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Cannatax DemystifiedSubmitted by Lory Kohn on Wed, 04/20/2011 - 11:14.
In a nation crying for new industry, with budget shortfalls impacting every level of government, cannabis commerce is a shining star hovering on the economic horizon. Cannatax generated from cannabis commerce could provide a lifeline for embattled governments desperate to maintain vital services in the face of rising costs. It isn’t, because demonization derived from the 1930s is responsible for marijuana “activists” settling for medical marijuana initiatives state-by-state instead of working together to overturn federal prohibition altogether – which effects legalization for every state in one fell swoop. This is a bizarre situation, where a group of like-minded citizens who overwhelmingly outnumber the opposition behaves like a minority which has to beg, plead, and cajole for “patients’ rights” instead of everybody’s rights. Why should you care about cannatax? Perhaps after driving the family van to Yellowstone, you and your brood might actually want to find the park open? Maybe you’re having difficulty remembering if your local library’s reduced schedule is Monday/Thursday/Friday or Tuesday/Wednesday/Saturday? Maybe you harbor hope your kid could learn in a classroom with less than fifty students? Then again, you may experience personal growth from being on hold for an hour or more waiting to talk to a live person about extending your unemployment benefits, since only 5 percent of the people who want to work in the cannabis industry can presently do so. If that's the case, stop reading here! The ability to collect bounty from cannatax revenue is also a core justification for legalization. As we’ll see, there’s legitimate concern whether accepted cannatax predictions have come in way too low to accurately reflect what a fully-firing cannabis industry could contribute to every level of government. When accurate figures emerge – like those you’re about to read – curiosity about cannatax will increase exponentially. Cannatax is available from city, county and state sales taxes, individual and business state and federal income taxes, licensing fees, import and export fees, and “sin taxes” – special levies placed on substances like alcohol and tobacco. According to The New York Times’ Stephanie Saul, most states are dependent on sin taxes generated by alcohol and tobacco sales to survive. And they’re barely scraping by. What if cannatax was added to the mix? That would be quite helpful in altering the current climate of doom and gloom holding the country in its sway. If I told you that the United States can generate an easy $67 billion worth of cannatax in a fully legal, regulated economy – just for openers – would that get your attention? A cessation of pursuing, prosecuting, and incarcerating marijuana “criminals” would free another $50 billion, bumping the gain to $117 billion. Over the next year, the State of Cannarado is looking at an actual, not theoretical, $160 million windfall from medical marijuana-related sales tax alone – without accounting for licensing fees or personal and business state income taxes. Promising, right? That’s why cannatax figures are finding their way into every form of media. Coverage generally takes the form of one-line quotes from economists, like “Harvard PhD Dr. Jeffrey Miron said today marijuana sales could generate $6.2 billion in tax revenue annually.” Until now, no one knew how he calculated that figure. Therefore, no one had the audacity to question whether it seemed high or low. Presumably, only ivory tower cognoscenti, with years of secondary education, could possibly do that. However, as we spelunk into federal and state cannatax calculations, you’ll be surprised to discover that these figures are considerably less mystifying than the high priests of poteconomics would have us believe. In fact, most of them involve nothing more challenging than middle school math. Cannatax in The USA Forecasting cannatax tests economists used to analyzing legal substances people have no emotional involvement with, like soybeans. When an illegal or quasi-legal substance beloved by millions enters the equation, suddenly economists have competition. Quite a few lovers of herbal gold are practiced in "observation of empirical data," having grown, nurtured, trimmed, transported, bought and sold bushels – if not tons – of it in the real world. That real-world experience levels the playing field with poteconomists, who often have difficulty distinguishing a rolling paper from a Post-It note. That's because avoiding anything gooey, gunky, stony, and skunky is paramount to preserving their tenure at institutes of higher learning. To determine maximum potential cannatax, poteconomists choose from three accepted methodologies:
Note the use of the verb “extrapolate” as opposed to “count.” That’s because no one has managed to attach a bar code to Lime Kush – yet. In other words, all poteconomists are forced to guesstimate. “We have very limited data about how many people consume marijuana,” Gettman relates. “The problem is, we don’t have an inventory, an audit, a census . . . of all the marijuana that’s coming into the country or grown here. It’s not like it’s registered in a warehouse and it’s brought to market.” Miron concurs: “The crucial problem in figuring out how much tax revenue we’d get is we don’t know the size of the market. It’s hard to determine the precise size of any economic market, especially if it’s underground. It’s subject to a lot more doubt.” When they’re doubtful, poteconomists become anxious. Then they make mistakes – like failing to account for revenue streams they should have accounted for (coming right up). The following forecasts for cannatax in the USA have received some degree of notoriety:
