Neighboring Maryland is on the verge of legalizing recreational marijuana.
Question 4 on the Maryland ballot asks voters, “Do you favor the legalization of the use of cannabis by an individual who is at least 21 years of age on or after July 1, 2023, in the state of Maryland?”
A recent poll by the Washington Post and the University of Maryland found that 73 percent of Maryland voters favor legalization. “Support for the idea is widespread, with majorities favoring it across regions, education levels, and racial, partisan and age groups,” the Post reported.
If approved, Maryland would become the 20th state to legalize use by adults. Washington, D.C. approved legalization in 2014 and Virginia approved recreational use last year.*
In West Virginia, cannabis is legal for medicinal purposes, but not recreational. Most years, a few lawmakers will introduce legalization bills, but they have yet to gain significant traction. At least two bills (here and here) introduced during this year’s session were never taken up by committee in either the House or the Senate. Several other bills dealing with decriminalization also failed.
Simple possession of pot remains a misdemeanor in West Virginia, punishable by between 90-days and six-months in jail and a fine of up to $1,000. Sale or distribution remains a felony, punishable by one to five years in jail and a maximum fine of $15,000.
Supporters of legalization argue, among other things, that there is a financial benefit to the state for the production and distribution of marijuana. The tax rates vary from state to state. Colorado, one of the first two states to legalize—the other was Washington—imposes a 15 percent tax at the wholesale level and another 15 percent on the retail price, plus a 2.9 percent sales tax.
And Colorado makes a lot of money off those sales, a record $423 million in 2021 off sales of more than $2 billion. But Colorado has 5.7 million people and an enormous tourist industry. Eighty-four million people visited Colorado last year.
Smaller states, as you would expect, bring in less money. Last year was the first full year of recreational marijuana sales in Maine, a state with a population of 1.3 million and 11-million overnight visitors in 2021. There the cannabis tax generated only $4.9 million.
How would West Virginia fare? The state’s population is static at just under 1.8 million, but tourism is growing, thanks to increased promotion and the National Park designation of the New River Gorge. The state had an estimated 16 million visitors last year.
The Tax Foundation’s rough estimate is that West Virginia could generate $38 million annually off an excise tax with a market established for at least three years.
That’s not nothing, but it also isn’t a financial silver bullet. As a comparison, tobacco taxes generated $165 million last fiscal year. Liquor profit transfers and beer taxes and licenses raised $37 million.
It is difficult to imagine the Republican supermajorities in the West Virginia legislature prioritizing marijuana legalization. However, bills sometime take on a life of their own. That is what happened in 2017 when a bill legalizing marijuana for medicinal purposes unexpectedly got traction and passed.
With Maryland about to become the second neighboring state to legalize recreational marijuana, West Virginia will have a handy testing ground nearby to help decide whether it wants to follow suit.
*(Washington Post: “The Virginia State General Assembly passed legislation in 2021 as a bill originally intended to go into effect in 2024. Then-Gov. Ralph Northam (D) expedited and signed the bill, fully legalizing the plant on July 1, 2021. But sales were still not to begin until 2024, giving the legislature time to develop a regulatory framework for the new market.”)