Cannabis legalization is turning conventional wisdom on its head

Conventional wisdom tells you it should be so easy! Three states with Democratic Governors want to legalize cannabis and in all three states the governors have Democrat supermajorities in both houses of the legislature. Nevertheless, even with these built in advantages, the cannabis legalization bandwagon has screeched to a grinding halt. In Illinois, New Jersey (it falls one seat short of supermajority in the Senate), and New York the push to legalize cannabis has frustrated and disappointed the governors!

 

Why legalize is important?

These three states share two things in common: 1) they are not in great fiscal shape and 2) they have very high tax burdens on their citizens.

The Democrat governors in these states are depending and planning on the revenue from cannabis legalization.

In Illinois, Governor JB Pritzker’s budget relies on revenue from sports betting and legal cannabis to cover a nearly $400 million gaping budget hole. [1] New Jersey’s Governor Phil Murphy in his budget address indicated that marijuana legalization and medical marijuana expansion could lead to $80 million in tax revenue. [2]

Governor Andrew Cuomo is the outlier in the group, the move towards cannabis legalization is going so bad that he dropped legalized cannabis revenue from his budget that was submitted April 1, 2019. [3]

So clearly these are states that are in terrible fiscal condition[4] and states that show no intention of restraining spending. With public sector union pensions, salaries, and benefits continuing to grow expediently, the governors are looking for all the sources of revenue they can grab.

Without this revenue their intractable problem grows intractably worse!

 

If it is so important why is legalization so hard?

The Democratic Party’s most loyal voting bloc’s representatives are not loyally going along with party leaders and falling in line with the governors.

The black caucus in these three states have looked upon the initial legislative push skeptically. Mainly because the high capital requirements shut out many investors in minority communities, and because the minority community believes they disproportionately bear the burden of the war on drugs. Additionally, influential ministers and influential groups like the NAACP, are lined up against the law.

As one influential opponent in Chicago’s African-American community stated, ““This is not about social justice,” said Abu Edwards, national director of state affairs for Smart Approaches to Marijuana, a nonprofit organization opposing legalization. “This is about big corporations and big greed coming into communities like Chicago and opening up dispensaries in low-income African-American communities. And the African-American community is not going to benefit from it.”[5]

Many critics of the Illinois medical licensing system believe that the financial requirements for a license shut out many in the African-American community. It seems that without an adequate fix in the system, the same could happen for a legalized cannabis system.

In New York the sentiment is echoed! African-American lawmakers firmly stand with the principle that there may be no legalization unless people of color are guaranteed a piece of the industry’s $3 billion pie.[6]

In the previous states that legalized cannabis, none ensured that the minority community was mandated to share in the economic pie. The fear that wealthy investors could cash in without anyone from the community benefitting is providing many legislators to take a pause on legalization.

But monetary issues are not the only item making the black caucus in these states hesitant to support a legalized cannabis bill. Issues about the fairness of the criminal justice system are becoming serious. Of the other states that legalized cannabis, none have offered companion legislation that would expunge criminal records of many with drug offenses. Supporters of these measures feel that strict drug laws unfairly targeted minorities and that on marijuana related offenses a African-American resident of New Jersey is three times more likely to be arrested for a marijuana offense than a white person. [7]

 

How does it all go down?

The Democratic governors in these states desperately want the revenue to help cure their fiscal ills. With spending restraint not in their vocabulary, they will grab onto any revenue they can.

But for the black caucus, they see this not as an issue of closing budget holes, but as an issue of opening up markets for their community and criminal justice fairness.

With states like Illinois that essentially shut the poor and minority communities out of medical cannabis via high capital requirements, the black caucus wants a freer market approach mixed with laws that provide economic benefits to members of the communities.

Along with access to the marketplace, the black caucus has requested reform in drug expungements and to make the criminal justice system fairer.

The Governors have discovered that the black caucus is a force to be reckoned with and their demands need to be heard and they need to become an important part of the process.

Without the support of the black caucus, cannabis legalization is dead, and that is conventional wisdom folks!

[1] https://www.ilnews.org/news/agriculture/bills-to-produce-millions-needed-to-balance-pritzker-s-budget/article_71390158-41de-11e9-8c82-7745d9c1b56d.html

[2] https://www.nj.com/marijuana/2019/03/gov-murphy-expects-to-make-80-million-on-marijuana-by-next-year-why-thats-unlikely.html

[3] https://mjbizdaily.com/nys-cuomo-dropping-adult-use-marijuana-from-budget/

[4] https://www.mercatus.org/statefiscalrankings

[5] https://www.chicagotribune.com/news/local/politics/ct-met-illinois-marijuana-naacp-20190417-story.html

[6] https://www.nytimes.com/2019/03/11/nyregion/marijuana-legalization-african-americans.html

[7] https://www.nytimes.com/2018/11/28/nyregion/legalization-marijuana-new-jersey.html

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