January 16, 2016

More questions than answers about taxing marijuana, researcher says

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Beau Kilmer, senior researcher at the RAND corp., addresses the Senate Finance Committee Tuesday. Taxing marijuana is complicated, he said, because the research is simply not available.


Lawmakers were advised Tuesday on the pros, cons, and what researchers still don’t know about taxing marijuana.

Beau Kilmer, a senior researcher for the RAND corporation and co-author of a major report contracted by the legislature last year, presented to the Senate Finance Committee.

“Quite frankly, nobody knows the best way to tax marijuana,” Kilmer said.

In theory Vermont is in a good spot, financially and geographically, to set up a legal pot market. With the closest legal market in Colorado, Kilmer said that within 200 miles of state lines — encompassing New York City, Boston and Montreal — there is a market for the drug that is 40 times the size of the market within Vermont’s borders.

If a nearby state were to legalize shortly after Vermont, they could siphon some tax revenue from Vermont by lowering taxes on Marijuana, Kilmer warned. Which is why he recommended to the lawmakers that they make any tax code flexible.

But if Vermont were to remain an island of legality in the northeast, the massive amount of people Kilmer estimates would come to the state could lead to “triple-digit millions” in tax profit.

Yet marijuana remains illegal on the federal level. States that have legalized marijuana right now rely on the goodwill of the Obama administration, not a much more reliable law or a court decision. This could change under a new president next year and allow the feds to shut down any marijuana business operating under a state law.

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