Saturday, November 01, 2014

Legal Marihuana Market in Oregon?


If Oregon states voters favor the legalization of weed, buying weed in Oregon will cost consumers less than buying the same product in Washington State because these two states share different tax policy. According this article, weed consumers in Washington States “pay a tax burden of 30 – 40 percent when they go to buy a den bag”. (Stuart, 2014) An ounce of weed in Washington states currently costs $500 dollars. On the other hand, if weed is legalized in Oregon State, an ounce of legal retail weed will cost $200 dollars. The fact that Oregon States does not impose sales tax on his consumer significantly lowers legal retails weed.
We can apply the Petlzman's theory to predict what decision will voters in Oregon make. According to his theory of generalization, the probability of opposition of any policy is a function of the tax rate and the spending to mitigate opposition per payer. Keeping constant the spending to mitigate opposition,  a higher tax rate will cause voters to oppose government policy, and therefore a policy will not likely to be passed. The case of Oregon is an opposite scenario. Oregon has no sales taxes, which means that the tax variable proportional to the probability of opposition is very low. As such, the legalization of marihuana in Oregon will face less opposition and this policy will likely to be passed.  

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