Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

To Eliminate Underground Markets, Tax and Regulate Less

by May 22, 2024
May 22, 2024
To Eliminate Underground Markets, Tax and Regulate Less

Jeffrey Miron

The state of New York legalized recreational marijuana in 2021. Recent estimates, however, count 2,000 unlicensed vendors and only 100 licensed ones. 

Why did legalization not eliminate the underground market? 

One problem is that New York’s policy change did not eliminate the federal ban on marijuana, which has two important consequences. State‐​legalized marijuana sellers cannot access the federally regulated banking system, and such sellers cannot deduct from revenue the costs of producing a federally illegal product. Thus, even without state prohibition, marijuana sellers face strong incentives to remain underground.

A second impediment is that New York has been slow at licensing legal marijuana retailers, with 30 people assigned to review about 7,000 applications. Additionally, a dispensary license in New York costs $7,000, plus $4,500 for a cannabis delivery license. 

The third factor is the state’s 13 percent tax on retail sales, which again advantages black market sales. 

To address this issue, Gov. Kathy Hochul announced an overhaul of New York’s legal cannabis program, granting authorities the power to speed up licensing and shut down local marijuana vendors. Faster licensing makes sense; shutting down underground vendors does not.

Instead, policy should allow the entire market to move above ground by reducing costly and time‐​consuming regulation. These include requirements on environmental impact, store security, and record‐​keeping, among others. By so doing, while expanding licensing and lowering the tax rate, the state can move most of the market above ground. This will plausibly raise tax revenue, by applying a lower rate to a much larger base.

0
FacebookTwitterGoogle +Pinterest
previous post
‘EV Health Checker’ creator ClearWatt reaches £200,000 fundraising target with latest investment from Prova
next post
Universal Savings Accounts to Help Families Build Wealth

You may also like

WWII’s Impact: The Birth of Europe’s Extensive Welfare...

April 18, 2024

Venezuelans Have a Right to Regain Their Freedom

October 25, 2024

Beltway Bandits

October 25, 2024

Considering Safe Banking for the Cannabis Industry

May 23, 2024

Repealing Only Two Biden-Era Tax Credits Could Cement...

March 27, 2025

On Investigating Presidents

June 12, 2023

Call for Papers: Cato Health Policy Workshop 2025

April 23, 2025

David Boaz Gave Liberty a Bright Future 

June 7, 2024

Meta Makes Major Moves to Advance Free Expression...

January 9, 2025

Speech Codes and Commissions Trample on the Expressive...

May 30, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Rescissions: A Small but Welcome Step Toward Spending Discipline

      June 5, 2025
    • DAVID MARCUS: Why Navy ships should not be named for gay rights icons

      June 5, 2025
    • GREGG JARRETT: Biden, the ‘marionette president; and the case of the runaway autopen

      June 5, 2025
    • Trump Practically Bans Travel and Immigration from 12 Countries with Flimsy Security Justifications

      June 5, 2025
    • ‘He’s not a big factor’: Trump’s Senate allies dismiss Elon Musk’s calls to ‘kill the bill’

      June 5, 2025
    • Fears grow that Tata Steel could be excluded from Starmer-Trump trade deal

      June 5, 2025

    Categories

    • Business (8,147)
    • Investing (2,008)
    • Politics (15,523)
    • Stocks (3,127)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved