Marijuana and the guv

How legalization is handled could be Hickenlooper’s legacy

In a visit to Southwest Colorado last Friday, Gov. John Hickenlooper was clearly unhappy that the state has been getting so much attention for its legalization of recreational marijuana. “I hate Colorado having to be the experiment,” Hickenlooper said.

That is a completely understandable sentiment. But what Hickenlooper might consider is that the legalization of marijuana may also be a great opportunity. It is all about kids and taxes.

Why or whether marijuana should be legal is at this stage irrelevant. The issue now is how well legalization is handled and that may well come down to economics. It is there that Hickenlooper can be key.

The governor’s frustration with legalized pot fits. Not only is he the father of a young son, with all the concerns that suggests, but marijuana is a distraction and a diversion from everything he wants to accomplish. Hickenlooper really wants to talk about making Colorado the best possible place to attract business and foster entrepreneurial behavior.

If he sees images of Colorado on his television, he wants to see happy families, blue skies, clear streams and snow-covered slopes. He does not need Colorado being the butt of late-night comedians. He does not want to talk about pot or hear his state’s name continually linked to it.

But then governors, like presidents, rarely have complete control over what they can or must do. And, like it or not, Hickenlooper had pot thrust onto his to-do list.

He should be able to handle it well. Before becoming governor, Hickenlooper was mayor of Denver. Where he first made his name, however, was in business – starting and operating brew pubs. That experience suggests the governor has the tools he needs, if he has his priorities in line.

Hickenlooper has made some seemingly conflicting statements about pot. He said he is not about to promote the marijuana business, and that he intends “to regulate the living daylights out of it.” At the same time, he wants to reduce the use of marijuana among youth.

But he also said the war on drugs has been a “dismal failure.” And with that in mind, perhaps he can recognize that the best way to limit pot use among the young might be to ensure that legal outlets succeed.

Illegal dealers, already operating outside the law, have no qualms about selling to children. But, as with bars and liquor stores, legal marijuana sellers will face strong incentives not to sell to minors. Is it not better, then, if most pot is sold through legal channels? If the legalized-pot industry does well, that may also tend to push illegal sellers out of state or into other lines of work. That could effectively limit how much marijuana is available to youth.

Adult pot users would probably prefer the safety, assured quality and convenience of buying from licensed purveyors. But that could also turn on price. Recognizing that, Hickenlooper’s best bet may be to work with the Legislature to ensure that legal marijuana is not taxed out of the marketplace.

That will run counter to the Legislature’s understandable instinct to treat the fledgeling industry as a cash cow. And it will offend those, like Hickenlooper, who are reluctant to seem supportive of marijuana sales.

What that means in tax rates will have to be worked out. But that comes down to pricing, which business and economists understand.

What is crucial is recognizing that the goal is to control marijuana distribution. That speaks to all of Hickenlooper’s concerns – including ending one front in the war on drugs.