Grass is Always Greener When It's Legal: Policies for State Regulated Marijuana

T he year 2012 is shaping up to be a banner year for proponents of marijuana legalization. Voters in Colorado, Oregon and Washington will consider legalization ballot measures on Election Day. Federal prohibition notwithstanding, these measures would begin the ending of prohibitions of not just medical marijuana, but also marijuana for recreational consumption. However, as California showed with an illplanned Proposition 19 in 2010, merely proposing to legalize marijuana is not enough to win over the electorate; voters should only consider proposals with a properly planned tax and regulatory policy. This paper lays out a potential regulatory framework of a legalized marijuana market. The proposed framework is founded on the goals in transitioning from a prohibition to a regulated market, and utilizes lessons learned from the taxation and regulation of other “sin” industries.