Sunday, July 29, 2018

Legal Pot: California Turns a Liability into an Asset

          Dan and I just returned from our trip to California. I had some frequent flyer miles to use or lose, and Dan had never been south of San Francisco, so I decided to use some miles to revisit some of my old haunts.
          We started in San Jose, where I lived for ten years, and ended in Los Angeles, where I lived for two years.
          The part of our trip that people seem most interested in is our visit to a pot dispensary, so that’s the part of the trip I’ll write about first. I’m going to be honest here and admit I’m no expert on pot. I tried it once in 1976, and I felt… nothing. And yes, I inhaled.
          I knew Dan wanted to visit a dispensary, but I didn’t know it was such a priority. He wound up convincing our host, the widow of the man who wound up with my job after I left it, to take him to a dispensary the first day we were in San Jose. We wound up at Airfield Supply, which is right by the San Jose airport.
          We had to show our ID to get in the store. Once in the store, we had to sign a disclosure form releasing Airfield Supply from liability for anything we might say, do, or stand by as a result of any purchase we might make. Only after that were we allowed into the part of the store with the products.
          I was around in the 1960s, and this store is not what I was expecting, which was a bunch of stoned long-haired hippie types saying “Dude,” “Cool,” etc. The staff could have been mistaken for the younger folks I worked with at Company L (the Los Angeles Times ran an article in its July 15 Business section titled “From Tech to Toke” on how tech workers are migrating to jobs in the “cannabis sector.”) The folks at Airfield Supply were highly professional and seemed to know their stuff, which makes sense. This is, after all, a business, and the goal is to make a profit. Airfield Supply takes credit cards, which surprised me, but, again, their goal is to make a profit, and credit cards make for larger purchases.
          Dan bought oils to vape. One was “Afghan Elite” another was “Gorilla Glue.” His total before tax cost was $100.10. Taxes added $28.49 to the purchase, so various state government agencies collected 28% on Dan’s legal pot purchase.
          He also bought a package of ten small cookies “for me” (I have a well-known weakness for cookies). The cookies, “Big Pete’s Cannabis-Infused Chocolate Chip Mini Cookies,” are professionally packaged and even have a bar code—81156020633—if you saw them on a grocery store shelf, they’d look right at home. These cost $19, and the tax on that purchase, $6.32, was 33%. (Full disclosure, I ate 3½ cookies and not all at once; I think they did relax me, but that could well be psychosomatic.)
          California is making 28% to 33% on all pot purchases.
          If you consider the money California was spending on pot prohibition before pot was legalized, California is making a lot more than 28% to 33% on the deal.
Airfield Supply is just one dispensary. Dispensaries are just about everywhere (although some upscale and upscale wannabe neighborhoods prohibit them), and they advertise not only in the local Pitch-like papers, but also in the Los Angeles Daily News. (Newspapers have to take revenue where they can get it these days--while we were in California, the Daily News announced it would lay off half its staff.) Interestingly, medical marijuana dispensaries are urging their customers not to give up their cards, since a person who has a medical card can buy pot at age 18; recreational stores can only sell to those 21 and older.
          It’s a new world out there, and California has changed that new world from a liability into an asset.
          Perhaps the rest of the country should do the same.
© 2018 Larry Roth

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