Wednesday, June 6, 2018

California Dreaming? More Like Disappointing

While Twenty-One Debunked is pleased that the fifth largest economy in the world, California, has fully legalized cannabis for recreational use and even finally has legal weed stores, nearly half a year later the promise of booming tax revenue seems to have been a letdown thus far.  While any cannabis legalization is better than prohibition, and any tax revenue is better than zero, of course, it still seems to have fallen a bit short of the promises.

How so, you ask?  Let us count the ways:
  1. Taxes are too high.  When all of the several different taxes are added in, it adds up to as much as 45% of the before-tax price in some municipalities. 
  2. That is, of course, if you can even GET any legal weed at all in one's municipality of choice.  Local option means that many towns and cities have chosen to locally ban (or delay indefinitely) the implementation of full retail legalization.
  3. And last but not least, the age limit is 21.
Add all these factors up and you have a recipe for a thriving, if smaller, black market for cannabis.  Especially since the original pre-legalization black market was not yet eradicated.  Had the Golden State started out with significantly lower taxes, more municipalities allowing retail cannabis stores, and an age limit of 18 (though the first two factors seem to be the most important), they could have easily eradicated the black market within a few years and then been able to raise the taxes on cannabis to even a much higher level than they are now without the black market coming back anytime soon.  That is basically what Rear Admiral Luther E. Gregory found out after the repeal of alcohol Prohibition in Washington State.  And it worked.

So, in a nutshell, here is how California can solve this problem:
  1. Lower the combined taxes on cannabis to no more than $10/ounce (or 10%, whichever is lower) for the first year or two.  And make cannabis retail licenses cheaper than liquor and tobacco licenses.
  2. Remove excessively strict levels of local option or at least provide incentives for municipalities to allow retail weed stores.
  3. Lower the age limit to 18.  Yesterday.
  4. Crack down on any vendors who are caught flouting any of the new laws, and blacklist violators from getting any retail licenses in the future.
  5. After the first year or two (or three), jack up the taxes on cannabis to as much as $50/ounce at the cultivation level and additionally 10-15% at the retail level.  Or make the tax proportional to THC content.
Problem solved.  Next.  But of course, that would make far too much sense, right?

Oh, and as long as we are talking about taxes, keep in mind that California's alcohol taxes are below the national average.  Raising those taxes would be a good place to start if they want more revenue quickly.

At least America's friendly neighbor to the north will not be repeating our mistakes.  Taxes in Canada will start out quite low, and the age limit will be 18 or 19 depending on the province.  Watch their economy boom faster than you can say, "O Cannabis!"

Tuesday, June 5, 2018

New York's Backyard Will Have a Smoking Age of 21

Well, its official now.  Effective just 60 days after it was signed today, Westchester County, NY (aka my own neck of the woods!) will now have a tobacco purchase age of 21, joining NYC as well as Orange, Rockland, Nassau, and Suffolk Counties and all of New Jersey.  It applies to both combustible tobacco products as well as e-cigarettes / vaping devices.  Thus, all of "New York's Backyard" except Putnam County (and Connecticut) will have an age limit of 21.

SHAME, SHAME, SHAME!

The only silver lining is that, just like the rest of New York State (where most other counties are still 18), the so called "smoking age" is only for purchase (not possession or consumption) and is more accurately called a "sale age" in that only the vendor would actually be breaking the law (and thus punishable) in such a case.  Thus, it is a relatively "non-violent" type of age restriction law (albeit still very ageist and repugnant nonetheless) since it is a very different kind of onus.  That is not true in some other parts of the country, unfortunately, and is certainly not true with the 21 drinking age except maybe in Louisiana.  So thank God (or Nature) for such small mercies.  But still, we say to those who voted for the age limit hike:

SHAME, SHAME, SHAME!

And speaking of NYC, it is very curious indeed that no one seems to be talking about what happened in NYC since they raised their smoking age.

We think we know why.  At first glance, it does appear to have had some effect.  According to the CDC's Youth Risk Behavior Survey (YRBS), teen smoking rates did in fact drop from 2013 to 2015 in NYC:

2005   11.2%
2007   8.5%
2009   8.4%
2011   8.5%
2013   8.2%
2015   5.8%

Those are the percentages of combined 9-12 grade students who reported any current cigarette smoking in the past 30 days.  Looks impressive at first:  a relative 29% drop from 2013 to 2015.  But take a look at the same data for the nation as a whole, for comparison:

2005   23.0%
2007   20.0%
2009   19.5%
2011   18.1%
2013   15.7%
2015   10.8%

As you can see, the nation as a whole also saw a similar (if even faster) drop in teen smoking at the same time, with a relative 31% decrease from 2013 to 2015, despite no change in the smoking age in most places.  And the teen smoking rate in NYC was already much lower before the law change, having dropped more dramatically than the rest of the USA prior to 2007 and then remaining at a low level since.

How about San Francisco, another major city that raised its age limit to 21?

2005   10.9%
2007   8.0%
2009   10.4%
2011   10.7%
2013   7.5%
2015   5.4%

They also saw a similar size drop from 2013-2015, to the tune of 28% (vs. 29% in NYC and 31% in the USA overall).  Just one problem though.  San Francisco did not raise their smoking age until 2016, so these data show that the drop in the smoking rate happened while it was still 18, before the age limit was raised.  Thus, it would actually be part of the no-change control group, not the experimental group.  And if you include the decrease since 2011, San Francisco in fact saw more progress than NYC.

Thus, we can conclude that the decrease in teen smoking in NYC following the hike in the purchase age was most likely NOT causally linked to it, and would most likely have occurred regardless given the above counterfactual data.  Kinda like we at Twenty-One Debunked initially predicted back in 2013 after first learning of the law change being proposed.  So if that wasn't the cause, what was?  Well, we know that nationwide, as well as in NYC, the secular trend for the past four decades (except a brief increase from 1992-1997) has been downward for both teen and adult smoking.  This was due to a general combination of education/awareness, taxation, regulation, and advertising restrictions, and the resulting cultural changes.  And in very recent years, electronic cigarettes have gained popularity as an alternative to combustible cigarettes, and in fact overtaking the latter and becoming at least twice as popular among high-schoolers by 2015.  Note that this was also true in NYC despite the 21 age limit applying to e-cigarettes as well.

Bottom line:  it looks like the supposed benefits of raising the smoking age to 21 were, shall we say, all smoke and mirrors.  The supposed success of Needham, MA was likely a statistical fluke and/or a result of endogeneity, much like the "early adopter" effects of the first few states to raise the drinking age to 21 creating that particular mirage in the 1980s.  Or perhaps increased enforcement in general relative to neighboring towns did the trick regardless of the age limit, like it did in Woodridge, IL and several other communities the 1990s.  We doubt there would be any real benefits for Westchester County or anywhere else that adopts such a law.  And even if such benefits of the 21 age limit were real, we at Twenty-One Debunked would still never support any age limit any higher than 18, on principle alone.

Old enough to fight and vote = old enough to drink and smoke.  'Nuff said.