With Marijuana Sales To Begin, What Massachusetts Can Learn From Other States

No stores in Massachusetts yet are able to sell marijuana for recreational use, but the first could open within a few weeks. 

Voters decided to legalize the drug more than a year and a half ago. But the Cannabis Control Commission said it's taking the time to avoid the potholes that made things bumpy for pot sales in Colorado and in Washington.

To learn more about how things are going in those states several years after they legalized the drug, we turn now to Ben Markus at Colorado Public Radio and, in Washington at public radio station KNKX, Gabriel Spitzer.

Carrie Healy, NEPR: Let's start with the economics of marijuana. Gabriel, since adult use marijuana in Washington was legalized, have medical marijuana dispensaries continue to stay in business?

Gabriel Spitzer, KNKX: They have not. That was sort of part of the ultimate end goal of the legalization of recreational marijuana here in Washington was to eventually fold the medical marijuana system, which was sort of lightly regulated -- considered kind of a gray market here, into the legalized system. So actually there's no longer any officially recognized medical dispensaries here.

There's a kind of special designation that certain recreational stores can get and patients are entitled to forego sales tax, which is really only a small part of the taxes that are collected on pot sales here. But essentially, the medical stores, which used to be ubiquitous here in Seattle in fact, have all but dried up now.

What did the economics of marijuana [end up being] in Colorado, Ben?

Ben Markus, Colorado Public Radio: Well, we still have many medical stores here in Colorado and that's in part because of taxes, actually. The tax rate on medical is much lower than it is for recreational, so that market has stayed alive. So if you walk into a store in Colorado, you'll see two counters: one counter is for medical patients, the other counter is for recreational.

If you went into Denver -- you wanted to look at the economics of marijuana -- you would just see that there are 200 stores in one city. It's kind of like gas stations; they're on every corner. And the economics of that means it's driven the price down. It's made profitability much harder. In Colorado, it's good for the consumer [but] it's a lot more difficult for the businesses, especially with the tax limitations they have and the kind of deductions they can take because it's federally illegal.

So good for the consumer, bad for the business, good for tax revenue. States collecting about $200 million  a year now in tax revenue, which isn't breaking the bank in terms of state budgets, but it's definitely revenue they didn't have before.

Gabe, what does the state tax revenue look like for Washington?

Spitzer: It's a bit lower than in Colorado. We don't have quite as many stores and I think the overall sales volume is a bit less than in Colorado. But the other thing about taxes here in Washington is that almost all of the tax revenue is earmarked -- much of it for public health and drug prevention and education services, as a matter of fact. Not very much of it is going to the state's general fund.

So it's not like it's all of a sudden paying for schools or that kind of thing. Only a small portion of it is going into discretionary spending. The rest really is earmarked specifically to offset and deal with some of -- what was anticipated to be -- the social effects of of legalizing recreational marijuana here.

Has there been a big effect on the black market now that sales are legal?

Spitzer: It's mixed and it depends what indicators you're looking at. On the one hand, if you think about one of the purposes of legalizing recreational marijuana here, it was to stop criminalizing the black market -- at least for users and small sellers. And in that sense, it's been a big impact. There are very, very few people now going to jail and getting arrested and even getting ticketed for marijuana possession and sales -- with the exception of you know large-scale traffickers and so on.

But on the other hand, there's still plenty of black market weed out there, and the prices fluctuate a fair amount. So the recreational market has had a bit of a hard time competing with the black market, in terms of trying to keep its prices low enough so people buy from the stores rather than somebody on the street.

And, Ben, is black market pot still a thing in Colorado?

Markus: It is, but the nature of the black market has shifted. So now the black market in Colorado is one that supplies marijuana to the rest of the country and surrounding states. What we have going on with some cases is something called "looping," where people come from out of state and they buy the maximum amount of marijuana per transaction at multiple stores or the same store, and then they drive that marijuana back to their home state. It's not exactly clear how widespread that is.

The other black market is for youth. So marijuana possession is legal in Colorado now up to an ounce. But if you're under the age of 21, it is not. And so, arrests of people who under the age of 21 are still quite high. And it tends to target Hispanics and blacks, according to the latest state data, disproportionately -- just as it did before legalization.

Ben, in Massachusetts there are lots of communities that have voted for a moratorium on sales and have used zoning laws to keep marijuana out. Was that the case way back for Colorado?

Markus: Yeah, so just to draw a distinction -- Denver has 200 recreational marijuana stores, [while] the city of Colorado Springs, an hour south of here, has zero. So each community gets to choose exactly how they want to design their system. Local communities have a lot of control. Now, Colorado Springs still has a lot of medical stores, so their medical patient numbers are quite high.

And the argument among advocates is by not allowing recreational sales within your city, you're simply pushing the sales to other counties that get to benefit from the higher tax revenue that comes from recreational marijuana. But Colorado Springs is a conservative community with multiple military bases and so they're making a decision that fits their community.

You know, we're all reporters here, all in the business of communicating -- what the heck are you all calling marijuana in your news coverage? We've found that we can alternate it with marijuana and pot, but what have your stations been doing?

Markus: So when we first passed legalization, we were interchangeably using pot, weed, marijuana -- but marijuana more frequently. We started to get complaints from marijuana businesses who felt like cannabis was a more appropriate term. Now, cannabis is more of a European type of term for marijuana. So now we use marijuana and cannabis interchangeably. Primarily we don't use pot or weed, because that's seen as more of a kind of lower level use of the term.

So then Gabriel in Washington -- what are you calling it?

Spitzer: Pretty similar, actually. Particularly at the beginning, there was a lot of nudging to use cannabis as a kind of more neutral term, a less loaded-sounding term. But we typically use marijuana and cannabis interchangeably. And we still do call it pot and weed occasionally as well, just because that's what people call it -- including a lot of the businesses, a lot of the stores, a lot of the signs say "legal weed" on them. So it's a little bit hard to avoid that.

Anecdotally, have either of you seen junk food sales fast food sales go up in your state?

Spitzer: (laughing) I wouldn't know, I guess. Sorry.

Markus: I mean, part of the problem in Seattle and Denver is that the population growth is so fast. Yes, restaurant sales have hit record levels at Denver. But that may just be because we're importing tons of people.

Spitzer: I will say this: Shortly after the legalization -- there's an annual event that predates the legalization here called Hempfest -- and that year the Seattle Police Department attended Hempfest with informational stickers that explain the new law stuck to bags of Doritos. And they handed out these bags of Doritos at Hempfest. They called it Operation Orange Fingers.

Markus: That goes to that stigma you were talking about, right? When Colorado passed its marijuana law, the governor said, ["Don't break out the Cheetos or gold fish too quickly"] -- referring to what would the federal government do. But just that idea that people have preconceived notions about what a typical user looks like and that may not actually be the case. But it's our popular culture that has kind of painted people in a certain light.