Overpromising and underdelivering on legalization in Colorado

BOOM TO BUST
The rise and fall of the ‘Napa Valley’ of cannabis

Driving the news: A big new feature story in the Wall Street Journal shines a spotlight on Pueblo, Colorado, which was set to be the ‘Napa Valley’ of cannabis after the state began commercial sales in 2014.

The reality turned out to be anything but. 

What they’re saying: Mason Tvert, who led the campaign for legalization in Colorado, acknowledged that market saturation and competition from other states had hurt cannabis businesses, but said the industry was maturing, not failing, WSJ reporter Julie Wernau writes in the story. 

Proponents of legalization, he said, never said it would save the economy. “People are upset that this isn’t solving all these problems that it was never intended to solve,” he said.

Read the full thing.

Why it matters: Cannabis legalization, though useful in many ways, isn’t an economic miracle. 

Many early cannabis firms that flocked to Pueblo in the early days have since gone bankrupt, saddled by too high taxes, too much regulation, and a market that never materialized in the way most expected.

It’s a cautionary tale for states and other jurisdictions that look to taxing cannabis sales as a salve for budget deficits. The industry needs effective regulation, rather than overtaxation and regulation to thrive. And promises, when they aren’t delivered, create backlash in communities, as the WSJ reports. 

Policymakers in states that are weighing legalization, like Pennsylvania, should heed the warnings of Pueblo and ensure that promises match reality — and that regulations help support the industry, rather than kill it. 

A quick note: The WSJ story certainly casts legalization in a negative light, and there is plenty to criticize about the reporting (of which I’m sure many will do) — particularly where it overstates the link between legalization and homelessness, of which there is scant peer-reviewed evidence — but the lessons of the story remain: Over-regulation strangled the industry in many places, and the success or failure of legalization lies in the implementation.

-JB

“People on various sides of the debate about marijuana legalization cherry-pick the studies that support their priors,” Case Western Reserve University Law professor Jonathan H. Adler told the Ohio Capital-Journal. “But when you look at the broader reviews of the literature as a whole, they don’t see these big effects.”

Read the full story.

Cuomo gets endorsement over NY cannabis issues 🌿

The New York City Deputy Sheriffs’ Benevolent Association, a union representing the city’s deputy sheriffs, endorsed former Gov. Andrew Cuomo for city mayor. They say that if Cuomo was in charge, there wouldn’t have been a “flood of illegal cannabis stores,” after cannabis was legalized in New York. Cuomo signed the bill into law, but left office shortly after — implementation was left up to his successor, Gov. Kathy Hochul. Read more.

California extends intoxicating hemp ban 👀

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San Diego increases cannabis tax to 25% 🤔

San Diego’s city council voted 8-1 on Tuesday to increase cannabis taxes from 8% to 10% to address a budget deficit, effective on May 1, Cannabis Business Times reports. 

Canadian government revenue from cannabis rises while alcohol sales falls 🥊

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Florida lawmakers propose to ban state funds from advocating for ballot measures 👀

Florida Sen. Jennifer Bradley proposed new legislation that would ban the use of state funds to advocate for or against constitutional amendments, after Gov. Ron DeSantis spent millions to defeat Amendment 3 last year, which would have legalized cannabis in the state. Read more. 

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Poseidon partners with Wurk and C15 Solutions 🤝

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Sundae School, a streetwear and cannabis brand, released a new docuseries for Women’s History Month called Women of Weed. Check out the first episode:  

Frustration grows in cannabis industry after delay in business openings | Delaware Online

California’s cannabis market: growth on paper, decline in reality | GreenState

The ‘Wild West’: What Georgia learned from Colorado’s cannabis experience | Atlanta Journal-Constitution

Ex-owner of D.C. dispensary suing I-71 businesses indicted for almost $1M in federal tax evasion | Outlaw Report