Cannabis in the Era of COVID-19

marijuana leaf

These are strange and trying times that we are currently living in, but you already know that. There has been some press coverage of the short- and long-term economic impacts on local and state government as a result of the pandemic but it will hit very soon. The Port of Louisiana is a major source of state and local governmental revenue and with slowdowns in both food and manufacturing production that will slow down. With the price oil bottoming, that industry is in dire straits-and a major loss of income to the state government. The hospitality and tourism industry is at a standstill for the foreseeable future. This trifecta of economic hits will affect both local and state governments, with what has been the foundation of revenue, for longer than what many people can envision. These are times that we need to re-evaluate many of the policies we have had in place for decades. Several years ago, the ACLU published a report that stated that Louisiana spent $79 million dollars a year enforcing cannabis prohibition. We no longer have the luxury of wasting tax dollars on the failed policy of prohibition, a policy that has generated a distrust of government, the criminal justice system and police.

I have written in this publication on cannabis reform before- creating a more sustainable therapeutic program, decriminalization of possession as well as the case for legalization. However, we find ourselves looking into the abyss as to the future of what services local and state government can provide. When I ride my bicycle through our beautiful city, it is evident that cannabis is helping a lot of our fellow New Orleanians get through self-isolation. It is a shame that that Louisiana continues to drag its feet on cannabis reform, but this legislative session has a plethora of bills that would move our state in a direction that polls show citizens support. This is not a red/blue issue with the citizens but rather a red / blue issue within the legislature. States that have moved forward with legalization quickly get over the partisan divide (though in the South that has been after a ballot initiative process- something we are not allowed). Through a failed policy of prohibition, the state of Louisiana is allowing the underground economy to provide a product in high demand albeit untaxed and unregulated. It is time to change the laws that are abject failures and move on reform this year.

One could argue that a middle ground on this subject would be to make our therapeutic cannabis program more robust. The industry is hemorrhaging money currently; I would not be surprised if several dispensaries close this year without change (we only have nine for the entire state), the universities and their contracted growers are not benefitting as expected and the patients are only allowed products that are the least used in other states. Due to draconian regulations the products that are available are upwards of fives times the cost in other states. However, as therapeutic cannabis is medicine in Louisiana it is not subject to the sales tax that a normal product would be subject to and therefore not an answer to the economic morass we find ourselves in. We should keep a separate medical program in place, but it could become a viable program supported by a robust tax and regulate adult use market. Too many children have seen a quality of life improvement thanks to therapeutic cannabis to end it, but too many cannot afford the pie in the sky prices or the long distances that many must travel to get to the dispensaries. There are several bills on the docket this session to increase the number of dispensaries, end the ban on raw cannabis and increase the number of debilitating conditions covered by our program. All of these are good bills that should pass, if not for the humanitarian sake of the patients then to make sure cannabis businesses do not go under.

Decriminalization is another way for local and state governments to save money and time in our courts. This would appear to be another middle of the road approach that under normal circumstances would make sense as the next logical step, but these are not normal times we live in. This week the Governor of Virginia signed into law a very good decriminalization bill. Once again, there would not be job creation and tax revenue so desperately needed by local and state government generated by the legal sales of this commodity. There is only one bill that deals with lowering the penalties for possession and is deeply flawed and was crushed by the legislature last session. In fact, almost no reform organizations supported the bill last year due to its flaws. That bill could be amended, but the author resisted amendments last year and has been unresponsive to requests to modify so far this year. We respect the author for trying for a miniscule step in the right direction, but one would hope that she would have worked with established organizations to create a more robust bill that could get people to back it.

So, to deal with the economic crisis we face both locally and as a state, one of the most logical steps would be to create a regulated and fairly taxed adult marketplace. We can learn from the states that have already created such a marketplace, that taxing cannabis to the extreme guarantees that a robust underground economy persists. We have seen, for example, that 80% of vape cartridges tested in prohibition states contained products that harm the end user, usually these products effect the upper respiratory system- not something we need to see in the era of COVID-19. Despite these risks, we continue to see people use these products. Have our draconian penalties stopped or lowered use? No, in fact, the use of cannabis continues to expand in our state (and nationally). Some of the biggest opponents in the legislature is the Louisiana Sheriffs Association and the District Attorneys Association-both of whom have a vested financial interest in keeping prohibition alive. To be realistic, we would need to make sure that they received adequate funding from tax revenue to make up for revenue losses from administering diversion programs. Many Sheriffs are supplementing lost revenue from parish jails by holding federal/ICE detainees (a subject for another article). So, they have found alternative revenue streams to keep their jails at high occupancy. No matter how we feel about that subject, too many parishes-built prisons to hold state prisoners (at the time) and bonded those projects, tying parish financial stability to mass incarceration. Not an ideal or morally justifiable position but the one that many find themselves in currently.

The bills that are in the legislature this session offer a good model. It allows for a relative free market economic model. Production and retail outlets have a fair structure, even allowing citizens to get a Department of Agriculture permit for personal grows out of public view. Parishes would be able to call for a local election to “opt-in” on this industry. So, communities that want to participate and a majority of citizens vote to opt in can participate in the new industry. Those that choose not to don’t have to do anything except stop arresting people. However, the state gets the tax revenue generated and local governments that participate get the added revenue as well. Considering we are surrounded by prohibition states a model to look at would be Colorado which generates roughly $250 million for state tax revenues. Massachusetts adult use stores are averaging $1 Million a DAY in sales since they opened up this year. Obviously, not the silver bullet financially that our state will face when oil is trading at $18.07 a barrel when the state budgets oil revenues based on $55 a barrel. But nonetheless a substantial revenue base. The City of Denver generates over $80 million dollars a year in cannabis revenue- that is half of the projected $150 million shortfall the city faces currently. Seattle generates over $95 million a year. This is a serious way for the city to meet its financial obligations and provide necessary services to its residents. It may be some time before New Orleans can lure tourists back to our city that has been one of the original hot zones of this pandemic, but if we create a robust cannabis industry-they will come back sooner and year round (ending our traditional slow season).We have not even dealt with the unequitable nature of enforcement of prohibition in this article. Last year a legislator I greatly respect told me “the Louisiana legislature does not give a shit about social justice, what they care about is money.” Well it is about time, during this crisis, for us to be able to kill two birds with one stone and save money, create good paying jobs, generate much needed local and state revenue as well as end the unequitable nature of cannabis prohibition enforcement.

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