Kirk: Opt-Out of Cannabis Industry

Commercial Marijuana in Tuolumne County has been promoted at recent BOS meetings and election forums.  During my campaign to become the District 3 Supervisor, I ran on a platform opposing commercial marijuana. I don’t care if adults choose to smoke marijuana. I oppose the commercialization of the cannabis industry in Tuolumne County as it will ruin us like it did in Calaveras County.

Black Market Expands with Commercialization

We were told legalization would end the black market. A recent Politico article “How Legal Marijuana Is Helping the Black Market” states “In many cases, it has fueled, rather than eliminated, the black market… and illicit sales.” https://www.politico.com/magazine/story/2019/07/21/legal-marijuana-black-market-227414

CNN elaborates how California pot taxes help the black market. “members of California’s cannabis industry are sending an S.O.S. to the state capitol, saying they’re struggling to compete against black-market operators who don’t have to meet stringent regulations or pay taxes and fees.” https://www.cnn.com/2019/11/26/business/california-cannabis-industry-layoffs/index.html

An LA Times article found billions in black market revenues, much larger than the legal market revenues.  https://www.latimes.com/california/story/2019-08-14/californias-biggest-legal-marijuana-market

Another LA Times article describes how a legitimate, large-scale cannabis operation was found to be part of the black market. https://www.latimes.com/california/story/2020-02-14/carpinteria-pot-farm-accused-of-selling-on-black-market

NPR reports “that even five years from now, the illicit market will still account for 53% of all cannabis sales in California.” https://www.npr.org/2019/08/23/753791322/california-says-its-cannabis-revenue-has-fallen-short-of-estimates-despite-gains

Crime Expands with Commercialization

KPCC/SCPR describes how neighboring Calaveras County has experienced outpriced land, higher crime and a change in the culture. https://www.scpr.org/news/2016/11/03/65910/calaveras-county-copes-with-change-after-influx-of/

Drug Cartels Expand with Commercialization

Newsweek described cartel expansion in California, especially noting Calaveras: “Today, activists in California counties such as Calaveras are pushing back, trying to ban cannabis farms to cut off the cartels.” Newsweek also notes the California attorney general’s office believes and has evidence that illegal weed goes into the nationwide pipeline coordinated by Mexican drug cartels such as the Sinaloa cartel and La Familia Michoacana. https://www.newsweek.com/2018/01/19/mexican-drug-cartels-taking-over-california-legal-marijuana-775665.html

Youth Access Increases with Commercialization

A recent RAND study “Young Adults Who Live Near Medical Marijuana Dispensaries Use Marijuana More Often, Have More Positive Views” states, “Living near more medical marijuana dispensaries that had storefront signage was associated with a four to six times larger effect both on marijuana usage and on positive expectations about marijuana. https://www.rand.org/news/press/2019/06/17.html

The Rocky Mountain HIDTA report states that Colorado’s past month marijuana use among youth ages 12 to 17 years old is 40% higher than the national average in 2016/2017.  The more accessible marijuana is to youth, the more they use it. https://rmhidta.org/files/D2DF/FINAL-Volume6.pdf

And why the concern about youth access?  A study of twins shows that for every 10 high school sophomores who use or have used marijuana, 6 will suffer from stimulant addiction, 4 will suffer from addiction to cocaine or hallucinogens and 1 will suffer from other addictions.  This compared to virtually 0 addictions to those who have not use marijuana. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3717485/

California Tax Revenues Fall Well Below of Expectation

The Mercury News article “California made $345 million, not predicted $1 billion, on legal cannabis in 2018” reports, “Former Gov. Jerry Brown budgeted for the state to take in $185 million in excise and cultivation taxes over the first six months of the year. California missed that mark by more than $100 million. For the current fiscal year, from July 2018 to June 2019, Brown initially budgeted for the state to take in $630 million in marijuana tax earnings. Newsom’s proposed budget substantially dropped that forecast down to $355 million this fiscal year.” https://www.mercurynews.com/2019/02/19/california-made-345-million-not-predicted-1-billion-on-legal-cannabis-in-2018/

NPR reports for July 2018 to June 2019 the estimate dropped even farther: “In May, Newsom’s budget lowered its expectations for the cannabis excise tax, to $288 million in the current fiscal year”. https://www.npr.org/2019/08/23/753791322/california-says-its-cannabis-revenue-has-fallen-short-of-estimates-despite-gains

Calaveras County Supervisor Dennis Mills stated in his blog “Marijuana Production Financial Impact: No Benefit – All Costs.” And that “When the County Chief Administrative Officer was asked what the associated costs of the new marijuana ordinance in relation to revenue, he could not supply the information.” Additionally, he stated “Taxpayers Pay the Cost of Pot Growing – The urgency ordinance fees did not cover the county’s cost to clean up the damage to the environment, eradicate plants, force compliance, prosecute crimes and many other costs. The only cost the growers pay is the expense of the processing of their application. All other costs were funded by Taxpayers.”https://www.mymotherlode.com/community/blogs/calaveras-the-sky-isnt-falling

The long-term prospects for tax revenues are not good.  According to Forbes the east coast will not be able to compete with the west coast and Latin America production, “Simply put, in the long term it will be simply untenable for large-scale indoor cannabis producers in the United States and Canada to survive.” https://www.forbes.com/sites/kriskrane/2018/04/25/cannabis-cultivation-will-be-a-race-to-the-bottom/

Read the Propaganda Hype Carefully

A recent Leafly article sings the praises of benefits Californians are reaping from marijuana taxes.  This article published January 24, 2020 estimates California took in $538M in state cannabis tax revenue for CY2019.  Yet the NPR article estimates the figure at $288M for FY2019.  Now some of the differences could be Fiscal vs. Calendar year, but that is a huge difference.  Leafly goes on to stay that California will allocate $332.8M in FY2021 for all the social programs mentioned in the article.  But just adding up the list of goodies comes to $387.6M, a basic addition error of $54.8M.  In all likelihood, because of the black market, tax revenues will not pan out and the spending forecast described in this article will not happen.  Just like SB-1 money is supposed to fix our roads. https://www.leafly.com/news/politics/californias-635m-in-cannabis-taxes-where-is-it-going

In summary. I do not care if adults choose to smoke pot, and neither do our county ordinances. What is concerning is that numbers don’t add up, and crime rates, black market, and youth use is increasing. While the cannabis industry is hell-bent on forcing their agenda on the counties, three-fourths of the counties in California have discovered it is not all it’s cracked up to be and are deciding to OPT-OUT of allowing commercialized cannabis. As a policymaker, I will not rush into this mess. I spoke with a County Commissioner in Colorado who told me that opening the door to commercial cannabis is like turning a light on in a dark room; do it and you attract all the bugs. I would hope any current or future Board member or City Council member would think twice before opening the floodgates.