Should Marijuana Tax Revenues Go to Towns That Ban Dispensaries?

If you aren’t supporting recreational cannabis, should you get to enjoy the shares of the pot pie? An article in the?Boston Globe?shed some light on the issue since there are now over 100 towns that have placed either strict limits on licensed cannabis businesses, or have completely banned them.

Pro-pot advocates have worked on a proposal to prevent towns and cities that have placed constraints on cannabis businesses from receiving any money from the state’s tax revenues, which are estimated to be over $150 million. The argument makes perfect sense; after all, why should you benefit from something that you didn’t help with at all?

Kamani Jefferson of the Mass. Recreational Consumer Council agrees. “Municipalities shouldn’t be entitled to something they took no part in,” he says. Jefferson is behind the proposal, which he says “would force their hand and really encourage them to let these businesses in.” State law provides municipalities with a 3% cut from cannabis retail businesses, but there is an increasing number of restraints being placed even in areas where voters approved Question 4 last year, the same measure that legalized cannabis.

Back in January 2018, Jefferson and other pro-pot advocates will introduce a bill that would shrink cuts from cannabis businesses to towns and cities that placed restrictions on cannabis operations to an amount that makes up the area’s share of the state’s 17% tax on commercial cannabis sales. However, the problem they face is answering how exactly they are going to decide how much that amount is going to be. Massachusetts Legislature has already overruled against proposals that would give bigger tax revenues to municipalities that have openly been welcoming cannabis businesses, twice.

On the other hand, the Massachusetts Municipal Association, criticized this idea. “This is punitive, wildly impractical, and impossible to implement,” says Geoff Beckwith. “The commercial marijuana law provides financial incentives for communities to zone for pot shops. Communities that decide not to are forgoing that incentive. That is the only reasonable and transparent way to shape tax policy.” He tries to justify it by saying that even towns that ban cannabis operations will still need money because police officers need additional training to catch drivers under the influence as well as other “spillover” costs that legalization incurred.

The debate around cannabis taxes is similar to the issue on payouts from?state lottery, which is the biggest source of local aid in Massachusetts.?A 2014 analysis?revealed that higher income communities got much more in taxes than lottery sales, while in lower income communities, which produced more sales in lottery tickets, received less local aid compared to what they’ve cashed in. Harvard, a town which doesn’t even have a single retailer selling lottery tickets, got?more in local aid?compared to poor communities that were home to lottery operations.

State activists are going ahead despite the obstacles they’re facing at the political and economic level. This might be a way to get back at the prohibitionists who many feel were the reason behind changes to Question 4 as well as well as the increasing number of town restrictions on cannabis businesses. “I’m not sure it’s workable, but I like the sentiment behind it,” says Jim Borghesani, a rep of sponsors behind Question 4. “Why should towns that vote to keep criminals in control of marijuana commerce and keep unsafe, untested product on the streets not experience repercussions?”

Bill Downing, who has been supporting legalization in town for some time now, refers to the potential consequences as “instant karma”. No matter which way you put it, everyone seems to agree on one thing – that executing the prohibition is going to be difficult.

It’s going to be challenging to decide how much money and from which channel they state will be dispersing funds to go to grants for certain project. State financial officials also say that accounting cannabis taxes, part of which will be merged with the same funds that will receive other sales taxes, will be another headache. According to Massachusetts law, cannabis taxes go to the Cannabis Control Commission as well as other state agencies that manage recreational pot. Any leftover money from that is used to fund public health projects, particularly those related to public safety, substance abuse, police training, and provisions for community assistance in areas that have been affected by incarceration rates for cannabis prior to legalization.

In a follow up discussion with a local town official here in Massachusetts, it is interesting debate and why do towns that have banned dispensaries allowed to get tax revenue from cannabis businesses.

The Old Testament DNA

One theory on the angst of cannabis fans seeing towns that ban cannabis businesses getting a piece of the pie if based in our very own DNA, or our “Old Testament” DNA.?If you are not familiar with the Bible, the Old Testament was the written Christian story before Jesus came to earth.?The general rule was an “eye for an eye” and “a day’s pay for a day’s work”.?There is something primal, something in our very fabric of right and wrong, that just knows that if you don’t allow the businesses you shouldn’t profit from it.?If you didn’t earn it, you shouldn’t get it.?It is “wrong” for a community that voted to ban marijuana to get tax revenue from marijuana, right??That is understood at some basic level of humanity, if you don’t want it, fine, that is your choice as a community, but to then get money from the tax revenue of the businesses you banned, well, that is just wrong.

An eye for an eye says you should not get the benefits from the things you voted to ban.?A day’s pay for a day’s work is you get what you earn, and those towns that allowed cannabis businesses should get their fare share of cannabis taxes, but if you didn’t “work”, you don’t get the “pay”.

Why Not Just Shut Those Towns Out?

After doing some digging, two themes emerged as why we can’t just cut those towns out of the tax revenue created from marijuana.?One, people not in the “fight for or against cannabis legalization” just don’t care enough to cut out those towns and do the required work necessary at the state treasurer’s office to figure out who gets checks and who does not, and what should those check amounts be without the missing towns included.?Two, the example that is most closely used as a working example is the way the lottery system works, at least here in Massachusetts.?There are some towns that ban or do not have a lottery terminal, meaning they created no sales into the lottery system, yet they get a check from the state for lottery tax revenue and income.?The standard line is that it would be too complicated and expensive to figure out how to exclude a small percentage of towns or cities from the lottery revenue money.?The same type of system exists now for cannabis tax revenue, but in Massachusetts a much higher percentage of towns voted for a ban or moratorium on cannabis in their town, the NIMBY excuse from conservative areas and towns. (Not In My Back Yard).

There is something inherently dishonest about banning cannabis businesses and then collecting revenue from those same businesses you banned.?The ironic part is that most of the town that have banned cannabis or voted on a moratorium have neighboring towns that do allow dispensaries and cannabis businesses, so the idea that you will keep cannabis products out of your town by not allowing marijuana business is just a fallacy.?What has happened is that people just must drive a longer distance to get their medicine or recreational cannabis, wasting gas (environment), wasting time, and creating jobs in neighboring towns.

One point of view mentioned was that towns that have homeless shelters and low income housing but want to "protect the children" and ban cannabis, should not have tax revenue cut down because they feel they are doing the right thing.?Why penalized the homeless in a town that voted to ban cannabis??I am not saying I agree, but I can see that moral stance as well.

Massachusetts is looking into whether these towns that voted on bans and moratoriums even had the legal right to make that vote as the option to ban businesses was not in the original marijuana legislation.?The question on whether towns can legally ban such businesses is an ongoing matter in Massachusetts.?

Is there a simple solution??Towns that vote against cannabis businesses shouldn’t get tax funds from cannabis.?Pretty simple yet pretty hard to enforce it seems.

(Article orginally appeared on Cannabis.net here)

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