Marijuana Legalization: Early Lessons from Colorado and Washington

Last November, in defiance of federal law, the states of Colorado and Washington legalized marijuana. What are the two states learning from implementation efforts so far?

On May 21, Governance Studies at Brookings and the Washington Office on Latin America (WOLA) held a Congressional briefing and released the paper Q&A: Legal Marijuana in Colorado and Washington. The related event and paper are products of a partnership between Brookings and WOLA focused on the marijuana legalization policy debate.

The panelists were Jack Finlaw (chief legal counsel for Colorado Gov. John Hickenlooper), Alison Holcomb (drug policy director, ACLU of Washington State), and Mark A. R. Kleiman (professor of public policy, UCLA). Congressmen Jared Polis (D-Colorado) and Steve Cohen (D-Tennessee) provided additional remarks. John Walsh of WOLA moderated the discussion.

Finlaw and Holcomb and Kleiman May 21 WOLA BI hill briefing 

Panelists said the states confront challenges in implementing legal marijuana, especially with respect to the issues of taxation, quality control and underage use:

  • Holcomb mentioned that Washington, in particular, faces challenges because, unlike Colorado, it did not start with a well developed regulatory structure for medical marijuana, so it can’t “copy and paste” specific policies.
  • Finlaw emphasized the difficulties faced by marijuana retailers who, due to marijuana’s illegal status under federal laws, often cannot conduct their businesses through banks. They also cannot deduct businesses expenses from their federal taxes. Both problems make it harder for Colorado to regulate and tax the industry.
  • Holcomb agreed on the tax issue and said that there is more work to be done on amending the federal law, particularly as attorneys are actually advising some marijuana dealers not to pay taxes in order to avoid self-incrimination under federal law.
  • Kleiman discussed the testing of marijuana products for quality and composition. He said this process is very difficult because no one audits the testing firms, especially troubling because they insist, “We’re honest, but everyone else cheats.”
  • Kleiman also pointed out that the more careful a state tries to be in laying down and enforcing clear rules for marijuana production and distribution, the more vulnerable it is to federal intervention. He also warned that policy makers in this space should be wary of making promises they can’t keep, particularly when it comes to underage marijuana use.

Join Governance Studies at Brookings for an event next week, Wednesday, May 29, where Jonathan Rauch, E.J. Dionne, William Galston and others will speak on the politics of marijuana legalization and release a new study on marijuana, generational change and the future.

Watch the video of the event below »