As Maryland lawmakers begin to unearth the issues involved in legalizing marijuana for recreational use, a top local official has an idea that is certain to shake up the debate – even if it’s never implemented.
Cannabis stores owned and operated by the state.
“The state should do something bold with this,” Montgomery County Executive Marc B. Elrich (D) told Maryland Matters in an interview last week.
“They should not just legalize it. They should let Maryland farmers grow, and the state should process and sell. And take every dime of revenues.”
Elrich said the Colorado model — where the state legalizes the drug and collects sales tax from retail sales — misses an opportunity for much greater revenue.
“What’s the justification for giving [the profits] to a bunch of private guys who are rich, so they will get richer, and then you’ll be sitting there with crumbs in your hand, when you could have all of it?” he said.
“State weed” might sound like an idea that a Takoma Park Democrat, in his first year as executive, might toss off as a joke, especially considering Montgomery County is famous – or infamous – for its county-owned liquor stores. But Elrich — a policy wonk in the Montgomery County tradition — is not just ruminating aloud.
“I am serious,” he insists.
He then referenced a recent conversation he had with state Senate President Thomas V. Mike Miller Jr. (D-Calvert) regarding the Commission on Innovation and Excellence in Education, which is working to figure out a funding formula for its ambitious policy recommendations. The panel is chaired by former University System of Maryland Chancellor William E. Kirwan.
“I’ve talked with Miller and when he goes through all the things you’re going to have with Kirwan, you’re not going to get to the number they need, even putting legalized pot in there, because all you’re going to do is get the [sales] taxes.”
A scholar who has studied the economics of marijuana said Elrich deserved credit for “thinking creatively.”
“He’s basically right,” said Prof. Jonathan P. Caulkins, who teaches operations research and public policy at Carnegie Mellon University.
Caulkins said the cost of growing cannabis plants is dropping significantly as larger companies — drawn by the wave of legalization — enter the market. That means the real action will increasingly be in selling the stuff, not growing it.
“There is a big gap between the cost of growing and the retail price,” he said. “And the question is, who is going to get it?”
Although some states and countries control alcohol and tobacco sales, “nobody’s ever done it with cannabis,” Caulkins said.
Serge Chistov, a partner in northwest Colorado’s Honest Marijuana Co., sees pros and cons in Elrich’s approach. In the short term, state-run sales would stabilize an industry that is in need of infrastructure.
“As we’re speaking today, I would love for the state to get involved, create the banking, collect the monies, set up the rules,” he said.
“Maryland is more equipped is to distribute anything — not just cannabis — faster and better than the best cannabis distributors, today, because they’re simply nonexistent, and when they are, they’re new, young and green.”
Over the long term, however, Chistov would want private companies in command.
“I’m a capitalist guy. Just let the competition, innovation and the true market forces be involved,” he said. “… Consumers want choice.”
The General Assembly’s Marijuana Legalization Workgroup held its first meeting on the same day last week that Illinois became the 11th state to allow recreational use of the drug.
Del. Kathy Szeliga (R-Baltimore and Harford Counties), who serves on the panel, is no fan of Elrich’s proposal.
“There are limits to what the state should do to fund education,” she said. “And becoming a statewide dealer of marijuana will neither solve the education funding problem nor be helpful to our youth.”
Former state attorney general Douglas F. Gansler (D) called the proposal “extremely outside the box, both in moral and economic terms.”
“The government ought to be keeping people safe, providing the highest standards of education and concepts like that — not selling people marijuana. One would have to tread carefully [because] once you go down that path, it’s difficult to come back.”
Colorado, which legalized retail sales in 2014, has now collected more than $1 billion in revenues from sales taxes and fees.
Elrich said that with the change in public attitude about marijuana legalization, after years of stagnation, the time for bold thinking is now.
“Stop playing around with it,” he said. “Just really take the money. You could do amazing things with it.”