Recreational Pot on the Ballot in Oregon, Alaska

Updated on
MARIJUANA

Marijuana buds and one hundred U.S. dollar bills ($100) are arranged for a photograph in Toronto, Ontario, Canada, on Wednesday, Oct. 26, 2011

Photograph by Brent Lewin/Bloomberg

Oregon, Alaska and District of Columbia voters will decide next week whether to legalize the recreational use of marijuana, marking the latest campaigns in a growing national push to roll back prohibition of the drug.

The measures on the Nov. 4 ballots in Oregon and Alaska would permit those at least 21 years old to buy and possess marijuana for personal use, joining consumers in Colorado and Washington state. In the nation’s capital, a proposal would allow residents to grow their own pot, though selling it would still be illegal.

“Thousands of adults would no longer be punished for using a substance that is objectively less harmful than alcohol,” said Mason Tvert, a spokesman for the Marijuana Policy Project, a Washington-based advocacy group. “If these measures pass, it will be two more states in which it’s sold in legitimate businesses instead of the underground market.”

Colorado and Washington this year became the first states to allow recreational-marijuana sales as a result of measures approved by voters in 2012. In Florida, voters next week will decide whether to allow its medical use, which is already legal in 23 states, according to the National Conference of State Legislatures.

Tolerated Experiment

While marijuana remains illegal under federal law, the U.S. Justice Department said last year that it wouldn’t challenge state legalization, provided authorities prevent out-of-state distribution, access to minors and drugged driving, among other things.

Oregon voters, who in 2012 rejected a similar measure, will be asked to direct the state Liquor Control Commission to adopt rules by January 2016 to supervise sales of recreational marijuana. The measure would allow personal possession of as much as 1 ounce away from home, if it’s out of public view, and as much as 8 ounces at home.

Marijuana producers would be taxed at a rate of $35 per ounce on flowers and $10 on leaves in Oregon, in contrast with Washington, where a levy of 25 percent is applied at the producer, processor and retailer levels.

“An early tax is harder to get around,” said Peter Zuckerman, a spokesman for the Oregon campaign to pass the initiative. Taxing by weight “will be a more stable tax.”

Tax Bounty

Legal marijuana would generate an estimated $16 million in revenue in fiscal 2017, according to a report released in September by the Oregon Legislative Revenue Office. The funds would pay for licensing and regulating the industry, with remaining money going to schools, substance-abuse treatment, state police and local enforcement of the measure.

The “Yes on 91” campaign advocating the Oregon measure has collected $3.1 million in cash contributions, according to campaign finance records at the Oregon Secretary of State.

Opponents with the “No on 91” campaign have collected $178,355 in cash contributions, including $100,000 from the Oregon State Sheriffs’ Association.

Among likely voters, 44 percent supported the measure while 46 percent opposed it, according to an Oct. 26-27 survey of 403 people conducted for The Oregonian and KGW. The results are within the margin of error of plus or minus 5 percentage points.

In the District of Columbia, marijuana-legalization advocates are campaigning for a measure that would allow residents to possess as much as 2 ounces for their own use, grow as many as six plants and share with friends.

Alaska Vote

The Alaska measure limits marijuana possession to one ounce and imposes a $50-per-ounce excise tax on sales from a grower to a retailer or marijuana product maker. Consumption in public would remain illegal and subject to a $100 fine. The Alcoholic Beverage Control Board would set regulations to oversee the industry, and the legislature would have the option to create a Marijuana Control Board to take on that role.

In Alaska, the least densely populated state, supporters in the Campaign to Regulate Marijuana Like Alcohol reported campaign donations of $867,394 since January, according to data from the Alaska Public Offices Commission. An opposition group called “Big Marijuana, Big Mistake, Vote No on 2” has collected $97,046 since April, the data showed.

“This initiative is about commercializing and industrializing a harmful drug,” said Charles Fedullo, a spokesman for the opposition campaign. “Alaska has substance abuse problems across the state. Adding another unhealthy product to that list does not help move our state forward.”

Uncertain Impact

Lacy Wilcox, a spokeswoman for the Alaska Department of Revenue, said the state hasn’t prepared an estimate of taxes it could collect on pot.

“It is only understood that the tax rate be $50 per ounce at the wholesale level of sale,” she said. “We cannot quantify what that would look like as far as volume, therefore we cannot project or predict what the realities will be if the initiative passes.”

Washington is collecting $7.3 million in excise taxes on $29.1 million in marijuana sales from July through Oct. 26, according to state Liquor Control Board data. Before the vote to legalize the drug two years ago, state officials projected tax revenue of as much as $1.9 billion from July 2013 through June 2017.

Colorado collected $29.8 million in tax revenue from recreational marijuana from January through August, or about $3.7 million a month, trailing last year’s state estimate of $5.5 million to $8.9 million a month.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE