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JANUARY 13, 2015Mark Thornton
TAGS Financial MarketsHealthThe Police State
Legal recreational cannabis/marijuana/pot is almost one year old in Colorado. The Denver Business Journal recently published a retrospective containing several articles reviewing the experience. The general conclusion is that it has been a big success, not the tragedy some had predicted or claimed. The remarkable thing is that the report claims the biggest remaining problem for the industry is caused by the Federal Reserve!
Some of the big concerns prior to legalization have turned out to be trivial or failed to materialize at all. Expectations of overdose deaths, delinquency, and crime did not materialize to the extent that the newspaper barely reported on those issues. Crime in Denver actually declined in early reports.
Earlier this year, I examined the experience in Colorado and found that most reports were favorable to legalization. For example, the Business Insider reported that “Legalizing Weed in Colorado Is A Huge Success,” although they did report a “down side” as well. Jacob Sullum reported that such things as underage consumption and traffic fatalities declined, but not significantly within an already declining trend.
There was one early report that strongly called into question the legalization of marijuana in Colorado. It was put out by an outfit called the “Rocky Mountain High Intensity Drug Trafficking Area” program. It turns out that the program is part of the White House Office on Drug Policy, but that fact is not advertised in the report. Their lengthy report, “The Legalization of Marijuana in Colorado: The Impact,” appears to be very scientific and evidence based. However, I found it has more logical holes than a wheel of Swiss cheese gone wrong.
There certainly has been an increase in consumption and some diversion to minors. Colorado has historically been a high use and high abuse state, ranking above the national average in many categories. However, Colorado is close to the national average in the important category, the rate of drug overdose deaths, and the majority of deaths are the result of prescription painkillers, such as Vicodin and Oxycontin.
It is also true that there is anecdotal evidence of problems with legal weed in Colorado. There was the young man who consumed several times the recommended number of marijuana-infused cookies and jumped from a hotel to his death. There was a story of a dog that died after eating cookies left on the kitchen table. And there were several stories of children stealing cookies from their homes or their grandmothers and sharing them with their friends at school.
However, these events are still just newsworthy anecdotes, not trends or statewide calamities. They are also predictable. In transitioning from prohibition to legalization there are going to be such problems, but competition has its many ways of weeding out such problems over time. The marijuana dispensary industry has already been implementing new procedures and new ways of packaging edibles to improve their safe use.
Federal Regulations Prevent Financial Freedom in the Industry
The one remaining problem is that people in the growing and retail businesses have been denied access to the banking system. Without bank accounts, and being a largely cash business, the firms are more at risk of robbery. Without bank accounts it is more difficult to pay vendors and employees, and paying fees and taxes to local governments has created headaches for all. Everyone agrees that the simple solution would be to allow the use of credit cards and bank accounts.
Local banking officials seem to be cooperating. The Colorado Division of Financial Services issued a charter for a credit union designed to serve the industry. However, efforts are being blocked by a holdup on obtaining deposit insurance and by none other than the Federal Reserve nixing efforts for the credit union to obtain a “master account” from the Federal Reserve.
continued...http://mises.org/library/sky-not-falling-legal-pot-turns-one-colorado
TAGS Financial MarketsHealthThe Police State
Legal recreational cannabis/marijuana/pot is almost one year old in Colorado. The Denver Business Journal recently published a retrospective containing several articles reviewing the experience. The general conclusion is that it has been a big success, not the tragedy some had predicted or claimed. The remarkable thing is that the report claims the biggest remaining problem for the industry is caused by the Federal Reserve!
Some of the big concerns prior to legalization have turned out to be trivial or failed to materialize at all. Expectations of overdose deaths, delinquency, and crime did not materialize to the extent that the newspaper barely reported on those issues. Crime in Denver actually declined in early reports.
Earlier this year, I examined the experience in Colorado and found that most reports were favorable to legalization. For example, the Business Insider reported that “Legalizing Weed in Colorado Is A Huge Success,” although they did report a “down side” as well. Jacob Sullum reported that such things as underage consumption and traffic fatalities declined, but not significantly within an already declining trend.
There was one early report that strongly called into question the legalization of marijuana in Colorado. It was put out by an outfit called the “Rocky Mountain High Intensity Drug Trafficking Area” program. It turns out that the program is part of the White House Office on Drug Policy, but that fact is not advertised in the report. Their lengthy report, “The Legalization of Marijuana in Colorado: The Impact,” appears to be very scientific and evidence based. However, I found it has more logical holes than a wheel of Swiss cheese gone wrong.
There certainly has been an increase in consumption and some diversion to minors. Colorado has historically been a high use and high abuse state, ranking above the national average in many categories. However, Colorado is close to the national average in the important category, the rate of drug overdose deaths, and the majority of deaths are the result of prescription painkillers, such as Vicodin and Oxycontin.
It is also true that there is anecdotal evidence of problems with legal weed in Colorado. There was the young man who consumed several times the recommended number of marijuana-infused cookies and jumped from a hotel to his death. There was a story of a dog that died after eating cookies left on the kitchen table. And there were several stories of children stealing cookies from their homes or their grandmothers and sharing them with their friends at school.
However, these events are still just newsworthy anecdotes, not trends or statewide calamities. They are also predictable. In transitioning from prohibition to legalization there are going to be such problems, but competition has its many ways of weeding out such problems over time. The marijuana dispensary industry has already been implementing new procedures and new ways of packaging edibles to improve their safe use.
Federal Regulations Prevent Financial Freedom in the Industry
The one remaining problem is that people in the growing and retail businesses have been denied access to the banking system. Without bank accounts, and being a largely cash business, the firms are more at risk of robbery. Without bank accounts it is more difficult to pay vendors and employees, and paying fees and taxes to local governments has created headaches for all. Everyone agrees that the simple solution would be to allow the use of credit cards and bank accounts.
Local banking officials seem to be cooperating. The Colorado Division of Financial Services issued a charter for a credit union designed to serve the industry. However, efforts are being blocked by a holdup on obtaining deposit insurance and by none other than the Federal Reserve nixing efforts for the credit union to obtain a “master account” from the Federal Reserve.
continued...http://mises.org/library/sky-not-falling-legal-pot-turns-one-colorado
