Not if, but when, marijuana becomes legal in Pennsylvania

A hundred years ago, cannabis was a major cash crop in this state. Now, the unmistakeable shift toward re-legalization promises a new economic windfall for the future.

By Randy LoBasso
Add Comment Add Comment | Comments: 36 | Posted Oct. 2, 2013

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Setting up a medical marijuana system would reduce criminality, sure. But eliminating it entirely? Well, that could be achieved by a bill state Sen. Daylin Leach introduced last April: Senate Bill 528, which would legalize marijuana for recreational purposes. It’s an unexpectedly intriguing proposal now that two states—Colorado and Washington—are actually preparing to put their own legalization plans into effect.

Leach’s legislation, co-sponsored by state senators Larry Farnese (D-Philadelphia) and Jim Ferlo (D-Allegheny), is pretty simple: legalize it, tax it and regulate it. The bill doesn’t set any of the details in stone, though. “We didn’t want to bite off more than we could chew,” he says, “so we didn’t mention tax rates specifically.” He says he’s looking at how Colorado and Washington pan out before deciding whether they have operational models worth emulating. “I think there’s a good idea out there,” he says, “which is that you want to marijuana to be sort of competitive with alcohol in terms of the tax rate, so you don’t adversely affect the alcohol industry.”

That suggests the taxes might be the same. According to the Montgomery County state senator, Pennsylvania could impose a per-joint tax similar to one beer, wine or mixed drink. In Philadelphia, there’s a 10 percent tax on alcohol in addition to the state’s 8 percent rate. So if a joint sold for, say, $5, and both state and city tax were the same, that joint would cost $5.90 in Philadelphia, while in Anytown, Pa., it might cost $5.40.

Another feasible scenario, Leach told the Journal Register, might be a one-dollar tax per joint. Using estimates from the Dept. of Health and Human Services that 1 million people in Pennsylvania smoke pot, and assuming an average smoker might smoke four joints a week, that would mean $200 per smoker per year, and $200 million in tax revenue on top of the $350 million the state would be saving in law enforcement costs. Not too shabby.

But Leach purposely didn’t specify a tax rate—or a way to spend that new revenue—so as not to eliminate any potential supporters around the state. “What a tax rate should be and where tax money goes are big policy questions,” he says, “and we didn’t want to add too many big policy questions onto what is already a big policy question.” Given the opportunity to suggest what the potential cash might possibly fund, however, he mentions our most obvious financial crises: schools and transportation.

Taxation alone, though, doesn’t begin to paint the picture of how Pennsylvania’s economy would change in a new era of legal weed. With a new industry comes the need for new infrastructure—for a means of getting the product to consumers.

Leach assumes the product could be sold—at first—through the state liquor store system. “They’re a good infrastructure that can at least begin the process,” he notes, “in that they’re used to collecting taxes, they’re used to checking if someone is intoxicated, they’re used to checking ID for age—all the things that would be relevant to deal with marijuana.”

If that worked out, the state could subsequently begin licensing some corner stores and food shops to sell smaller amounts of ganja, just as, currently, liquor licenses enable some small shops to sell beer if they meet certain standards. That’s a step that would wait, Leach says, until we have a chance to observe how Colorado and Washington maintain their recreational marijuana system. But he envisions coffee shops someday allowing Pennsylvanians to acquire their vice, maybe purchase a Rice Krispies treat or six, and be on their way.

Aside from such licensing and sales revenue, though—and on top of the aforementioned $550 million in likely taxes and law-enforcement savings—there’s also an economic boon to be found in the ancillary costs associated with denying this industry’s existence. Those costs are harder to figure out. They include the amount of people who get arrested, then lose their job, go on unemployment and no longer pay taxes to the state or their local municipality. They also include the number of new jobs generated from new businesses opening that could potentially sell product to locals. For instance, if the state were to sanction weed-friendly coffee shops, that alone would be a whole industry. Leach points out: “There’d be distributors, there’d be drug paraphernalia, like, places that sell rolling papers”—or however you like to smoke your pot—“and that would create jobs. There would be a lot of new income and activity generated.”

Between the enforcement stand-down, the taxation, the job-keeping and the infrastructure, then, the senator rounds up his estimate to about $1 billion per year the state could generate by legalizing pot.
 

BUT WHAT DOES THAT MEAN to you? Right now, of course, there’s no industry or infrastructure to speak of. There are street and home-based illegal dealers in Philly, sure, but for one average casual smoker—a late-20s professional living in the Graduate Hospital area—obtaining enough pot locally can be a problem.

