Could legal marijuana become big business?

State victories for recreational pot use are prompting questions about its pros and cons.

By Bruce Kennedy Nov 7, 2012 3:59PM

Does Tuesday's legalization of recreational pot use for adults in Washington State and Colorado signal a death knell for illegal marijuana across the United States -- and the start of a new, legal and profitable industry?


Tuesday's elections "have forever changed the playing field regarding cannabis prohibition laws in America (and probably in large parts of the world too)," Allen St. Pierre, the executive director of the National Organization for the Reform of Marijuana Laws, wrote on the group's website.

Supporters say the measures will generate tens of millions of dollars in revenue for state and local governments while undermining illegal drug enterprises.


"Prohibition has failed," said an editorial in the Seattle Times. "Licensing the growers and retailers will take marijuana out of the hands of criminal gangs and bring it into the open, where it can be regulated and taxed."


But just how to regulate and tax marijuana in those states remains a huge question, especially since the drug remains illegal under federal law.


Eighteen states and the District of Columbia have legalized the use of medical marijuana. Years of observations of the industry have given analysts a baseline for considering the financial and legal obstacles recreational pot stores will face.


"This is the tricky thing," says Dr. Alexandre Padilla, an economics professor at Metropolitan State University of Denver. "Already you have the issue with medical marijuana dispensaries -- where a lot of banks refuse owners of medical dispensaries to open accounts because they're afraid the feds will close their offices because they are violating federal law."


The U.S. Department of Justice has been relatively quiet on the issue, saying Wednesday it's reviewing the Colorado and Washington ballot initiatives, with "no additional comment at this time." But there are concerns that the measures could trigger legal challenges all the way up to the Supreme Court.


In Colorado, the first recreational pot stores are scheduled to open in January 2014. Local governments can still keep the stores out of their towns, and employers can prohibit their employees from using marijuana. The state "has a lot of work to do quickly in terms of setting up the appropriate rules and structures," Rosalie Pacula, with the Rand's Drug Policy Research Center, told the Denver Post.


Supporters of marijuana reforms say legalizing pot has potentially enormous financial benefits. They say pot is already one of the largest cash crops in the United States. And longtime observers believe that, if legalized and properly regulated, marijuana could become  a very cost-efficient commodity.


"It doesn't cost much to produce it if you don't have to hide it," said Bruce Benson, the chair of the economics department at Florida State University. "I don't know if there are the kinds of scale economies in marijuana production that that there are in beer production.  It's more of . . . a packaging thing for a retail market, a legal market. So you could see some substantial processing packaging plants perhaps develop. That's down the road."


But all of this is still speculative. "The voters have spoken, and we have to respect their will," Colorado Gov. John Hickenlooper, a Democrat who opposed the recreational marijuana measure in his state, said in a statement issued Tuesday night."This will be a complicated process, but we intend to follow through. That said, federal law still says marijuana is an illegal drug, so don't break out the Cheetos or goldfish too quickly."

204Comments
Nov 8, 2012 2:40PM
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When prohibition of alcolol was tried back in the 1920s, the mafia became wealthy and people still drank.  Prohibition of marijuana obviously hasn't worked.  The "war on drugs" has been a black hole for money.  The common sense thing to do is legalize, tax, and control it, just like we do with alcohol and cigarettes. 
Nov 7, 2012 11:13PM
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smoke on finally I have been smoking my entire life and quit a few years back due to drug tests for work.  lets make this legal and stop testing everyone for employment way safer than alcohol and what people do in their personal life is their own business period.  If you do any drug alcohol included that affects your work shame on you and you need help.
Nov 8, 2012 12:44AM
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Its Your BODY DO WHAT YOU WANT WITH IT!    It works for women who cant say no to sex or yes to birth controll but YES TO ABORTION, and Gays who want to marry.    Now its Smokers time to get their civil rights back.   Way to go Colorado and Washington. you people are the BONG  ER BOMB   :-)
Nov 9, 2012 12:58PM
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Check out the facts!!!  Marijuana, weed, pot, and B B Que are not harmful to you in moderate consummation; however alcohol, tobacco, cocaine, opium and about 30 other class "A" narcotic are habit forming.  Marijuana is considered a class "D" drug which has not proven to have any addictive effects.....Check it Out

Ho... Ra  for Washington State and Colorado

 


Nov 9, 2012 1:14PM
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The only reason weed is frowned upon is because it's social unacceptable. You show up to a party, you bring a bottle of wine, not a bag of joints. Personally I feel that people should stop being so effing afraid of something they consider a "drug" and pull their heads out of their asses! Legalize that shiz.
Nov 9, 2012 1:24PM
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Prohibition is an inane law that infringes on individual rights and personal freedom. I applaud those with common sense and the balls to tell the feds we've had enough of their lying propaganda.

