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John Hazen White’s LOOKOUT: Legalizing Pot Will Not Fix RI Economy

Thursday, March 27, 2014


Rhode Island government is constantly in search of a new revenue scheme that will miraculously solve our financial problems – problems, of course, which are the result of the state’s continued inability to limit government spending and focus on real economic development. As the size of state government spending grows, while our tax base declines further, we grab at ill-considered and indeed reckless ideas, pipe dreams really, like casino gambling and video gaming.

So here we are in 2014 with our gambling dependency about to turn around and bite us, courtesy of Massachusetts, and the General Assembly debating whether to continue to pay off the 38 Studios debt or become something of a pariah in financial markets by shoving the debt at the moral obligation bond insurers and wiping our hands of it. But now there’s a new scheme at hand for more revenue.

Marijuana revenue scheme

The legislation to sell pot within our borders is being presented as the latest panacea: Voila! We can tax it and shuttle more dollars into state coffers. That legalizing marijuana has absolutely nothing to do with economic development, as did gambling before it, and is not a good idea for a whole lot of reasons, has little to do with the urge to develop a new tax revenue source. As departing Governor Chafee has stated about the prospect of marijuana taxes, now we might be able to fix our potholes!

I have no hesitation predicting that tax revenues from marijuana sales will not fix the dreadful, worsening state of our roads and bridges. Nor will it accomplish much in the way of jobs. Instead we’ll end up creating and spending more on government because of the problems legalizing marijuana will create for us. And lest any of us think that a marijuana tax revenue stream will be strong enough to really make a difference in our financial situation – like restoring a decent amount of the dollars we are going to start losing to Massachusetts (by this time next year), the March 14 GoLocalProv.com article, Legalized, Taxed Marijuana Would Generate .1% of RI Budget, certainly laid that hope to rest.

As the article explains, even taxing marijuana sales at 10% per ounce of the weed will only bring in an estimated $5 million a year. That amount is peanuts in an $8 billion budget. Legalizing marijuana for its tax revenue is a zero sum game at best and could have very negative consequences, both financial and social.

Sending the wrong message

Legalizing marijuana in Rhode Island will also send another negative signal about the state’s management and its direction, as in; These folks will do anything for a buck. What the national business raters, the investment community and businesses looking for location opportunities will take from such a development will be that Rhode Island keeps fiddling while the state fiscally collapses.

Marijuana use is a reality in our society and has been for a long time now; a majority of Americans when asked about legalization support the idea. As it is available and generally tolerated, it does more harm than good to punish people with jail time and education/career penalties for simple possession and use. Misusing it, especially in the workplace and in a host of situations where one has a direct responsibility for the safety of others, is a crucial public safety consideration. Legalization is a big step with potentially far reaching consequences. Former Congressman Kennedy’s viewpoint, formed from his own painful experiences and reflective of many others’, should be given full weight and deliberation. Do we really need to do this for $5 million a year?

Our state desperately needs jobs, so our most important priorities must be to cut government spending, stimulate the business environment and provide strong educational opportunities for our children, including career training. If we don’t focus on these things, it won’t matter how little or much we can get from gambling or marijuana taxation, because the state will go up in smoke anyway.


John Hazen White, Jr. is President and CEO of Taco, Inc. in Cranston and is the founder of Lookout RI.


Related Slideshow: Marijuana Use in the New England States

According to data collected by the Substance Abuse & Mental Health Services Administration, New Englanders are among the nation's top marijuana users in the country.  See how the indivdual states compare in the slides below:

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6. Maine

Percent of respondents who used marijuana in the past year: 12.45%

National Rank: 13th most

Possession Laws: Decriminalized (2.5 ounces or less)

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5. Connecticut

Percent of respondents who used marijuana in the past year: 12.50%

National Rank: 12th most

Possession Laws: Decriminalized (less than 0.5 ounce)

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4. Massachusetts

Percent of respondents who used marijuana in the past year: 14.19%

National Rank: 5th most

Possession Laws: Decriminalized (1.0 ounce or less)

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3. New Hampshire

Percent of respondents who used marijuana in the past year: 14.60%

National Rank: 4th most

Possession Laws: Medical Use Only

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2. Rhode Island

Percent of respondents who used marijuana in the past year: 14.85%

National Rank: 3rd most

Possession Laws: Decriminalized (1.0 ounce or less)

Prev Next

1. Vermont

Percent of respondents who used marijuana in the past year: 14.90%

National Rank: 2nd most

Possession Laws: Decriminalized (1.0 ounce or less)


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