Harrison Trepagnier

Ms. Coco
English 1001- 11
2 May 2015
High Economics
When I came to college I was opened up to many new things that I had never
witnessed before. Sex, alcohol, cheating and drugs are just a few of the things that I can
think of off the top of my head. At first all of these subjects seemed quite taboo to me but
then I realized that it was time to stop running away from all of them. Though cheating I
still may stay far away from going to bars in tigerland, meeting new women through
friends and social media, and witnessing the use and transactions of drugs have all
become something that I had decided to step up to try. Throughout this school year
marijuana became a normal word in my vocabulary. It was like a miniature underground
network every dealer knew who each other were. People would compare prices to each
one of the dealers then decide who they would buy from. Quantity and quality were huge
aspects of a potential buyer they would test out different sellers product from their friends
or by sampling the sellers marijuana. I would see people using it, I would see people sell
it, and I would see people buy it and this got me thinking as to why people enjoyed it so
much. It was time to researching about it. Soon I would be sitting in front of my Apple
MacBook air laptop computer trying to figure out why people enjoy using and selling this
drugs so much.
Surprisingly it was not just my friends who enjoyed to the use and the transactions
of marijuana. This was on a scale of the whole country colleges, high school, and major

cities were all of the key places that marijuana was being sold illegally. After researching
for a while I had come to the realization that marijuana was starting to become legalized
in many states. According to William Wanlund of the CQ Researcher databases
marijuana, the fastest growing industry in America (cqpress.com) , stated by the
ArcView group, a network of cannabis business investors and business entrepreneurs.
Throughout the United States of America marijuana is a growing and booming industry.
Marijuana can be purchased for medicinal use if many states and even recreationally and
in a hand full of them as well. Marijuana can be purchased medicinally in states where
people are diagnosed with different diseases and medical problems. Also, marijuana can
be purchased in a handful of states recreationally by anyone who is over the age of 21.
With the research that I have compiled it led me to the question, how has the marijuana
industry impacted the United States of America? We will now look at the marijuana
industry in whole, medical marijuana laws, Colorado's marijuana economy, what a trip to
the 420 state would be like, and lastly if louisiana were to ever legalize marijuana.
The Marijuana Industry
The Marijuana industry is described in full in an article by William Wanlund of
CQ Researcher. On November 5, 1996 the bill was approved and then on November 6,
1996 it became effective that medical marijuana was legalized in the state of California.
This Legalization would be the product to hospital patients for treating and ultimately
healing different diseases ranging from as low as migraines to as high as cancer. Soon
after many states would follow in the footsteps of California by legalizing medicinal
marijuana as well.

Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland,

Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey,
New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Washington
state, and Washington D.C. have also legalized medical marijuana since then.
Laws vary in each state by their state government. Across the board in every state
patients must register and obtain a physicians approval then they may purchase and use
medicinal marijuana. While in most states medical marijuana is only allowed to be used
for treatment under certain diseases such as glaucoma, Crohns disease, HIV/AIDS or
sexual transmitted disease, and cancer. Some states, like California, have much looser
laws as to what patients can be prescribed medical marijuana. All a patient needs is the
recommendation from the physician regardless of the condition. California uses
medicinal marijuana to treat problems such as muscle spasms, anorexia, seizures, nausea,
or any chronic medical symptom that limits the ability of the person to conduct life
activity. Patients purchase medical marijuana at specific medicinal dispensaries and in
some states patients may purchase medical marijuana in other states medical or
recreational dispensaries.
Recreational marijuana became legalized on January 1, 2014 in the state of
Colorado. This was followed by Washington state, Oregon, Alaska, and Washington D.C..
Any adult over the age of 21 with proper identification has the opportunity to buy
recreational marijuana in these states. (Wanlund cqpress.com) With loos laws in these
states these dispensaries have the opportunity to supply to black market seller bringing
out to other states where marijuana is illegal this is considered a federal crime so it is not
practiced by most sellers.

The marijuana market is soaring Wanlund states, The ArcView group...