“An eighth is about $60,” says the smoker, who asked to remain anonymous for obvious reasons. “Crappy weed can be $40; it’s about $20 for a gram; and an ounce can really range anywhere, from about $300 to $400 or more.” Meanwhile, the smoker says, their dealer recently lost a Northeast-Philadelphia-by-way-of-Denver connection, and their source has been completely dry since then.

“I think the general consensus is, dealers don’t necessarily want it to be legal,” the smoker says, “but casual smokers are all about it, because it makes it a lot easier for everybody. For someone like me, it would make life a lot more simple.”

And cheaper. A 1994 NORML study titled “The Economics of Cannabis Prohibition” found that in an untaxed, 100-percent free market, bulk marijuana “might reasonably retail at the price of other medicinal herbs, around $.75-$1.50 an ounce.” There’d be no such market, of course, and that same study noted that when putting a value on selling cannabis at the retail level, it’d help—like Leach suggests—to use alcohol as a benchmark, pricing a single joint around $1.25 to $2.50. (That’s $75 to $150 per ounce.)

NORML also suggests computing a “harmfulness tax” into marijuana to make up for the societal impact of legalization. A study conducted in 1994 found that daily pot users report a 30 percent higher risk of “injuries” than non-users, and the cost of those accidents would need to be accounted for; among other harmfulness factors, marijuana contains more tar than cigarettes on a per-weight basis, though a joint typically weighs less than a cigarette, and users smoke less of it. With risk factors weighed in, NORML concluded, a $.50 to $1.00 tax per joint would make sense; in 2013 dollars, that’s $.79 to $1.58. (American healthcare is changing, too, of course, and asking 10 different people what Obamacare will do yields 10 different answers, so that could also affect how much a joint might be taxed in Pennsylvania.)

“Everyone is agreed that the price of marijuana is inflated because of the illegal status of the market and so forth,” says Jon Gettman, a senior fellow at George Mason University and leader of the Coalition for Rescheduling Cannabis, “but we don’t know what the price is going to be, we don’t know what the tax is going to be to add to that natural price of the sale, and we don’t know what the usage patterns are going to be.”

Ultimately, amid all the scenarios, likely and unlikely, that could arise from legalizing pot and letting the government regulate it—or even sell it themselves—Pennsylvanians seem to be inexorably moving toward the conclusion that’s slowly making its way across America: Prohibiting the plant from human consumption has been a total economic and sociological failure. With the state’s school funding dried up and vital transportation projects being decimated in the state Capitol, even just the state’s $350 million annual expenditure to arrest between 20,000 and 26,000 people each year looks increasingly like a war of choice we simply can no longer afford to fight.

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COMMENTS

Comments 1 - 36 of 36
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1. Les Stark said... on Oct 2, 2013 at 12:33PM

“Great article and thank you!

Two minor corrections, the spelling is Enos Sheaffer and he was not the first person arrested in the state but rather the first person arrested in Lancaster County. Others had already been arrested in the Philadelphia area.

But thank you for you great journalism and it is true, it's not a matter of if but when!”

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2. Anonymous said... on Oct 2, 2013 at 12:49PM

“There have been several wars over hemp since history began but always before the fights were over finished crops and seeds,,this last one since 1937 was brought through the back door,instead of trying to steal crops or seeds from a weaker neighbor industrialists stole the plant from mankind.”

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3. Ed said... on Oct 2, 2013 at 01:38PM

“Lillian, what 1950's textbook have you gotten your "facts" from?

- Vast majority of Americans have tried pot. A vast majority of Americans still enjoy it, may of whom you may not even suspect.
- There is no evidence pot "kills brain cells". More BS propaganda based on bunk science
- Chances are your daughter is a stoner, and quite possibly your doctor, your pilot, and your local mailman. Plus hundreds of pioneers of industry including Steve Jobs, Ted Turner, Richard Branson, multiple olympic athletes, and yes even our own loveable President Obama.

Fortunately, your opinions are outdated and no longer the mainstream. We basically are waiting for you and your generation to die off, along with your ridiculous "facts".”

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4. cmg said... on Oct 2, 2013 at 01:52PM

“OUTSTANDING article! ~I'd give almost anything in my possession~ (pot not withstanding.. and oh..not my children or first born grandchild either! lol) ~ to open up our daily Lancaster Newspaper.. and find THIS article on the Front Page! ..that would be so awesome!.. (they, however, have sticks up their pattooties).. and would most likely bury this INFORMATIVE piece of ~crystal clear newsworthy diamond~ in the deep dark inner sanctions of Section B ~for Boo ..hiss! ~ Write.. and RIGHT.. on ..my good man! Thank you for a great read!”

