HARTFORD, CT — Arguments around legalizing recreational marijuana and how much money the state can really expect from it took center stage Monday as a bill to tax adult cannabis sales and distribute the revenue to underserved communities was the subject of a public hearing.
The Finance, Revenue and Bonding Committee held a public hearing on a bill that would establish a state gross receipts tax of 6.35 percent on retail cannabis sales for adult use; a state tax on transfers from growers of ($35 per ounce for cannabis flower and $13.50 per ounce for trim); and a 3 percent local option tax on retail sales.
All of the state tax revenue would be deposited into the Community Development Corporation Trust Fund, which would fund early literacy education and community development corporations focused on improving the lives of people living in economically distressed and underserved communities.
Local tax funds would go to the municipalities where the retail sales occurred.
“Regulating and taxing cannabis sales will generate significant new revenue for our state and local governments,” testified Kebra Smith-Bolden, co-director of the Connecticut Coalition to Regulate Marijuana.
“Under the proposed plan, virtually all of the funds will be directed to the communities that have been most devastated by cannabis prohibition,” Smith-Bolden added. “For decades, minority and low-income individuals have been disproportionately affected by marijuana enforcement and the war on drugs. It is fitting that they be the ones who benefit from cannabis tax revenue following legalization.”
Another proponent, Steven Hernandez, executive director for the Commission on Women, Children and Seniors, implored the committee to embrace the legislation, calling it “visionary” in its approach because it funds myriad inner city programs instead of tackling each one in a “piecemeal” manner.
Sen. John Fonfara, a Hartford Democrat who co-chairs the committee, asked Hernandez what if the legislature passed the bill without carving out funds for the community trust fund.
Hernandez said if that was done it would be an opportunity lost, pointing to the fact the legislature’s history of redirecting monies raised into special funds.
Those opposed to legalization made a passionate argument that it is the wrong path for Connecticut to follow for a number of reasons, including that revenue brought in doesn’t factor in other costs shouldered by a state that legalizes. In addition, they argued, the money isn’t worth the suffering innocent families may endure.
One of those imploring legislators no to legalize was Susan Klein, of Brooklyn, who said her husband of 25 years was killed in 2015 when their car was struck on Interstate 84 by a teenager who later was found, she said, to be driving under the influence of drugs.
“The 18-year-old girl that hit us was high on marijuana,” Klein said, fighting to hold back tears as she spoke at the press conference.
She said because there is no equivalent impaired driving test for marijuana it took three-and-a-half years to get justice and see the person, who killed her husband, sentenced.
“It is really difficult for me to understand why legalization is even a question,” Klein said. “That something so wrong is even being considered. There is no amount of money worth the devastation that this would cause.”
Her sister, Jennifer Anthony-Bogue, who stood by Klein’s side for support, said she, too, can’t believe Connecticut is even debating the issue.
“This seems to be a state that cares more about money than lives,” Anthony-Bogue said.
The press conference was arranged by Sen. Tony Hwang, R-Fairfield, and Rep. Vincent Candelora, R-North Branford, two staunch opponents of legalization.
Hwang said he didn’t know of one Republican senator who was in favor of legalization but he quickly added that he didn’t see legalization as a partisan issue.
“We have learned from some of our fellow states that legalizing marijuana has created challenges that they did not foresee, and data that we can analyze from states like Colorado shows that the costs associated with legalization, both monetary and societal, far outweigh the benefits,” Hwang said.
Hwang added: “We need to take a step back and ask ourselves, ‘Are we doing this just to generate revenue? Have we really looked at the data and thought deeply about the potential consequences of this massive legislative shift?’ Before we take this step, we need to make sure that we are looking at the issue from all sides and consider long term implications.”
Candelora suggested that the legalization issue is not about social justice, but rather is is about making money, and he added that it is also a mistake to lump the legalization issue together with wiping criminal records clean.
“We shouldn’t be having a conversation about expunging arrests on the back of marijuana legislation,” Candelora said, stating that the expungement issue is a conversation that can be tackled separately.
Many members of the Black and Puerto Rican Caucus won’t vote for legalization if it’s not tied to expungement.
How much money will the proposal raise?
There’s no fiscal note on the bill yet, but the Marijuana Policy Project, testified that based on its research the legislation as written is projected to provide approximately $170 million in state taxes and $22 million in municipal taxes annually.
Additionally, the policy project’s statement said the bill is a well thought out effort to direct funding to areas hit hardest by cannabis arrests — namely larger cities.
“The services would include — in order of priority — free or low-cost early childhood education, supplementing per-student funding to increase achievement at public elementary and middle schools, building or fixing community resources like playgrounds, parks, community centers, senior centers and public libraries, increasing owner-occupancy of residential buildings, supporting pathways to home ownership, creating pipelines to employment, expanding access go programs at community centers and senior centers, and providing low-cost transportation alternatives,” the testimony said.
But those opposed argue whatever money is brought in will be spent — and then some — by the increasing ancillary public health and enforcement costs legalization brings.
Luke Niforatos, of Smart Approaches to Marijuana (SAM), said a recent study by his group shows the state of Colorado, where recreational marijuana is legal, spends $4.50 on public health, law enforcement and other programs for every $1 it receives in marijuana tax revenue.