MONTPELIER – Vermont could find millions of dollars in revenue by becoming the first state in the Northeast to legalize marijuana, but many questions remain unanswered.
In a study released Friday, the Rand Corp. found that if Vermont chooses to lead the region on marijuana, state officials must step into a “fog of uncertainties” about public safety, taxes and tourism.
“There is no recipe for marijuana legalization, nor are there working models of established fully legal marijuana markets,” the report states.
Not to mention that marijuana remains illegal under federal law.
The 218-page report , commissioned by Gov. Peter Shumlin and legislators last May, makes no recommendation about whether Vermont should legalize marijuana. Instead, it provides a wealth of information about the opportunities and risks of legalization.
Vermonters use marijuana at a higher rate than the rest of New England or the nation as a whole, according to the report. However, far more marijuana customers live outside Vermont than within its borders.
This sets up a challenge for the state: Should the state prepare for an onslaught of marijuana tourists?
“That enormous demand can be seen as a great opportunity for generating a tax windfall or as a threat to Vermont’s current brand and economic niche, or both,” the report stated.
Marijuana taxes could, in theory, generate between $20 million and $75 million a year, according to the study. The larger figure could be reached through what the report calls “marijuana tourism and illicit exports.”
The high revenues could evaporate if the federal government intervenes, or if another northeastern state becomes a competitor.
“Indeed, because legal marijuana can flow across borders in either direction, Vermont’s prospects of deriving considerable tax revenue even from its own residents would become much less promising if one of its immediate neighbors were to legalize with low taxes,” the report states. “It is not clear that Vermont has any long-run comparative advantage in hosting the industry.”
Shumlin, who leans in favor of legalization, told the Burlington Free Press on Friday that he plans to spend the weekend reading the full report but characterized it as “great.”
“It does what exactly what I hoped for, which it tells us both the challenges and the opportunities of legalization,” the governor said.
The Burlington Free Press asked Shumlin whether he’s concerned about the effects of legalized marijuana on highway safety.
“We should look at Colorado and Washington state’s experience in this regard and find out whether these are real fears, or whether they are part of our long tradition of resisting change on this subject,” the governor said.
Studies coming out of those states are inconclusive on many questions, according to the Rand researchers.
During a discussion in Montpelier about whether black market marijuana sales would convert to legal sales, Jonathan Caulkins of Rand Corp. emphasized the uncertainty.
“We think we have the world’s best data on how much that happens, and we know those data sort of stink,” Caulkins said. “Basically nobody’s ever done this before. Colorado and Washington did, and they’re still very early.”
The Vermont Police Chiefs Association is among many groups opposing marijuana legalization for public safety reasons.
“I don’t understand why we’re even considering this, other than the lure of money,” said George Merkel, the Vergennes police chief and head of the state chiefs association.