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   From: rachel-madcow@msnbc.com   
      
   In article    
   forging asshole  wrote:   
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   During the next year, California officials said last week, the   
   state expects to seize “more than $1 billion worth of illegal   
   cannabis products.” That announcement came a few weeks after the   
   US Justice Department bragged about guilty pleas by 11   
   unlicensed California marijuana merchants who had been nabbed   
   with help from state and local law-enforcement agencies.   
      
   The continuing war on weed in California, which supposedly   
   legalized marijuana in 2016, reflects the striking failure to   
   replace black-market dealers with state-licensed vendors, a plan   
   that has been doomed by high taxes, local bans and   
   overregulation. Judging from the marijuana legalization bill he   
   introduced last week, Senate Majority Leader Chuck Schumer (D-   
   NY) has learned nothing from that experience.   
      
   Six years after California voters approved recreational   
   marijuana, unauthorized suppliers still account for somewhere   
   between two-thirds and three-quarters of sales. A recent report   
   from the Reason Foundation (my employer) highlights one major   
   reason licensed businesses have had so much trouble competing   
   with illegal suppliers: Taxes are too high.   
      
   Geoff Lawrence, the foundation’s managing director of drug   
   policy, found that California’s effective tax rate ranged from   
   $42 to $90 per ounce, depending on the jurisdiction, compared   
   with an estimated wholesale production cost of $35 per ounce.   
   The corresponding rates in Colorado and Oregon, both of which   
   have been more successful at displacing the black market, are   
   about $33 and $21, respectively.   
      
   Despite modest tax relief approved this year, legal marijuana   
   remains overpriced in California. It is also inconvenient to buy   
   in much of the state, Lawrence notes, thanks to local sales bans   
   that have created “massive cannabis deserts” where “consumers   
   have no access to a legal retailer within a reasonable distance   
   of their home.”   
      
   Legal sellers also must contend with burdensome licensing   
   requirements and regulations. Dale Gieringer, California   
   director of the National Organization for the Reform of   
   Marijuana Laws, says those rules help explain why legal   
   marijuana prices are much higher than he anticipated.   
      
   “It turned out that I had vastly underestimated the cost of the   
   regulations imposed by the new law,” Gieringer writes in an   
   introduction to the Reason Foundation report. “In addition to   
   state and local licensing fees, there were elaborate rules on   
   cultivation, retailing, transportation, manufacture, testing,   
   facility siting, ownership, security, storage, on-site   
   consumption, wholesale distribution, seed-to-sale tracking,   
   waste disposal, labeling, packaging, environmental compliance,   
   water usage, etc. ad nauseam.”   
      
   Despite years of complaints about these barriers, Schumer   
   decided that the cannabis industry needs more taxes and   
   regulations. His 296-page Cannabis Administration and   
   Opportunity Act, which is cosponsored by Sens. Ron Wyden (D-   
   Ore.) and Cory Booker (D-NJ), includes 52 pages dealing with   
   taxation and 71 pages prescribing new regulations for marijuana   
   businesses.   
      
   Schumer’s bill calls for a federal excise tax starting at 10%   
   and rising to 25% by the fifth year, which would be in addition   
   to frequently hefty state and local taxes. Implicitly   
   acknowledging the counterproductive impact of those levies, the   
   bill would cut the rates in half for businesses with proceeds   
   below specified levels.   
      
   Schumer wants to charge the Food and Drug Administration with   
   registering marijuana businesses, setting product standards,   
   establishing labeling requirements, policing “adulterated” and   
   “misbranded” products, regulating advertising and promotion and   
   imposing “restrictions on sale and distribution.” In addition to   
   mandating specific rules, such as a nationwide minimum purchase   
   age of 21 and a ban on adding flavors to cannabis-vaping   
   products, the bill would authorize the FDA to impose any   
   restrictions it deems “appropriate for the protection of the   
   public health.”   
      
   Given the FDA’s dubious sense of what protecting public health   
      
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