State-Level Marijuana Legalization

Marijuana legalization initiatives at the state level – Prop. 19 in California in 2010, the proposals likely to be on the ballot in Colorado and Washington State this fall – run into a tricky set of problems. Marijuana, if legalized, ought to be regulated and taxed. But how can you tax and regulate, at the state level, something that remains a Federal felony? It might seem that all a state can do is what New York did with alcohol in 1923: repeal its state law entirely, leaving the business unregulated by the state and allowing the federal government to enforce its prohibition, or not.

In fact, it did seem that way to me when I proposed the design problem as an assignment to UCLA first-year public policy students as part of their introduction to policy analysis. I thought I was giving them a problem with no good solution; discovering that such problems exist is an important part of policy education, and the class was so extraordinarily strong I thought they were ready to absorb that rather daunting lesson early in their educations.

Well, it turns out I was right about the students, but wrong about the problem. Much to my surprise, one of the groups came up with a workable regulatory scheme (based on liquor stores) and another with a workable tax scheme (physical tax stamps). (A third group had the idea for a sunset provision, with a commission to propose revisions to whatever the new law was in light of experience.)

I wrote up the students’ ideas in a short memo and sent it around to some of the activists I know, with no perceptible result; the Washington and Colorado proposals don’t incorporate these ideas, and California is going nowhere.

The memo is here.

[Cross-posted at The Reality-Based Community]

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Mark Kleiman

Mark Kleiman is a professor of public policy at the New York University Marron Institute.