Billions at stake as Wisconsin dicusses legalizing marijuana

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By PARKER SCHORR
Wisconsin Watch

CHICAGO (AP) — The historically black parts of Chicago’s south side bear the marks of disinvestment common to many of the city’s mostly black neighborhoods.

Along the expansive South Dr. Martin Luther King Jr. Drive, many of the district’s blocks once home to vibrant institutions are now marred by overgrown, vacant lots. A nearby census is one of the poorest in the city.

But for Seke Ballard and Seun Adedeji, the area is ripe for reinvestment because of its being disadvantaged.

In late June, Illinois Gov. J.B. Pritzker signed a law legalizing the recreational use of cannabis. The change, which will take effect on Jan. 1, is expected to lighten the load carried by black residents, who have been disproportionately harmed by past cannabis laws and poverty.

Though blacks nationwide use marijuana at similar rates as whites, they are much more likely to be faced with criminal penalties. In Wisconsin, blacks are four times as likely as whites to be arrested for pot possession, where all uses are illegal.

With 11 states and Washington, D.C., having legalized cannabis for adult recreational use and 33 states plus D.C. with medical-cannabis laws, marijuana has quickly grown into an $8 billion-a-year industry that shows no signs of slowing down. Now some Wisconsin lawmakers are debating the benefits of legalization — but many of the Republicans who run the Legislature are not willing to go along.

Democratic Gov. Tony Evers has proposed legalizing medical marijuana. Evers also wants to decriminalize possession of small amounts of marijuana.

Nationwide, by 2022, legal cannabis revenue is projected to nearly triple from current levels into a $23 billion industry, according to the Arcview Group, a cannabis-focused market research firm.

If Wisconsin were to legalize cannabis for medical uses, there would be a net $1.1 billion gain, bringing in additional fees and health benefits while possibly reducing opioid overdoses, addiction and traffic fatalities over five years, according to a cost-benefit analysis by the University of Wisconsin-Madison’s La Follette School of Public Affairs. If the state were to decriminalize cannabis, it would save an additional $30 million in decreased criminal justice costs.

The study did not offer projections about state tax revenue, but the Legislature’s leading proponent of legalization, state Rep. Melissa Sargent, D-Madison, says such a step could bring in $138 million a year.

The marijuana industry’s continued growth is almost unprecedented. Tom Adams, editor in chief of Arcview, says the only consumer industries that grew as largely and as quickly as cannabis in recent years were broadband internet in the 2000s and cable television in the 1990s.

In Sargent’s latest bill, cannabis-business in Wisconsin could obtain one of five different types of licenses. There would be licenses for producers, processors, distributors, retailers and microbusinesses. A business could hold more than one.

A proposed merit system would rank applicants using several criteria, such as whether they have plans for environmental protection and the ability to provide stable jobs to local residents. Any businesses with 20 or more employees would also be required to enter a “labor-peace agreement,” which would prohibit employees from strikes and picketing and the applicants themeslves from disrupting any labor organizing efforts.

Less than a fifth of marijuana business owners identify themselves as members as racial minorities, and 4.3% are black, according to a report from Marijuana Business Daily. Seventeen percent of executives in the industry are members of racial minorities, however — a larger percentage than in U.S. businesses as a whole.

The cannabis entrepreneur Abbie Testaberg fears big businesses will come to dominate the state market if Wisconsin legalizes marijuana for medical or recreational uses. Testaberg and her husband, Jody, run three cannabis companies, including a hemp-growing operation in western Wisconsin.

Testaberg hopes marijuana, if it is legalized, does not go the way of the dairy industry, which is seeing family farms increasingly squeezed out.

“If we enter the cannabis industry regulation the same way as where we’re currently at with big farm regulations, we’re going to create the same monster,” Testaberg said.