Getting back to those mistakes and lapses in logic, please note:
Regarding the additional revenue streams unearthed by Cannabis Commerce, these didn’t take a flash of great genius to discover – they were obvious. For example, if marijuana were suddenly fully legal and regulated, does anyone doubt the pharmaceutical industry would jump in with any number of therapeutic products? Gettman doesn’t: “There’s a lot of money to be made by developing highly refined pharmaceuticals based on the chemical ingredients in marijuana. Yeah, there’s billions of dollars there.” Now that you’ve got a taste what goes into calculating cannatax, let’s examine Gettman’s Lost Taxes methodology and demystify how cannatax is calculated:
Think there’s more than 15,000 metric tons sold annually? Many people do, including the National Drug Threat Assessment of 2010, which, according to Max Chaiken, “puts the number of how much is produced in Mexico at 21,500 metric tons. Even if only half of that is coming into the United States, that’s 10,750 metric tons right there. And we know that a lot of it’s being grown in this country as well. So it’s not inconceivable to me that we have 20,000, maybe 25,000 metric tons on the domestic market that’s being consumed by Americans.” If you agree, just multiply however many metric tons you think are consumed by $3,500 a pound, or whatever figure you feel, based on your own experience in the trade or other knowledge you may have, is a more accurate real-world gauge of what a pound sells for. Fun With Cannarado Sales Tax Now that MMCs (medical marijuana carecenters, a.k.a dispensaries, collectives, co-ops, clubs) in Cannafornia and Cannarado have rung up a few years’ worth of retail sales, useful statistics have emerged. That means we can guess a whole lot less. We can mine actual MMC pricing data — and make more meaningful inferences about the readiness of The World's Most Promising Commodity to assume its rightful place as a consistent producer of government revenue a la alcohol and tobacco. If you live in another state, like Grohio, the amount of cannatax that can be collected in a fully legal, regulated landscape is dependent upon your population. Bear in mind that cannatax figures will always be crippled in medical marijuana states, because only the chronically ill or people pretending to be chronically ill will be transacting. That sad state of affairs limits cannatax to 5% of what it could be if anyone could buy cannabis like anyone can buy alcohol and tobacco. Play the game
What if every municipality allowed dispensaries? That would boost the state sales tax revenue up 25% ($10 million), from $40 million to a number which rounds off to $50 million. What about city sales tax? So, the combined city and state sales tax figures amount to around $100 million in "Cannarado" from sales of raw buds alone. What about those MIPs (marijuana infused products)? And cultivation supplies? 10% of $110 million is $11 million. That bumps our ultra-cautious guesstimate to $121,000,000 million. Underground to Overground? Take a third of $121,000,000 — around $40 million — tack it on, and land in the $160 million range. Now we're getting somewhere. Your turn to play In April 2011, premium grams still sell for closer to $15 than $10. Therefore, without accounting for edibles or cultivation supplies, there could be as much as $150 million possible in annual city and state sales tax based on sales of pure buds alone (we previously calculated $100 million @ $10/gram; $15 a gram is 50 percent higher, so $100 million becomes $150 million). Just plug in any variable and guesstimate – remember, every poteconomist admits they do the exact same thing. That’s a bunch of figures to process for now. Keep in mind that we just calculated Cannarado sales tax only; we didn’t discuss licensing fees (like the $90 application fee you and 150,000 other residents totaling some $13 million may have already paid the Department of Revenue), personal and business state income taxes, and the inevitable sin taxes coming down the pike. Any way you look at it, it would take quite a nimble mind to argue against collecting cannatax on the 25,000 or so metric tons of marijuana consumed annually in the USA. It’s going to be purchased anyway. So why not tax it? I can answer that in a word reprised from earlier in this article: demonization. An eerily-enduring subject deserving of its own article . . .
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This poor man is being punished for his medical marajuana
This poor man is being punished for his medical marajuana they stopped his health insurance and wouldn't give him his medications. Its very sad.
cut//paste//snip
“It’s my coffee, my tobacco, whatever you want. It’s my social drug,” says Mathiesen, a 69-year-old deli clerk at New Seasons on Southeast Division Street.
And in a weed-friendly town like Portland, he says, that never posed a problem—until last year, when Kaiser Permanente suddenly cut off his pain medication, citing his marijuana use.
