Wednesday, October 7, 2015

Emerging medicinal marijuana economy in Illinois

The topic of legalizing marijuana for medicinal and recreational use has been a recurring theme in the media over the last few years.  It has also been a popular topic here on Legal Ruralism (you can read some earlier posts here, here, here, and here).  Currently 23 states and Washington, D.C. have legalized medicinal marijuana.  Of those, four states and the District of Columbia have legalized marijuana for recreational use.  See here for additional info on state laws.  Even though the number of states that have legalized marijuana for medicinal and recreational use has continued to grow, it is still illegal in the majority of states and under federal law.  With the assistance of groups such as NORML and the Marijuana Policy Project, many citizens are pushing for marijuana reform at both the state and federal levels. 

Many proponents of legalizing marijuana for medicinal and/or recreational use focus on the revenues that can be earned from taxing the sale of marijuana.  Some point to the failure of the "War on Drugs," the persistence of cartels, and the destruction of our national forests by illegal growers as reasons to legalize the plant (see post here).  The theory is that legalizing marijuana will reduce the monetary incentive to grow illegally or to transport marijuana across our national borders.  Since all grows would be regulated and legal supplies would increase, the profits for black market marijuana would decrease, thus reducing the number of illegal grows.  Legalizing marijuana could also allow some of the money spent on fighting the marijuana trade to be focused on illegal grows on public land and on other drugs such as meth, heroin, and cocaine.  Others assert that marijuana is less dangerous than alcohol, and therefore, because alcohol is legal, marijuana should be legal.  Others spotlight the medicinal uses and health benefits of the drug.  However, one other reason should be acknowledged when considering legalizing marijuana - jobs.

A recent article by an Associated Press journalist described what is happening with the first legal cultivation center in Illinois.  Although a handful of cultivation centers in the state have now been approved to grow medicinal marijuana, Ataxia was the first to "run the ga[u]ntlet of state requirements" and grow its first crop.  Ataxia is based in Albion, a conservative town with a population of 1,975 in the southeast corner of the state (for more info on the town, see here).  People in the town seem hopeful that the cultivation center will bring revenue and jobs to their town.  At this point, however, only seven people are employed, not including managers, who work at the center.  The company does plan to expand once it acquires more medical marijuana patients.  Ataxia plans to hire 50 to 60 additional employees as they expand their business.

The article mentions a former high school agriculture teacher who currently works at the cultivation center.  She reportedly goes home every day smelling of what the author describes as "the fragrance of money and jobs."  While this may be true for the teacher, with such a small number of employees, it is hard to imagine Ataxia having a significant effect on the town as a whole.  However, if Ataxia is able to hire 50-60 new employees, that could go a long way to helping the town reduce its unemployment (Albion unemployment is 7.3%, state average is 7.1%) increasing revenue to other local businesses. 

Many rural towns across the country are much worse off than Albion and could really use a boost to their economies.  In fact, many rural towns are trying to find ways to bring jobs to their towns through industries such as mining (as seen in the movie Uranium Drive-In and here) and prisons (see here, here, and here).  Marijuana can be grown year-round, and unlike mining which is very location specific, can be grown anywhere there is access to electricity (as long as it is grown indoors).  Further, if done properly, growing marijuana poses less of a risk to the environment than mining.  It also needs less structure to operate compared to what prisons require.  If done properly, legalizing marijuana (at least for medicinal uses) could bring much needed jobs to these struggling rural areas without the hurdles and risks of bringing mining, nuclear waste, or prisons into the communities.

In Illinois, as well as other states, only companies with access to money and legal resources to navigate the various permitting processes can grow marijuana for medicinal use.  Because marijuana is still illegal under federal law and medicinal marijuana is still new to Illinois, the state's desire to ensure the growing and selling is done consistent with regulations is understandable.  If anything goes wrong, the state could be blamed for the way they regulate and manage the growers.  However, under this type of system, the majority of the profit goes to the select few companies who have the capital to overcome the barrier of entry in the medicinal marijuana industry.

There is a way to place more of the profits in the hands of rural communities (and rural individuals), however.  The state could allow individuals to grow marijuana and sell the plants directly to dispensaries or to form co-ops (see here for a post about loss of revenues to Mendocino Sheriff's Department after ban on marijuana collectives).  The inspection of the small grows could be done by licensed dispensaries or by government agents.  Larger companies would still have a leg up on the competition, but allowing individuals to grow plants in back yards or spare bedrooms would allow people to enhance their income or even become self-employed.  For a discussion about the economic benefits and challenges of growing legal marijuana in rural northern California, see here.

States that are legalizing medicinal and recreational marijuana are on the cutting edge of marijuana policy.  These states have the opportunity to experiment with how they manage the crops, growers, and customers.  Because marijuana can be grown anywhere, rural communities should seriously consider what marijuana could do for their local economies.


Daniel Quinley said...

There are two points I'd like to make here. One, is the near desperation that rural towns often feel to bring in industry. With small populations, these economies are unable to become self-supporting. I think medical or legal marijuana is an interesting proposition for rural communities. It seems to be at odds with the conservatism prevalent throughout rural America. This seems to mean that economic realities trump conservative values.

In addition to this surface contradiction, I feel like locating marijuana farms in rural areas make a lot of sense. There already is significant know-how--between the existing marijuana farms and prevalent agricultural industries. However, based on the rural mentality of doing things independently, I wonder at how effective legal marijuana would be in shifting away from illegal growers. And this is where I think the co-op idea, more so than the individual grower, may have a lot of merit in a rural setting. Of course, small-town residents will have to start smoking weed to make that practice sustainable.

Dakota Sinclair said...

A potential issue with marijuana farming is that marijuana requires extremely fertile soil. This could lead to more fertilizer runoff pollution in the long run, which would damage the ground water for generations. That said, it's interesting to note that in the first week of legal marijuana sales, Oregon reportedly made 11 million dollars in taxes. Much of that marijuana would need to be harvest in rural areas, which is indicative that the locals stand to gain much from legalization.

As Dan noted, rural areas are desperate for jobs. Even a Wal-Mart, exploitative that it is, brings 30-40 jobs to an area that wants anything and everything it can get for would prefer co-ops or community grows that sell marijuana and other products, but it is understandable that the community wants work and is often at a point where "any" work is appealing.

I like that you note the loss of money Mendicino suffered. Often overlooked is how much profit law enforcement makes off of RICO related seizures. Anything related to drug usage can be seized and sold to buffer the department up. On one hand it seems reasonable to put illegally gotten gains to good public use, but RICO seizures are often without warrant or due process. The seizures go to fund M16s, SWAT teams, and over-priced training simulations. And exceedingly generous pensions that can reportedly go up to 90% of their fulltime salary. Police need to prepare to draw down their needs. The drug war, much like the alcohol war (Prohibition) created criminals and empowered gangs. With legalization I would hope to see a reduction in crime and with it a reduction in police forces.