The sunny Caribbean island of Puerto Rico is facing some dark financial times: Large companies fled the island for friendlier tax laws, creating a deficit that the resource-rich, industry-poor territory has been unable to fill. Puerto Ricans — about 45 percent of whom live at or below the poverty line — are following suit: The island’s population has fallen by 400,000 people, to 3.4 million, in no small part because unemployment here (12 percent) is almost triple what it is back in the full-fledged USA (4.3 percent).
Above all, Puerto Rico is more than $74 billion in debt to creditors it cannot pay and has $50 billion in pension obligations it cannot fulfill. There are assertions that up to half of the debt is “illegal” — the result of toxic Wall Street tricks of the kind that engineered the Great Recession — but the weight of the financial obligation remains.
Puerto Rico might be able to convince Congress to fix these ills, and perhaps even consider the territory for statehood, were voters there able to send someone to Congress or to vote in presidential elections. Taxation without representation, fiscal penury resulting in a form of indentured servitude — didn’t conditions like these bring about significant change, somewhere and sometime else in America?
This is the atmosphere in which Puerto Ricans are considering drug-policy revolution, and looking to medical marijuana for the bailout that’s not coming from banks or lawmakers on the mainland.
Two years ago, Puerto Rico legalized medical marijuana by executive decree — a trick nobody in the 50 states would dare try — and earlier this summer, Gov. Ricardo Rossello signed another order authorizing a legal framework for a medical-marijuana industry. Cultivation facilities, processing centers, and dispensaries are all now legal.
According to the island’s treasury secretary, a legal marijuana industry could generate up to $100 million a year and create thousands of jobs. As attorney Goodwin Aldarondo, president of Puerto Rico Legal Marijuana, told Fox Business, everybody’s banking on weed to be Puerto Rico’s savior.
“It’s the only viable alternative we have to solve the economic situation,” he said. “It’s been many, many years since Puerto Rico has had a new industry.”
This is the line heard all over the mainland U.S., where marijuana tax revenues have helped Colorado towns balance budgets and build new civic institutions and give failing California counties new hope of the same. But while cannabis may be able to relieve chronic pain and cure cancer, Puerto Rico’s many woes may be too big a challenge for even the magic plant to solve.For weed to generate massive sales tax revenue, there needs to be massive sales. There are only 9,000 medical marijuana patients on the island, Fox Business noted — a tiny fraction of the 3.4 million people there — and store-bought cannabis is expensive, a luxury for people in poverty.
Unless the drug is outright legalized and becomes part of the island’s tourism economy, there isn’t much realistic hope for a massive market expansion of the kind enjoyed in Colorado, Oregon, Washington and other legal states.
Speaking of Colorado: With legal weed fueling tourism, and with two million more residents than Puerto Rico, cannabis sales taxes netted “only” $200 million last year. With fewer people and far fewer potential customers, it’s not clear how Puerto Rico can hope to net up to half that haul.
Something more will need to be done. Something more drastic — more freeing. More legalizing, one could say. If the mainland is content to leave Puerto Rico to its own devices, it’s not a far stretch to imagine the island styling itself as the world’s cannabis-friendly tropical island destination out of pure economic necessity.
credit:420intel.com
