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Fix The Subways, With Weed

Legal weed is a painless way for state and local governments to raise major new tax revenues, and it comes as big cities desperately need the investment.

Posted on December 12, 2018, at 11:27 a.m. ET

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We’re entering a new phase in the marijuana debate, and the question is no longer “should cannabis be legalized for recreational use?” Now, the real question is what should be done with the considerable tax revenues that legal weed will generate? In New York City, the answer is clear: Use it to fix the subways.

Support for legal recreational weed is now one of the few cultural issues that transcend political polarization — 62% of Americans support marijuana legalization, according to the Pew Research Center, and a Gallup poll showed 66% of Americans favor legalizing weed for recreational use. Nine states that voted for Donald Trump in the 2016 presidential election have since passed bills legalizing medical marijuana.

Marijuana is now legal for adult recreational use in 10 states plus Washington, DC. Twenty-two states have decriminalized the possession of small amounts of marijuana. Of the remaining states, that still ban it, 17 acknowledge its medical value, through laws permitting the sale of low-THC, high-CBD products. A total of 49 of the 50 states support the use of marijuana to varying degrees.

The stock market may be collapsing, but the cannabis industry is heading ever upward. Globally, it’s projected to triple in size by 2022, reaching $32 billion in annual sales. Canada, which recently legalized recreational weed, is projected to have $6.5 billion in retail weed sales by 2020, a figure that exceeds the sales of spirits and is close to annual wine sales.

That growth is good news for state and local governments, which are discovering that legalizing cannabis is a painless way to generate public funds while diminishing the discomfort and pain induced by everyday life, aging, and illness. Colorado has collected $862 million in cannabis taxes since 2014; Washington state has raised $686 in excise taxes since 2014, and Oregon, $173 million since 2016. New York City would easily outdo them all.

In 2018, the New York State Department of Health issued a report highlighting research that showed that marijuana is not a “gateway” drug as conservatives have argued for decades. More importantly, the report projected state revenues from taxing cannabis as high as $600 million annually. But that is almost certainly underestimating it: The report didn’t even consider the revenue likely to come from tourists coming to New York and enjoying the local weed, which of course they would do. And it vastly underestimated the share of the adult population that would purchase marijuana, once it was legalized and the stigma of violating the law was removed.

And, not surprisingly, the health experts didn’t explore the potential for job creation and business growth stemming from research and development in new methods to distribute, market, and even consume cannabis. In places with recreational weed, the old-fashioned “head shop” has been superseded by the modern marijuana dispensary, a cross between an Apple store and a high-end coffee shop. In California, the medical and recreational marijuana industries have spurred the development of dozens of new startups exploring everything from on-demand weed delivery services to high-tech new ways to get high. There’s no reason to think New York wouldn’t attract a similarly vibrant industry.

All this would come as New York City’s most vital public service is in a state of crisis. For the past quarter-century, the state has failed to adequately invest in the subway system, culminating in today’s catastrophe: endless train delays, overcrowding, and the public’s loss of faith in the subway system’s capacity to take people to and from work quickly and reliably.

There is a plan to modernize the subway, but the funds to implement it — an estimated $30 billion over a decade — do not exist in any budget or financial plan. Legalizing cannabis and dedicating the revenue to the mass transit system is the best way to assure the future of New York City and the surrounding region. The subways and commuter rail lines serve all New Yorkers, of all ages, ethnic and racial groups, and income levels. Even the hedge fund managers and cosmetic surgeons who don’t ride the subways depend on the people who do.

Now that New York University’s Rudin Center for Transportation has taken the lead in advocating for legalizing cannabis and dedicating the taxes to mass transit, just about every politician is arguing to spread the buckshot, rather than concentrate the funds on the one public service that operates 24 hours a day, 7 days a week, and that is the lifeline of New York City — which is itself the economic engine of the entire state.

By legalizing and taxing cannabis, New York would have a new revenue source that could be dedicated to transportation, that would not divert funds from other essential public services, and that would grow in future years and decades, as cannabis becomes more fully accepted and utilized.

No other public service is directly used by more than 5.6 million people a day, allowing them to get to work, to school, and to cultural venues without owning a car. Without the new taxes from legalizing weed, the entire subway system may indeed go up in smoke.


Mitchell L. Moss is the director of NYU’s Rudin Center for Transportation and a professor of urban policy and planning at NYU’s Wagner School. Kelsey B. McGuinness and Rachel G. Wise are research scientists at the NYU Rudin Center for Transportation.

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