Local Government -- Overcoming Hurdles and Assessing the Economic Rewards of Prop. 64

by Placerville Newswire / Jan 07, 2017 / comments

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The November elections have come and gone. While some of the ballot measures don’t cause local officials much grief, others such as Proposition 64 (recreational marijuana) have many city and county leaders losing sleep over the potential economic and societal consequences these measures may have on their communities and budgets.

“I’m paying special attention to Prop. 64,” said Mark Bryson, an economic analyst with MuniServices, one of the nation’s leading tax auditors for cities and counties. “I don’t think recreational marijuana will have the same economic impact it had in other states because we already had legalized medicinal marijuana. It takes 10 minutes to get an online prescription for medicinal marijuana, and because of Prop. 64, it’s not taxed.”

Through Prop. 64, adults 21 years and older are now allowed to possess and use marijuana for recreational purposes. While the measure created two new taxes, one levied on cultivation and the other on retail sales, it explicitly forbid these from being applied to medicinal marijuana.

“Municipal officials need to start considering local ordinances that address recreational and medicinal marijuana to close this loophole, said Bryson. “There are costs related to health and safety issues that cities and counties may be expected to address. One example might be training police officers and providing them with equipment to administer new ‘driving while weed-impaired’ tests.”

While the intent of Prop. 64 was to disable the black market sales of marijuana and put extra revenue in state and local coffers, it may not prove to be the god send it was made out to be.

“In addition to extra taxes and fees imposed on recreational and medicinal marijuana, local officials have to consider special zoning guidelines and restrictions for the cannabis industry,” said Bryson. “What is the allowable proximity to a school or park? What zones can they operate in? Are there adjacent zones they are not allowed to operate next to? Being decisive on questions like these will prevent a lot of turmoil down the road.”

In a recent economic forecast titled California Futures: Money, Weed, and War! 1, Jerry Nickelsburg, a senior economist and adjunct professor at the UCLA Anderson School of Management, writes that based on Colorado’s history with legalization, he predicts an industry which is 0.2% of California’s $2.5 trillion economy and 0.13% of California’s employment.

“The cannabis industry can have a lot of positive impacts on local communities if managed right,” said Bryson. “While it may not transform our state’s economy, the industry will benefit many cities and counties that proactively shape it to achieve their goals.”