Pubdate: Wed, 20 Mar 2013
Source: Denver Post (CO)
Copyright: 2013 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Vincent Carroll
Page: 23A

FIVE TIPS FOR TWEAKING THE POT REGS

Let's hope the legislature has a mind of its own when it comes to 
Amendment 64 and that it stops short of adopting the entire set of 
proposals from the governor's task force on marijuana.

The task force had to address a huge array of issues involving the 
growing and selling of cannabis and has rightly been praised for its 
overall work. Still, at least a few of its suggestions merit further 
debate. Here are my top five:

1. Taxes. Although the task force didn't make a specific 
recommendation about the size of a special "marijuana products sales 
tax," it raised the possibility of 25 percent. That's in addition to 
the 15 percent excise tax mentioned in Amendment 64 (which voters 
would also have to approve), existing state and local sales levies, 
and maybe new local taxes as well.

In short, cannabis products could face a total tax of 50 percent or more.

Perhaps lawmakers could shrug off that burden if it weren't for the 
specter of high taxes aiding the survival of the black market, which 
is a criminal swamp the amendment was supposed to help drain.

The risk-related mark-up in the black market is no doubt significant, 
too, and no one can really say what a "safe" tax is. Meanwhile, 
supporters of a high tax can point to Washington state, which also 
legalized cannabis last fall and which has already imposed a 25 
percent tax on each of three stages of production in a bold attempt 
to gouge a fledgling industry.

Since the excise tax is earmarked for schools, a modest marijuana 
sales tax should be put on the ballot if only to pay for regulation 
and enforcement. But 25 percent has the feel of a revenue grab, with 
potentially unintended consequences.

2. Vertical integration. This means "cultivation, processing and 
manufacturing, and retail sales must be a common enterprise under 
common ownership." But why adopt a model so likely to inhibit 
efficiency and specialization?

True, the medical marijuana industry in Colorado is vertically 
integrated, and the task force is urging that medical marijuana 
license holders get a one-year jump on everyone else in filing 
applications for the new businesses. So maintaining the present 
structure could make regulators' life easier.

For that matter, the task force says vertical integration should be 
reviewed in three years to determine whether it should be continued. 
But by then the forces plumping for the status quo may be invincible. 
Just look at how hard it is to change rules governing the sale of 
alcohol in this state if a proposal steps on the toes of liquor stores.

3. Coloradans obviously don't want an oligopoly of marijuana barons, 
but the state's interest will hardly be served if we end up with a 
system similar to booze, where one store per owner is the rule.

4. This may be what Attorney General Eric Holder wants to see, but 
it's still obnoxious. Americans have been free to go wherever they 
want in this country and buy whatever is legal there, and we 
shouldn't start tinkering with that principle.

5. Maybe banning ads from public airwaves will pass legal muster, but 
banning all general marketing is likely to run up against judicial 
rulings on free speech-even commercial speech.

Steven Zansberg, who specializes in First Amendment and media issues, 
tells me the proposed regulations "would raise serious constitutional 
concerns" in light of the fact that they call for a broader ban on 
mass marketing campaigns of now lawful products than one found 
unconstitutional in Lorillard Tobacco vs. Reilly in 2001.

Colorado may be entering uncharted territory with recreational 
marijuana, but that doesn't mean we can't uphold traditional 
freedoms, promote meaningful competition and treat the new businesses fairly.
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MAP posted-by: Jay Bergstrom