Pot's black-market backlash

The upshot of such actions is predictable and depressing. Colorado lawmakers are banking on about $70 million a year (PDF) in taxes from pot and their Washington counterparts have projected new revenues of $1.9 billion over the first five years of legalization. There’s just no way that’s going to happen if a legal ounce of pot is double the price or more of back-alley weed. Even the most stoned pothead isn’t that easy to scam.

If the experience of state cigarette taxes teaches us anything, it’s that draconian levies allow black markets to flourish. After raising its per-pack tax by a dollar this year, Massachusetts is now grappling with somewhere between $74 million and $295 million in lost revenue. Most people are happy to pay taxes that they think are fair—and most people will avoid taxes they think are extortionary. Combine that with the widespread NIMBYism at work in Colorado and it’s a recipe for clutching defeat from the jaws of victory.

The past several decades haven’t been kind to the nation’s drug warriors, especially when it comes to marijuana, the only illegal drug that is used on a monthly basis by more than 1 percent of Americans. In 1996, California passed a medical marijuana law and was soon followed by 19 other states and the District of Columbia. Crime—whether drug-related or not—didn’t go up, kids didn’t start toking up in droves, the heavens didn’t fall.