Struggling to Create a Legal Marijuana Economy

Wednesday, January 22nd, 2014

Washington State is struggling to create a legal marijuana economy:

Early in the summer, Kleiman projected that legal cannabis in Washington will initially sell for at least forty-two dollars for an eighth of an ounce. Outdoor growing will lower that figure, but probably not enough to undercut street dealers. Ben Schroeter, who goes by Ben Jammin, has been selling pot in the Seattle area for forty years, and offers high-quality, locally grown product for twenty-eight dollars an eighth. He sells weed from California at twenty dollars an eighth. Some customers may be willing to pay a premium for the convenience, and the peace of mind, associated with buying legal pot that has been tested for impurities. But Ben Jammin says, “I assume that a lot of people are still going to come to me.”

At the city-council meeting in Seattle, Kleiman said that the tax scheme outlined in I-502 was rigid and shortsighted. Because of the state’s heavy surcharges, legal marijuana will likely be more expensive than the illicit equivalent; but, as production costs plunge, legal pot will become much cheaper. “We’re gonna have a tax that starts too high and winds up too low,” Kleiman said. He laid out a better approach: “The optimal tax system… if I were doing it on a blackboard, would have been somewhat homeostatic. You’re looking to maintain a price maybe a little bit below, or a little bit above, the current illicit price. And, therefore, you’d like to have the tax be low at the beginning… and rise as the cost in the industry falls.” The state didn’t reconsider its tax plan, however; the prospect of an immediate windfall was perhaps too tempting.

One group is definitely not coming to Washington’s legalization party: minors. Scientific evidence suggests that marijuana poses few long-term health risks to adults but can harm adolescents whose brains are still developing. The liquor-control board has made it a priority to keep people under the age of twenty-one out of I-502 stores. But, according to some studies, a quarter of marijuana consumers are underage. Kleiman told the city council that it would be better for children to get marijuana from parents or friends who buy it at I-502 stores than to obtain it through the black market, because of the testing and the quality control. Moreover, if kids keep resorting to the black market, they will sustain the criminal enterprises that I-502 was designed to eliminate. “Once you have a licensed-store system, you should expect — and in fact want — most of the pot that goes to kids to go through that system,” Kleiman said, adding, with a seditious grin, “You can’t say that out loud. But I can.” Young people who can obtain a green card already purchase pot from dispensaries. “Nineteen-year-old kids on skateboards with a medical-authorization card,” Ben Jammin told me. “That’s the cash cow now.”


  1. Grasspunk says:

    Fellow farmer Bruce King writes about this from the farmer’s side.

  2. Bob Sykes says:

    Marijuana should be regulated like tobacco and alcohol. But don’t pretend there are no health risks. They will be the same as tobacco, meaning elevated risk of lung cancer and heart disease, although the addiction risk will be less than that for nicotine. Also, across the board performance impairment during intoxication, both physical and mental, is an obvious risk.

    It should also be pointed out that “legalization” schemes like those in Colorado or proposed in Washington and elsewhere do not eliminate the black market, although its market share is reduced.

    And the bigger problems of meth, cocaine, and heroin are not addressed. Heroin, in particular, has made a huge come back, even in rural areas.

    All in all, pot legalization is a bad joke.

  3. Isegoria says:

    Actually, smoking marijuana doesn’t seem to impair lung function. It also seems to fight cancer. Not what I would’ve expected, either.

  4. Slovenian Guest says:

    It’s a joke all right, considering that water intoxication gets more people than weed.

    In comparison, alcohol alone causes a million hospitalizations yearly in the USA, a million!

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