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Legal Market For Pot In D.C. Could Be Worth $130 Million Per Year, Says Official

D.C. estimates that legal sales of marijuana would produce a market worth $130 million per year.
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D.C. estimates that legal sales of marijuana would produce a market worth $130 million per year.

A D.C. official is estimating that legal marijuana sales in D.C. would create a market worth $130 million a year.

In testimony delivered on Thursday to a D.C. Council committee considering a bill that would legalize and tax the sale of marijuana, Dr. Yesim Sayin Taylor of the Office of the D.C. Chief Financial Officer said that the number is based on the assumption that 122,000 people would purchase up to three ounces of marijuana every year at $350 an ounce.

Taylor said that she could not estimate how much of that D.C. would take in as revenue, since it remains unclear what — if any — excise tax the city would impose on marijuana producers, how many people might be steered away from legal sales by a proposed 15 percent sales tax, and how many people would remain in the medical marijuana program, where the sales tax is lower.

The tax-and-regulate system would also impose significant regulatory costs, she said, and could require two city agencies charged with regulating the production and sale to hire up to a dozen new employees.

A bill that would create a legal system for production and retail sales of marijuana like those in Colorado and Washington state was introduced by Council member David Grosso (I-At Large) last year, part of what has become a trend towards the rapid liberalization of marijuana laws in the city.

In July, D.C. decriminalized the possession of marijuana, and next week voters will cast ballots on an initiative that would allow residents to possess up to two ounces of marijuana and grow six plants in their homes.

Earlier this week, the D.C. Council gave final approval to a bill introduced by Grosso that would allow residents convicted of non-violent marijuana offenses to have their criminal records sealed. Another bill introduced by Council member Vincent Orange (D-At Large), who chaired Thursday's hearing, would limit drug testing by employers.

At the hearing on Grosso's tax-and-regulate bill taking place today, dozens of residents and advocates argued that legal marijuana sales would be a boon to the city's economy and would do away with the black market for the drug, which city officials estimate is used by 91,000 residents over the age of 18 every year — 14 percent of the city's population.

"It is time to end the failed experiment of marijuana prohibition. It has enriched cartels, empowered gangs and made criminals out of otherwise law-abiding citizens, while failing to serve the young people it was designed to protect," said Stacia Cosner, deputy director of Students for Sensible Drug Policy.

Orange and Grosso also heard from experts and advocates on how Colorado and Washington structured their legal markets, and peppered witnesses with questions on everything from whether non-residents should be able to purchase marijuana to whether growers of the drug should also be allowed to sell it, a practice known as vertical integration.

Opponents were in the minority, but spoke passionately about how legal marijuana could increase usage by children and teenagers.

"When we debate over the legalization of marijuana and how to regulate it in the District, let us not forget the consequences that this could have on our most vulnerable citizens, from the adolescent with the mental health disorder who's at risk for self-medicating... to the six-month-old whose parents smoke marijuana with newfound freedom in their home, exposing the child to dangerous second-hand smoke," said Lanre Omojokun Falusi, the president of the D.C. chapter of the American Academy of Pediatrics.

Fred Moosally, the director of the Alcoholic Beverage Regulation Administration, was also scheduled to testify on the role his agency will have in regulating marijuana sales if Grosso's bill passes. In prepared testimony, Moosally said that tweaks should be made to the bill to allow for stronger enforcement of a provision banning sales to those under the age of 21.

Despite the debate on the bill, any tax-and-regulate system could still be over a year off. Grosso said that he would re-introduce the bill during the next Council session starting in January, after which it would have to be debated again, amended and put to a vote. If it passes and is not blocked by Congress, ABRA would be given 180 days to craft rules for the program. That could push any legal sales into 2016, say advocates.

And regardless of what legal sales could bring in for D.C. coffers, Grosso said that his bill was not about revenue. "This is not about the money, this is about the criminal justice aspect of this," he said.

According to a recent poll commissioned by WAMU 88.5's The Kojo Nnamdi Show and the Washington City Paper, a majority of likely voters say they will vote for Initiative 71 on Nov. 4 and that the sale of marijuana should be similarly legalized.

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