Tax Analysts Blog

Pancho Villa and Three Hundred Million Joints

Posted on May 1, 2013
As everyone knows, Colorado recently legalized marijuana. I think that is terrific. We should not care if people get “nice with Johnson” which is what my high school buddies called smoking pot. It is one of those code terms you can use in front of adults. You can be in front of Johnny’s parents and say, “hey man, you want to get nice with Johnson?” Johnny’ mom might say “isn’t it wonderful that the boys are being nice to Johnson.” I don’t smoke it; I don’t care if you do. Someone once told me that Rocky Mountain High was John Denver’s tribute to getting stoned in high altitudes. I heard that Peter, Paul, and Mary’s Puff the Magic Dragon was about pot. But we know artists have been glorifying dope smoking for decades. Cab Calloway sang Reefer Man in 1932. Louis Armstrong performed Muggles in 1928 (muggles was what the hip jazz kids called pot). You can find these songs, as well as hundreds more dealing with pot on YouTube.

Here are some cool facts about pot in Colorado. The Colorado Futures Center estimates that demand for marijuana will hit 2,268,985 ounces a year (how they can be that precise is beyond my comprehension.) That’s like 70 tons of pot – in Colorado alone. How much pot is that? It’s about 70 million grams. If you can roll five joints per gram, we are talking about three hundred and fifty million joints. There are only five million people in the state.

With all that pot being toked up, the folks in Colorado naturally thought that they would see a windfall. They are proposing a 15 percent excise tax and very special 10 percent marijuana sales tax on pot consumption. Those are the kinds of taxes Mayor Bloomberg imposes when he wants to keep you from doing what he does not do.

Okay so this is a big money grab. Everyone keeps saying that marijuana will retail for $157 per ounce. I seem to recall pot being much cheaper in 1970s Scranton. But at that price, the proposed taxes will bring in about $130 million a year. The modern day equivalents of Carrie Nation assert that the projected revenue will not cover the societal costs of extra law enforcement, public health, and human services. They want higher taxes. So we can have a debate about externalities and proper use of excise taxes.

But wait; there are no obvious externalities that would justify such a large excise tax. There are some anti pot folks, like a group called Smart Colorado, who claim that marijuana use is addictive (not true), is a gateway drug (also not true), and impairs peoples thinking. The latter is true. In fact, I think that is the point of smoking dope. As long as you don’t get behind the wheel and limit your post smoking activities to eating bags of Doritos, the vast majority of public health scholarship indicates there are no health or public safety risks. But like lots of tax prohibitionists, the anti potters are not motivated by public health. In Colorado, many of them, like modern day Carrie Nations, believe they are doing God’s work. I don’t know what Jesus or Moses or Muhammad would have said about pot. And the tax prohibitionists don’t either.

One more piece of pot trivia. The last line of the song La Cucaracha, the anthem of the Mexican Revolutionaries, is “Marijuana que fumar!” That means smoke marijuana. Picture Pancho Villa in tie dye listening to the Grateful Dead. Viva!

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