Arizona voters take up marijuana legalization and increasing the minimum wage
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1 Arizona voters take up marijuana legalization and increasing the minimum wage
2
3 Officially named the Regulation and Taxation of Marijuana Act Allows adults (21+) to possess and use 1 oz or less of marijuana Permits adults to possess up to 6 marijuana plants Retail sale of marijuana would begin March 2018 Impose 15% tax on retail sale of marijuana and marijuana products, on top of existing sales taxes Creates and funds the Department of Marijuana Licenses and Control
4 In addition to taxes, there are licensing fees for marijuana businesses New businesses (retailers, manufacturers, distributors and testing facilities) pay $10,000 to $20,000 Businesses required to renew the licenses annually, with a cost of $3,300 to $6,600 Applicants for licenses also must pay a $5,000 application fee
5 Recreational use and possession of marijuana would be legal, but there would still be restrictions Driving while high and consuming marijuana while driving remains illegal Outlaws using passengers using marijuana if there isn t a separate passenger compartment in the vehicle
6 Other violations would be punishable by a max $500 fine and public restitution Smoking or using marijuana in a public place Underage use Unauthorized manufacture of marijuana products Possession of more than 1 oz, but less than 2.5 oz
7 Arizonans would get rights related to marijuana that do not currently exist Courts cannot deny custody, visitation or parenting time for marijuana use Drivers cannot be prosecuted for per se DUI solely based on presence of metabolites in a person s body Addresses a 2014 AZ Supreme Court ruling on DUI prosecutions for a driver with inactive metabolites Workers cannot be fired for marijuana use while offduty, though companies can still ban consumption or possession of marijuana in the workplace
8 Arizona Department of Marijuana Licenses and Control Oversees regulation of marijuana laws and businesses, including processing applications and inspecting facilities to maintain compliance with the law Medical marijuana oversight transferred to DMLC from the Department of Health Services
9 Arizona Department of Marijuana Licenses and Control By September 2017, DMLC must start accepting applications for marijuana businesses from existing medical marijuana businesses By December 2017, begin issuing licenses Also by December 2017, DMLC must star accepting applications from all others
10 Licenses will be approved by the Marijuana Commission, a 7-member panel appointed by the governor 3 commissioners who own marijuana businesses 4 commissioners with no financial ties to marijuana businesses There is a cap on retailer licenses until September 2021: One marijuana retailer per 10 liquor store licenses issued by the state
11 After September 2021, DMLC can issue additional licenses for any one of three reasons Minimizing the illegal market for marijuana Meeting the demand for marijuana Providing for reasonable access to marijuana retailers in rural Arizona
12 The DMLC must adopt rules to implement Prop 205 Guidelines for issuing, suspending and revoking licenses Establishing security for marijuana establishments Requirements for preventing sales to youth Requirements for labeling of marijuana products Rules for marketing and advertising must restrict appeals to children
13 In January 2020, after two years of legal marijuana retail sale, the market may evolve. Marijuana bars: DMLC may allow licenses that permit consumption of MJ in a retailer
14 Marijuana delivery: DMLC may write rules to allow delivery of marijuana directly to consumers
15 Cities and counties are allowed to as voters to enact a measure (but only in November elections) to prohibit one or more types of marijuana businesses. However, such a ban will not effect either an existing non-profit medical marijuana business or one that reorganizes to be a for-profit recreational business.