estimated industrys combined 2014 retail and wholesale sales (including medical
marijuana) at $2.7 billion a 74 percent increase over 2013 (cqpress.com). Recreational
marjiana is loosely regulated but medical marijuana has many laws that patients must
follow lets take a look and these laws and taxes.
Medical Marijuana Laws
The Marihuana Tax Act is a U.S. federal law that imposed tax on the sale of
cannabis, hemp, or marijuana. (USlegal.com) Stated by US Legal laws were need to
keep medical marijuana regulated and taxed. In 1937 Harry Anslinger drafted an Act and
the act was then introduced by Robert L. Doughton of North Carolina. According to US
Legal under Title 26 of the United States Code the Act is codified or amended. The Act
did not criminalize the possession or usage of marijuana, in any form. But it did include
penalty and enforcement provisions to the violation of the code. If violated a penalty
could result in a fine of $2000 and five years of imprisonment. Every person who sells,
deals, dispenses, or gives away marijuana must register with the Internal Revenue Service
and must pay a special tax. All transactions must be written on a government form and
that transfer will be taxed. All transfers must include the name and address of th the buyer
and seller. (USlegal.com) Throughout United States History the Marihuana Act has been
Amended added on to and also portions have been deleted from the Act. Under is a table
of the history of marijuana in the U.S. to have a visual understand of the marijuana laws
and taxes.
Chronology
18401911

Cannabis enters the American marketplace.

1840

Cannabis-based medicines are sold in U.S. drug stores.

1850

United States Pharmacopeia lists marijuana as a remedy for labor pains, nausea and
rheumatism.

1906

U.S. Pure Food and Drug Act regulates labeling of products containing cannabis, opiates
and other ingredients.

1911

Massachusetts becomes first state to ban cannabis.

1930s
1940s

Marijuana and hemp are outlawed, but hemp gets a wartime reprieve.

1930

Federal Bureau of Narcotics Commissioner Harry J. Anslinger linksmarijuana to violence.

1937

Marihuana Tax Act criminalizes untaxed possession of marijuana and effectively ends U.S.
hemp cultivation.

1942

Cannabis is removed from the U.S. Pharmacopoeia, ending recognition of its medicinal
use. Government encourages hemp production.

1945

Federal ban on hemp cultivation is restored.

1950s
1960s

Federal government tightens restrictions on cannabis.

1951

Boggs Act sets fines and mandatory sentences for marijuana.

1956

Narcotic Control Act further stiffens drug penalties.

1969

Supreme Court finds the 1937 Marihuana Tax Act violates Fifth Amendment protections
against self-incrimination.

1970s
1980s

Federal government declares war on drugs while states begin to decriminalize marijuana.

1970

Federal Comprehensive Drug Abuse Prevention and Control Act categorizes marijuana
among the most dangerous illegal substances.

1973

Oregon decriminalizes marijuana possession; 10 more states follow by the end of the
decade.

1976

President Gerald R. Ford bans federal funding for research intomarijuana's medical
benefits.

1978

New Mexico legalizes limited medical use of marijuana.

1986

Anti-Drug Abuse Act institutes mandatory sentences for drug crimes and raises federal
penalties for marijuana possession.

1990sPresent

Legalization gathers steam.

1996

Arizona and California voters approve medical use of marijuana; Arizona legislature
nullifies the action in that state a year later.

1998

District of Columbia voters approve medical marijuana use. Congress blocks

implementation.

2012

Voters in Colorado and Washington state approve recreational use ofmarijuana by adults.

2013

Justice Department announces it will not challenge state marijuanalaws.

2014

Recreational marijuana sales begin in Colorado and Washington. Voters in Alaska,

Oregon and Washington, D.C., approve recreational use; Congress blocks implementation
of the D.C. law. Federal legislation authorizes industrial hemp production for research
purposes. Colorado officials face lawsuits challenging the state's recreational-use laws.

2015

Georgia becomes 23rd state to legalize medical marijuana. Recreational sales begin in
Oregon. Ohioans vote on Nov. 3 on an amendment to the state constitution that would
legalize both recreational and medical marijuana.

November
2016

Nevada to vote on whether to permit recreational marijuana. In 15 other states, legalization

advocates are pushing ballot initiatives that would give voters a chance to make
recreational marijuana legal.

Figure 2.1: In this figure it is shown a chronology of marijuana in the U.S.

According to The National Conference of State Legislature, Medical marijuana
is still a Schedule I drug under the controlled Substance Act. (NCSL.org) This means
that illegal possession is considered the same possession of drugs such as cocaine,
methamphetamines, and heroin. Currently the Obama Administration has encouraged
authorities to not persecute people who distribute for medicinal marijuana.
Medical marijuana laws have been implemented to protect prosecution of sellers
of medicinal marijuana. To allow sellers to cultivate marijuana at home gardens. It allows
the growth of a variety of strains for different Tetrahydrocannabinol levels. Lastly, it
allows either the smoking or vaporization of medical marijuana. (NCSL.org)
It may seem unfair for medical marijuana dispensaries to have all of these laws
and taxes to follow but recreational marijuana is on the rise of have much or regulation
and taxing. Through these taxes and regulations the government has been able to use tax
revenue to help state and national budget in closing up the gaps. Now that we have seem

