Dannemann: Cannabis Is Not Without Risk

Triple Spaced Again
© 2023 New Mexico News Services

New Mexico has passed the one-year anniversary of legalizing recreational adult-use marijuana. The news releases were bursting with excitement. Government and business leaders were celebrating, saying the industry is off to a great start.

These announcements focused only on the business side – lots of money, lots of tax revenue – not mentioning the effects on New Mexico consumers.

In one year, New Mexico had $300 million in adult-use cannabis sales. The state issued around 2,000 cannabis licenses, including 633 retailers, 351 producers, 415 micro producers, and 507 manufacturers.

Cannabis retailers pay both New Mexico gross receipts tax and excise tax. The state is collecting more than $2.5 million a month from these taxes. The excise tax is 12% until July 1, 2025, and then gradually rises to 18%.

Unnoticed in the news reports, cannabis shops have apparently been a boon to commercial landlords. Until recently, strip malls were pockmarked with payday loan shops. We just outlawed high-rate payday lending, but we unintentionally saved the landlords, replacing those loan stores with cannabis shops.

Excuse me, not shops. We made marijuana respectable by changing its name to cannabis, and upscaled the stores by calling them dispensaries. Just like when we legalized gambling and changed its name to gaming.

Cannabis has good sides and bad sides, and we should not forget about the bad sides.

It seemed, in the news coverage of the anniversary, nobody was talking about the moral hazard of giving full legal status to an intoxicating drug.

In April the New Mexico Department of Transportation hosted a conference cleverly titled, “High on the road: The intersection of recreational cannabis and traffic safety.” DOT is taking this seriously. It had reported that in 2021, before cannabis was legal, New Mexico had 71 driving deaths in which cannabis was involved. (Cannabis was not necessarily the cause. Cannabis traces stay in the body for many days, and that makes measurements unreliable.)

Impaired driving is not the only bad effect. So are stupid behavior and impaired decision-making, which are not measured. So is the increased possibility of workplace injury.

When New Mexico legalized gambling, in 1996, there was considerable debate about whether our citizens might fall prey to the dangerous temptations of gambling. Gov. Bruce King refused to sign the legislation, which was a factor in his losing the 1994 election to Gary Johnson.

Did a few people develop a gambling addiction that otherwise would not have occurred? Yes. Did a few people gamble away their family savings? Yes. Did a few people commit crimes to cover their gambling losses? Yes.

Retired dentist Guy Clark, chairman of Stop Predatory Gambling, has been a lone voice continuing to remind us of the social costs of gambling, calling it “an addictive and self-harming activity …. correlated with suicide, child and spouse abuse, and homelessness.”

There has been ongoing pressure to expand what gambling venues are authorized to do. For example, a bill was introduced to legalize sports betting at racinos in 2021. It was defeated, suggesting that legislators share some concern.

It was also noted that gambling would not draw much tourism. Revenue would come mostly from locals, who otherwise might have spent their money on other local entertainment – so it might be economically neutral.  

Likewise, it appears our cannabis customers are mostly local. We really don’t know whether the revenue is a net gain for the state. The probable exception is a few communities near Texas that are doing exceptionally strong business.

The state should be tracking all of this so eventually we can find out what legal cannabis is doing to us. And we need a cannabis version of Guy Clark reminding us that this stuff has risks.

Contact Merilee Dannemann through www.triplespacedagain.com.


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