Marijuana legalization advocates often argue that a legal cannabis industry would serve two important public functions: create new sources of tax revenue for public investments and free up law enforcement resources to focus on “real” crime.
But much of the experience to date indicates that marijuana sales taxes are crippling the legal industry, while a lot of the proceeds end up in the hands of police departments that are frequently either unable or unwilling to protect cannabis businesses from thefts or being undercut by the illicit market. What’s more, why should legal marijuana businesses subsidize law enforcement more than other businesses if legal marijuana already lowers the cost of law enforcement?
As for new income streams for public projects, police departments are eating up a large share of what is available. The nationwide protests over the killing of George Floyd have ignited fierce debate on the outsized share of local and state taxes allocated to law enforcement, with many protesters uniting in calls to “defund the police” and instead spend the money on education, health and youth programs. It’s time for marijuana reform advocates to also question whether they want the dividends of legalization to fund socially beneficial programs, rather than law enforcement efforts that have historically used cannabis prohibition as a pretext for racist policing.
California is an illustrative case in this regard. The drafters of Proposition 64, the Adult Use of Marijuana Act, were conscious of the need to secure the votes of conservative, property-owning suburbanites. To partly allay fears that marijuana legalization would lead to hotbeds of crime and out-of-control drug use, Proposition 64, which was approved in 2016, ensured that twenty percent of the projected $1 billion in annual tax revenue would go towards “public safety.” Promising a huge cut of legal marijuana’s cash to California law enforcement ensured that while police lobbies and unions remained officially opposed, they did not aggressively campaign against the measure nor seek political favors to derail the effort.
This same script has played out in marijuana legalization efforts across the country. Illinois, the most recent state to legalize adult-use cannabis, is apportioning some of its substantial marijuana tax revenues to “local police departments for additional training and crime prevention programs.”
Nevada’s marijuana taxes also flow to the state’s police departments, while in Colorado the police receive funding from cannabis taxes to deliver diversion and addiction recovery programs.
Portland, Oregon, instituted a supplementary 3 percent city tax on marijuana which was sold to the public as a means of supporting women and minority-owned businesses, drug rehabilitation programs and increased DUI enforcement. A 2019 city audit revealed that nearly 80 percent of this money went to “public safety causes,” which in reality simply meant the Portland police bureau was covering its own budget shortfall. This revenue comes on top of state cannabis taxes, of which 15 percent is allocated to law enforcement.
As well as bringing police spending into focus, the Black Lives Matter protests also revealed that marijuana businesses aren’t even getting the police protection which they pay more for than other legal outlets. Law enforcement resources in almost every major city in California were deployed against demonstrators during protests, while organized thieves targeted cannabis dispensaries. Many cannabis business owners reported that it took police officers hours to arrive, if at all. Pot shops are especially vulnerable to robberies since federal cannabis prohibition means they have to operate in cash. New Jersey and Arizona look set to legalize cannabis in the not too distant future. Perhaps even New York and New Mexico. Such efforts always come with trade-offs and compromises. The twin storms of the coronavirus outbreak, which has decimated state budgets and impoverished millions of Americans, and the Black Lives Matter protests must lead the drafters of adult-use cannabis legislation to question whether they are willing to compromise to anticipated law enforcement demands for a cut. The benefit to marijuana businesses, as well as the wider public, of funding law enforcement with cannabis legalization money has never been more in doubt.