16 Localities can enact reasonable ordinances to govern time, place and manner of marijuana establishment operations, but with limits They cannot limit number of retailers, manufacturers or cultivators to less than the number of non-profit medical marijuana dispensaries that exist in the locality They cannot prohibit for-profit dispensary from operating in a place zoned for operation of non-profit dispensary or facility
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18 All money from taxes and fees would be deposited in the Marijuana Fund Money in the Marijuana Fund pays for the Department of Marijuana Licenses and Control and the Department of Revenue to regulate and enforce marijuana laws After that, 50% of licensing fees from each business goes to the city/town/county where the business is located
19 All of the remaining money in the Marijuana Fund is then distributed to schools and for public education 40% to school districts and charter schools for education expenses 40% to school districts and charter schools for full-day kindergarten instruction 20% to Dept of Health Services for public education campaigns on harms of alcohol, marijuana and other substances
20 What does that actually mean to the bottom line? According to the Joint Legislative Budget Committee s analysis, taxes and licensing fees are projected to generate more than $135 million the first two full years of retail operation $53.4 million in FY19 $82 million in FY20
21 How will that money be distributed? $17.2 million ($8.6M in both FY19 and FY20) to DMLC and DOR for regulation and tax administration $10.6 million ($6.8M in FY19 and $3.8M FY20) to local governments with MJ businesses
22 $86 million to K-12 schools $43 million ($15.2M in FY19 and $27.8M in FY20) to K-12 schools for operating costs Teacher pay Construction Maintenance $43 million ($15.2M in FY19 and $27.8M in FY20) to K-12 schools for full-day kindergarten $21.5 million ($7.6M in FY19 and $13.9M in FY20) to the Arizona Poison Control System for public education campaigns on marijuana, alcohol and other drugs
23 Additionally, marijuana sales are subject to the existing state and local sales taxes. JLBC anticipates $64.2 million ($22.4M in FY19 and $41.8M in FY20) in revenue for the state and local governments
24 Unknown costs Substance abuse treatment ER visits Adjudication of offenders Unknown savings Reduced arrests for marijuana offenses Reduced prosecutions Reduced incarcerations
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26 Officially named The Fair Wages and Healthy Families Act Increases minimum wage from $8.05 to $10/hr on Jan , $10.50 in 2018, $11 in 2019, $12 in 2020 After that, mimimum wage would increase annually by the cost of living Tipped employees can be paid up to $3 less than the minimum, as law currently allows Requires employers to provide earned paid sick time.
27 How does sick time work? Beginning July 2017, employees earn at least 1 hr of sick time for every 30 hours worked For companies with less than 15 employees, capped at 24 hours earned/used in a year For companies with more than 15 employees, capped at 40 hours earned/used in a year Employers have the ability to set higher caps, if they choose
28 Sick time can be used as it accrues, and unused sick time carries forward, though a company can instead pay employees for unused sick time at the end of the year Employees who leave their job do not get paid for sick time
29 Even employers currently exempt from minimum wage law would be required to comply with sick time. There is an exemption for family businesses: People employed by a parent or sibling are not required to receive sick time Employers cannot interfere with, restrain or deny any rights granted by Prop 206, and cannot retaliate against an employee who exercises those rights
30 Does this mean there will be a statewide standard for minimum wages and sick time? Not necessarily! Local governments are allowed to enact laws providing for greater sick time rights. They also retain the ability that already exists in law to enact laws setting a higher minimum wage
31 What does this mean for Arizona s economy? The ever cautious JLBC says Prop 206 may have an economic impact on tax collections and state spending, but makes no claims about whether those are positive or negative.
32 Potential positive impacts: More individual income taxes More sales taxes Could reduce participation in public assistance programs Potential negative impact: Reduced corporate income taxes
33 Arguments in favor Current minimum wage equals $17,000 salary for a full-time worker, $12/hr equals almost $25,000 Federal poverty limit: $16,000 family of 2, $20,160 family of 3, $24,300 family of 4 Half of Arizonans don t get sick time, so this is job security for workers facing illness It s good for the economy: better employee performance and retention, more disposable income, and increases to spending will boos the economy
34 Arguments against Employers will cut jobs if they are forced to pay nearly 50% more for wages The result will be those intended to be helped will now be out of work Put simply, low wages are better than no wages Small businesses are harmed the most Uncertainty sure, there are benefits, but it s impossible to know if they outweigh the costs
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