The climate is right.
High on the list of changes planned by Gov. J.B. Pritzker is the state-wide legalization of recreational marijuana. The timing for this legislation is even more favorable now than before the election.
Legalizing marijuana has been tried and tested by states before Illinois. There are substantial benefits that could help the state navigate budget problems and funding issues. It has the potential to infuse revenue at the ground level, as the retail market develops and helps stimulate the local economy. It has a proven record of reducing the impact of the opioid epidemic.
In November, the Illinois Economic Policy Institute published “The Financial Impact of Legalizing Marijuana in Illinois.” The report noted taxation and regulation of marijuana in Illinois could create nearly 24,000 new jobs. Legalization would boost the state’s economy by $1 billion per year and generate in excess of $500 million in new state and local tax revenue.
One of the most compelling reasons to move forward with legislation is the impact it has on the opioid crisis. According to the Center for Disease Control, deaths attributed to opioid overdose totaled 70,237 nationwide in 2017. In Illinois, there were 2,778 in 2017, which followed 2,411 in 2016 and 1,835 in 2015. In states that have already legalized marijuana for recreation, the number of opioid deaths is dropping. In some states, fatalities have fallen as much as 33 percent. It’s a number we have to take seriously.
The climate is right in Illinois to take the next step in marijuana legalization, but that alone doesn’t warrant charging ahead blindly. With other states having gone before us, there is no excuse for not moving methodically and purposefully in preparing to make this significant change. There is time to do it right.
Though Gov. Pritzker has made it clear that revenue through taxes is a priority, the predominance of the plan seems to focus on creating opportunities for minority businesses and benefits to communities affected by drug crime. There does not seem to be, however, a thorough analysis pondering through what system that revenue stream is built. If economics is one of the key reasons justifying legalization, that's a question that needs to be addressed sooner rather than later.
The process of legalizing a once illegal substance is challenging. It does not just involve taxes and licenses. It requires a transition from a pre-legal state to a post-legal one. Going from a high demand-high cost product with minimal market infrastructure to a lower demand-lower cost product once the market develops and stabilizes.
Colorado gained initial revenue simply by being a pioneer in legalization. As the market stabilized, production costs came down, reducing the tax revenue with it. California, meanwhile, taxes both by weight and by prices, leaving at least part of the revenue not dependent upon supply or increased demand to drive tax revenue up.
As a state, we're closer than we've ever been to legalized recreational marijuana. There are plenty of reasons to proceed, and plenty of reasons we should answer some important implementation questions before we finalize it.