Hilary Bricken
by

Straight out of the gate in 2015, states with adult use marijuana laws on the books are now asking whether they still need their original medical marijuana laws and industries. Both Colorado and Washington are questioning the necessity of a medical marijuana system now that their regulated recreational marketplaces are in full force. Even Oregon, which legalized marijuana only a few months ago is hearing rumblings on this question.

When a medical marijuana state legalizes recreational marijuana under a regulated regime it ultimately will face the question of whether the two parallel industries (medical and recreational) should both continue to exist. This question becomes even more serious when the state’s medical marijuana industry is unregulated and uncontrolled. In those situations, the recreational businesses which are highly regulated and taxed do not think it fair to have to compete with their un-regulated medical marijuana counterparts. At that point, they usually start lobbying their state by pointing out that if the state wants to maximize its tax revenues from marijuana sales and ensure public health and safety, it should shut down the unregulated medical businesses entirely.

Unsurprisingly, competition between the illegal, the medical, and the recreational markets is pretty fierce at this point. Taxes on recreational marijuana alone are causing a good number of customers to access the existing illegal and medical markets. According to the Associated Press:

In Washington, the black market has exploded since voters legalized marijuana in 2012, with scores of legally dubious medical dispensaries opening and some pot delivery services brazenly advertising that they sell outside the legal system.

And the number of patients on Colorado’s medical marijuana registry went up, not down, since 2012, meaning more marijuana users there can avoid paying the higher taxes that recreational pot carries.

Both the Washington and Colorado governments are getting considerable heat from recreational marijuana businesses (and others) about their illegal and medical markets, and they are both looking at how they can rein in their medical systems and fix the big tax differential between medical and recreational marijuana without harming patients. But therein lies the rub. How can states equalize the tax structures between medical and recreational without negatively impacting legitimate patients who oftentimes lack the funds to purchase high-priced cannabis?

Various “fix” measures are on the table in each state; Washington’s Liquor Control Board is talking about increasing the number of licensed storefronts statewide and lawmakers are looking at massively updating the state’s existing medical laws. Colorado is planning to crack down on providers that give medical marijuana to those who should not qualify for it.

Alcohol once went through a very similar medical versus recreational dichotomy. During alcohol prohibition, one of the exceptions to the national ban on alcohol was its medicinal use as prescribed by a physician. One critical difference, however, is that the medicinal claims for alcohol were generally bogus, whereas there is little doubt that marijuana can be quite effective for certain medical conditions.

One thing is certain: no one state has legalization completely figured out and there is no “gold standard” that works for both adult use and medical patrons. Only time will tell for the fate of each of these marketplaces.

 

6 responses to “Medical vs. Recreational Marijuana in 2015”

  1. The problem is the states lack of leadership in regards to the medical side. They have ran away at every chance they get to address any real regulations on medical side, then because they claim they are unregulated they need to be done away with. The good majority of legislators see it as a threat to the fragile retail system. Well it sure seems regulated when I haul cash into the department of revenue now monthly instead of quarterly, due to a change in their regulations, and I can list of a myriad of collectives shut down for distance compliance “regulations”, and I know that the authorities that come by and try to get us to sell…and yes I’m calling it a sale..hence the sales tax we pay..are trying to trip up everyone on a regulation. Yet when we asked the city of Seattle to take the lead on so called delivery services advertising no medical authorizations necessary, Mr. Pete Holmes in effect said there was no need..that it was okay because it was a transition phase. I also think that Pete said that medical patients represent less than 10% of the customers for marijuana. Now everyone thinks that dispensaries are a challenge for retail…at 10% of the market? Really?….How about Chris Hurst …He wants to seize illegal marijuana from the black market and auction it to the retail 502..highly tested and regulated market so that the money can then be diverted to law enforcement. .so this not regulated product will be tested by the same labs that have tested the “not tested medical marijuana” before it goes into the system? Mind you all the pesticides you can put on it that won’t test+ even though they’re there….note: most labs have to be told what pesticide to test for…so what maybe 100-200 individual tests..The state needs to figure out how to play nice and be happy that established medical dispensaries are there….require them to purchase product from the 502 side with 25% tax on the producer already and note: at $3-5gm total….. cheaper than what they are currently paying, take the 9.2% sales tax the “regulations” require, and be happy that medical will save 502…patients get good pricing state gets @35% tax out of the transactions. ..and while they’re at it allow 502 producer/processors to sell products to the tribes and the state gets their 25% still…..or don’t. …and watch businesses go out of business. ..Over production due to the states requirement to be at 50% production within 1yr and 100% within 2yr. …and now changing their stance that cities and municipalities can be “dry”…..such a shame that Washington State, the people are so progressive yet our legislators are so repressive, will squander so much of our $ capital…and ultimately the hotbed of marijuana will be the overtaxed, uncompetitive back marker, in about 2-3yr when it’s descheduled. ..I don’t want to have to move to Oregon or some other state, I kinda like it here..and sometimes, for the life of me I don’t know why!

  2. Please stop referring to non 502 cannabis as black market. That is the FREE market you are talking about, in the true spirit of cannabis. The Black Market is the state with its fear and coericion, taxes, and idiots in charge…

  3. Medical marijuana should merge with the health care system as well as with recreational marijuana. This will require fundamental change in how mainstream medicine treats marijuana. Fortunately, newly legalized state research will illuminate this process. Bottom line is that some patients should qualify for free research-validated medical cannabis treatments paid for by insurance, medicare or states. Oregon created a model over 18 years where marijuana farmers have greatly subsidized the care of tens of thousands of patients. What you describe as the unregulated medical market needing to be reined in is, in Oregon, one of the most effective programs that help needy people. Instead of shackling medical marijuana with more unenforceable rules we need to free the cannabis economy so that innovators and entrepreneurs can grow health, wealth and prosperity. Creating a thriving recreational market based on eliminated prohibitionist plant limits will alter the economic geography. Plant limits trump tax rates.

  4. There is no such thing as recreational. If, in the absence of a disease or diagnosis recognized by the allopathic monopoly, a body feels better, or relieved, or less painful or, Jah forbid, euphoric, seems to me a perfect example of a therapeutic probe, indicating that there is an undiagnosed health condition which, left untreated, will become chronic or acute disease, that will in the future become a condition authorized for medical cannabis, if the person has access, and if they don’t die waiting.

    There is no such thing as recreational cannabis. It is all medicine. What we currently call recreational cannabis is truly preventive medicine.

    Next we get out our Black’s Law Dictionary and dissect “recreational”. Scalpel, please.

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