Md. legislators eye revenue from legalizing marijuana
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By: Bryan P. Sears; Daily Record Business Writer February 9, 2015
ANNAPOLIS — Maryland could see millions of dollars in new revenue from the legalization of marijuana, but the unanswered questions and a legislature in which nearly one-third of the members are new could delay passage of a bill this year.
Legislators are already beginning to look at the economic benefits and ramifications of legalizing the recreational use of the drug, similar to what has happened in states such as Colorado and Washington, even though a bill has not yet been introduced.
“It’s a complicated issue,” said Del. Eric G. Luedtke, D-Montgomery and a member of the House Ways and Means Committee. “We still have a lot of issues to hash out.”
With the one-third mark of the 90-day session nearing, a bill legalizing recreational use has yet to be introduced though legislators expect to debate the issue again as they did last session. Del. Curt Anderson, D-Baltimore City, said he plans on sponsoring legislation in the House, which would then be cross-filed by Sen. Jamin B. “Jamie” Raskin, D-Montgomery and a member of the Senate Judicial Proceedings Committee. Raskin had offered a similar bill last year.
There are a lot of unknowns when it comes to the potential benefits of legalizing marijuana in Maryland.
Legislators question how legalizing the recreational use of marijuana would affect law enforcement and substance abuse policy and how edible products would be kept from children.
Sen. Robert A. “Bobby” Zirkin, D-Baltimore County and chairman of the Senate Judicial Proceedings Committee, said a number of those questions are being answered in states that have already moved toward legalization.
“Because other states are acting as the laboratory, we’re going to be able to have an intelligent conversation about the results because we’ll know what happened there,” Zirkin said. “One thing is for certain: They’re making a fortune from doing this. The big question is: what are the drawbacks?”
Exactly how much revenue would flow to the Maryland coffers is also unknown. It’s an important conversation for some in a year where fiscal austerity has become more than a buzzword.
“Even $45 million would go a long way to restoring some of the budget cuts,” Luedtke said.
The Department of Legislative Services last year estimated that a $50 per gram excise tax on an 1.9 million ounces sold would bringing more than $70 million in the first year and as much as $96 million annually thereafter. That figure does not include other sales taxes and fees that could generate another $40 million or more annually.
That figure is less than the nearly $158 million former Del. Heather R. Mizeur, a gubernatorial candidate, estimated could be generated to pay for school construction.
Another independent analysis estimated Maryland could generate nearly $41 million annually — second-most among Mid-Atlantic states — based on a sales tax rate of 6 percent and a 15 percent excise tax, according to Nerdwallet.com.
The same website had estimated that Colorado would generate about $78 million in related revenue. Colorado state Rep. Jonathan Singer, a Democrat, told the House Ways and Means Committee, told the Maryland legislators that his state is on track for about $70 million.
Legislators also hope that jobs will follow.
Singer told the panel that his state’s burgeoning recreational marijuana industry has helped the state go from 4oth to 4th place in terms of job creation. But Singer cautioned the committee that not all of the jobs were related to the industry.
“Clearly there are jobs and people are being employed in Colorado and there’s tax revenue implications,” Luedtke said. “We need to keep watching the data.”
Del. Sheila E. Hixson, D-Montgomery County and chair of the House Ways and Means Committee, said one possible benefit could be in providing tobacco farmers in the state a new cash crop.
Despite the allure of additional tax dollars and jobs, legalizing marijuana in Maryland isn’t as easily done as said.
Gov. Lawrence J. Hogan Jr is a staunch opponent of full legalization.
Additionally, the bill in previous years has had difficulty in both the House Judiciary and Senate Judicial Proceedings Committee.
Luedtke believes that the implications of such a law would so wide-ranging as to require review by several committees.
Zirkin, the chair of the Senate Judicial Proceedings Committee, said this year is likely to be a conversation year with legalization off in the future, if ever.
“The writing is on the wall for passing this legislation right now,” said Zirkin, who acknowledged that similar comments were said about a bill he sponsored that decriminalized small amounts of marijuana in the state.
“The story of this has not yet been written,” Zirkin said. “It’s a very evolving issue.”