When discussing the pros and cons of legalizing marijuana, the economic impact of legalization is often cited as a benefit, especially taxes raised as a result of the production and sale of the plant and related products.
Medical marijuana is part of the discussion of the pros of complete legalization, but it is a much smaller part of the economic impact, according to national and state reports.
How Wyoming approaches legalization will influence potential economic and tax revenue benefits. A majority of state residents, 54%, support allowing adults to legally possess marijuana for personal use, while 85% backed medical marijuana, according to a University of Wyoming Survey Analysis Center poll conducted in December.
The Tax Policy Center reports that of the 33 states where medical marijuana is legal, the small number of states that tax medical marijuana sales do so at rates that often the same as or close to the state’s general sales tax rate and do not raise much revenue.
For example, official revenue reports show Colorado has garnered more than $1.6 billion in state tax and fees from marijuana. Marijuana sales alone for January 2021 were more than $187 million. Colorado charges a 2.9% sales tax for marijuana purchases, but that sold for recreational use is assessed an additional 15% in excise taxes.
While State Rep. Bill Henderson, R-Cheyenne, wants Wyoming’s economy to diversify, his interest is legalizing medical marijuana is prompted by more compassionate concerns.
Henderson sponsored House Bill 82 in the 2021 Wyoming Legislature that would have authorized a report on the implementation requirements for medical marijuana. Henderson said the legislation was in response to issues that other states with medical marijuana laws have faced.
“I want to keep the focus of my interest in this on the pain control, the serious health conditions that can benefit from medical marijuana,” Henderson said. “That’s one of the reasons why I think this (medical marijuana legalization) should be driven by the folks who are on the front lines.”
State Sen. Chris Rothfuss, D-Laramie, cosponsored House Bill 209, which would have legalized recreational use of marijuana. He sees legalized marijuana as a means to diversify the economy and increase tax revenues for a cash-strapped state government.
Medical marijuana by itself won’t be enough to achieve those goals, he said.
“I’m not sure it really does represent a significant economic development opportunity,” he said.
HB 209 would have imposed a 30% excise tax on marijuana sales. During testimony before the House Judiciary Committee, a state analysis estimated the bill would have generated about $47 million a year in taxes. Two thirds of the tax revenue generated annually – $30.7 million – was targeted for the school foundation fund. The other third – $15.35 million a year – would have benefited the local government of the jurisdiction in which the sales took place.
Though both HB 82 and 209 were forwarded to the full House of Representatives by their respective committees, they failed to come to the floor for debate or a vote before the session ended, leaving legalization to be considered in 2022.
In the meantime, state residents have increased opportunities to acquire marijuana as other states ease prohibitions, boosting their economies and tax revenues, even if it means facing possible penalties on their return to Wyoming. Under state law, possession of any quantity up to 3 ounces is a misdemeanor punishable by up to a year in jail and/or up to a $1,000 fine.
Wyoming remains one of six states that have not legalized or decriminalized marijuana or its byproducts, like CBD oil, in some manner. Only one state bordering Wyoming – Idaho – has continued to mandate marijuana as fully illegal. Recreational marijuana is legal in Colorado to the south and Montana to the north. To the northeast, South Dakota voters last year approved ballot initiatives legalizing medical and recreational marijuana. State officials have challenged the ballot initiatives, and the South Dakota Supreme Court will be ruling on the merits of overturning the recreational marijuana vote.
Nebraska has decriminalized first-time possession of an ounce or less of pot as an infraction with a maximum fine of $300. More stringent punishment is authorized for repeat offenses.
There is also the possibility that the Northern Arapahoe Tribe and Eastern Shoshone General Council could complete efforts to decriminalize marijuana and take steps toward legalizing medical marijuana on the Wind River Reservation to boost economic development.
Legalization of marijuana, even for medical-related purposes, could pose an economic problem for Wyoming’s fledgling hemp businesses. While both hemp and marijuana plants are sources for CBD oil promoted for the relief of pain, there is a much higher amount of THC in marijuana than is found in hemp. THC is the main psychoactive component in the cannabis plant, and when present in hemp in higher quantities (above a maximum 0.3%), the crop is treated as if it is marijuana and must be destroyed.
John Connett, a University of Wyoming Ecosystem Science and Management master technician, said consideration needs to be given to how marijuana is grown, if it is ever legalized in the state.
“Hemp and marijuana crops can impact the quality of each other,” Connett said of potential cross-pollination.
The Wyoming Medical Society has taken a stand against involving physicians in any procedure that would require them to approve the use of medical marijuana, said Dr. David Wheeler, a Casper neurologist and organization president.
Wheeler said there is limited clinical data to show that marijuana is useful in clinical conditions. The U.S. Food and Drug Administration has only approved the use of marijuana in treating two rare and severe forms of epilepsy. He added that there are health and mental concerns related to its use, and its possession is still prohibited under federal law.
“Throughout the country, the term ‘medical marijuana’ is used specifically to introduce a pathway to legalization. It bastardizes our profession in the pursuit of that social change. We object vigorously to that,” Wheeler said. “Our position is that ‘medical marijuana’ is not a meaningful phrase, and that we do not support legislation that forces physicians to prescribe marijuana as a medication.”
He said it’s an entirely separate question of whether marijuana legalization is a good or bad idea that many physicians are “pretty divided on.”
Despite the unwillingness of physicians to prescribe marijuana use, Wheeler said that should Wyoming approve medical marijuana, “there are many, many, many clinical providers around the country who will happily get licensed in Wyoming.”
“It will be prescribed in Wyoming, whether doctors on the ground in Wyoming want to do it or not,” he said.
