California’s Balancing Act: Blue Ribbon Panel to Determine Tax for Pot in California

by Veronica Morgan

Gavin Newsom, lieutenant governor of California. Photographer: Patrick T. Fallon/Bloomberg via Getty Images

Gavin Newsom, lieutenant governor of California. Photographer: Patrick T. Fallon/Bloomberg via Getty Images

Lt. Governor Gavin Newsom released a 93-page report today, urging what has been called a “blue- ribbon panel” to regulate recreational marijuana through decriminalization, rather than looking at it as a tax base.

The spectrum of perspective is broad. The panel consists of twenty-four participants that come from different backgrounds.

Addiction doctors, law enforcement, legal scholars, tax experts, and a former White House advisor on drug policy, joined Newsom and the American Civil Liberties Union (ACLU of N.CA) to come up with an initiative for the November 2016 election to decriminalize recreational use for those over 21 years-of-age.

The ACLUNCA, Lt. Gov. Gavin Newsom, and a 24 member "Blue-Ribbon" panel will create ballot measure.

The ACLUNCA, Lt. Gov. Gavin Newsom, and a 24 member “Blue-Ribbon” panel will create ballot measure.

The task is not so easy. Currently a thriving black market exists throughout the state, and stretching into Mexico. Newsom writes in his report, “This industry should not be California’s next Gold Rush.”

The dilemma comes down to taxes. Set the taxes too high, and the black market will continue to thrive. Set taxes too low and you risk a price drop that, some say, would make pot too easily available to minors.

Former White House Drug Policy adviser, Prof. Keith Humphreys said, “High prices, which you can induce by putting a minimum price on or setting high taxes are good for deterring use, especially by kids, but if they are too high the illicit market can still continue… So that’s a balancing act and that’s why one of the other things we emphasize is the importance of some flexibility in the process.”

Executive Director of the Northern California ACLU, Abdi Soltani, explained, “When you switch to a legal market, you can test the product for safety, you can inspect the farms for their water use, and you can make sure the workers are paid a wage and not abused.” Soltani also noted, “The only regulatory tool we have over the illicit market now is to arrest people and put them in jail.”

Newsom, who is a candidate for California Governor in 2018, put it this way, “Perhaps the most important message from the report is what we are not recommending. We are not recommending maximizing the amount of tax revenue, we are not recommending that we promote and create a large industry, and we are not promoting and recommending that the price of marijuana drop significantly, and the reason is all of those goals would depend on and encourage heavy use.”

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