Louisiana Committee Rejects Bill To Establish Marijuana Tax System To Prepare For Eventual Legalization
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A Louisiana bill that would have established a tax system to prepare the eventual legalization of adult-use marijuana had an initial committee hearing on Tuesday, at which members narrowly rejected the plan.
Members of the House Committee on Ways and Means voted 8–7 against passing the bill—HB 636 sponsored by Rep. Edmond Jordan (D)—out of committee. It failed mostly along party lines, with Rep. Joseph Orgeron casting the lone Republican vote in favor of passage.
The proposal aimed to set the state up for an adult-use marijuana legalization program by creating specifically the tax infrastructure for a commercial marketplace. It conceives of cannabis producers selling products to retail consumers 21 and older and specifies that adults could not sell products among one another, but it would not in fact legalize marijuana.
“We can get into a long debate on whether cannabis should or should be legal or illegal. That’s not the purpose of this bill,” Jordan told committee members at the hearing. “The purpose of this bill is simply to say that if, in the event that it is legalized, that we have a taxing mechanism in place.”
The proposed retail tax on marijuana would be based on weight, with products taxed at 15 percent of the average market price for cannabis, which would be determined by state officials. Medical marijuana, meanwhile, would be exempt from the new tax.
The state Department of Revenue would be in charge of tax collection and enforcing the tax scheme. Funds would go to pay for salary increases for K–12 schoolteachers in the state as well as full-time support staff at public elementary and secondary schools.
Speaking in support of the bill at Tuesday’s hearing, Kevin Caldwell, Southeast legislative manager for the advocacy group Marijuana Policy Project (MPP), told members that the tax scheme would bring in an estimated $45 million in state revenue during the first year of legal sales, “and then it progresses over several years to the point of, as it matures at five years, we would be looking at $228 million for the state.”
Over a similar timeline, he said, illicit marijuana sellers would be expected to fall from 100 percent market share to 25 percent.
As for the bill’s plan to route revenue to public teachers and school staff, Caldwell said, “my step-daughter is a teacher in New Orleans, and I know how hard she works and how she struggles to pay her mortgage.”
As for opponents at the panel hearing, Will Hall, the director of the Louisiana Baptist Conference’s public policy office, claimed marijuana legalization could harm the state by fueling crime, human trafficking and youth mental health problems, as well as putting veterans at risk.
He called California—which he described as “one of the leading states in pot”—a “complete failure” and asserted that in Oregon, illegal growers “will go down to the border and [get] illegals and bring them up and basically enslave them on their grows.”
Asked by committee member Rep. Mandie Landry (D) about evidence showing that people sometimes substitute marijuana for alcohol, Hall said “the only study I really have on that” was a Yale study of veterans that found marijuana “caused exaggeration of the PTSD.”
“They became using more alcohol and actually started using more opiates,” he said.
Landry responded skeptically.
“I think every veteran who’s ever come here that I’ve seen testify on this would disagree with you,” she said.
“I’ve worked at the highest levels at the Pentagon, the Joint [Chiefs of] Staff, and so I’ve seen the data,” Hall shot back, “and I know what the Arm is doing in terms of management, command, and they absolutely reject the use of marijuana because of its deleterious effects on veterans.”
“Again,” Landry replied, “I’ll say for six years, I’ve had veterans come here and say the opposite.”
She asked whether Hall had any information “comparing marijuana to alcohol, especially among younger kids,” saying that she believed that substituting cannabis for alcohol had the potential to reduce overall harm.
Hall responded by pointing to evidence of marijuana’s use on the developing brain but did not speak to the effects of alcohol.
In fact, considerable research suggests to a possible substitution effect, including among younger people. A report published in March by Bloomberg Intelligence (BI) found that three in four young adults said they’re substituting cannabis for alcohol at least once per week.
Continuing with questions for Hall, Rep. C. Travis Johnson (D) asked whether he believed that alcohol and tobacco are harmful for youth. Those, he pointed out, are already both taxed by the state.
“I think we ought to ban tobacco,” Hall said.
“My point is this bill is not really about for or against,” Johnson explained, noting that it would merely establish a tax that would fund public education if legalization eventually does occur.
“This instrument is simply if the will of the people were to move forward, a tax will be levied on that product,” he said.
HB 636 was intended to work in tandem with a separate bill from Rep. Candace Newell (D), HB 627, which would create a three-year pilot program that is “designed to test and evaluate parameters of the implementation of a permanent adult-use cannabis program,” according to a legislative analysis.
“Aside of just wanting to have legalized recreational marijuana, I’m also looking at another revenue source in the state of Louisiana,” Newell said about that measure last month. “I’m talking about statewide, across the board, education on the product—the use of the product, the dangers of it and how it can be beneficial.”
Under Newell’s legislation, currently pending before the House Committee on Administration of Criminal Justice, the Louisiana Department of Health would be responsible for overseeing the pilot program, which would be designed to evaluate “potential challenges, limitations, or risks that could arise before a potential permanent rollout.”
The idea would be to provide an “opportunity to gather real-time feedback and data to assess the effectiveness of the temporary pilot program and potential permanent program, as well as identifying any unintended consequences.”
Only existing medical cannabis dispensaries that were licensed as of August 1, 2022 in select regions would be eligible to participate in the pilot program.
The bill filings come nearly a year after the Republican governor of Louisiana signed bills to decriminalize marijuana paraphernalia and enact restrictions on the hemp market.
That came on the same day that Gov. Jeff Landry (R) vetoed a measure that would have allowed him and future governors to issue pardons for people with past cannabis convictions, he gave final approval to the paraphernalia decriminalization proposal from Rep. Delisha Boyd (D).
As it stands in Louisiana, possession of up to 14 grams (or half an ounce) of marijuana is decriminalized, punishable by a $100 fine without the threat of jail time.
In 2022, former Gov. John Bel Edwards (D) also signed into law a measure that was designed to streamline expungements for people with first-time marijuana possession convictions.
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