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 9, 2012 4:13PM
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Legal or not, a employer that drug screens can still send one home without pay same as alcohol, get sent home enough and its fired, and totally legal.
Nov 9, 2012 4:13PM
Nov 9, 2012 4:00PM
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the same people here saying 'it is my body I can do what I want' don't get it !

I have no issue with the law being passed or pot in general - all for it - smoke 'em if you got 'em...

 

however...

 

the US Govt is requiring you to have health insurance - WTF?

 

your body you can do what you want does not apply if you are being forced to pay for something you may not need or do not want

 

everyone get stoned so you will be to oblivious to the rights & freedoms that you are losing daily & if you do happen to notice you can get a Rx for medical pot & have your coworkers pay for it with the new health care law in place...

Nov 9, 2012 3:54PM
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im sure at first people will be able to make money on it, but as time goes buy the govnment will raise taxes on it so much that only huge corporations will be able to afford to sell it.
Nov 9, 2012 3:44PM
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Time to invest in Doritos and Funions! What a country!
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 3:05PM
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In 1861, eleven states decided they didn't want to agree with the US government and have more states rights. How'd that work for them?  I hope all their Federal funds get shutoff (college grants, agri subsidies, ect)  then we will see some backpedalling!   Goverment handouts are huge business compared to some weed tax. 

Nov 9, 2012 3:03PM
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MJ legalization may also help curtail the import of "hard" drugs like cocaine, heroine, pills, etc. MJ is a nearly pure profit "cash cow" for drug Cartels due to requiring virtually no processing beyond packaging, and also serves as a pipeline which many other substances piggyback their way in on. With a much smaller illegal MJ market here, it will be increasingly difficult to launder drug money, and make it easier to trace just exactly who is manufacturing, buying, selling, and transporting truly dangerous drugs into the USA. Many of the illegal "supermarket" type dealers will not survive, and the ones that do will find their markets dwindle without the "foot in the door" MJ has so conveniently provided in the past.        
Nov 9, 2012 2:55PM
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Two blunts and a large coke please

 

Plus throw in two twinkies

Nov 9, 2012 2:47PM
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The hemp industry that the U.S. had long ago could be used for ethanol to elevate the price of corn ,reflected in our FOOD prices of late !
Nov 9, 2012 2:46PM
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The censoring MSN thought police don't like some of the things i have to say on this issue.
Speed The Day when harsh justice comes to visit them in their corporate dens of iniquity.
Soon The Cleansing

Nov 9, 2012 2:46PM
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Because it can't be taxed, people would grow their own. Pretty hard to grow a 6-pack of Budweiser or Magnum of wine out behind the barn.
Nov 9, 2012 2:43PM
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I think the initiatives are doomed. Like other products placed under a "sin tax" there will no doubt be a hefty tariff laid on weed. People will be fed up with this sooner or later and the smokers will go back to look for the local pushers to score a lid. I don't smoke dope, but I like beer. Maybe those states should shift the sum total of their local "sin taxes" from all A/B's and tobacco products to the the acquiring of mariguana. I can see it now: Head shops selling the permitted quantity of dope and acting as a state sponsored agency to collect tariffs and maintain records. I don't think so.

Nov 9, 2012 2:35PM
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it will still take years and years for some to get past THE REEFER MADNESS & CHECH-N-CHONG

STEREO TYPES that are way way over done ! and procreated by the MEDIA in just reporting WTF?

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 2:13PM
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WOW... its your body and I don't really care what you do with it.  Just don't expect to be handed jobs where it involves rescue, machinery, military, etc. etc. I. E.. jobs where people expect you to bring your A-game and not be a totally baked retard.
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 2:08PM
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Trans Fat kills and reduces fertility

Saturated fat kills and reduces fertility

White flour kills and reduces fertility

High fructose Corn Syrup kills and reduces fertility

GMO grain kills and reduces fertility

Corporate food kills and reduces fertility

MARIJUANA does NOT kill. It doesn't even need to be smoked. It can be safely vaporized or eaten. It's actually a healthy plant to eat with lots of vitamins and minerals.


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