October 25, 2009
By Jerry Kopel
Medical marijuana not only makes legal sense, it
also can make legal cents for Colorado's future budgets.
How Colorado got this far is based on past experience and also President
Obama's "advice" to the Dept. of Justice.
The past: In the 1988 General Assembly the then-Majority Leader Chris
Paulson introduced HB 1167. The plan was to impose a stamp tax on
marijuana and controlled substances.
In fairness, Paulson didn't dream it up. The concept came from a book of
suggested legislation for conservatives and the law had been adopted in
several other states. By 1994, similar laws were adopted by a total of
27 states. In the Colorado version, which took effect Jan. 1 1989, the
tax was $100 per ounce of marijuana and $1000 per ounce of an illegal
"Payment of the tax ... shall be evidenced by the affixing of stamps to
packages containing a controlled substance or marijuana." It would be up
to the Revenue Dept. to determine the type of stamp. But the department
was told by statute to sell (the drugs) for cash". The reason was to
avoid a constitutional problem of self-incrimination. Those buying would
not be asked for identification or proof that he or she possessed
The penalty for the "owner" of the illegal drug who didn't have the tax
stamp affixed would be ten times the amount of taxes owed. That was
reduced to "three times" by amendment in 1993 to HB 1088. However, if
you were "legally " in possession of marijuana or controlled substances,
you did not owe any tax.
The Denver Post report on the debate in the House said "Rep.
Kopel voiced the only opposition to the idea during discussion on the
House floor ... stating that 'enacting a drug tax would send the wrong
message by implying there is something OK about drugs or they wouldn't
be taxed by the state government.' "
Final vote in the House was 45 to 14 and 22 to 11 in the Senate.
Opposition in both houses was bi-partisan. When the bill reached
Governor Roy Romer's desk, there was significant opposition raised,
including the Colorado Federation of Parents For Drug Free Youth, Inc.,
who urged a veto. Instead Romer issued a letter stating HB 1167 "has
become law without my signature."
Romer wrote that opposition groups "... have expressed doubts about
whether this legislation can be enforced and whether young people will
understand taxation of an illegal pursuit."
The press had a field day as Jan. 1, 1989 approached. In the Colorado's
stamp center was the seal of the state that you also see on legislative
stationery, colored green for marijuana, red for controlled substances
and the words "marijuana" and "controlled substances."
Revenue spokesperson Kathy Kanda told the Denver Post "We're
still trying to figure out how one would affix the stamps and to what.
Will they stick onto Ziplock bags, or whatever?" One thousand stamps
The first stamp was purchased by Woody Paige of the Denver Post
who then made back the $100 cost by writing a column about his venture.
And that first sale didn't happen until the third day of availability.
Paige told how to attach the stamps: "Bag top is to be folded down at
least one inch. The stamp is to be placed in the center of the bag
overlapping the edge and sticking to the bag so that the stamp will be
destroyed when the bag is opened."
According to information given me through 1994, there were 35 other
stamps sold on marijuana and none on controlled substances.
In June of 1994, the U.S. Supreme Court handed down a
decision that doomed Colorado's drug tax law. By five to four, the
court expanded the Fifth Amendment prohibition against double jeopardy
(multiple punishments for the same offense) to taxation. The opinion in
Dept. of Revenue v. Kurth Ranch, written by Justice Paul Stevens,
said that states may not follow up a narcotics conviction by imposing a
tax on illegal drugs.
The case arose in Montana after drug agents seized 1,811 ounces of
marijuana in a raid on a ranch. The party pled guilty and the state
assessed $848,000 in penalties and interest.
The party filed bankruptcy and bankruptcy court, U.S. District Court and
the U.S. Court of Appeals all agreed that imposition of the tax after a
criminal prosecution amounted to double jeopardy.
Stevens, during oral arguments, before the Supreme Court reflected "It's
a little bit unusual to tax something that a person is not permitted to
own". That is close to the comment I made to House members on second
reading of HB 1167.
How does a history of drug stamps effect medical
marijuana?. Section 14 of Article 18 of the state constitution spells
out how legal growing, selling and buying of medical marijuana is to
work. However the constitution does not deny the legislature the ability
to pass additional language insofar as it does not conflict with
language in the constitution.
The only money received by government is in Section 14(3)(i) dealing
with funding to pay for regulation by the Dept. of Health. So a legal
tax could be levied on the dealers, at least as far as Colorado law is
incurred. On the federal level, President Obama told the Dept. of
Justice to basically leave "real" medical marijuana alone. If the
department ignored the president, the U.S. constitution gives the
president power to "grant reprieves and pardons for offenses against the
U.S. except in cases of impeachment."
Justice Stevens analysis in Kurth Ranch does not apply to medical
marijuana which can by state law be legally-owned property. The
constitution provides for a reasonable use of the plant being sold and
it has nothing to do with other controlled substances.
It would be useful for the legislature to seek a declaratory judgment
from the state supreme court on a bill dealing with the legality of
taxing profit made by dealers in medical marijuana.
(Jerry Kopel served 22 years in the Colorado House.)