Beware Business on the Ballot:  Marijuana and Lotteries

Ballot Corporations Financial Justice Politics Taxes

            Marble Falls     In nineteen states and the District of Columbia, recreational marijuana has been legalized.  Another five states have the issue on the ballot during the midterms:  Arkansas, Maryland, Missouri, North Dakota and South Dakota.  You’d think that if you added all of that up, it would look like half of the United States would smoking dope on the streets, free and clear, but sometimes you have to read between the lines when money business trumps monkey business, as I found out listening to KABF recently, at least as far as Arkansas is concerned.

There is a proposition of the ballot, Amendment 4.  It looks like legalization, but the more I listened to the back and forth by commentators on this issue, the more it is clear that what people are really voting on is not legalization, but corporatization.  The referendum was heavily backed by the existing medical marijuana dispensaries that are already legal.  So legal in fact that 92,000 Arkansans have been approved to partake.  The marijuana industry does not want to make recreational marijuana legal except if all the smoke buying is coming through approved dispensaries like their own.  In fact, they want to keep it illegal with the police as their business security force, maintaining the same penalties, including jail time, if an Arkansan bought a bag from a supplier outside of the dispensary network or grew plants in their basements or gardens.  Marijuana business folks want to make sure they make all the money, rather than having the California-problem, where there continues to be parallel economies with many users sticking with the dealers they know or growing their own, rather than through the businesses on the make.

The marijuana business forces try to make all of this seem like a public good, dangling taxes with special purposes in front of always desperate governments and easily deceived voters.  The amendment would:

Eliminate all taxes on medical marijuana and tax recreational marijuana at 16.5%, including the standard 6.5% sales tax plus 10% for UAMS, law enforcement and the state’s drug court programs, which are voluntary drug recovery programs intended to keep people facing drug charges out of jail.

Here they are borrowing from the tried-and-true strategy of the US lottery industry manipulated by Scientific Games, Inc. (SGI) which prints the fancy tickets and games of chance.  They built the model of financing initiatives in states to expand their businesses everywhere while dangling the inflated claims of piles of new revenue that states would gain. Of course, these promises were another form of gamble that didn’t pay off with the real results providing only a negligible percentage of a state’s revenue.

I don’t have a horse in this race, as neither a buyer or a seller, but I can easily see that it will be the constituency that we organize that will pay the price on Amendment 4, if it passes, just as it does on lotteries.  They’ll be the home grower and the buyer from the neighborhood dealer who will be tripped up thinking all this is legal now, rather than a funnel into the industry’s dispensaries.  They will be victimized, just as they have been by lotteries.  As Kathryn Schulz reported in The New Yorker,

…the money raised by lotteries comes largely from the people who can least afford to part with it. Every state lottery is regressive, meaning that it takes a disproportionate toll on low-income citizens. Rich people do play the lottery, of course…. But the wealthy buy fewer tickets than the poor (except when jackpots approach ten figures); because of that and because their purchases constitute a much smaller percentage of their income, playing the lottery has a far smaller impact on their pocketbooks. The difference can be drastic: according to the consumer financial company Bankrate, players making more than fifty thousand dollars per year spend, on average, one per cent of their annual income on lottery tickets; those making less than thirty thousand dollars spend thirteen per cent. That means someone making twenty-seven thousand dollars loses some thirty-five hundred dollars to the lottery every year. To put that number in context, nearly sixty per cent of Americans have less than a thousand dollars in savings.

This is business, so the standard warning, caveat emptor, let the buyer beware applies.  In this case in Arkansas, the voter needs to beware.