Washington's 'Pot Czar' Says Legal Marijuana Could Be Too Cheap

Mar 10, 2014

Washington and Colorado are embracing their role as “laboratories of democracy” when it comes to drug policy, but as Washington’s marijuana consultant points out, “Dr. Frankenstein had a laboratory, too.”

As Washington's so-called "pot czar," UCLA public policy professor Mark Kleiman has furnished the state’s Liquor Control Board with policy recommendations. Now, he has published a stinging critique of the state-by-state approach to legalization, and Washington’s law in particular, in the national magazine "Washington Monthly."

In the piece, Kleiman raises a number of arguments that may sound surprising to Washingtonians who have followed the implementation of Initiative 502, starting with the price of legally-sold marijuana. Many people in Washington have worried it will be too high, making it uncompetitive with black market pot. Kleiman is concerned it will be too low.

Legal Pot Too Cheap?

“Producing anything legally is much cheaper than producing anything illegally,” Kleiman told KPLU. “It’s heavily taxed as a percentage of the retail price, compared to shoes. But whether that’s a heavy tax per gram of cannabis depends on what the retail price is.”

Advocates say the taxes and high demand will keep marijuana prices from plunging, and point to rising prices in Colorado where legal stores have already begun operating.

But Kleiman guessed that once the market stabilizes, producing a gram of marijuana could cost as little as 50 cents. Even adding taxes and profits margins could price it well below what illegal pot costs. That, Kleiman said, could create serious harm.

“The main bad outcome from cannabis legalization, the only one that I think matters, is an increase in heavy use, and particularly heavy use among minors,” Kleiman said. “The strongest policy lever to prevent additional drug abuse is to keep prices up.”

Mixed Messages

Kleiman also argues in his piece that relaxed attitudes toward marijuana and, more importantly, marijuana advertising, could lead to more drug use among young people.

Washington’s law does provide for countervailing messaging. One-fourth of the excise taxes collected will fund public health, prevention and education efforts. More money will go toward policy evaluations and research to better understand the effects of marijuana legalization.

But Kleiman said it would be much more effective to deliver information and public health messaging at the point of sale. He argued retail staff should be trained in basic pharmacology instead of being just salespeople.

“The guy in the liquor store has no responsibility to keep you from developing a problem drinking pattern or from drinking and driving; that’s not his job. He’s just supposed to sell you as much liquor as he can. I’d hate to see the cannabis industry develop in the same direction,” Kleiman said.

One Policy Vs. Many

Ultimately, Kleiman concludes that making marijuana policy state-by-state is fraught with problems, from the contradiction with federal law, which still outlaws marijuana, to an excessively powerful for-profit cannabis industry to a potential “race to the bottom” among states on price.

He said it would be much better to come up with a coherent national policy, and pointed out a majority of Americans favor legalization.

And what, exactly, are the odds the federal government could actually create such a policy?

“Oh, slim to none,” said Kleiman.