Letter: The economic case for cannabis legalization

From: Scott Keen


Economist Morton Marcus often notes Indiana’s tendency to sit on the sidelines, watching the economic-progress parade pass by, only later scrambling to scoop up any post-parade road apples left for us (my paraphrase).

Indiana is watching the legal cannabis market pass us by. Why? Gov. Holcomb’s lame, evasive excuse that it is still federally illegal? I thought Republicans were all about state’s rights.

Millennia of experience shows cannabis is safe. It will eventually be legal across America. Amazon recently announced it quit testing candidate employees for cannabis as it eliminates a good part of the work force for no good reason.

Polls show 80% of Hoosiers support legal recreational cannabis, already legal in 15 states, with medical cannabis legal in many more. Indiana is surrounded by such states, Illinois and Michigan ecreationally, Ohio and Kentucky medically.

Some states simply decriminalized cannabis. But not friendly, tourist-magnet Indiana: “Come to Indiana with weed, we’ll throw you in jail. Please buy some booze and a gun!”

Indiana politicians must get off their moral high horse. Indiana supports and profits mightily from significantly worse vices like mini-distilleries, online gaming. In 2020-21 Indiana made $63M in alcohol (“stupefying, highly addictive and lethal”) tax, $385M in tobacco (“cancer”) tax, $316M in lottery profits and $437M in gaming (“preys on those least able to afford it”) tax.

Most Hoosiers are within a couple hour’s drive to a legal (until you bring it back to Indiana) out-of-state dispensary. Many are going. A visit to a bustling dispensary just across the Illinois state line showed 95% of customer cars displayed Indiana plates. Customers included a lady in a “Purdue Mom” sweatshirt and a Vietnam vet who used cannabis for his PTSD, dismayed he could not access it in Indiana, even medically. One gent blamed Eli Lily for having their thumb on Indiana politicians regarding legalization. All typical, mostly older Hoosiers.

For every $100 spent on cannabis products (all grown and processed in Illinois creating good jobs), Illinois collects $6.25 in state, $0.25 in local, $17.48 in excise, and $8.75 in county taxes. A 33% tax.

The Illinois cannabis industry forecasts more than $1 billion in cannabis sales in 2021, bringing $333 million in taxes! About 25% of sales are estimated as coming from out-of-state, surely including many Hoosier dollars.

This assessment doesn’t even include the weighty negative societal and fiscal costs of enforcing highly unpopular, stupid cannabis laws historically established to harass minorities, hippies (youth) and the poor.

News reports say big alcohol and tobacco companies lie in wait for the feds to legalize cannabis so they can swoop into the late-legalizing states and dominate the market before local businesses get established. No doubt.

Let’s not again wait until Indiana is shoveling up road apple dregs left for us by giant out-of-state companies. This huge, inevitable, emerging grass-roots (ahem) cannabis market should belong to Indiana and be supplied by Hoosier entrepreneurs (growers, processors, and distributors), to the substantial economic benefit of our whole state.

Hoosiers grow stuff. Let’s do that.