the tax and regulations or medicinal marijuana let's take a look at the best examples state
of recreational marijuana.
Colorados Marijuana Economy
Colorado is widely known as the High State, the 420 State, or the Marijuana
Disney World of the United States. This is very understable with the numbers that they
are producing in marijuana sales and tax revenue. Colorado has been making so much
money from marijuana sales that they have started to put that excess money into state
programs such as education, rehabilitation and drug reformation programs, and the state
budget. It got to the point where Colorado was making so much money that they almost
started to give money back to the customers because of the increase in sales and tax
revenue. As Donald Trump once said, were are going to be winning so much that we are
going to get tired of winning. Which they are with the leading and high numbers in sales
other states have been debating more on if legalizing marijuana would help out there
state.
According to time.com in the money category Colorado, in 2014, has $76 million
in tax revenue. This came from legal cannabis sales to recreational and medicinal users
for adults of the age of 21 or older. Nine months into the year of 2015 $73.5 million was
collected in taxes by the state. By the end of 2015 the state had collected $125 million in
taxes.
You are probably wondering, what are these specific taxe? Fortunately, I have that
answer! Marijuana in initially taxed 2.9 percent for retail and medical marijuana sales.
After that there is a 10 percent retail marijuana special tax is a 15 percent excise tax.

Along with these taxes there are application and licensing fees for the dispensaries. This
adds up to 27.9 percent right at the transaction at the cash register.
Now just like every other state there are taxes on items such as tobacco, liquor,
and beer. Lets compare these taxes to the marijuana tax. In Colorado tobacco is taxed
3.74 percent of the price and alcohol is taxed 2.9 percent of the price. After the tax on
liquor and beer 60 cents is collected per liter of liquor and 8 cents is collected per gallon
of beer. Also along with all of these taxes and collections there is a sales tax on the end of
all of these items. This means that if you add all of the taxes and collections uo,
marijuana tax is still higher. (time.com)
A marijuana tax is essential for the state to make money for of this booming
business so it can be added into the government budget. Though this may be a slight
percentage of the states budget these taxes help to close any gaps in the states budget
deficit and start government programs. Now that we have looked at the numbers game of
the economy lets look at a vacation to Colorado to show the influence that marijuana has
on the state.
A Trip to the 420 State
Alan Feuer took a trip up to denver to visit the Colorado pot trail. There he would
would learn the influence that marijuana has on the Colorado econmy. In Colorado
everything was marijuana, there were pot-smoking sji buffs, weed friendly charter
S.U.V.s, THC limos, stoner paint classes, stoner cooking classes, and stoner mountain
treks. You would find these activties through mobile apps like leafly or weedmaps. Lastly
you can book your travel experiences through websites like TravelTHC.

It started at the computer he booked a three-day sampler tour of denver at the

price of around $1,295. He arrived in denver and checked into his hotel room at corporate
Crowne Plaza. As he checked into his hotel room he received his room key and a large
vaporizer, also known as a vape. After settling into his hotel room he met up with with his
cannabis spirit guide where he received his swag bag. In this bag was a small vape, a
copy of Dope Magazine, and a bottle of lavender oil. He then may his way to a ballroom
where he would be introduced to multiple strains of marijuana. The man helping him
explained the different types of tourist that visit, which were from all over. The man also
explained to Mr. Feuer about the High Times Cannabis Cup, a trade show and
competitive even. Part of his travel package was a livery car and driver. In this car Mr.
Feuer could smoke all the weed he wanted since it was not in public.
The next morning Alan had a class at the Stir Cooking School here he would learn
how to make different pot friendly meals. He started to realize that everywhere he went
there were shrewd little business deals like if he spent $20 at dispensary A he would
receive a coupon to restaurant B. Everywhere he went the marijuana business was
connected in some type of way. After cooking class Alan got on to a party bus to take a
tour. After getting off the bus while smoking some more weed. They stopped at a 40,000
square-foot structure it was like the vatican city of pot. Inside there was 8,000 individual
plants of 50 different strains of marijuana. After the growing farm they tour was taken to
a dispensary where there was museum like gift shop. On the shelves were many different
types of pot infused products like candy bars, root beer, and lip balm. This would bring
an end to his second day.