Doctors prescribed Mathiesen oxycodone several years ago to relieve arthritis. Now, Mathiesen says, the Oakland-based insurance giant is discriminating against him based on an arbitrary social stigma around cannabis.
“I also drink half a beer a day. Is that prohibited? They said no,” Mathiesen points out.
John Sajo, a longtime marijuana activist in Oregon, says doctors routinely deny pot users access to medication—even when they’re in Oregon’s medical marijuana program. Pot patients have also been denied organ transplants (see “Organ Failure,” WW, May 21, 2008).
“It seems like a lot of healthcare providers have those sorts of rules,” Sajo says.
But prompting insurance companies to discuss those rules, if they exist, is an uphill battle. In response to WW requests, the PR departments at Kaiser and Providence Health released only brief statements.
Regence BlueCross BlueShield of Oregon says it has no such policy restricting marijuana users’ access to medication.
“Generally speaking, we recommend that patients not use opiates and marijuana together,” reads an email response from Kaiser spokesman David Northfield. “The doctor chooses 99 percent of the time at Kaiser Permanente Northwest to recommend to the patient to make a choice [between pot and prescription narcotics].”
Mathiesen’s story begins about four years ago, when he was briefly hospitalized for heart arrhythmia. Doctors prescribed Coumadin for blood clots. The drug can interact badly with aspirin, Tylenol and other analgesics Mathiesen had been taking for his arthritis, so doctors gave him oxycodone instead.
The powerful painkiller can be habit-forming in some patients, but Mathiesen says he had no problems with the drug. He took it until last summer, when his former doctor left Kaiser and he was assigned a new physician, Dr. Tamara Oren.
Mathiesen says he always informs doctors he uses pot, and after viewing his file, Oren asked him to take a urine test. When the test came out positive for marijuana and oxycodone, Mathiesen says Oren told him he had to choose between the two, citing company policy.
He refused to give up cannabis, so Oren yanked his prescription for oxycodone. Mathiesen was left with only over-the-counter painkillers, and because Coumadin mixes badly with those drugs, he had to drop the anticoagulant as well.
Numerous online medical sources warn of harmful or fatal interactions between alcohol and oxycodone. But Mathiesen could find none on oxycodone and marijuana. He wrote letters to Kaiser demanding the insurer either justify the policy or drop it.
“Anti-marijuana fever in this country is fuel[ed] by religious and cultural prejudices with no rational or honorable basis,” Mathiesen wrote to Kaiser. “What I don’t want is to have the remainder of my life put in jeopardy or pain because of cultural/religious prejudice.”
Kaiser officials set up a meeting with Mathiesen on April 15 to discuss the policy and his requests for a doctor with an open view on marijuana. But on April 7, Dr. Maureen Wright, an associate regional medical director at Kaiser, canceled the meeting.
“We offered to meet with you to discuss your concerns, which you told me during our telephone conversation was related to discrimination,” Wright wrote. “What you outlined in your letter has to do with your wish that we nullify our opioid protocol. That will not be done.”
So Mathiesen now is left with no prescription painkiller, no blood-clot pills and no primary care provider.
“They’re saying, ‘You don’t get the best medicine because you smoke marijuana,’” Mathiesen says. “That’s social engineering. I can’t trust a doctor like that.”
http://www.wweek.com/portland/article-17383-smoke_screened.html
A Timaru medicinal cannabis campaigner given an 8 week reprieve
A Timaru medicinal cannabis campaigner has been given an eight-week reprieve from sentencing
www.stuff.co.nz/timaru-herald/news/4913271/Cannabis-campaigner-expected-to-be-locked-up
topdocumentaryfilms.com/medicinal-cannabis/
http://topdocumentaryfilms.com/medicinal-cannabis/?utm_source=feedburner...
So it is happening world wide. Betty
humm, betty, I seem to be on a band wagon today, smile. Forgive me if I am wrong, however, I have seen some inconsistencies in your postings, that leave me to wonder if indeed, you are who (and where) you say you are. Just saying.
The problem is, America is NOT a Democracy - it is a Republic! As our Founding Fathers established, can we keep it?
Why I dont quite know how to answer that Ms. Betty
Why I dont quite know how to answer that Ms. Betty but I will not be offended no need for forgiveness. What is it you want to know?
I'm sorry Ms. Betty I missed your response
I'm sorry Ms. Betty I missed your response if you call someone out it is only polite to answer them don't you think?
Or do you have nothing to say? Now I don't know you and I think you have no call for what you wrote whatever in the world it is. I'm just poliely asking because otherwise it seems very rude.