Recreational pot would grow in Oregon, Alaska if voters approve
Oregon and Alaska voters will decide whether to legalize marijuana next week under proposals to make them the third and fourth U.S. states to allow the drug's recreational use.
The measures on the Nov. 4 ballots would permit those at least 21 years old to buy and possess marijuana for personal use, joining consumers in Colorado and Washington state.
"Thousands of adults would no longer be punished for using a substance that is objectively less harmful than alcohol," said Mason Tvert, a spokesman for the Marijuana Policy Project, a Washington-based advocacy group. "If these measures pass, it will be two more states in which it's sold in legitimate businesses instead of the underground market."
Colorado began recreational-marijuana sales in January, followed by Washington state in July. Voters in both states legalized the practice in 2012. In Florida, voters next week will decide whether to allow its medical use, which is already legal in 23 states, according to the National Conference of State Legislatures.
While marijuana remains illegal under federal law, the U.S. Justice Department said last year that it wouldn't challenge state legalization, provided authorities prevent out-of-state distribution, access to minors and drugged driving, among other things.
Oregon voters, who in 2012 rejected a similar measure, will be asked to direct the state Liquor Control Commission to adopt rules by January 2016 to supervise sales of recreational marijuana. The measure would allow personal possession of as much as 1 ounce away from home, if it's out of public view, and as much as 8 ounces at home.
Marijuana producers would be taxed at a rate of $35 per ounce on flowers and $10 on leaves in Oregon, in contrast with Washington, where a levy of 25 percent is applied at the producer, processor and retailer levels.
"An early tax is harder to get around," said Peter Zuckerman, a spokesman for the Oregon campaign to pass the initiative. Taxing by weight "will be a more stable tax."
Legal marijuana would generate an estimated $16 million in revenue in fiscal 2017, according to a report released in September by the Oregon Legislative Revenue Office. The funds would pay for licensing and regulating the industry, with remaining money going to schools, substance-abuse treatment, state police and local enforcement of the measure.
The "Yes on 91" campaign advocating the Oregon measure has collected $3.1 million in cash contributions, according to campaign finance records at the Oregon Secretary of State.
Opponents with the "No on 91" campaign have collected $178,355 in cash contributions, including $100,000 from the Oregon State Sheriffs' Association.
Among likely voters, 44 percent supported the measure while 46 percent opposed it, according to an Oct. 26-27 survey of 403 people conducted for The Oregonian and KGW. The results are within the margin of error of plus or minus 5 percentage points.
In Alaska, the Alcoholic Beverage Control Board would set regulations to oversee the industry. The legislature would have the option to create a Marijuana Control Board to take on that role. The measure limits marijuana possession to one ounce and imposes a $50-per-ounce excise tax on sales from a grower to a retailer or marijuana product maker. Consumption in public would remain illegal and subject to a $100 fine.
In Alaska, the least densely populated state, supporters in the Campaign to Regulate Marijuana Like Alcohol reported campaign donations of $867,394 since January, according to data from the Alaska Public Offices Commission. An opposition group called "Big Marijuana, Big Mistake, Vote No on 2" has collected $97,046 since April, the data showed.
"This initiative is about commercializing and industrializing a harmful drug," said Charles Fedullo, a spokesman for the opposition campaign. "Alaska has substance abuse problems across the state. Adding another unhealthy product to that list does not help move our state forward."
Lacy Wilcox, a spokeswoman for the Alaska Department of Revenue, said the state hasn't prepared an estimate of taxes it could collect on pot.
"It is only understood that the tax rate be $50 per ounce at the wholesale level of sale," she said. "We cannot quantify what that would look like as far as volume, therefore we cannot project or predict what the realities will be if the initiative passes."
Washington is collecting $7.3 million in excise taxes on $29.1 million in marijuana sales from July through Oct. 26, according to state Liquor Control Board data. Before the vote to legalize the drug two years ago, state officials projected tax revenue of as much as $1.9 billion from July 2013 through June 2017.
Colorado collected $29.8 million in tax revenue from recreational marijuana from January through August, or about $3.7 million a month, trailing last year's state estimate of $5.5 million to $8.9 million a month.
To contact the reporter on this story: Alison Vekshin in San Francisco at avekshinbloomberg.net To contact the editors responsible for this story: Stephen Merelman at smerelmanbloomberg.net Jeffrey Taylor, Pete Young