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5. Lillian said... on Oct 2, 2013 at 02:07PM

“Thanks Ed and I love you back!
Trying pot and regularly using pot is quite different . There is ample data out there to support that brain cells are in fact killed when smoking marijuana on a regular basis and that its effects on growing adolescents are not positive. I would agree the mailman at my post office probably is one or at least gives a good impression of a stoner. Thanks also for being a cheerleader for the famous pot tryer's, but I doubt regular users. FYI: I don't use Apple, don't watch CNN, don't fly on Virgin, and I am most proud to say I did not vote for the current occupant in the Oval Office.
As for the 50's textbook? I wasn't around then and neither during the 60's, and I plan to be around for a long time just so narrow-minded folks like me can piss you off. :)!”

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6. Ed said... on Oct 2, 2013 at 03:09PM

“Oh honey, you don't piss me off. I know your opinion is in the minority and will go the way of those who opposed things like gay marriage, racial equality, and women's rights. You're a dying breed...”

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7. Dan said... on Oct 2, 2013 at 08:37PM

“”

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8. Dan said... on Oct 2, 2013 at 08:54PM

“You hit the nail on the head man! Any way who said they would make it legal for young kids to use. I'm so tired of hearing about the kids smoking. If it was regulated correctly, kids won't have access. I mean do you see kids rolling into the liquor store buying booze?? Not to mention all of the medical benefits. Who are you or anyone to tell someone what they are allowed to use to treat ailments! I just love those people who bad mouth pot while drinking alcohol or are taking prescribed painkillers. The times they are achangin'. And for the better.Wake up people.”

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9. cannabis.pro said... on Oct 2, 2013 at 09:33PM

“We are at 20 Medical Marijuana States, plus Washington DC. Marijuana is currently legal in three states, Alaska, Washington, & Colorado.

Pennsylvania needs to flush the good ol' boys down the toilet in Harrisburg for any of this healthy, economy boosting legislation to move forward.

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10. Ian said... on Oct 2, 2013 at 11:01PM

“Lillian-
I understand you have your own perspective on pot, but you should look into the facts more. I am not trying to be rude or disrespectful, but you are WRONG. I am very pro pot and I am very against adolescents smoking weed. I admit i have smoked many many times and I am just about to turn 20 this year. I have no desire to bash anybody for their opinion but I will correct the facts. I suggest you check out Marijuana Policy Project, or MPP, via google. They have many scientific papers and documents on the subject. Please do not dismiss information because you believe it must be false. I really do believe in the cause. I hope you read this as I am willing to continue discussing this if you have any questions or arguments that I may not be aware of. Take care!
Ian

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11. tielman said... on Oct 3, 2013 at 02:34AM

“I'm always amazed at the money side of this Weed debate. For egs. our presant attempt at a Governor has his eye on the White House and he's got the current userspeak down pat. To the levell we're supposed to applaud and smile at. The rut he's stuck in, as vouched for by a contribution in this discussion who'se ear he has obviously found, is that old kernal the gateway conspiricy.
Assuredly put to the simplest test of all. For the many times when you've been stoned with your friends when if ever did someone suggest we all go and do : herion, crystal meth, coke, opium and ALL THE PRESCRIPTION KILLERS that are legally obtainable, with a Dr.s prescription of course ? When ?
The political impact time is Now. Gov Christy is history. Pennsylvania must begin again its Hemp industry that will allow State Soverenty to finance is own Affairs, assist the Federal Govt. where possible with its debt problems, but that we're doing fine thank you uncle Sam.”

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12. Mario said... on Oct 3, 2013 at 06:45PM

“Unfortunately, you are wrong Lillian. Read any information in new studies and you'll see that THC actually has shown to help cure various cancers, I'm sure when your older and get cancer you wont be opposed to using this amazing medicine. Also you need to read up on your neuro-biology before you start making statements that pot kills brain cells. Sorry to sound like a hater, but I cant stand when people use bunk propaganda to spread lies. Lets see.... huffing substances like glue kill braincells, why? because you cut off the oxygen from your brain.

