The headlines last year were incredible: Some half a billion dollars would fill state coffers if we legalized marijuana, the result of taxing and regulating a massive pot market. But last Thursday, state pot adviser Mark Kleiman burst the state's bubble. Although the Office of Financial Management (OFM) had estimated Initiative 502 would net some $250 million to $450 million in tax revenue a year, Kleiman said a more realistic number would be closer to $180 million.
Or even less.
"I think if they could bring in $100 million [the first] year, they would be doing good work," he said.
What sucks is that the state knew, or should have known, that its calculations were based on inflated numbers, math errors, and absurd estimates.
The problem began with oversize projections for how much legal pot we'll smoke (which, in turn, affects the estimates for tax revenues). The state estimated Washington annually consumes 188,000 pounds of pot, based on United Nations data that, according to OFM, concludes "the average number of grams in one use is two grams."
But the data doesn't say that. The UN report actually suggests most potheads consume far less than two grams—even those frequenting Amsterdam cannabis coffee shops smoke only two grams per week.
That wasn't the only miscalculation.
Without disclosing this fact, OFM changed the UN data about the number of days potheads use pot, which increased the overall revenue calculation by 15 percent.
When I pointed out these discrepancies to OFM in February, fiscal impact statement author Julie Murray confirmed one small error, but said the larger discrepancy was intentional. I pressed them five times by e-mail and three times by phone about why they didn't disclose that the source data was altered. On March 20, OFM spokesman Ralph Thomas finally responded to my question, writing, "We don't have any further response."
These undisclosed overestimates led to a revenue projection more than double what OFM would have calculated by using the actual UN data. And that's too bad: Those funds were promised to pay for the state's Basic Health plan and substance-abuse treatment, and now it seems we'll be lucky to get one-fifth of that.