Spin Control: State under high pressure to meet pot tax projections

OLYMPIA – Washington adults may have to average about 35 joints each year by 2020 for the state to hit current projections on tax revenue from legal marijuana.

Or so the back-of-the-envelope figuring would suggest, based on a couple of unrelated numbers that cropped up last week. Left in the hands of reporters who have little to do because the Legislature is doing even less, numbers are dangerous things. But here’s one way to figure it:

On Thursday, the Office of Financial Management released the latest population estimates for Washington, which topped 7 million for the first time as people flock to the state, presumably to take advantage of the economy, weather and our extremely well-run government.

On Friday, during debate on proposed changes to marijuana laws, Rep. Reuven Carlyle, D-Seattle, said the tax bill being approved assumes about $1.1 billion a year in pot taxes within five years. That assumes about half the state’s marijuana is purchased from legal sources, rather than the black market, said Carlyle, who is his caucus’s top tax guy.

Carlyle has serious doubts about that – and some assumptions behind the figures – but the marijuana taxes were approved Friday in the House and Saturday in the Senate in a bill that was a bone of contention between Democrats and Republicans all year.

As with most things in the brave new world of legal marijuana, no one really knows how much pot is smoked, eaten or otherwise consumed in Washington. But the state paid a consultant to come up with an estimate: 6.2 million ounces of marijuana for recreational and medical purposes from legal and illegal sources.

The consultant didn’t break that down to a joints-per-person average and numbers crunchers for the budget committees are too busy trying to stave off a partial government shutdown to be bothered. But here’s one way to figure it:

The 7 million population figure includes all ages, but because this is LEGAL marijuana, we have to assume that only people 21 or older should be part of the equation. Let’s assume that stays pretty steady, and like most years, folks age 21 and up are about 75 percent of the total. So, roughly 5.25 million eligible pot consumers available.

Let’s go out on a limb and say the 250,000 or so folks over 80 aren’t the prime marijuana market, take them out of the equation and use a round number of 5 million potential pot consumers. Some won’t smoke any, some will smoke lots, which is why we have averages.

If half of the 6.2 million ounces is sold in state-licensed stores where taxes are collected and sent to Olympia, that’s 3.1 million ounces. Spread over 5 million people, that’s an average of 0.62 ounces per person.

Now comes the hard part: How many joints in an ounce? We consulted several experts, who all said “it depends.” Some joints are fat, some skinny, some huge, others small but potent. But if one were to average two joints to a gram – that’s slightly less vegetation than in a standard cigarette – and know there are about 28.35 grams in an ounce, that makes about 57 joints to the ounce, or 35 joints for that average personal intake.

Some medical marijuana users go through more, with strains featuring high concentrations of the chemicals that don’t produce that euphoric high. But medical users also can grow some of their own, which would be untaxed, so some medical pot would have to be factored out of the equation.

The bulk of that tax stream clearly will fall on recreational pot users. If revenue falls short, there could be a move to increase taxes. But there are complaints that taxes just approved already may be so high that Washington businesses will be uncompetitive with Oregon when that state’s stores open.

With the only thing growing faster than marijuana businesses being Olympia lobbyists for the marijuana industry, it doesn’t take a psychic to predict they’ll push for lower taxes to give the state’s pot entrepreneurs a “level playing field” against Oregon. And as Fudd’s First Law of Opposition dictates, if you push something hard enough, it will fall over.

That would put the Legislature in a really tough spot. If it cuts the tax rate and can’t agree on another tax on some other product or service, it would have to make up the lost revenue by increased sales volume.

In other words, it would have to tell residents, “Roll another one. Washington needs the money.”