Analysis of the November 6, 2018 Michigan Recreational Marijuana ballot proposal.

Ballot title

The ballot title is as follows:[12]

Proposal 18-1. A proposed initiated law to authorize and legalize possession, use and cultivation of marijuana products by individuals who are at least 21 years of age and older, and commercial sales of marijuana through state-licensed retailers.[13]

Ballot summary

The ballot summary is as follows:[12]

This proposal would:

·        Allow individuals 21 and older to purchase, possess and use marijuana and marijuana-infused edibles, and grow up to 12 marijuana plants for personal consumption.

·        Impose a 10-ounce limit for marijuana kept at residences and require amounts over 2.5 ounces be secured in locked containers.

·        Create a state licensing system for marijuana businesses and allow municipalities to ban or restrict them.

·        Permit retail sales of marijuana and edibles subject to a 10% tax, dedicated to implementation costs, clinical trials, schools, roads, and municipalities where marijuana businesses are located.

·        Change several current violations from crimes to civil infractions.

Should this proposal be adopted?

[ ] YES

[ ] NO[13]

 

Pretty straightforward, isn’t it? Except for the “municipalities where marijuana businesses are located” after implementation costs and clinical trials are paid for. Can you say a bribe of 30% (of the 10% tax) for county and city governments to locate lots of pot establishments? Such a lucrative cash crop should not need incentives, except to entice reluctant counties and cities.

It also doesn’t mention that there is 35% each for K-12 education and roads. We all know that 70% is a shell game, with the legislature decreasing funding elsewhere – it’s all one big pot (no pun intended). Dig a little deeper:

Ballotpedia has a good summary of the differences between the difference state laws as well as other useful information.

Michigan’s law would allow five times as much pot as any other state’s law. Colorado and California both allow possession of one ounce, which Michigan allows 2.5 oz. The lack of specified penalties for up to double the amount possessed, grown, or gifted to people over 21 allows this misdemeanor to be punished by a small fine. In cities like Ann Arbor, which has thumbed its nose for years at pot laws with its Hash Bash, the fine would probably be less than a parking ticket.

This 14 page law (plus delegations to administrative agencies) is subject to an up-or-down vote of the people without amendments typically made in the legislature (where there were not enough votes in any state but Vermont). For this reason the default position for wise voters on ballot proposals is to vote No most of the time, unless you have read the text of the proposal. I’ll bet that less than one percent will read the law. For this reason I plan to break most of it up into bite size pieces to help people digest it in small portions.

Campaign Financing – follow the money

 The pro-legalization forces have spent $1.74 million compared to the $0.29 million for those who would keep the status quo: six times as much. Look for the gap to widen unless some large corporations and small businesses (who will have difficulties in this booming economy hiring workers who can pass a drug test) join with opponents to help defeat it.

Who stands to gain from passage of this referendum? According to excellent articles in WORLD magazine, Big Tobacco, Big Alcohol and I would add Big Government. The size and scope of government will grow as it gets addicted to the 10% excise tax, the bribery of village, town, city and county governments, and of course government programs to help addiction. Helping people kick the habit is nowhere mentioned in the 14 page! (yes, no typo) proposal.

The Devil is in the Details

To be fully informed about Michigan’s proposal, you have to read the entire 14 pages. What’s in the proposal and what is left out are both significant. Here is a section towards the end, which describes the funding and taxes. My comments are in (bold italics). Bold regular font is used to emphasize certain points and make it easier to read.

“Sec. 12. In computing net income for marihuana establishments, deductions from state taxes are allowed for all the ordinary and necessary expenses paid or incurred during the taxable year in carrying out a trade or business.

(Theoretically each establishment could pay little or no state taxes like many non-profits. Competition could make the margins as small as gasoline, leaving only 6% sales tax for retail stores and the 10% excise tax. Of course there will still be a black market to avoid 16% in taxes.)

“Sec. 13. 1. In addition to all other taxes, an excise tax is imposed on each marihuana retailer and on each marihuana microbusiness at the rate of 10% of the sales price for marihuana sold or otherwise transferred to anyone other than a marihuana establishment.

  1. Except as otherwise provided by a rule promulgated by the department of treasury, a product subject to the tax imposed by this section may not be bundled in a single transaction with a product or service that is not subject to the tax imposed by this section.
  2. The department of treasury shall administer the taxes imposed under this act and may promulgate rules pursuant to the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to MCL 24.328 that prescribe a method and manner for payment of the tax to ensure proper tax collection under this act.

Sec. 14. 1. The marihuana regulation fund is created in the state treasury. The department of treasury shall deposit all money collected under section 13 of this act and the department shall deposit all fees collected in the fund. The state treasurer shall direct the investment of the fund and shall credit the fund interest and earnings from fund investments. The department shall administer the fund for auditing purposes. Money in the fund shall not lapse to the general fund. (Big deal: remember the K-12 and roads shell game.)

  1. Funds for the initial activities of the department to implement this act shall be appropriated from the general fund. The department shall repay any amount appropriated under this subsection from proceeds in the fund.
  2. The department shall expend money in the fund first for the implementation, administration, and enforcement of this act, and second, until 2022 or for at least two years, to provide $20 million annually to one or more clinical trials that are approved by the United States food and drug administration and sponsored by a non-profit organization or researcher within an academic institution researching the efficacy of marihuana in treating the medical conditions of United States armed services veterans and preventing veteran suicide. (A great cause, but $40 million is a pittance compared to the total amount that will be collected over the next years). Upon appropriation, unexpended balances must be allocated as follows:

(a) 15% (bribe!) to municipalities in which a marihuana retail store or a marihuana microbusiness is located, allocated in proportion to the number of marihuana retail stores and marihuana microbusinesses within the municipality;

(b) 15% (bribe!) to counties in which a marihuana retail store or a marihuana microbusiness is located, allocated in proportion to the number of marihuana retail stores and marihuana microbusinesses within the county;

(c) 35% (shell game!) to the school aid fund to be used for K-12 education; and

(d) 35% (shell game!) to the Michigan transportation fund to be used for the repair and maintenance of roads and bridges.”

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More to come in future articles…

 

Other articles by Dale Murrish

In previous blog posts, I began telling the story of my brain tumor and the depression which followed it. The second article in the series described my faith in God which sustained me through both trials.

Having recently started a word-by-word translation of Martin Luther’s Bible from German to English, I introduced the project and published Matthew Chapter 1 . Later I wrote commentary on it; my church background and theological training is in my USA Melting Pot bio.
Dale Murrish writes on historytraveltechnologyreligion and politics for the USA Melting Pot club, LinkedIn, and Troy Patch. On the USA Melting Pot website are over a dozen ethnic presentations from people with firsthand knowledge under Culture & Country (right hand side), and outdoor presentations (Hobby & Fun), including posts on bicycling, skiing and camping.

Other interesting articles on the USA Melting Pot website have been written by Bilal Rathur on his hajj to Saudi Arabia (Part 6) and by Carl Petersen. Thanks to both of them for their contributions.