Colorado’s new marijuana laws appear to have sidestepped any heavy-handed enforcement of federal drug policy, likely paving the way for increased state tax revenues and business development.
On 6 November 2012, the voters of Colorado approved the passage of Amendment 64 to the state’s constitution. Passing with approximately 55% of the vote, the Amendment (now Article 18, section 16 of the Colorado State Constitution) legalizes the possession of up to 1 ounce of marijuana for personal use by individuals who are aged 21 or over. Private individuals are also allowed to grow up to six plants (three of which may be mature) under the new marijuana law. A similar amendment, known as Washington Initiative 502, was also passed following a successful popular vote in November of 2012, in an election that saw 81% voter turnout. (www.sos.wa.gov)
Both of these initiatives suggest that, at least in some parts of the country, popular attitudes toward the personal use and possession of marijuana have begun to resonate with lawmakers. The new laws also take considerable steps beyond those of 20 other states, which have already made provisions for the medical use of the drug.
From a legal standpoint, Amendment 64 and Initiative 502 directly defy U.S. federal law, under which marijuana possession continues to be illegal and the drug categorized as a controlled substance. However, a recent official statement from the U.S. Department of Justice suggests a “wait and see” policy towards Colorado’s recognition of marijuana as a legalized but regulated recreational drug.
For the time being at least, the feds have stated their intention to focus drug law enforcement efforts toward cases involving underage use of marijuana, and drug trafficking associated with violent criminal organizations and gangs. The statement, released on 29 August 2013, notes that, in the cases of Colorado and Washington, "the department expects these states to establish strict regulatory schemes," and that its stance on the matter involves "deferring its right to challenge legalization laws at this time."
Thus, the department’s policy appears to give Colorado and Washington the opportunity to test the success of their stated regulatory policies, and to allow time for these policies to be fully implemented.
In the meantime, the state of Colorado appears to be gearing up for the potential financial benefits of marijuana regulation. On 18 May 2013, Colorado governor John Hickenlooper signed into law two bills designed to set guidelines for the cultivation, retail sale, taxation, and regulation of marijuana as a fully legal recreational drug. In effect, these laws would make marijuana roughly akin to alcohol in terms of authorized sale and consumption. The effect on tax revenues and the local private sector could be noticeable.
Speaking about the effects of the new marijuana laws in an interview with the New York Daily News, Mason Tvert, communications director for the Marijuana Policy Project, noted, “In 2014, the new excise tax is expected to raise $24.1 million” in revenues. And added, “All of that money will go toward public school construction.” According to the Daily News article, an analysis by the Colorado Center on Law & Policy also found that millions of dollars more could be expected from local and state taxation of the drug, and that the state of Colorado could expect up to “$60 million in total combined savings and additional revenue for Colorado’s budget with a potential for this number to double after 2017.” (NY Daily News, “Colorado Becomes World’s First Legal, Fully Regulated Market for Recreational Marijuana…”)
Meanwhile, in another recent article, the Denver Business Journal reports that marijuana-growing operations have already delivered a significant financial boost to industrial real estate in the state capitol. The DBJ article asserts that such businesses have been willing to pay rents that are as much 30% to 40% above market rates for real estate, and that many of those transactions are in cash, due to the difficultly most large-scale marijuana growers have in securing bank loans. (Denver Business Journal, “Metro Denver Marijuana Growing Operations Giving Boost…”)
Of course, not everyone is thrilled about the new policy or its potential to fill the state’s tax coffers and enrich the local real estate market. Retired U.S. Army General Barry McCaffrey, former head of federal drug policy under President Bill Clinton, has stated publicly that the liberalized marijuana laws in Colorado are wrong-headed and will result in increased use of the drug by minors and in additional collateral costs for the state as the notion of a drug-free workplace is eroded. (Denver Business Journal, “Ex-Drug Czar Says Pot Law Will Harm Colorado”)
Whether the U.S. Department of Justice will step in to more actively enforce federal drug laws at the state level in the future, or if McCaffrey’s gloomy predications regarding the decline of the drug-free workplace in Colorado will come to fruition, are issues that remain to be seen. But, for the time being at least, it looks as if the state has taken its place at the forefront of more open marijuana policies in the U.S., and stands poised to reap the potential financial rewards of the drug’s legalization and regulation.