New York mayoral candidate proposes legalizing, taxing limited amounts of marijuana

John Liu.

New York City mayoral candidate John Liu yesterday proposed regulating and taxing legalized (limited) amounts of cannabis as part of his campaign platform yesterday.
And while the idea is commendable in a city with thousands of marijuana arrests each year and a racial bias in enforcing marijuana laws that borders on criminal, Liu’s plan is based on questionable statistics, cannabis price-fixing and a tax rate of over 28 percent.

“It’s time to recognize that the prohibition of marijuana has failed,” Liu said at a press conference yesterday. “And its enforcement has damaged too many lives, especially the minority communities.”
“Look, this is New York City,” he added. “We’re a very dynamic city. The bottom line is that 900,000 New Yorkers are using marijuana on a regular basis.”
Liu says he’s never tried marijuana and probably wouldn’t even if his bill was passed and cannabis use and possession of limited amounts were legalized. But he says he isn’t intolerant of those who do use the herb:
“When people come to work they are fully expected to perform at work,” Liu told “According to the medical experts, marijuana is not more dangerous than alcohol. So to the extent that someone has a couple of beers, or a glass of wine every evening, according to the medical professionals marijuana is not too far off from that.”
At the press conference, Liu distributed a 13-page document regarding the regulation of cannabis that he put together in his current position as city comptroller. And while the concept of legalized cannabis sounds appealing, the devil is in the details.
The major questionable premise in his entire scheme is that it is based off of current street prices for an ounce of herb in the city, which as any New Yorker can tell you, are ridiculously inflated compared to elsewhere in the country.

Prices from Liu’s report.

The average price for an ounce, based on Liu’s data, is $407. Even with the black market still existing, prices have dropped considerably in other states where cannabis cultivation has been legalized for either medical or recreational purposes. That same $400+ ounce would sell $200 ounces or less in places like Colorado, Washington, California and Oregon (or even New York’s sort-of neighbor, Maine).
Still, Liu estimates that the current annual market for marijuana in NYC is about $1.4 billion dollars spread out among the roughly 900,000 regular cannabis users living in the city. That’s roughly $2,000 per-year per pot smoker.
At a 20 percent tax, that would net the city about $400. That money would be filtered into education, specifically college tuition reduction at schools like City University of New York, according to
To make sure that happens, the plan calls for the state to come up with a “tax policy designed to hold the retail price constant.”
In short: you’ll still be paying $400 on average for an ounce of ganja in the Big Apple.
On top of the 20 percent marijuana excise tax, there would be a 4.5 percent city sales tax, a 4 percent state sales tax and a 0.375 percent surcharge for the Metropolitan Transit Authority for a grand total of 28.375 percent tax on your herb. No word on if that tax will be factored into the price-fixed $400 ounce or if it would be in addition to that price.
One thing we think Liu does come close to getting right, however, is that the city could save tens of millions of dollars (and countless days of time) in law enforcement and court costs by legalizing cannabis possession, use and display.
The other major hurdle is that any measure passed would have to be approved by the New York state legislature (and then the governor) before it would be considered law – which would seemingly be a long shot at this point in time (much like Liu’s chances for mayor, according to several New York news sources). The Washington Post points out that Gov. Andrew Cuomo has been a steady opponent of cannabis legalization and even decriminalization.