#19: State-Legal Marijuana Use

September 20, 2019 Archived Blog Posts


As of August of 2019, the following states/district have made marijuana fully legal:  Alaska, California, Colorado, District of Columbia, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington.  Fully legal is just what it sounds like, medicinal and recreational use is legal.  Another 27 states have legalized it for medicinal purposes, and in 13 states it is still 100 percent illegal.   These statistics present the basis for some rather passionate and maybe heated discussions.  Currently the Federal Government still classifies marijuana as a Schedule 1 drug, therefore making it illegal at the federal level.  This classification is what forces state-legal marijuana businesses to operate on a cash only basis.  Banks are extremely nervous about violating Federal law and therefore no credit card or check transactions are allowed.  Additionally, a business can’t file a Federal tax return for deductions that other businesses not in the pot business do with impunity and can pay up to 90% of their income in taxes.    

There is a difference between legalization and decriminalization.  Legalization is the lifting or abolishment of laws banning the possession and personal use of marijuana.  If done federally this would allow the government to regulate and tax marijuana use and sales.  Those in favor of legalizing “pot” make the case that taxpayers would save millions of dollars by removing hundreds of thousands of offenders caught with small amounts of marijuana, thus unburdening the judicial system. 

Decriminalization is a loosening of criminal penalties imposed for personal marijuana use even though the manufacturing and sale of the substance remain illegal.  Essentially law enforcement is instructed to look the other way when it comes to the possession of small amounts of pot for personal use.  The production and sale of marijuana remain unregulated under decriminalization and those caught using it face civil fines verses criminal charges.    

Proponents of legalization argue that allowing the manufacturing and sale of the substance removes the industry from the hands of criminals.  They also propose regulation of the sales would make it safer for consumers who choose to use marijuana and that it would increase revenue in cash-strapped states.  Opponents claim marijuana is a gateway drug that leads users to other, more serious and addictive substances.  Proponents of decriminalization argue that it makes no sense to give the federal government the authority to legalize the use of pot on one hand while attempting to regulate it on the other, much the way it sends conflicting messages about alcohol and tobacco use.  

As you can see this issue is as clear as mud.  Lines have been drawn in the sand from both schools of thought.  There are valid arguments on both sides, however the only thing we know for certain is you must know your individual state law if you choose to partake in the use of marijuana, and Federal law trumps (no pun intended) State law.  Thank you for your business.

Lance Benedict
President/CEO Industry Lab Diagnostic Partners  
9/20/2019