Monday, April 5, 2010

Marijuana Legalization and Regional Budget Deficits

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What does marijuana legalization have to do with regional budget problems?

In 1992 I read a book only because it was a Christmas gift. The book, The Popcorn Report, by Faith Popcorn, who coined the term "cocooning", proclaimed the ability to predict social and business trends for the 90's. The one thing that stayed with me from the book was that she said that three states in the U.S. set the trends for which the rest of the nation follows. The three states were California, Colorado, and Florida.

It should give us all the heebeejeebies to think that California is setting the trends right now, because many smart minds such as Rogoff, for example, have said it is in for repeated defaults going forward. Yes, the seventh largest global economy in repeated defaults. There is good journalism, in the news thread following, by both Ezra Klein and David Ignatius of the Washington Post, who compare the political impasse in California to our Congress. Klein says, What happens when one of the two major parties does not see a political upside in solving problems and has the power to keep those problems from being solved?

Now, I've led into today's subject in a very round-about way, because my chosen subject is that of legalizing marijuana. If Colorado is a trendsetter, it passed Amendment 20 in 2000, which legalized medical marijuana. Yesterday's Denver Post headline was As dispensaries pop up, Denver may be Pot Capital, U.S.A. The first sentence being, "Denver now appears to have more marijuana dispensaries than liquor stores, Starbucks coffee shops or public schools, according to city and corporate records."

So far, Denver has issued 300 sales-tax licenses for dispensaries, exceeding the number of liquor stores by a third. Denver's sales-tax office is getting 25 applications per day for dispensaries. (Denver now has more than L.A.)

There has been a lot of debate and political discussion regarding this issue in my town and state, especially over the past year. The headlines in our local paper have covered the subject more days than not. Details and guidelines are still being debated and worked out. Some towns proclaim they refuse to allow it. Seizing an opportunistic response to those attitudes, Macon Cowles, one of Boulder's city council members proposed that Boulder offer a city-run dispensary. He felt that if medical marijuana is being legally grown -- and taxed -- in Colorado, Boulder might as well be the epicenter for it and reap the benefits. "I think this is potentially an important industry," Cowles said. Brilliant, wasn't he?

It is not hard to predict some things when the facts add up.

The facts right now are:
  • States, municipalities, and local governments are desperate for revenue
  • Many U.S. citizens are in favor of legalization of marijauna
  • States, municipalities, and local governments are deserate for jobs creation
  • Pot dispensaries generate jobs
  • Pot dispensaries generate sales tax revenue
  • Legalizing marijuana saves many law enforcement dollars
  • Legalizing marijuana saves prison expenses
Recently, I ran Commercial Real Estate Demand Soars in Colorado for Pot Dispensaries. Some businesses benefiting from pot legalization here besides commercial real estate include hydroponic and indoor growing suppliers, heating, plumbing, electrical, ventilation providers, medical doctors, masseuses, and lawyers.

I'd call that a no-brainer. If your state hasn't legalized marijuana, yet, I'd venture a guess that they will do so in the not-so-distant future.