Cannabis Science & Policy Summit - Day 1 - Midgette
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Transcript of Cannabis Science & Policy Summit - Day 1 - Midgette
Marijuana Legalization in Vermont:
Assessing the Policy Landscape and
Some Revenue Implications
Greg Midgette PhD
April 17, 2016
Slide 2
• Commissioned by
State of Vermont
• Eight chapters,
80,000+ words
• Does not make a
recommendation
• Not a cost-benefit
analysis
• Goals: Provide insights
for discussions and
highlight uncertainty
Slide 4
Marijuana prevalence in Vermont
higher than in rest of country
0%
2%
4%
6%
8%
10%
12%
14%
2002/2003 2013/2014
% using
marijuana
in past month
Year
US
Northeast
Vermont
Source: NSDUH
Slide 5
Marijuana prevalence in Vermont
higher than in rest of country
0%
2%
4%
6%
8%
10%
12%
14%
2002/2003 2013/2014
% using
marijuana
in past month
Year
US
Northeast
Vermont
Source: NSDUH
Slide 6
Marijuana is primary substance for
14% of treatment admissions
Source: Vermont Department of Health, 2014. Only includes those receiving
treatment at state-funded treatment facilities.
Slide 7
How much did Vermont spend
prohibiting marijuana in FY 2014?
• In year after decriminalization, criminal
cases decreased 80%
– But total marijuana cases increased 20%
– Collected $200,000 in fines
Slide 8
• In year after decriminalization, criminal
cases decreased 80%
• Few incarcerated only for marijuana
– 5 in FY 2014
– 3 behind bars at one point
How much did Vermont spend
prohibiting marijuana in FY 2014?
Slide 9
• In year after decriminalization, criminal
cases decreased 80%
• Few incarcerated only for marijuana
• Net costs: $800,000 - $1.1 million
– For those ages 21+: $550,000 - $750,000
How much did Vermont spend
prohibiting marijuana in FY 2014?
Slide 11
Extreme options
Commonly-discussed options
Middle-ground options—Small scale
Middle-ground options—Large scale
Report discusses 12 alternatives
to status quo supply prohibition
Slide 12
Extreme options
Commonly-discussed options
Middle-ground options—Small scale
Middle-ground options—Large scale
Senate Bill 95
Slide 13
Extreme options
Commonly-discussed options
Middle-ground options—Small scale
Middle-ground options—Large scale
Senate Bill 241
Slide 14
Extreme options
Commonly-discussed options
Middle-ground options—Small scale
Middle-ground options—Large scale
House Committee Amendments to SB 241
Slide 16
Tax revenue:
Many factors to consider• Actions of other jurisdictions
– How long would Vermont be only east coast
jurisdiction that legalized production?
• Collateral effects
– E.g., effect on spending on alcohol and tobacco
and, hence, their taxes
• Other effects on tax revenue
– Tourism, employer taxes, productivity losses
• Focus here is on revenue from MJ sales
Slide 21
• Police enforcement
– Underage use
– Impaired driving
– Time/place violations (like open bottle laws)
– Residual black market
– Bootlegging (tax evasion)
• Regulatory costs
Cannot ignore offsetting costs
Slide 23
Cost of regulation: Key points
• Regulation could be more expensive than
VT’s current (weakly enforced) prohibition
• For any “large-scale” legalization option,
both start up regulatory costs and on-going
costs could well be in low single-digit millions
of dollars per year
• Start up costs
– Incurred before sales generate tax revenue
– Many paid “in-kind” (extra work load)
Slide 24
When it comes to annual revenues,
think orders of magnitude
• About $1 million: Current prohibition cost
• Low to mid-single digit millions: Developing
and regulating large-scale options
• Tens of millions: Tax revenue from VT users
• Hundreds of millions: Tax revenue from out-of-
state residents if federal government does not
intervene and VT industry ramps up before
nearby states legalize
Slide 25
Other potential costs
• Increased use/abuse could create other costs
– Greater need for marijuana treatment
– Greater need for prevention messaging
– More impaired driving
– Costs to employers of juggling conflict with federal
drug-free workplace requirements
• All highly uncertain
– In some cases not even clear costs will exceed
savings
Slide 26
Giant wildcard: Legalization’s
effect on use of other substances
• Interactions on product/supply side also
unknown
Slide 27
Concluding thoughts
• Vermont should be commended for
seeking a rigorous study beforehand
• Uncertainty abounds
• There are many options
• All involve tradeoffs
• What option is “best” depends on
observer’s values/objectives