Observations on legal pot

Texas has opted for the underground, unregulated, market for cannabis, backed up with severe fines and prison time. And they seem happy with this model as there is little effort to make any significant changes.

The Washington legislature is getting prepared to convene, and they have a lot on their plate. They may not like admitting it, but the “seed to sale tracking” scheme that always sounds so good when the laws are being written has failed miserably and has not functioned as designed for 6 years. The brave approach would be to abandon it entirely, but what will actually happen is that they’ll throw more money at it. Testing needs attention as the state is far behind the curve for thorough laboratory testing. But this is an example of how the older laws written by CO and WA are going stale and need some maintenance.

Michigan opened retail sales on the first of December, a month earlier than expected. They, and Illinois, have a robust legal structure that takes into account all the good stuff from other states. MI is interesting because it’s the second largest legal state behind CA, and of course opens up a market for the bulk of the upper midwest. Illinois opens on January 1, another large state which further extends the market into a lot of illegal states. Both programs have/will come up without major issues, except the very common slowness in getting operations licensed and built. Illinois has a novel tax structure (considered and rejected by other states) of 10% for products having less than 35% THC, 25% for those having more. Those are extremely low rates, even given the two-tier structure.

Arizona looks like it is a fully legal and regulated market, but it’s not. Their initiative to fully legalize and regulate failed a few years ago, partly due to the proponents being split into two groups that couldn’t compromise. So they have a minimal medical marijuana program that is running amok. They are the only state which has no testing of any products. (Testing by the producers themselves does not count). Efforts are underway to try the initiative process again in 2020, but there are two groups that have competing proposals and they are not compromising.

I’ll be following closely New Mexico because I’m near there, and they are getting geared up to pass legal cannabis during their legislative session in January. Most watchers are optimistic something could pass. We’re not talking a big market here at all, which makes it easier to implement. And, their medical market is running well enough they could transition very quickly.

Those are the states I’m watching this winter.

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