State News
January 21, 2015

State could earn $20-$75 million from legal pot

State could earn $20-$75 million from legal pot

By Tom Brown, VTDigger.org

Vermonters illegally consume between 33,000 and 55,000 pounds of marijuana annually, according to a study by the Rand Drug Policy Research Center.

Legalizing, taxing and regulating that volume could generate $20 million to $75 million a year, the report said. Factor in marijuana tourism, and the revenue estimate soars into the hundreds of millions.

The 218-page report prepared for lawmakers offered no recommendations but provided a detailed analysis of the available data on legalization. The report looked at public health effects, regulatory structure, revenue potential and other impacts of legalizing the use of recreational marijuana.

While it suggested no specific path to legalization, it did offer a series of alternatives to the retail model that is in effect in Colorado and Washington state.

According to the report, lawmakers could:
• Allow adults to grow their own.
• Allow distribution only within small co-ops or buyers’ clubs.
• Permit locally controlled retail sales (the Dutch coffee-shop model).
• Have the government operate the supply chain (government monopoly).
• Have a public authority operate the supply chain.
• Permit only nonprofit organizations to sell.
• Permit only for-benefit companies to sell.
• Have very few closely monitored for-profit licensees.

Beau Kilmer, co-director of the research center, cautioned lawmakers that any direction they choose could be undone by federal authorities. The Obama administration has instructed the Justice Department not to interfere in state efforts to legalize cannabis, but that could change.

“No one knows who will be president in 2017, let alone what his or her position will ultimately be with respect to marijuana legalization,” Kilmer said.

The study estimates that there are about 80,000 marijuana users in Vermont, who spend from $125 million to $225 million a year on the drug.

“Those numbers show that current efforts are failing,” Sen. David Zuckerman, P/D-Chittenden, said Friday. Zuckerman hopes to introduce a bill to legalize the drug next week or the week after.

He said his bill would likely reflect some of the information provided in the study.

Keith Flynn, commissioner of the Department of Public Safety, said the administration is taking a “wait and see” attitude on legalization and urged lawmakers to “go slow.”

“This report opens the dialogue,” Flynn said. “There are a lot of areas for inquiry. We have the opportunity to get this right, to learn the lessons [of other states].”

Flynn’s boss, Gov. Peter Shumlin, has said he generally supports legalization but wants to see how it plays out in Colorado and other trailblazing states.

“This Rand report will serve as a critical foundation for our ongoing discussion about the best course for Vermont,” Shumlin said in a statement. “I continue to support moves to legalize marijuana in Vermont but have always said that we have to proceed with rigorous research and preparation before deciding whether to act. This report will help us do that.”

House Speaker Shap Smith said any bill on legalization will be tested first by the House Ways & Means, Judiciary and Health Care and Human Services committees.

“In looking at the discussion surrounding the legalization of marijuana, it is clear to me that Vermonters have a diverse range of opinions, views and beliefs on whether or not legalization is the best step forward for our state,” Smith said in a statement. “While I am intrigued by some of the findings described in the Rand report, there are still many unanswered questions the Legislature must answer.”

Matt Simon, of the pro-legalization Marijuana Policy Project, said the study contained a lot of “complexity,” but that some of the proposed alternatives, such as state-controlled distribution and small co-ops were “nonstarters.”

Mary Alice McKenzie, director of the Burlington Boys and Girls Club and a member of the anti-legalization group SAM-VT, said she opposes the law because of her concerns with substance abuse among youths.

“Vermont does not do a good job of addiction prevention – for alcohol, tobacco, opiates or marijuana,” she said. “Vermont has not focused on prevention.”

The study said 60 percent of marijuana users nationwide have a high school education or less, which is the population most served by substance abuse counselors, she said.

The study said science is inconclusive on claims that legalized pot could reduce alcohol use, but did state that the public health harms of marijuana use are smaller than the use of alcohol and other drugs.

A bill that would require that edible marijuana be packaged in single-dose, child-resistant packaging has already been filed by Sens. Dick Sears, D-Bennington, and Jeanette White, D-Windham.

Lawmakers authorized the study last year as part of S.247, a bill that made changes in Vermont’s medicinal marijuana law. The state paid $20,000 toward the report, which was also underwritten by Good Ventures, a nonprofit that makes grants for consultation.

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