The active ingredient in marijuana is THC along with cbd,cbdb, and various amounts of other cannabinoids. Do you know how they are recieved in the brain? I doubt it, but I'll explain it to you in the most dumbed down way I can. Basically your brain contains receptor cites that bind different neurotransmitters to receptors, neurotransmitters such as seratonin,dopamine,norepinephrine and so on. continue. on next post due to limitations”

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13. Mario said... on Oct 3, 2013 at 06:52PM

“Things such as eating,exercise and so on release these neurotransmitters, and guess what? what? oh my our brain has contained SPECIFIC cites for cannabinoids to attach to, and why? Because our brain creates neurotransmitters that mimic THC and other cannabinoids. The brain and body readily metabolizes these and maintains a fairly stable levels, unlike introducing lets say heroin, which mimics the pain reducing neurotransmitter endorphins. Unlike heroin though, THC consumption does not down regulate receptor cites as readily(which is what would cause a physical addiction). IN NO WAY does the introduction of said cannabinoids kill Brain cells. You might think that since the effects seem to slow the brain. That is only because the effects of cannabinoids on the receptor cites (through natural cannabinoids) is used by the body to reduce stress, and alot of it has to do with being able to let go of memories. This is why THC is shown to be a very good PTSD medication”

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14. Mario said... on Oct 3, 2013 at 06:58PM

“Also I have smoked pot nearly everyday of my life since i was 16, im now 25. I'm a College graduate with a degree in organizational management(although my passion is pharmacology,neuro-chemistry/biology). And I must say it seems like I'm a lot more educated, interested in being educated about, pretty much anything that has to do with the human body and brain than you are. I'm not trying to bash to hard, but please come with some REAL knowledge next time your going to try and demonize some people's life choices.”

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15. k said... on Oct 4, 2013 at 02:27PM

“I smoke (actually vaporize) twice a day, have for 20 years (I'm over 40). I am a highly motivated, highly compensated technical expert. Pot has not killed my brain cells, my motivation, or my life in any way. In fact, it's allowed me to leave behind drinking alcohol, which I used to do in excess. I have a career, a family, a house and a fantastic quality of life. None of the purported negative effects of pot have materialized for me. In fact, the only negative effect of my marijuana consumption is the fact that I presume my money is being funnelled to criminal organizations, and that's due to solely ot the illegality of it. Stupid stupid law supported by ignorant people.”

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16. VICTOR said... on Oct 20, 2013 at 03:26PM

“Hello, I am 63 years old and I have so much pain to it is ashamed, I need pot for my pain, all these medications that I take don't do anything for my pain. please some one help me, I live in Pennsylvania”

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17. Pauly bagodoughnuts said... on Oct 31, 2013 at 07:58PM

“I consider myself a conservative, but I do agree that Pa needs to reform its Marijuana laws 100%. I think it is a personal choice like alcohol or tobacco, not up to state or federal government to decide. I have, and will continue to voice my opinion to conservative lawmakers and candidates. The decision should be left up to the people.”

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18. Anonymous said... on Nov 4, 2013 at 09:12PM

“Just thinking; majority of people I have talked to that do NOT support the legalisation of marijuana are also pro-abortion? Coincidence? I think not. Baby killers. People that smoke weed are too busy putting money towards the munchies and watching horrible films and knowing its bad but its great!! Too high to think about making bad choices, just wanna have fun lay back and have the comfort of smoking and not letting the daily stresses of life impact us negatively so we feel the need to drink. Sit in the comfort of our home and blaze one and you'll see within those few moments you won't even remember why your day was so bad in the first place. LEGALIZE. -Chase I. P.s. my abortion statistic was false.
.”

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19. Anonymous said... on Nov 10, 2013 at 10:54PM

“I can't wait. I am so tired of waking up every morning and wondering, will today be the day I become a criminal? Just because I'm old, I hurt, and marijuana eases the pain and helps these old bones move without pain. I truly hope this happens soon. If not, I'm going to stick a For Sale sign in the front yard, pack the house up, and take my tax paying butt back home to California.”

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20. master grower421 said... on Nov 12, 2013 at 02:34PM

“Lets do it”

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21. Anonymous said... on Dec 9, 2013 at 05:13PM

“Legalize it it can make a lot if profit and it's fine”

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22. Anonymous said... on Dec 16, 2013 at 12:02PM

“I don't know if your information is incorrect or the police officer abused his power, but when I was arrested for smoking weed I was certainly put in handcuffs, but I'm not from Philly. It was not a pleasant experience.”

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23. Mr.legalize said... on Dec 16, 2013 at 10:39PM

“im from PA we need to legalize for ALL uses, I really want to move to Colorado and blase up there, are so many uses for it and most people do it anyway or at least most people I know honestly the sooner the better.”

