Amendment 64, the
ballot initiative that legalized cannabis in Colorado, was also
known as the Regulate Marijuana Like Alcohol Act of 2012. Under
“Purpose and Findings,” it says marijuana should be “taxed in a
manner similar to alcohol” and “regulated in a manner similar to
alcohol.” How is that working out so far? Judging from the
recommendations made by the Amendment 64 Implementation Task
Force, not so well.
Start with taxes. Colorado’s
excise tax ;on beer is 8 cents per gallon, in addition to a
tax that of 58 cents per gallon. According the U.S. Treasury
Department, the federal tax comes out to a nickel per 12-ounce
container. Let’s be generous and say the state tax adds another
penny, so that’s nine cents a bottle, or a rate of about 8 percent
if you buy a $7 six-pack. For distilled spirits, the ;federal
tax ;is $13.50 per “proof gallon” (which is 50 percent
alcohol), to which Colorado ;adds ;a
tax of about 60 cents per liter (regardless of alcohol content,
apparently). The Treasury Department says the federal tax amounts
to $2.14 per 750-milliliter bottle, to which, by my rough
calculation, the state tax adds something like 35 cents; let’s call
it $2.50 per bottle in total excise taxes. That’s equivalent to a
12.5 percent tax on a $20 bottle of vodka.
By comparison, the task force says the state should impose a 15
percent excise tax on marijuana at the wholesale level, plus a
special sales tax at a “reasonable rate.” According to the task
report, some members thought 25 percent would be reasonable,
while others thought it would be “too high, encouraging the
survival of the illegal market and increasing the incidence of home
cultivation among private citizens” (which Amendment 64 allows).
Let’s say the sales tax is 10 percent. Without knowing the
wholesale “cost” (a largely notional number when retailers are
required to grow at least 70 percent of their inventory, as the
task force recommends) or the retail markup, it is hard to say
exactly how much these levies would increase the price for an
eighth of an ounce, which currently sells for about $25 in
Colorado’s medical marijuana dispensaries. But these taxes clearly
are much heavier than the taxes collected on alcoholic
What about regulation? While newcomers are free to make and sell
alcoholic beverages (provided they obtain the necessary licenses),
the task force wants the recreational marijuana market limited to
existing dispensaries for a year. While ;alcohol regulations
generally prohibit vertical integration, with exceptions
for businesss such as brewpubs and wineries that sell directly to
the public, the task force wants to require ;vertical
integration (for the first three years at least). ;While
alcohol can be consumed in bars and restaurants, the task force
seems determined to foreclose any such option for marijuana
(although the rules it recommends seem to leave some loopholes).
While sellers of alcoholic beverages are free to advertise on TV
and radio, on billboards, and in general-interest publications, the
task force wants to ban such ads for state-licensed pot stores (a
form of censorship the state constitution
does not seem to allow).
There are various other ways in which the legal treatment of
marijuana in Colorado, as discussed so far, sharply diverges from
the legal treatment of alcohol, despite Amendment 64′s promise that
they would be similar. In a recent letter
to John Hickenlooper, a former brewpub owner who is now Colorado’s
governor, Bill Althouse, a Colorado activist who identifies himself
as executive director of the Campaign to Regulate Alcohol Like
Marijuana, offers some modest proposals for alleviating this
If a child sees a parent consume alcohol, Protective Services
may remove the child from the home.
If a parent has one drink, it will cause loss of custody of
children in a divorce case.
No alcohol may be served by the drink anywhere in
All publicly viewable consumption at sporting events, backyards
, political rallies, fraternal organizations, breweries, vineyards,
farmers markets, and picnics, even if the alcohol is free, is a
Alcohol consumption outside a private home is a crime.
No alcohol advertising is allowed except for adult only
All alcohol production and sales must be a monopoly selected by
All craft beer is illegal, only large brewers may be licensed
All alcohol sales are package sales only, must be in child
proof containers and placed in plain dark paper exit packaging
stapled shut before leaving the store.
Non Colorado citizens will be limited to one bottle of beer per
Colorado citizens will be limited to a six pack per
Home brewers must grow their hops under artificial lights in a
separate locked space and brewing must also occur in that locked
space. Using sunshine is a crime.
Alcohol retailers must only sell alcohol and nothing else.
Outside investment in beer production or hops growing is
As Colorado’s legislators consider the task force’s
recommendations during the next month or so, they should keep
Althouse’s suggestions in mind. Maybe that will help steer them
toward policies that show greater respect for free markets,
consumer choice, and freedom of speech.
Originally posted here: