The Blunt Truth About Marijuana Legalization

As Pennsylvania was preparing to legalize medical marijuana back in 2017, I posted a blog about the Economic Impacts of Marijuana Legalization. A lot has changed in the legal landscape since then and we have had more time to reflect on the experiences of the states blazing the legal trail, Colorado and Washington.

Colorado

In October of 2018, The Colorado Division of Criminal Justice Office of Research and Statistics released “Impacts on Marijuana Legalization in Colorado,” a report that compiles and analyzes data on marijuana-related topics.

The Denver Post summarized the positive findings of the report as follows:

  • Five years after Colorado legalized marijuana, young people are not smoking more pot than they used to, organized crime is on the rise and it’s a mixed bag as to whether legal weed has led to more dangerous driving conditions.
  • Marijuana has not impacted graduation rates or dropout rates in Colorado. Graduation rates have increased while dropout rates have decreased since 2012.

The state report did report a number of negative findings as well:

  • The number of fatalities where a driver tested positive for any cannabinoid (Delta 9 or any other metabolite) increased from 55 (11% of all fatalities) in 2013 to 139 (21% of all fatalities) in 2017.
  • Rates of hospitalization with possible marijuana exposures increased steadily from 2000 through 2015.

Other findings in the state report are mixed:

  • Felony marijuana court case filings (conspiracy, manufacturing, distribution, and possession with intent to sell) declined from 2008 to 2014, but increased from 2015 through 2017. However, felony filings in 2017 (907) were still below 2008 filings (1,431).
  • Filings in organized-crime cases followed a similar pattern, with a dip in 2012 and 2013 followed by a significant increase since 2014. There were 31 organized crime case filings in 2012 and 119 in 2017.

Colorado originally anticipated $70 million in marijuana tax collections per year, but it hit $130 million in 2015, went over $190 million in calendar year 2016 and topped $266 million in 2018.1 A 2016 estimate put the economic impact for the state of Colorado at $2.4 billion, when revenues were half of the 2018 total.

Updated April 2019: https://www.colorado.gov/pacific/revenue/colorado-marijuana-tax-data

Image result for washington state flag

Washington

In Washington, the legalization was expected to generate an estimated $388 million annually. The revenues, however, have been slow to materialize but have grown rapidly with the excise tax revenues from marijuana starting at $62 million in FY 2015, and then more than doubling to $134 million in FY 2016. In FY 2017, Washington state collected $319 million in legal marijuana income and license fees, an increase of 238 percent. While this amount is still short of the original estimates, the marijuana revenues exceed revenues from liquor by more than $113 million.2

The Washington State Caseload Forecast Council conducted an analysis of the impacts from the legalization of recreational marijuana:  

  • Between June 2008 and December 2009, the analysis showed, there were 1,312 offenses committed that resulted in felony sentences for the manufacture, delivery or possession with the intent to deliver marijuana.
  • By contrast, during an 18 month period following the opening of recreational cannabis stores in 2014, there were just 147 marijuana-related crimes that resulted in felony level sentences — a nearly 90 percent decrease.

As reported in Seattle’s Child, the 2016 Washington State Healthy Youth Survey found that “Rates of teen marijuana use have not increased since 2014, despite the changing landscape.”3

The 2016 Washington State Marijuana Impact Report found that since legalization, marijuana use in the state is higher than the national average, which is no surprise: “Washington State young adults (18-25) past-year marijuana use was 6% higher than the nation’s in 2012-2013 – Washington adults (26+) were 5% higher.”4 The report also noted an increase in fatal accidents, however the absolute number remains small: “Drivers with active THC in their blood involved in a fatal driving accidents have increased 122.2% from 2010 (16) to 2014 (23) according to the Washington State Traffic Safety Commission.”5 Finally, the report noted a small number of marijuana-related crimes reported to the Spokane Valley Police Department for January to August of 2015: possession (21), theft (14), and harassment (11).6

Conclusion

Partisans will still find enough evidence to support their positions, but at this point, the scales seem to be tipping in favor of the marijuana legalization advocates. The worst fears of the legalization opponents have not materialized, at least in terms of any chronic, long-term economic impacts. A robust debate continues regarding the health impacts of marijuana legalization, but that is another story.

Sources

1 Source: https://www.colorado.gov/pacific/revenue/colorado-marijuana-tax-data
2 Source: https://www.tre.wa.gov/portfolio-item/washington-state-marijuana-revenues-and-health/
3 Source: http://www.seattleschild.com/Washington-state-legalized-pot-how-has-that-affected-kids/ /
4 Source: http://www.riag.ri.gov/documents/NWHIDTAMarijuanaImpactReportVolume1.pdf, page 9.
5 Source: http://www.riag.ri.gov/documents/NWHIDTAMarijuanaImpactReportVolume1.pdf, page 9.
6 Source: http://www.riag.ri.gov/documents/NWHIDTAMarijuanaImpactReportVolume1.pdf, page 9.

Amazon HQ2 vs. DC Housing

Now that cities across the country have properly grieved the loss of the HQ2 they never had, and NYC pretty much dumped Amazon on their Valentine’s day date, we have some serious questions. How many communities have policies in place to handle an economic shock like landing an HQ2? How does plopping 25,000 new high paid tech workers in a city affect housing? This post will look at how Amazon HQ2 might impact housing in Washington, DC.

There are a few things we know:

  • Washington DC is one of the most expensive housing markets in the US. The median rent is $2,146 per month.
  • Speculation is rampant. The day of the official announcement there was a 435 percent jump in Zillow users viewing homes in Arlington compared to the same day a year earlier.
  • If you already own a home, you’re lucky. But for those looking to purchase a home or rent, costs are expected to rise.
  • Displacement may be an even bigger issue. As costs rise, those that can’t afford housing are pushed farther away from the economic opportunities found in city centers.

As we’ve previously written about HQ2, in places like Seattle, San Francisco, and Washington DC, the cost of living can rise beyond the reach of many non-tech workers.

Over the past decade, the median home price in Washington DC has risen more than 50 percent, from $365K in 2009 to $581K in 2019. Along with that, the cost of rentals has increased significantly, now requiring a minimum salary of $85,840 to afford a median-priced apartment in DC. Ouch.

An estimated 136,000 renters in the DC metro area now spend more than half of their income on rent.

Over the next decade, some policymakers are seeking to stabilize rent and construct new rental units. Communities surrounding HQ2 have promised to create and preserve 2,000 to 2,400 affordable and workforce housing units from 2019 to 2029. These policies will not be enough to both catch up with the past decades’ rising housing costs and adequately address the housing impact of HQ2. An estimated 136,000 renters in the DC metro area now spend more than half of their income on rent. The promised units would address less than two percent of the existing gap.

For communities watching from the sidelines, here are a few resources for thinking about an equitable housing strategy:

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