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Trump can save the economy from Covid-19 recession by weed

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Black people are nearly four times more likely to be arrested for possession of weed

With Congress back in session this week, lawmakers have a heavy agenda in front of them: how to help Americans hit hardest by the pandemic, and what to do about institutionalized racism and police brutality against African Americans across the country. There is one simple move that Congress could make which would at least improve both problems: the descheduling of weed at the federal level. Here’s why.

Let’s start with the economy. In early July, the unemployment rate was at 11.1 percent. With many states seeing an increase in Covid-19 cases and deaths, that number will likely rise. Back in Washington, Republicans are squabbling over whether to fund additional pandemic stimulus programs while Democrats demand more money for unemployment insurance. But lawmakers need only read between the leaves to find a good chunk of money to help out families and businesses, especially those most at risk and historically marginalized communities of color. Some estimates predict that with complete federal legalization, marijuana could create $105.6 billion in federal tax revenue and one million jobs by 2025. 

And according to the Pew Research Foundation, two-thirds of Americans are in favour of its legalization. Right now, weed sales are legal and taxed in only nine states. Even so, US sales were over $12.2 billion in 2019. As a native Coloradan, I’ve watched my home state develop its CBD policy and industry over nearly two decades. Last year, Colorado made over $302 million in tax revenue and over $1.7 billion in sales.

I spoke with Lisa Gee, director of marketing and corporate social responsibility at Lightshade Labs CBD Company in Colorado. “Since we opened almost 10 years ago we’ve seen incremental growth,” Gee said. “This year, because of the pandemic, there was a lot of scepticism about how it was going to affect our industry, but we have seen record-breaking months. April was our biggest month in history; May was bigger than April and June was as big as May.”

And there is big money in taxing and licensing marijuana sales. While states tax weed growth and sales differently, Gee explained to me that for recreational marijuana in Colorado there are multiple taxes: An excise tax of 15 percent when the flower is transferred or purchased from a growth cultivation facility to a retail establishment; a state sales tax of 12 percent the consumer pays when they purchase weed; a state sales tax of 2.9 percent on medical/retail marijuana; additional local sales taxes from the district; and licensing and annual renewal fees. 

Gee said that because marijuana is still criminalized at the federal level and classified as a Schedule One drug, hemp companies aren’t able to make any of the regular business deductions when they pay their taxes. Ironically, these businesses still have to file federal income tax forms. So, even though it’s illegal federally, the federal government is still getting some of that money.

As for where the weed tax money goes, in Colorado the first $40 million or 90 percent — whichever is greater — from the excise tax goes to a Department of Education fund; 10 percent of the sales tax goes to local governments; and remaining monies go to substance abuse prevention and treatment. Gee went on to tell me, “If the public could see the specifics of the economic impact that marijuana has on the state rather than just sales numbers they would understand the positive effect that marijuana taxes have on the community.”Aside from the economic benefits of descheduling and taxing marijuana growth and retail sales at the federal, state and city levels, there is also an obvious argument to be in terms of racial justice.

While the US only has 5 percent of the world’s population, we have over 25 percent of its incarcerated population. And according to the ACLU, arrests for marijuana make up over half of all US drug arrests. Although Black and white people use hemp at about the same rates, Black people are nearly four times more likely to be arrested for possession of weed. In Iowa, the District of Colombia, Illinois and Minnesota, where George Floyd was murdered by police officer Derek Chauvin in May, Black people are 7.5 to 8.5 times more likely to be arrested on charges of possession of marijuana. The descheduling of marijuana would take away one excuse for racist police officers to hunt Black people for sport. 

2021-07-13