Seeing stimulus in the push to legalize pot

Henry Champ on the state-by-state push to tax marijuana.

In 1933, in the midst of the last Great Depression, one of the first acts of incoming Democratic president Franklin Delano Roosevelt, was to set in motion the procedure to repeal the Volstead Act.

By the end of the year, Prohibition was over. It hadn't worked.

At the time of repeal, it was estimated there were 100,000 speakeasies in New York City alone. Organized crime was flourishing.

When Prohibition was enacted in the U.S. in 1920, the criminal gangs were then concentrating on gambling and thievery, all petty stuff.

By the time it was ended, the bigger gangs, such as Al Capone's in Chicago, were awash in liquor money and had branched out into prostitution, protection rackets, and the bribery of police and public figures.

Al Capone, in hat, leaves a Chicago courtroom in custody of U.S. marshals after being sentenced to federal prison for violating income tax laws in October 1931. (Associated Press)

Gun battles between gangs and sometimes with the police broke out on the streets of many cities, the Thompson sub-machine gun as ubiquitous then as today's barrage of semi-automatics and the inner-city drug gangs that deploy them.

At the same time, the America public had lost faith in its government, which was battling both the Depression and an unemployment rate that bordered on 25 per cent.

Roosevelt saw all this, but none of these elements on its own was the main reason for repeal.

Roosevelt knew how to beat the Depression: spend and circulate money. He had a stimulus plan but no money. Taxing the sale of booze was his answer.

Cash cow

Something quite similar seems to be happening in the United States today.

Look closely and you find politicians are contemplating much more seriously than you might think the notion of legalizing marijuana. With the attraction for many being the tax monies that could be available.

Government surveys show that 100 million Americans — almost one-third of the population — have smoked marijuana or its resin, hashish. Twenty-five million say they used the drug in the past year.

Many tax-strapped politicians today are feeling the way Roosevelt did in 1933, that the war on drugs is no more successful than the war on alcohol.

These U.S. politicians, mind you, are not at the federal level. When asked recently about legalizing marijuana, President Barack Obama replied, "I don't think that's a good strategy to grow our economy."

But in state offices and city halls around the country, the views are quite different.

Thirteen states have already legalized medical marijuana even though the federal Narcotics Act says marijuana has "no currently accepted medical use."

To many, the acceptance of medical marijuana is the first step on the way to legislating pot as a substance that, like alcohol, would fall under government control and be exploited for its tax revenue.

'The usual ailments'

How important could this be?

Betty Yee, chairman of California's State Board of Equalization, estimated recently that a regulated marijuana trade could earn the state about $1.4 billion annually.

California is one of the 13 states that have approved the sale of medical marijuana. In a recent series on this phenomenon, the Washington Post reported that there were 400 "dispensaries" that have popped up in Los Angeles alone.

According to the Post, all a customer needs is to prove he or she is 21 and a state resident, and pay a $150 fee in order to see a doctor who can then provide a "physician's recommendation."

Valid for one year, this recommendation allows the holder to buy up to eight ounces (227 grams) of marijuana at a time.

The Post interviewed some of the customers at one of these dispensaries. A patient named Joe Rizzo said he told the doctor, "I had problems with my knee." Gayo, a 20-year old, recited a list of ailments he saw in a newspaper ad: "Chronic back pain and the rest, like everyone else," he said, "Non-sleeping. Can't eat very much."

What created the gold rush of "dispensaries" was the announcement on February 26 by U.S. Attorney General Eric Holder that the feds would no longer raid such stores.

A growing acceptance

Other signs of a growing acceptance of "medical marijuana?"

For one, all three Democratic candidates in the contest to be New York State's next attorney general support the notion.

Also, there are bills in Massachusetts, California and in the U.S. Congress that would legalize marijuana altogether. There are other bills that would decrease federal penalties for possession as a way of dealing with overcrowded (and costly) courts and prisons.

Finally, it is getting hard to pick up a newspaper here without seeing someone opine on the subject or discuss whether the current Mexican drug troubles and violence would be much reduced if marijuana became legal. 

The arguments point to the fact that marijuana makes up about 80 per cent of all the drugs smuggled into the U.S. from Mexico, a trade estimated at $14 billion a year that goes right into the coffers of the big drug cartels.

The Obama administration is currently embarking on tougher border policy, with more money for barriers, border agents and drug enforcement officers. But many are wondering if this is money well spent.

It's not possible at this point to predict the future of marijuana laws in this country, but the momentum seems to be moving and rather quickly.

Just as Roosevelt reckoned in 1933 when he pushed to kill Prohibition, there is money to be made in that drug business and a savvy public administrator can put it to better use than the gang bosses.