(This story is part of a package on the ten-year anniversary of adult use cannabis legalization in Colorado and Washington. You can read the other stories here.)
Cannabis legalization debates have become increasingly complex over the years, as the industry grows more sophisticated and the possibility of federal legalization comes into view.
But ten years ago, on November 6, 2012, when voters in Colorado and Washington were deciding on whether to approve adult use legalization measures at the ballot box, they’d been presented with relatively straightforward messaging.
In Colorado, the Campaign to Regulate Marijuana Like Alcohol pushed the argument that cannabis is safer than alcohol. And in Washington, the New Approach campaign argued not that legalization is a panacea, but that its pros outweigh the cons–and that the cons of prohibition are far more harmful.
Both campaigns ultimately promised to take money from illegal operators and instead funnel it into state budgets, to take a product that people were already consuming and regulate it while ending the arrests of these consumers, and that the sky wouldn’t fall in the form of rising youth use and cannabis-impaired driving accidents.
To mark the ten-year anniversary of these voters making their states the first jurisdictions in the world to legalize cannabis for adult use, Cannabis Wire turned to the data to address this question: How have things panned out?
The data suggest: broadly, pretty good.
And if you ask the former and current governors of these states, they’d say so, too.
Washington State Governor Jay Inslee didn’t support the campaign to legalize back in 2012, when he was running for governor, but called for national legalization when he ran for president in 2020. And former Colorado Governor and now U.S. Senator John Hickenlooper, who opposed the legalization measure back in 2012, said this during an anniversary event last month:
“There was concern that legalization would cause teenagers to think it wasn’t such a big deal, and they’d start using it more and they’d experiment more. And one of the great things Colorado has is a health survey, Healthy Kids Colorado, where we go out— it’s now up over 40,000 participants. But I go into the U.S. Senate on a regular basis and say, ‘We can prove that since we legalized marijuana, there has been no increase in teenage experimentation. No increase in consumption. No increase in driving while high.’”
Just this week, he announced that he would introduce the Preparing Regulators Effectively for a Post-Prohibition Adult Use Regulated Environment (PREPARE) Act. The announcement touted Colorado as a success story, and its headline read: “Ten Years After Legalization in Colorado, Hickenlooper Bill to Pave Way for Federal Marijuana Legalization.”
Here’s a snapshot of the latest data from both states:
TAX REVENUE (AND SPENDING)
Legal sales began in both states in 2014. Washington state imposes a 37% excise tax, while Colorado has three taxes: 2.9% state sales tax at retail, 15% cannabis tax at retail, and 15% cannabis tax on wholesale cannabis. (We aren’t considering local taxes.)
How much revenue (taxes and fees) has the state received since 2014? $2.27 billion.
Where does that money go? Most goes into the general fund or into a “marijuana tax cash fund.” However, the ballot measure passed in 2012 specifically set aside some portion for schools.
How much have schools received? In 2020-21, the Colorado Department of Education saw $175.4 million in cannabis revenue, and its total to-date is $619.9 million. The funds have gone to different programs, including: the School Bullying Prevention & Education Grant Program, the Early Literacy Competitive Grant Program, and the Drop-out Prevention Programs.
How much revenue (taxes and fees) has the state received since 2014? $2.37 billion (this is through the end of 2021; however, this figure will likely come in closer to $3 billion once the 2022 totals come in).
Where does that money go? More than half of that has gone toward health care, either the Basic Health Plan Trust Account, which provides health care services at no cost, or the state’s Health Care Authority, for things like youth surveys and community health centers.
Where else? The remainder goes toward: the Washington State Patrol’s Drug Enforcement Task Force; the University of Washington Alcohol and Drug Abuse Institute and the Washington State University for research on impacts of cannabis use; the Department of Agriculture for lab analysis of pesticides in cannabis; the Superintendent of Public Instruction for drop-out prevention; and the Department of Ecology for cannabis testing protocols and accreditation standards.
NUMBER OF BUSINESS LICENSES
We are only counting adult use licenses here.
Product Manufacturers: 299
Testing Facilities: 12
To be determined. Current testing methods can only identify that somebody has consumed cannabis, but not when and how much. Therefore, somebody who is in an accident and has cannabis in their system might have consumed that cannabis days prior. Further, there is no national standard for cannabis-impaired driving, as there is for alcohol. And, there is no consensus, built upon research, regarding exactly how cannabis affects drivers.
An example: a report out of Colorado last year found that the prevalence of cannabis “identified by Colorado State Patrol officers as the impairing substance in a DUI” rose from 6.3% in 2014 to 8.7% in 2020. But it contains an asterisk: “Note that the detection of any cannabinoid in the blood is not an indicator of impairment but only indicates the presence in the system. Detection of Delta-9 THC, one of the primary psychoactive metabolites of marijuana, may be an indicator of impairment.”
(In other words, a rise could be attributable to many factors, such as, for example, more people consuming cannabis post-legalization, and therefore more people having detectable levels of THC in their systems.)
One common question in states with legal adult use is whether the medical cannabis program will shrink. In Colorado and Washington, the answer is: somewhat.
When adult use sales began: ~111,000
Now: ~ 74,000
The way the state presents this data is somewhat murky. The Department of Health shares the total number of “recognition cards” issued each year, and this could include “initial, renewal, replacement, and corrections.” Looking back at 2016, which is how far back their chart goes, it’s just over 18,000; looking at 2021, it was around 14,000; and data by July 2022 showed just over 6,000.
Each state’s leading youth survey shows that past month cannabis use among middle and high schoolers is trending down.
Middle School: 5.1%
High School: 19.7%
Middle School: 3%
High School: 13.3%
Grade 6: 1.3%
Grade 8: 7.3%
Grade 10: 18.1%
Grade 12: 26.7%
Grade 6: 0.9%
Grade 8: 2.8%
Grade 10: 7.2%
Grade 12: 15.9%
In both states, arrests are way down. However, even within those smaller numbers, racial disparities persist. In both states, a Black person is roughly 2x more likely than a white person to be arrested for possession.
White: 1,287 (33 per 100,000)
Black or African American: 152 (56 per 100,000)
White: 352 (7 per 100,000)
Black or African American: 56 (16 per 100,000)
Neither state made promises on equity in the state’s cannabis industry; this priority didn’t enter the spotlight in legalization debates until years later. But, both states are now trying to make up for lost time.
In 2018, Denver Mayor Michael Hancock called on officials to “develop a plan to address equity within the cannabis industry.” In 2020, Denver released findings from a survey that found that a significant majority of business owners are white, as Cannabis Wire reported at the time. Since then, Denver has, for example, reserved delivery and hospitality licenses for equity applicants, and last month its City Council approved a $15 million fund “to provide technical and capital support to qualifying small business entrepreneurs.”
In Washington, cannabis regulators pushed for legislation in 2020 that established a Social Equity Task Force, which made recommendations to regulators about how best to create a social equity program. The rules for that program are set to be finalized this month. And, regulators are in the process of preparing an application process for at least forty licenses through the program. At the time of publication, a visitor to the homepage of the Washington Liquor and Cannabis Board will first see information about this program.
LOOKING TO THE FUTURE
One noteworthy development out of each state is that the editorial boards of both The Denver Post and The Seattle Times have, since last year, called for potency caps on cannabis products, arguing that they bring an increased potential for mental health issues. Whether such caps take hold in adult use states remains to be seen.