black market, there is no reason for longtime illicit suppliers to change business models.

In our own Suffolk County, there is some interest in an expected component of the state’s looming legalization that would allow counties, large towns, and cities to decide for themselves whether to allow weed shops. As in California, untaxed and unregulated home delivery would thrive under this condition, while weed buyers would just jump in their cars to drive to wherever retail shops were legal.

One of the other problems with the way Gov. Andrew Cuomo is thought to be leaning is in preferring that marijuana be grown indoors. This would all but shut out the state’s small farms, handing a massive windfall to well-funded investors who could cover the sky-high startup costs. Indoor growing is far from green, too, consuming massive amounts of electricity for lighting, heat, and air circulation, frequently relying on chemical fertilizers, and producing greenhouse gases while consuming and potentially contaminating massive quantities of water. From the governor’s perspective, it might make sense: Large marijuana concerns would likely be hearty political donors. However, it would kill smaller green producers or push them into the black market.

California’s example is a cautionary tale of how not to legalize recreational marijuana. As New York lawmakers consider their own version, they should look west to see what works and what does not and for lessons about the pitfalls of poorly crafted regulations.