Despite those contradictory signs, pot will be legal in Texas much sooner that we expect. Maybe not in 2 years, and possibly not in 4 years. But if it’s not totally legal for recreational adult use in 10 years I’ll eat my hemp-woven shirt. 1
One the one hand, California legalized adult recreational use of marijuana on January 1st, bringing the scale and business heft of the world’s 6th largest economy to the issue. Marijuana Business Daily VP editor Chris Walsh told me the $1 billion estimate of state tax revenue bandied about for California might not happen right away, but likely will be reached a few years down the line. $1 billion in tax revenue, plus the businesses built to provide the product, create financial momentum for legalization nationwide.
On the other hand, US Attorney General Jeff Sessions announced in the first week of January a lifting of the Obama-era “Cole memos,” which had given comfort to marijuana businesses in states which had already voted for legalization. Sessions did not order any particular sort of crackdown, but rather returned the authority to prosecutors to enforce federal drug laws, even in “legalization” states. At the federal level, marijuana is still considered illegal. As a result, prosecutors could decide to enforce federal laws against providers. Walsh told me on balance that crackdown remains unlikely in states that have made marijuana legal, but business owners still did not appreciate the signal.
So what about Texas? At first glance, marijuana legalization seems like a deeply backburner question. And compared to other states, Texas currently has an extremely narrow medical-use legal framework, in which patients with specific conditions like epilepsy can obtain a doctor’s permission to use a low-THC potency extract of cannabis called “Cannabinoid oil.” You can’t get high from this stuff. But, things change fast.
For the record, I expect medium-term legalization in Texas although I’ve got no dog in the fight. I’m not a user, and I don’t particularly want my kids to get easier access to pot. Mostly I’m just a guy that believes in the coercive power of money. The money case for legalization is strong. Strong enough to overcome a lot of natural resistance even in, or especially in, Texas.
Advocates for legalization who aren’t users tend to adopt four main lines of argumentation, which I’ll characterize as:
- High cost of criminal justice
- Reducing criminal financial power
- State tax revenue potential
Among that spectrum of reasons, there’s a coalition waiting to be built. Let’s take them one at a time.
The criminal justice argument is that we have a nasty habit of incarcerating people, and handing down felony convictions, far in excess of the harm caused by society of the sale, possession, and use of the drug. Texas Senate candidate Beto O’Roarke, Democratic Congressman from El Paso, embraces legalization as an important platform of his candidacy, precisely for this type of argument.
O’Roarke described to me campaigning all over Texas and meeting folks for whom a marijuana-related conviction has meant a life-sentence to poverty, interfering with their ability to work, go to school, or get a loan. O’Roarke isn’t a newcomer to the legalization argument either, as he literally wrote a book on it in 2011, titled Dealing Death and Drugs: The Big Business of Dope In the US and Mexico co-authored with Susie Byrd, then a fellow city councilperson from El Paso. “We’ve spent a trillion dollars on the ‘War on Drugs’ over the last 45 years,” he told me, “and we’ve achieved zero of our policy goals.”
Houston’s District Attorney announced a policy in March 2017 of not arresting folks for small amounts of marijuana possession, a small criminal justice reform that may portend future trends in Texas’ cities.
The second argument, reducing criminal power, rests on the markets-based realization that criminalizing marijuana – as we learned from Prohibition – greatly increases the power and wealth of criminal gangs. Legalize, the thought goes, and you undercut the profitability and corrupting power of the Mexican drug cartels operating on both sides of our border with Mexico.
The pro-business case for legalizing marijuana nationally, or in Texas, is undergoing an interesting shift, as markets mature. In the early days of legalization, in states like Washington and Colorado, the “mom and pop” shops of scrappy entrepreneurs seemed poised to benefit the most. As Fivethirtyeight.com reported recently, industrial-scale agricultural techniques aren’t far away, however, and wholesale prices are dropping. In a less regulated market, their reporting claims, ten medium-sized Midwest farms could grow enough product to supply the entire nation. As markets naturally trend toward efficiency, the business face of marijuana may morph into to something far more “corporate” than anything we’ve seen until now.
Finally, the state tax-revenue potential of marijuana is compelling. With four years’ worth of data from Colorado’s retails sales experience, we can project the revenue potential for Texas. Colorado’s state pot revenues hit $247 million last year. If Texas raised the same amount of revenue per capita as Colorado, the state would reap over 1.2 billion per year. That kind of money would matter a lot in a state allergic to income taxes.
Polling firm Gallup reported in October 2017 that 64 percent of Americans support legalization. Perhaps even more interestingly for Texans, 51 percent of Republicans nationwide support legalization, a figure up 9 percent from the prior year.
Legalization rolls on. Both Canada and Massachusetts will have legal adult recreational retail sales by the summer of 2018. For all I know, Texas might be the last state to legalize marijuana. But O’Roarke disagrees and says that, as he crisscrosses the state campaigning, the issue comes up in cities and small towns all across Texas.“If Texas were to move to legalization, it would be over. [Federal] Prohibition would end. I think we could be the first state in the South.”
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- I don’t actually own one of these yet. ↩