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24. Anonymous said... on Dec 22, 2013 at 04:20AM

“The one thing I don't hear in all these posts is voting. I live in Pittsburgh and I take 3 different pain meds 4 times a day to help with my pain. I have smoked and I feel so much better after. Unfortunately I don't want to break the law. We all need to stand together and contact our legislators. I have sent letters and emails to our politicians saying I vote and these laws to change. They might not listen to me or my neighbor but thousands who write they can't ignore. In Colorado they didn't listen on the gun laws and got voted out. Use the voting booth to get rid of our old guard will effect the changes we need. They want to keep their jobs.”

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25. amphilos said... on Dec 30, 2013 at 12:46PM

“Thanks for this outstanding post... I could say a lot, about the Lillian's of the world. Also when are we going to wake up and throw the people who come with lies and bad science philosophy out of our body politic. When we realize that the PA State Legislature belongs to the people of Pennsylvania that's the hemp of the matter. If we look at our 100 year history we will have enough information and education as well as ammunition to appeal these lies. The State Legislature is the key in legalizing marijuana for medical recreational and industrial use it would be a win for the mom and pop business within our towns and cities big or small and that's a fact!

Thanks FAYD! Legalized don't penalize!”

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26. Anonymous said... on Dec 30, 2013 at 05:58PM

“Why is it not 18?”

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27. Anonymous said... on Dec 30, 2013 at 06:01PM

“I would qualify but not my age”

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28. Anonymous said... on Jan 2, 2014 at 03:10AM

“I have widespread body pain due to a rare disease, but I do not use pot to keep me from the pain that makes me feel like I am going to die; I use meloxicam, its legal and with insurance cost less than $10 a month, I'm not drug impaired nor have that pot funk on me.”

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29. Anonymous said... on Jan 2, 2014 at 03:17AM

“Mario you are incorrect, pot does not cure cancer, it only helps with the side effects of cancer treatment.”

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30. Anonymous said... on Jan 3, 2014 at 06:43AM

“I too am a long time user, not abuser, and didn't even start smoking until I was 18. An adult where under federal law I am legally able to make decisions, vote or even be drafted. If it is regulated, which it would be, it poses no threat to adolescents or anyone else. Especially if I am enjoying it alone, in my own house. Currently you're made to feel like a criminal just to buy it. Or you depend on unreliable & unregulated marijuana, and it's very tragic. I'd love to be able to just pop over to a store to purchase instead, I'm in the position I'm in now; knowing no one trustworthy, unable to buy and unable to sleep for days.

Oh a btw lilian, if you ever get cramps from your monthly period (possibly weekly it seems) you know what would help alleviate that discomfort? No not midol”

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31. Anonymous said... on Jan 15, 2014 at 12:28AM

“No victim, No crime! If the state truly cares about drugs and prostitution then put the money into better treatment programs and education. Stop wasting our tax dollars on victimless crimes. The only benefactors are private prisons. When Pennsylvania voters realize that Corbett is nothing more than a private prison building machine and not interested in decriminalizing anything, maybe then we can talk about silly Marijuana laws that don't make any sense.”

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32. Anonymous said... on Jan 28, 2014 at 12:37PM

“In fact, alcohol prohibition created entirely new opportunities for criminals to build fortunes and did nothing to stop people from drinking. Make it legal and put it in state stores , then we the people would know it isn't cut with something bad. The tax from it would help get our schools out of debt.”

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33. Anonymous said... on Jan 30, 2014 at 07:13AM

“If it's legalized. There should be no smoke shops! It should be dispersed threw a pharmacy in pill form. Also all prescription assigned the user should be forced to surrender all driving privileges. If caught under the influence of the substance should be the same as DUI.

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34. PaStoner said... on Feb 3, 2014 at 04:40PM

“I believe Mary Jane should be legalized (PA Resident). Do some research what harms does smoking a plant do to us. Nothing really but why are two substances such as Alcohol & Cigarettes legalized which are killing us. So PA Please LEGALIZE MARY JANE”

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35. Anonymous said... on Mar 12, 2014 at 08:24AM

“I bet all ur synapses look great, all nice and slow! You're cerebellum, too, nice and fried!!!! GO MJ”

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36. Anonymous said... on Mar 17, 2014 at 01:19AM

“Icant beleive what some of you ignorant stupid sick totally mis-informed crazy communist control freak evil cruel hateful A--HOLES say and think . You never smoked or you would understand how it effects people. Surrender your drivers license, take it in a pill..Are you nuts? People like you should not be able to vote, and need to smoke. And need to suffer with terrible pain so you can learn compassion. You would make a great Dictator.”

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