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The Pros and Cons of Legal Cannabis

The C.P.C. has been in business for roughly 4 years in Seattle, after Washington approved the use of medical cannabis in 1998.
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At the C.P.C., or Center for Palliative Care, in the Georgetown neighborhood of Seattle, a friend of mine and I walked into Ben Reagan's office in the back of the clinic. The walls were lined with extracts, concentrates and edibles. Rotating shelves containing tubes of different strains of cannabis were neatly labeled with the name of the strain, the price per gram, and the percentage concentrations of Sativa and Indica. My friend asked Reagan what the difference was between White Widow and Widow's Peak.

"The White Widow species produces several different kinds of plants that produce different kinds of effects," Reagan said. "Widow's Peak is usually seen as the height of potential for White Widow. What kind of effect are you looking for?"

"I want to have really great sex," said my friend, who was visiting the C.P.C. as a carrier of a medical card allowing him permission by the state of Washington to use medical cannabis for the back pain he contracted from his years as a firefighter. "And I don't want my partner to fall asleep."

"Then you want to blend the harlequin and the white widow," Reagan said. "It's kind of heady, but still a little more on the fun side than the sleepy side. The White Widow is 60 percent Sativa blend, making it more of a daytime thing. The Indica strain is more for joint pain and insomnia."

The C.P.C. has been in business for roughly 4 years in Seattle, after Washington approved the use of medical cannabis in 1998. Just last year, voters in both Colorado and Washington State approved ballot initiatives which legalized the recreational sale of cannabis while instituting regulations similar to the sale of alcohol. For example, nobody under the age of 21 can buy it, it's still illegal to consume it in public and getting caught while driving under the influence of cannabis will still result in a DUI charge. It's still currently not possible for anyone without a medical card to buy cannabis in Washington, but regulations are expected to go fully into effect by Spring of 2014.

"As a business that's been around for a long time, Ben and I have been lucky to serve as consultants and to state legislators, city officials, police departments, and district attorneys who now have to figure out how to regulate a product that can be used as medicine, fuel, polymer, plastic, and other products that are already regulated," said Jeremy Kaufman, executive director of the C.P.C. "The entire world is watching [Washington State] and how we're handling this, how we're putting it all together."

The C.P.C. is still legally classified as a nonprofit medical R&D firm, and Kaufman explained the concept of palliative care as the type of care you receive for various ailments and conditions. Kaufman said there hasn't been one case that's walked through his doors whom he hasn't been able to help with cannabis.

"A big part of what we do is education," Kaufman said. "We've been able to help treat cancer, chronic pain, loss of appetite, insomnia, nerve disorders, psychological disorders, and a lot of other conditions. As symbiotic, organic organisms, human beings and cannabis have a very unique relationship."

However, Kaufman still hasn't changed the status of his business to be classified under the new 502 law that was passed by Washington voters last Fall, because the end result would be more costly to customers. Under the new system, there would be an additional 50 percent to 70 percent increase in sales taxes on top of the 9.8 percent sales tax the C.P.C. already charges. Kaufman said the additional taxes come from a 25 percent sales tax anytime product changes hands.

"You get taxed 25 percent when it goes from the grower to the extractor, to the processor, to the baker, to the retailer, before it even gets to the end user," Kaufman said. "The state is seeing the C.P.C. as a model to build off of going forward, so a big part of our education is also showing that there are more efficient ways of regulating cannabis."

Under the new laws, the sale of recreational cannabis is being regulated by the same state agency that regulates the sale of liquor. But because cannabis used to be regarded as an illegal substance, there's no existing case law establishing legal precedent for how cannabis can be sold and regulated by a public entity. According to Kaufman, this means the laws literally are up to interpretation by anybody who participates in any part of the trade whenever a product changes hands, making the process a giant headache for both producers and consumers.

"At first, there was an immediate flooding of the market, and a huge free-for-all when 502 passed," Kaufman said. "People were opening all kinds of businesses, shipping in stuff from out of state, getting really cannibalistic."

Obviously, legalizing and taxing cannabis for recreational use would be a huge increase in state tax revenues. A 2010 Cato Institute study estimated $8.7 billion in new federal and state tax revenue if cannabis were to be legalized all over the United States. Washington State's I-502 alone is projected to generate $1.9 billion in additional tax revenue in the next five years.

But at the same time, as an illegal substance becomes legal, other budgets will be cut. Due to the lack of people being arrested, jailed, and prosecuted for smoking or possessing marijuana, Washington State just passed through sweeping cuts to the departments of public safety and corrections. While there's a clear benefit in less lives ruined from the war on drugs, the budget cuts are nonetheless laying off people like parole officers who are monitoring murderers, rapists and sex offenders who are out on bond.

Washington's shortcomings in the process of legalizing and taxing marijuana shouldn't discourage other states from trying, as Oregon, California, Hawaii, Alaska and Maine are likely to do soon, but should serve as a case study for what went right and what can be improved the next time.