Monday, February 13, 2012

Rural-urban interdependence re: medical marijuana; who's getting the short end of the stick?

As a self-proclaimed ruralist, I think a lot about how to garner attention, credibility, prestige and resources to rural people and places. This leaves me thinking about how rural and urban are inter-dependent. After all, everyone knows that cities matter, the urban is interesting, and mets (metropolitan areas, that is) are downright miraculous. It seems, then, that if we could convince urbanites that they need the rural, that the rural brings value to their lives and they thus have a stake in rural success (or at least rural survival!), we could get policymakers to take rural people more seriously.

It was with this in mind that I clicked over to read a New York Times story this morning under the headline, "Struggling Cities Turn to a Cash Crop." I thought it might be another urban ag story, a story signaling that urban areas don't need rural agriculture because they are now self-sufficient, in the business of growing their own (usually in a plot no bigger than a city block, or perhaps in a skyscraper).

Well, this turns out not to be an urban ag story, but rather a story of the urban benefitting fiscally from the fruits of rural labors. (What's new, you might ask?) As you've guessed by now, the "cash crop" is marijuana, and I wrote about its changing regulation in California a few weeks ago, here and here. Today, though, we have the New York Times focusing on what is at stake economically for urban places in the federal crackdown on medical marijuana. The New York Times story is primarily about the taxation benefits associated with medical marijuana dispensaries, which are principally in cities. Here's an excerpt:
Sometimes lost in the discussion of medical marijuana is the extent to which it has become small but growing source of new tax collections for cities and states that have been struggling to balance their budgets for more than four years now.
Oakland, California collected $1.4 million in taxes on marijuana last year, which represented 3% of all business taxes collected. Denver collected in excess of $3.4 million in sales tax and application and license fees last year, while Colorado Springs collected $700,000. Meanwhile the State of Colorado collected $5 million in sales tax from medical marijuana last year, more than double what is collected the prior year.

Of course, rural areas get some economic benefits from marijuana production, be it authorized or not. Read related posts here and here. Still, this focus on the public coffer boost that cities are getting from this particular "cash crop" got me wishing local governments in rural areas also reaped more of the fiscal rewards associated with pot. This, in turn, gave me the idea of an "extraction tax" on marijuana--something akin to what local governments sometimes levy on mining.

An NPR story, also from today, focuses on the federal crackdown on medical marijuana, and the impact of that on rural counties that are major producers.

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