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How can Nevada screw up Marijuana Legalization; Let me count the ways

How can a state that has so successfully handled legal gambling, legal 24/7 consumption of alcohol and legal prostitution have so fouled up legalizing marijuana?

The problems with legalizing medical marijuana alone in Nevada are legion.  It was approved by voters over a dozen years ago, but to this day I believe we only have two lawful medical marijuana stores operating – one in Las Vegas and one in Sparks.

And because the state has so fouled up the approval of licensed marijuana growers, those stores are essentially selling home-grown “rag weed” until the professionals are finally allowed to sell their crops.

Much of the problem, unsurprisingly, can be laid at the feet of state legislators – with the notable exception of State Sen. Tick Segerblom, who has been a mensch on this issue – who have had to be dragged kicking and screaming to make a reality that which the citizens of Nevada, in no uncertain terms, demanded.

And they continued to abdicate their responsibilities in the 2015 session by refusing to deal with the new issue of legalizing marijuana for recreational use.

Make no mistake.  The handwriting is on the wall.  Government drug warriors have lost the drug war. At least as far as marijuana is concerned.  Legal, recreational marijuana is coming – like it or not, one way or the other.

As such, the people of Nevada, through the initiative process, put a petition to legalize, tax and regulate recreational marijuana like alcohol in front of the 2015 Nevada Legislature, and the Legislature promptly “pulled a Pontius Pilot” and washed its hands of the entire thing.

Cowards.

Supporters of the initiative have proposed a long, complicated eight-page piece of legislation for voters to vote on next November.  The problem is, legalizing marijuana is different from taxing and regulating marijuana.  So the proposed initiative is a mess.

For example, it allows the government – through the Department of Taxation – to come up with “reasonable restrictions” (speech control) for signage and advertising with no definition of “reasonable.”

It allows the government to “establish the fair market value” of marijuana at the wholesale level.

Government price control?  When has that ever worked in a free market economy?

And why, by the way, would we shift the regulatory burden for recreational marijuana from the state Department of Public and Behavioral Health – which is already regulating the medical marijuana industry – to the Department of Taxation?

Even putting it under the supervision of the Department of Agriculture makes more sense than the Department of Taxation.  It’s a crop, after all, right?

Meanwhile, back at the ranch…

The initiative prohibits the Department of Taxation from imposing regulations that make the operation of a marijuana business “unreasonably impracticable.”  But again, who gets to decide the definition of “unreasonably”?  A government bureaucrat?  No thanks.

It limits the possession or use of marijuana to “persons 21 years of age or older.”

I’ve always had a problem with that when it comes to liquor.  I mean, if an 18-, 19- or 20-year-old adult can vote, sign contacts and get his ass blown off by an IED in Afghanistan, why can’t he fire up a doobie in the privacy of his own home?

But I digress…

The proposed initiative allows people to grow and possess small amounts of marijuana for personal use – but only if you don’t live within 25 miles of a marijuana store and only if you grow it in a locked closet or other room.

Um, doesn’t that defeat the purpose of legalization?  I mean, we don’t tell people they can only brew their own beer or ferment their own wine in a locked closet at home if they live 25 miles away from a liquor store.  Why would we treat legalized pot differently?

It limits the number of retail marijuana stores that can operate in Clark County to 80, while a quick check of my online Yellow Pages indicates there are 161 retail liquor stores in Las Vegas alone – not counting North Las Vegas, Henderson or unincorporated Clark County.

This is government control and restraint of free trade.  The market itself is a far better judge of what the market needs and will bear.

And why shouldn’t licensed marijuana retail stores be able to open multiple locations – like Lee’s Discount Liquor Stores in Las Vegas?

The initiative sets the cost of an annual license for a retail marijuana store at up to $6,600 per year, whereas my quick Google search for the annual cost of a retail liquor store license in Clark County is only $1,800.

There’s also a hidden “excise” tax of 15 percent tacked onto marijuana at the production level.

I could be wrong here because I took public school math as a kid, but by my calculations the cost of that hidden excise tax on an ounce of marijuana will be around $14, whereas the excise tax on alcohol, I believe, is set at around $3.60 per gallon.

“Sin” taxation on marijuana at that high (pardon the pun) of a level is a sin in and of itself.

And if we’re not careful, the cost of taxed and regulated marijuana will be so high that people will opt to continue buying it on the street from untaxed and unregulated criminal “dealers” rather than go the legal route.

Is that really in our community’s best interest?

The initiative stipulates that people who have served “as an owner, officer, or board member for a medical marijuana establishment” cannot be an “owner, officer, or board member” for a recreational marijuana business.

Which makes about as much sense as saying that the owner of a Mexican restaurant cannot be the owner of a Japanese restaurant.

Already-approved, experienced and licensed medical marijuana operators are the PERFECT individuals to operate a recreational marijuana operation.  I mean, come on.

Now this is probably the most egregious aspect of the entire initiative…

There’s a “special interest” clause in there that prohibits a marijuana grower from selling its crops directly to a product manufacturer or retailer.  Instead, it may sell its crops “only to persons holding a wholesale dealer license pursuant to Chapter 369 of NRS.”

Chapter 369 of NRS means…a liquor wholesaler.

Why in the world should a properly licensed MARIJUANA grower have to sell his product through a LIQUOR “middle man” who is not required to get a marijuana license like everyone else in the food chain?

This is an outrageous provision that not only restricts the free market but can potentially kill the businesses of lawful, licensed legitimate marijuana growers.  How in the world did this ever get in there?

And then there’s the most cynical provision of the entire initiative…

Any extra revenue generated from the taxation of recreational marijuana in excess of what’s needed for the regulatory operations of the Department of Taxation are to be “deposited to the credit of the State Distributive School Account in the State General Fund.”

So toke up, dude!  After all, it’s for the children!

Good grief.

Look, I get it.

Supporters of legalizing marijuana were forced to go the initiative route because the Nevada Legislature abdicated its responsibility on the issue.  But this is not the way to go – especially since, after a cooling off period, the Legislature will be free to repeal the legalization of marijuana.

No, if the voters themselves are to make the decision and bear the burden of legalizing marijuana, the proper and correct way to do so is through a constitutional amendment – absent special interest clauses like that ridiculous liquor wholesale provision.

Other states have legalized or are proposing legalization of recreational marijuana through a constitutional amendment, not a legislative initiative.  So once again, at least when it comes to marijuana, Nevada has done it wrong.

What we ought to do is place on the November 2016 and 2018 ballot a short, simple amendment legalizing marijuana that stipulates that the Nevada Legislature SHALL, not may, do its job and pass appropriate regulations and taxation provisions into statute.

Borrowing from similar amendments I found that have been floated in Florida and Ohio, a Nevada constitutional amendment might read something like this…

“All people in the State of Nevada of legal voting age and older shall have the right under state laws to possession, use, and cultivation of cannabis. This right shall not be infringed except that the transfer of cannabis by purchase or sale may be regulated as necessary to ensure health and safety. ‘Cannabis’ in this section is defined as all parts of any plant of the genus Cannabis, whether growing or not, and the seeds thereof.

“Cultivators shall neither be permitted to sell their products directly to the public without a retail license, nor shall they be required to sell their products through a wholesaler.

“The provisions of this section are self-executing and severable, and, except where otherwise indicated in the text, shall supersede all conflicting state and local laws, charters and regulations or other provisions of this constitution.  The Legislature may pass laws implementing and facilitating the provisions of this section that are not in conflict with its provisions.

Boom!  If you’re going to legalize marijuana – and I understand that many continue to object to such a move – but if we’re going to do it, let’s do it right.

For the children, of course.