Efforts to legalize recreational marijuana in Connecticut may ramp up next year ”“ especially as the state wrestles with what are predicted to be a $2.1 billion deficit for Fiscal Year 2021, which began on July 1, and a $3.5 billion deficit for FY22 and ”™23.
While the General Assembly has considered legalization bills in its 2019 and 2020 regular sessions, they have yet to win the approval of state Republicans.
The latest attempt, SB 16, introduced in February by Senate President Pro Tem Martin Looney, House Speaker Joe Aresimowicz, state Rep. Matt Ritter and state Sen. Bob Duff ”“ Democrats all — would have allowed adults 21 and older to possess and buy up to 1½ ounces of cannabis from a licensed retailer. But like most legislation, it fell by the wayside once Covid-19 hit.
Introduced in 2019, SB 1085 was similar to SB 16; it ultimately failed to win approval from any Republicans as well as a few Democrats.
So why would a third time possibly be a charm?
Money ”“ and lots of it.
According to a new study by the director of the Connecticut Center for Economic Analysis (CCEA) at the UConn School of Business, Connecticut stands to reap $35-$48 million in direct new revenue during the first year of legalized marijuana sales, which would escalate to $188-$223 million in the fifth year.
Aggregate new state tax revenues over five years would range from $784-$952 million; in addition, direct local tax revenue is projected at $71 million over five years, with $21 million in year five alone. New employment is projected to increase from 5,669-7,418 in year one to 10,424-17,462 in year five. Also in year five, the study forecasts state GDP to grow between $953 million to $1.7 billion, depending on which of two scenarios is undertaken.
“In one scenario, CCEA assumes the state chooses to save all of the new revenues, spending nothing on new state services or maintaining current services, thus minimizing impacts in employment and GDP,” writes the study”™s author, CCEA Director Fred Carstensen. “In the second scenario, CCEA assumes the state chooses to spend all new revenues on expanded state services ”” or on preserving services that would otherwise be cut, thereby maximizing economic impacts.
“Realistically,” Carstensen continues, “the latter scenario is closer to the likely outcome, given large deficits that Connecticut faces in the next few fiscal years. Providing both scenarios permits full understanding of the range of potential outcomes and clearly establishes that even the pessimistic scenario for legalization ”” where the state absorbs all new revenues ”” is a solid choice in terms of job creation, growth in state GDP, and benefits to Connecticut”™s fiscal health.”
Regardless of which tax regime the state chooses and how it spends the new revenues, “legalization will generate significant job creation, strong growth in GDP and hundreds of millions in new tax revenues,” Carstensen wrote. “In the face of the challenge of recovering from the Covid-19 pandemic, legalization offers a path to strong recovery.”
According to the Hartford Courant, the $15,000 report was paid for by the national pro-legalization lobbying group the Marijuana Policy Project.
“It”™s our hope that the Connecticut Legislature takes up the issue of adult-use cannabis in a special session this year or during the 2021 regular session,” the group says on its website. “Many individuals who suffer from conditions that can be treated with marijuana aren”™t able to access medical marijuana cards. In addition, no adult should be penalized for using (a) substance that is safer than alcohol.”
‘Safer than alcohol’?
That conclusion is drawn in part from a 2015 report by the U.S. Centers for Disease Control and Prevention (CDC) that more than 30,000 annual U.S. deaths are attributed to the health effects of alcohol, while a 2015 study published in Scientific Reports reported that the mortality risk associated with marijuana was approximately 114 times less than that of alcohol.
According to the website War Drug Facts, in 2017 there were 35,823 alcohol-induced deaths, with 0 caused solely by marijuana.
Obviously there remains much to debate on the issue, including how sales would be regulated; the difficulties of establishing reliable DUI tests; and reticence about allowing the legal ingestion of something that has been demonized for decades.
But State Rep. Steve Stafstrom (D-Greenwich), who has long advocated for legalizing marijuana, told the Business Journal he favors revisiting the question this year.
“What the UConn study tells us is what we have known for a long time,” he said. “Legalizing cannabis in a way that rights the many legal wrongs done to minority communities is not only a moral imperative, but it is a financially prudent measure to enact. Let”™s legalize it, let”™s regulate it and let”™s get it done in the 2020 session.”
Senate Majority Leader Duff (D-Norwalk) agreed, telling the Business Journal: “The study points out what a lot of us have believed for a while now. Legalizing and regulating cannabis would generate significant revenue for the state.
“However,” he added, “I am not a proponent of regulating cannabis because of revenue. I support legalization because it will result in safer uses of cannabis and help to rectify decades of injustice. Prohibition of cannabis has resulted in pushing people to the black market, which can pose significant dangers from tainted marijuana to potentially dangerous or violent interactions.
“Furthermore,” Duff continued, “the government has used this prohibition to pursue a ”˜War on Drugs”™ which has done immeasurable damage to black and brown communities across this country. It’s time we end the illogical prohibition of a substance that’s safer than alcohol and cigarettes.”
Newtown First Selectman Dan Rosenthal said he wasn’t so sure.
“A lot of people are in a bad way,” he said. “So is it a good idea to encourage marijuana and (legalized sports) gambling? I doubt that there would be enough of an income infusion to make that much of a difference.”
During a webinar last week about Covid-19’s economic effects, Edward Alden, the Bernard L. Schwartz senior fellow at the Council on Foreign Relations, also was skeptical of legalized cannabis as something that “drives economic growth in any significant way.
“It could create some new small businesses,” Alden allowed.
Senate Minority Leader Len Fasano (R-North Haven) and House Minority Leader Themis Klarides (R-Derby), both of whom are not seeking reelection this year, have expressed concerns in the past about legalizing cannabis in the state. State Sen. Kevin Kelly (R-Stratford), viewed as a possible successor to Fasano, has stated his own reservations, including arguing against the idea that since neighboring Massachusetts has legalized recreational marijuana, the Nutmeg State should follow suit.
Legalized recreational cannabis businesses in the Bay State, which began operating in late 2018, brought in over $420 million in sales last year. According to a recent Boston Globe report, that figure is due in part to an eighth of an ounce retailing for $50-$60 “before adding an effective 20% combined state and local tax. Compare that with $20 to $30 for an eighth of an ounce of exceptional cannabis in Oregon, the state with the cheapest legal weed.”
What are they waiting for? It only takes a paragraph or 2 to get this done.
Its stupid of Republicans to not support legalization, where’s the Libertarian wing of the party?