gary johnson
Ending Marijuana Prohibition Marijuana Business News

Former New Mexico Governor: Washington ‘Worst-Case Scenario’ For Marijuana Regulations

gary johnsonWhen one compares the recreational marijuana regulations and provisions in Colorado to Washington, it’s pretty clear that Colorado has the better system. For evidence of that, consider the end result to the consumer. The prices in Washington are significantly higher for recreational marijuana compared to Colorado. I have long stated that unless the prices for legal marijuana are relatively close (or preferably cheaper) than the black market, the black market will never fully go away. That is a point that former New Mexico Governor Gary Johnson agrees with. Per Oregon Live:

“They have taxed it to the level where if you are a prior user of marijuana, prior to it being legal in Washington, you are still consuming it on the black market because of how expensive it is. It’s the worst-case scenario and they have it playing out in Washington State,” Johnson said.

Johnson advised future states, including Oregon and Alaska, to “forget about tax revenue” and focus on other benefits of legalization.

“The tax revenue from marijuana gets dwarfed by the savings in law enforcement, the courts and prisons. You are moving the entire industry from a black market.” Johnson continued, “If there were no tax revenue at all we would be way, way ahead because of all of those other things.”

I’m curious to see how Oregon’s roll out of recreational marijuana affects Washington State. It’s going to be hard to justify $19 per gram in Washington when it’s being sold on the other side of the Columbia River for an estimated $5 per gram. Washington’s legal recreational marijuana industry will never reach its full potential with such high prices.

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  • ĐΣFΣCŦΣĐ

    I agree! Well said.

  • Sarijuana

    Sigh. I wish he was our governor again. But thankfully he’s working toward legalization.

  • Jimmy Staab

    High taxes are not creating high prices, it is a very small recreational marijuana grow canopy in WA State of just 2 million sq feet or 46 acres that is causing high prices. The MJ growers I know are making a killing growing for 20 cents a gram and selling for $3 to $4 a gram. If the Washington State Liquor Control Board would increase the grow canopy to 500 acres, prices would fall to $5 a gram. The taxes collected would also fall with lower prices. The Growers want every one to think the problem is high marijuana taxes so that the state will reduce the taxes they pay and they can make even more money. But until the supply of marijuana grown increases and you have more price competition driving down prices, marijuana prices in Washington State will not decrease. Don’t believe the lies most MJ growers in Washington State are getting rich fast.

  • firetheliberals

    I told you so. The greedy liberals in olympia thought consumers would just pay up with their stupid VAT on weed.

  • Mike Johnson

    Most politicians either want to keep it illegal or tax it to death..just remember who our friends are when it comes time to vote.

  • malcolmkyle

    Washington state is suffering from the (Mark) kLeiman effect. They paid that geriatric prohibitionist hundreds of thousands to sabotage the whole shamonka.

  • Tim Bowles

    In case you didn’t know legislators in olympia had NOTHING to do with setting the tax rate, that was in the initiative and they are about lower the rate to one 30% tax. People are so antsy and overreacting. Its just beginning. Calm down

    • newageblues

      It’s not exactly just beginning, it’s been almost 2 1/2 years since it was legalized. I hope you’re right that we’re just being a little impatient.

  • Closet Smoker

    The bad regulations are because of federal interference,and spineless state politicians. Of course 502 was written to appease prohibitionists.

  • Mack

    People think lowering the taxes is the way to reduce prices. As an economist this is not true. You want lower prices, you increase the supply which means you increase the current grow canopy of 2 million sq. feet or only 46 acres to over 100 acres. More supply, more price competition and lower prices. The typical marijuana grower will make more than 1 million in profit this year in WA State. You reduce their taxes they only make more money. If the supply is still limited prices will still remain high. You are just giving the growers a tax break by reducing taxes so that they will make even more money. Increase the amount of marijuana they can grow, they will grow more, there will be more price competition and the prices will fall to black market prices. I promise you that lowering taxes will not lower marijuana prices if you still limit the number of stores selling it and the number of growers growing marijuana. I will be 100% right about this. Lowering taxes will not lower the price. You will still be paying $20-$30 a gram for your marijuana in one year if they only lower taxes and do not increase competition by increasing the grow canopy the number of growers and the number of stores.

    • HellNo

      Cartels don’t pay taxes on sales. If you want them out of the marijuana business, don’t burden the legal growers with high tax rates.

    • newageblues

      You’re right about the need to increase the supply. If Washington state is serious about putting the cartels out of business, they need to let the free market decide pricing, not merely try to replace illegal cartels with a legal cartel that limits supply and maintains prohibition level pricing.

      Relegalizing cannabis can reduce alcohol related disasters, but to get the full effect, cannabis needs to be priced inexpensively like alcohol, which would be more than fair to killer alcohol.

  • Geezer

    I’m confused. The recreational prices in Washington state have come WAY down. They started out very expensive when the stores opened last summer, but last week I got some very nice Presidential OG on sale for $13/g including tax. I don’t know what the black market price is, but is $13/g really such a high price to pay, considering it’s legal, you’re able to choose from a wide selection of strains, and you know exactly what you’re getting?

    • been there

      You don’t consider $350+/oz. “such a high price to pay”? Really?

      • Geezer

        What’s the black market price? Seriously, I don’t know. I took a peek at the menus of a couple of Colorado recreational dispensaries and couldn’t find anything below $15/g. I should have expressed myself better, but what I was trying to say is that the Washington state law is demonstrably not the “worst-case scenario,” as the NM governor contends.