Colorado is contemplating an uncommon strategy to safeguard its nascent marijuana industry from a possible federal crackdown even at the expense of hundreds of millions of dollars in tax collections.
A bill pending in the Legislature would enable marijuana growers and retailers to reclassify their recreational marijuana as medical marijuana if a change in federal law or enforcement happens.
It’s the boldest effort yet by a U.S. marijuana state to prevent federal intervention in its weed market.
The bill would enable Colorado’s 500 or so licensed recreational marijuana growers to immediately reclassify their weed. A change would cost the state more than $100 million a year because Colorado taxes medical marijuana far more lightly than recreational marijuana — 2.9 percent versus 17.9 percent.
The measure says licensed growers could instantly become medical licensees based on a business need as a result of change in local, state or federal law or enforcement policy. The change wouldn’t take recreational marijuana off the books, but nevertheless, it wouldn’t completely safeguard it either. What it could do is help growers protect their inventory in case federal authorities begin confiscating recreational marijuana.
The provision is receiving plenty of attention in the marijuana industry following recent opinions from members of President Donald Trump’s administration. White House spokesman Sean Spicer has said there’s a “big difference” between recreational and medical marijuana.
It has been a huge week for recreational marijuana in the U.S.A. Three things have happened.:
1) The US Justice Department reported that it had informed Indian Country Tribes that they “may propose” to have marijuana legalized on their reservations. So far no tribe has made any such request and if they did the federal government would have the final say on yes or no. However, this announcement opens the door for the possibility that recreational marijuana could be possessed and consumed on tribal lands. Even when tribal lands reside within the borders of a state in which recreational marijuana is illegal.
2) The US Congress ended its federal ban on medical marijuana. This sends a strong message to states that have not yet legalized marijuana and makes the concept even more palatable to voters. It will surely influence politicians to be more liberal in their thinking about legalized marijuana, whether medical or recreational. Furthermore, it shows the federal government is obviously moving, albeit slowly, in the direction of national recognition of the trend to end marijuana prohibition.
3) Just today (December 19, 2014) it was announced that the states of Nebraska and Oklahoma have asked the US Supreme Court to reverse Colorado’s marijuana laws. We will wait to hear what the legal pundits say but in my opinion this is not going to fly. In my opinion it is a thinly veiled attempt to apply pressure and convince Colorado to give their neighboring states a portion of their recreational marijuana tax revenues. According to Nebraska officials they have had an increase in their law enforcement costs at places along the Colorado border and are being asked to bear an increased expense with no increased revenues.