In a Nutshell:
- Michigan would establish a relatively low tax rate on marijuana under Proposal 1.
- Unlike the majority of other states, Michigan would not invest this new revenue in public health, data collection, substance abuse treatment, mental health services, or youth prevention efforts.
- Other states have recognized that there are a number of risks associated with marijuana legalization, whereas Michigan seems to be leaving itself unequipped to deal with any anticipated (or unintended) consequences.
For those who study government, ballot initiatives are often viewed with ambivalence. On one hand, they represent a potentially inspiring exercise in direct democracy (at least if you ignore factors like low voter turnout, and if you look past the massive amounts of money typically spent to collect petition signatures and sway voters’ opinions and behavior). On the other, ballot initiatives often lack the nuance and detail that can be achieved through slower and more deliberative legislative processes.
Proposal 1 is, therefore, somewhat light on details. The proposal places substantial responsibility for rule-making in the hands of Michigan’s principal regulatory agency, the Department of Licensing and Regulatory Affairs (LARA). This means that Michigan voters will not know the full extent of what marijuana legalization might look like in Michigan before voting in support or opposition. The proposal is abundantly clear in a few key areas, however, perhaps chief among them being the rate of taxation for retail marijuana sales and the subsequent disposition of this revenue.
After paying for implementation, administration, and enforcement of the new regulatory structure, as well as holding aside $20 million for medical marijuana research for two years, remaining funds from the proposed 10 percent excise tax on marijuana sales would be distributed to schools, roads, and local governments (but only ones that have retail marijuana establishments). Michigan’s 6 percent sales tax would also be applied to new marijuana sales, and that revenue would be distributed the same as other sales tax revenue; this distribution is outlined in the Citizens Research Council’s tax outline. Conspicuously missing in the proposal is any acknowledgement of the need to fund data collection, substance abuse treatment, mental health services, youth drug prevention, and other public health efforts and services related to marijuana legalization.
When we look to other states that have legalized marijuana, we see both higher tax rates and funding for a broad spectrum of health programs and services.
The majority of Washington’s 37 percent excise tax on marijuana is used to support health care services, substance abuse treatment and prevention, community health centers, health education, data collection, and research on marijuana use, as well school dropout prevention.
In Colorado, marijuana sales are taxed at 30 percent (a 15 percent excise tax and a 15 percent special sales tax). The excise tax funds are used for schools and the special sales tax funds a variety of programs, including substance abuse treatment and prevention, mental health services, data collection, marijuana research, health education, and other public health functions.
In Oregon, where the combination of state and local taxes on marijuana sales totals 20 percent, one fourth is dedicated to mental health, alcoholism, and drug treatment and prevention services. California, Maine, and Massachusetts have likewise decided to invest marijuana dollars in public health, mental health, and related state services.
These other states have made these decisions because they are aware that, contrary to some assertions, there is a serious potential for marijuana abuse, dependence, and clinically relevant impairment/distress. Some research suggests that around 1 in 11 who try marijuana will develop dependence and 3 in 10 users manifest a marijuana use disorder. Substance use disorders can lead to a variety of negative psychosocial and physiological outcomes. Marijuana use is also associated with a variety of mental health conditions, including schizophrenia, other psychoses, social anxiety disorder, and, to a lesser extent, depression. Evidence also suggests an association between heavy marijuana use and suicide.
While occasional use of marijuana by otherwise healthy adults is not likely to lead to any serious public health consequence, public health principles should guide governments to care about the health of all people and give consideration to the most vulnerable rather than the least. For younger individuals and those adults with a variety of predisposing factors, marijuana use is certainly cause for concern.
The potential for marijuana abuse and dependence is much higher among adolescents. Adolescents who use marijuana also face greater neurocognitive risks and persistent neuropsychological decline from childhood to midlife, as well as negative outcomes related to lower educational attainment, poorer work outcomes, and lower satisfaction with life and relationships. Moreover, this risk of developing a use disorder and concurrent or lasting cognitive impairments among adolescents appears to be greater with marijuana use than with alcohol.
We’ve learned from experience with alcohol and tobacco that, in spite of regulating and taxing substances with a high potential for abuse, we still see widespread use and immense related costs. Although governments collect billions in revenue from tobacco taxes and alcohol taxes, the health care costs of tobacco and alcohol exceed tax revenue by hundreds of billions each year, to say nothing of enforcement costs, lost productivity, and other social costs.
If, as research suggests, marijuana use also increases the risk and severity of alcohol use disorders and substance dependence/abuse of tobacco and other drugs, then the resulting impact and costs will be compounded beyond the direct risks posed by marijuana. Moreover, while marijuana impairment increases a driver’s risk of a fatal automobile collision, the interaction of marijuana together with alcohol creates a much higher risk than either substance alone. Even if increased marijuana use from legalization doesn’t ultimately exacerbate other existing problems, it will still be an act of throwing yet another weed on Michigan’s public health pyre without providing any means to dampen the blaze.
To be sure, schools, roads, and local governments are all worthy recipients of additional state revenue, yet these budget areas appear to have been picked for political expediency rather than relative need or applicability to marijuana legalization. This choice, however, creates the potential for long-term harm to individuals from exacerbating a lack of public health and behavioral health resources.
Ultimately, excise taxes should pay for any costs associated with the substance or activity that is being taxed, in particular so that these costs are not borne by others in society. As the Citizens Research Council highlighted earlier this year, public health is tremendously underfunded in Michigan. Community mental health and substance abuse treatment facilities are likewise in dire need of resources. Without additional revenue, existing resources may be spread even thinner. Moreover, without a specified funding source, needed data collection, evaluation, and research on marijuana is less likely to occur.
Michigan voters should take a lesson from our experience with Michigan roads (both the physical structure and funding structure): if one doesn’t build something well from the start, it sets them up for more trouble and costs in the long run.