Nov 9, 2012 1:12PM
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of course it will mean big business.. you know the kind of tax you could impose on this?  Make persons interested in selling the product get a license at a cost, also tax each purchase.. I see a big income for the treasury of the States that legalize this..  
Nov 9, 2012 1:02PM
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Grow your own, then the weed will be worthless on the market

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yes it will become big business.  And if anyone is wanting t o get into the business in Washington, look up http://washingtonmarijuanaschool.com/
Nov 9, 2012 1:37PM
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Never really understood why the government had such a stance on pot. It's no more dangerous than alcohol. And the taxes on it would be great for decreasing the country's debt. If politicians could ever begin to rein in their spending in the first place, but that's another story...
Nov 9, 2012 1:58PM
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When will these so called "smart" people in Washington realize that they are losing out on Billions of tax dollars. Wasting billions of dollars prosecuting and jailing people who are not doing anything "Criminally"  to anyone else (in most cases). The  #1 "Crime" of inmates in the current U.S. Prison population, is for posession/ and or distribution. The "War on Drugs" should be dropping pot (legalize Nationwide), and put efforts on: Meth, Crack, Heroin.

Nuff said.

Nov 9, 2012 1:33PM
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yes it can! They need to legalize in all states!! Colorado and Washington are going to bank!
Nov 9, 2012 2:25PM
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Many of societies problems today are the result of excess STRESS.  People run around like chickens with their heads cut off, worrying about this and that.  What we all need to do is to slow down and live in the present moment-and smoking marijuana in limited quantity can help some anxious people do that.  I was on anti-anxiety meds, and felt wasted 24/7.  Taking a toke or two at the end of the day helps me relax, sleep, and focus on what I need to do the next day.
Legalizing marijuana use will result in profitable businesses.  The problem may be that the gov't will most likely put severe regulations on it.  Why not make it legal for folks to grow their own little plot for personal use?
Nov 9, 2012 2:09PM
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The Mexican government has already contacted the USA with "concerns" on how legalization here is going to affect the drug cartels there. Mexico is concerned how potentially cutting $1.5 Billion from Cartel revenue by legalizing MJ here will steer these Mexican mobs to other forms of crime. Or possibly reduce the under the table kickbacks to their corrupt government officials, and maybe ours too?
Nov 9, 2012 1:39PM
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I hope so. Time to bring Mary Jane under Federal control as with alcohol and starting making money off of it.  Otherewise, we'll continue to bleed federal enformcement dollars chasing this stuff down -- and the Drug Cartels will continue to rake in the money.  What better way to fight organized crime than take away their cash cow? DUH!
Nov 8, 2012 6:04PM
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Although it is widely accepted - even in most Government and legal circles - that the occasional use of cannabis is most certainly no more dangerous than socially accepted drugs like alcohol and tobacco, possession still remains an offense in most countries.

Cannabis is a class "D" drug.   Alcohol, Cocaine, Heroin, Opium, and Tobacco are considered to be a class "A" narcotic.

 Cocaine, Heroin, Tobacco, and opinion narcotics
Nov 9, 2012 3:33PM
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I've smoked pretty much every day for the last 20 years.  Never had to be rushed to the hospital because I was od'ing.  Never puked my guts up because I smoked too much.  Never robbed a liquor store to buy it.  Never sold it to kids or blew the smoke in anyone's face.  Never considered killing myself or anyone else because I couldn't handle my high.  Graduated from college, always maintain a job, and always pay my bills on time.  If someone can explain to me, in detail with logically sound reasoning, what I'm doing that is directly hurting them, I'll glady quit and take up the anti-pot campaign.  But it's never happened before, and I don't see it happening now.  Blaze on, brothers and sisters...

Nov 9, 2012 1:56PM
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Why not, I mean if the Federal Government  can't protect and secure our borders as the Constitution mandates, hell a little Mary Jane can't hurt. I'm looking forward to it, now if I can only get my professional lincense board to agree...
Nov 9, 2012 1:48PM
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Over the years in the public's mind the bottom dwellers have been dishonest used car salesmen and money grubbing lawyers. We elect representatives and send them to Washington to govern in our best interests. And what do we end up with? Lawyers.....and used car salesmen.
Nov 8, 2012 5:45PM
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my main concern, is how will the cartels react?  I dont think they will sit back and let their billion dollar business "go up in smoke" without some type of retalliation....

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