Cross-State Cannabis Shopping: Are Economics Now Driving Legalization?

Cross-State Cannabis Shopping: Are Economics Now Driving Legalization?
Cross-State Cannabis Shopping: Are Economics Now Driving Legalization?
cannabis shopping (cover) by MysteryShot is licensed under Adobe Stock

Cannabis legalization is spreading across the United States and around the world. Congress is now (seriously) discussing not if but how to put an end to cannabis Prohibition nationally.

For those state governments that continue to resist cannabis normalization, a new form of pressure is surfacing. Economics.

A recent headline provides some context.
Cannabis is fully legal in Oregon. Indeed, the state is drowning in a glut of legal weed. The state has already passed its own “cannabis export bill”. But it requires federal help (as well as at least one state partner) to make the legal exports of cannabis a reality.

The residents of Idaho are well ahead of the politicians here. This is evidenced by their reaction to the opening of a legal dispensary on the Idaho/Oregon border.
Marijuana is illegal in Idaho, but it's legal in Oregon. It's illegal to transport marijuana into Idaho as well, but that didn't seem to be stopping customers who were eager to see what the store in Ontario, Oregon, had to offer.

As The Seed Investor regularly reminds investors, cannabis is not merely safe. We are becoming increasingly aware of its health-promotion properties.

People are becoming increasingly educated on cannabis. The result is that they are (finally) tuning out 100 years of anti-cannabis Boogeyman propaganda.

Americans are going to consume non-toxic/non-addictive cannabis, whether or not their state government is enlightened enough to legalize it. This brings us to the economics.

Colorado has a thriving legal cannabis industry, one of the few in the U.S. It’s now a $1 billion per year industry. The state has collected over $1 billion in cannabis taxes and fees.

For dinosaur states like Idaho, a CNBC article provides a sobering number.
  • 25% of people who traveled to Colorado between 2013 and 2018 listed “cannabis” as a reason for their visit.

Cannabis tourism. One state taking large numbers of leisure dollars (and collecting taxes on them) from other state governments.

Now we have cross-border cannabis shopping.
Afton Cardosa, an Idaho resident who said she uses marijuana both medically and recreationally, arrived at 7 a.m. and waited in line until the doors opened at 10 a.m.

"It's something that we've been wanting and pushing for, and they finally heard the people and let us have it," Cardosa said of the store. "It's opening day. I didn't know if there was going to be a party going on or long lines. First dispensary opening in Ontario, of course it's going to be a long line."

It’s not just one person in Idaho who plans on this cross-border shopping.

When the store called Weedology opened Friday, customers from Idaho had been waiting in line for more than three hours, the Idaho Statesman reported . A large number of license plates in the parking lot were Idaho plates.

With Oregon drowning in low-price legal pot, how long until more cannabis dispensaries begin to line the border with Idaho?

Idaho’s state government has two choices. It can embrace (failed) “War on Drugs” thinking and look to increase enforcement of the state’s antiquated cannabis laws.

That will decrease cross-border shopping with Oregon. It won’t eliminate it. It won’t put a single dollar of cannabis taxes into Idaho’s coffer.

Or, Idaho can legalize cannabis – and join the 21st century. Instead of wasting law enforcement dollars punishing its residents with its obsolete laws, it can be collecting its own tax dollars.

If you were a resident of Idaho (whether or not a cannabis consumer), which path makes the most sense?

Legal cannabis is here to stay. And as long as there is this absurd legal discrepancy between states, cannabis tourism and cannabis cross-border shopping are here to stay as well.

There are countless reasons to justify legalizing cannabis. Economics may be about to become the biggest.
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