The next day he would eat at a marijuana friendly restaurant. At the restaurant the
chief executive informed him that the business got 300 to 600 customers weekly and each
bill averaging $650. Later that day Mr. Alan received a massage where he surprisingly
did not get high. That evening he had put all the piece together and realized how
Colorado had a great tourism setup. By the end of the trip he was glad that he had visited
denver. ( Feuer nytimes.com)
The state of Colorado has the perfect tourist setup everything is connected to one
another. Just like New Orleans one restaurant would lead to a bar and that bar would lead
to a club and that club would lead back to another restaurant, Colorado was the exact
same way. The tourist influence helps Colorado economy strive just like New Orleans has
a high tourism influence. Now that we have taken a trip to the 420 state lets take a look
at the possible revenue that louisiana could generate.
Louisiana Possible Legalization
This next section is a study conducted by Divya Raghavan of nerdwallet.com.
These are not exact calculation hence why it is just a study.
According to Raghavan the U.S. stands to collect $3,098,866,907 in state and
local marijuana taxes per year this is twice the budget of the Small business
Administration, in 2013. Using the Substance Abuse and Mental Health Services
Administration for the percentage of marijuana users the age of 25 and older and using
the Tax Foundation for rates of louisianas state and local tax. A formula has been created
to estimate the amount of money louisiana would earn in sales tax revenue if marijuana
was legalized. In addition to these percentages a 15 percent excise tax is added in in the

formula which represents Colorados excise tax. Also $14 billion is the estimated total
marijuana market sales throughout the United States.
The formula is state market size equals the percentage of marijuana smokers age
25 and older in louisiana times the state the total population of people age 25 and older in
louisiana divided by the total marijuana users in the U.S. times $14 billion. The Tax rate
equals the state and local tax percentage plus the 15 percent excise tax. After finding
these two numbers total sales tax revenue of louisiana equals the state tax percentage
times the state market size.
State Market Size= % smokers in louisiana*Louisiana population/% of total smokers in U.S.*$14
Billion
Tax Rate= state and local taxes+15% excise tax
Total Tax Revenue Collected=State Market Size*TaxRate
Figure 5.1: This is the written out formula to calculating Total Tax Revenue Collected.

To calculate the number take 3,006,605 and multiple 3.02 percent which comes
out be 90,799 people who have smoke marijuana in Louisiana. This is 0.86 percent of the
people of the entire U.S. population who smoke marijuana. Then multiple 0.86 percent by
$14 billion which makes $120,595,745. Now take $120,595,745 and multiple by 23.89
percent which calculates to $28,810,324 that is the total tax revenue collect in Louisiana.
State Market Size=3.02%*3,006,605/0.86%*$14 billion= $120,595,745
Tax Rate=8.89%+15%= 23.89%
Total Tax Revenue Collected=$120,595,745*23.89%= $28,810,324
Figure 5.2: This is the formula calculating Total Tax Revenue Collected with numbers.

Like stated earlier these are not exact calculation there are some factors that are
not accounted. Variation in excise tax, since this is a state regulated business excise tax

may vary state to state. Reduced spending on law enforcement, spending will be reduced
on law enforcement because there will be less prosecution for marijuana related
incidents. Medical marijuana sales, this revenue may have some deduction because
medical marijuana is cheaper than recreational. Potential market change, the market is
unpredictable it will change day by day which will affect the revenue collected.
(Raghavan nerdwallet.com)
This may seem like a confusing formula of calculating total tax revenue collected
but that is why the written formulas are included. This shows that if Louisiana were to
legalize marijuana we would thrive in sales and tax revenue to put into to programs such
a education and rehabilitation.
Conclusion
After researching this topic I have learned so much about the marijuana industry. I
have learned that it is not just your stereotypical people like corn rolled hair and
skateboard dudes who smoke marijuana. High class business men and women just
enjoying their break from the office also enjoying smoking. I have learned that the
marijuana industry has a huge impact on the economy and the way things are growing it
is just going to grow larger. I have learn about the marijuana industry, medical marijuana
laws, Colorados marijuana economy, what a vacation to Colorado would be like, and
what it would be like if louisiana were to ever legalize marijuana. I encourage to do your
own research because there is always more that you can learn about business and the
industry as a whole.

Work Cited
Feuer, Alan. "Taking a Trip, Literally, on Colorados Pot Trail." The New York Times. The
New York Times, 16 Apr. 2016. Web. 02 May 2016.
Legislatures, State. "State Medical Marijuana Laws." State Medical Marijuana Laws.
National Conference of State Legislatures. Web. 02 May 2016.
"Marijuana Tax Act Law & Legal Definition." Marijuana Tax Act Law & Legal
Definition. US Legal, INC. Web. 02 May 2016.
Raghavan, Divya. "How Much Your State Could Make From Legalized
Marijuana."NerdWallet. Ner Wallet, 22 Sept. 2014. Web. 02 May 2016.
Wanlund, William. "Marijuana Industry." CQ Researcher 16 Oct. 2015: 865-88. Web. 2
May 2016.
Wolff-Mann, Ethan. "Colorado on Pace to Nearly Double Revenue from Marijuana Tax."
Time. Time, 22 Sept. 2015. Web. 02 May 2016.