Saturday, September 22, 2018
It's no secret that recreational marijuana is a cash cow, but until recently, retailers have had no piggy bank in which to deposit all their earnings. However, thanks to the efforts of Gardner Federal Credit Union, marijuana dispensaries in Massachusetts may have found a home for their earnings. The Boston Business Journal has the story:
The bank said Friday afternoon that it would begin banking for the industry, working with Safe Harbor Services, a
wholly-owned affiliate of Partner Colorado Credit Union that is the leader in compliance-based cannabis banking services.
“As a credit union committed to helping people and serving the underserved, we found in Safe Harbor a partner who offered a viable and proven compliant-based cannabis banking option and a way to keep our communities safe. Our board of directors recognizes the need to provide banking services for the safety of our citizens in reducing the ‘cash on the streets’ and I applaud them for their vision and commitment to providing public safety," said GFA Federal Credit Union’s CEO, Tina Sbrega.
Banking has long been a thorn in the side of recreational marijuana retailers. Because marijuana is still illegal at the federal level, if a bank were to accept funds derived from marijuana sales, that would constitute money laundering. The resulting friction between state legalization and federal drug policy has created an business ecosystem where cash is king. Colorado marijuana entrepreneur Babak Behzadzadeh told The New York Times: "If we had bank accounts, it'd be much easier."
Safe Harbor Services began helping local banks and credit unions in Colorado accept marijuana money in 2014, serving a vital–and very profitable–role in the cannabis industry. The company has expanded its reach outside of Colorado, now offering its services to credit unions like Gardner Credit Union in Massachusetts. The company is able to help its customers deposit their cannabis profits "legally" by ensuring that none of the money is derived from activities specifically prohibited by the Cole memorandum, and that the banks who accepted cannabis cash were careful about what they did with it–specifically ensuring that it did not migrate outside of states in which marijuana was legal. However, with the recent rescission of the Cole memorandum by Attorney General Jeff Sessions, it is not clear that Safe Harbor will be able to continue offering their services to financial institutions.
Polls show that the majority of Americans favor legalization of marijuana, and 30 states have legalized the drug in some form. With this increasing momentum in favor of legalization, states have expressed an interest in allowing banks to accept money derived from marijuana sales in order to quell threats of violence and robbery to marijuana businesses, who generally carry large amounts of cash on hand. Whether the current administration will crack down on organizations like Safe Harbor and their partners like Gardner Credit Union in Massachusetts remains to be seen, but something will have to be done with all of the cash currently being generated by the marijuana industry.
September 22, 2018 in Banking, Business, Commercial Law, Decriminalization, Drug Policy, Federal Regulation, Finance, Law Enforcement, Local Regulation, Medical Marijuana, News, Recreational Marijuana, State Regulation | Permalink | Comments (0)
Friday, September 14, 2018
Officials initially issued warnings to the many perpetrators, but after many months of noncompliance, LA is now filing criminal charges against various retailers, growers, and delivery services.
The Los Angeles Daily News reports that earlier this month, prosecutors there have charged 515 people for helping to run 105 illegal marijuana operations:
“Our message is clear: If you are operating an illegal cannabis business you will be held accountable,” Los Angeles City Attorney Mike Feuer said.
It’s widely believed that Los Angeles has the world’s biggest marijuana market, and businesses have thrived for years under the state’s loose medical marijuana laws. But since the start of the year, new California laws have required all cannabis businesses to have both a state and city license to operate — licenses that can add costs to operations in the form of fees, testing requirements and hefty taxes.
The new laws also let cities regulate the marijuana industry, and many cities so far have opted against allowing such operations. Los Angeles, however, began licensing retail outlets in late January and most other types of marijuana businesses on Aug. 1. As of Friday, the city said 163 businesses have been given temporary licenses to operate.
But that represents just a fraction of the overall marijuana market, and for the past eight months, the City Attorney’s office coordinated with the Los Angeles Police Department to identify and investigate businesses that were operating without licenses. Most are retail shops, the City Attorney’s office said, but action also was also taken against marijuana growers, extraction labs and delivery services.
California and other legalized states, like Washington, and Colorado, continue to struggle with black market operations well after legalization has taken effect. In an effort to level the playing field, Los Angeles and other cannabis officials say they will take all measures necessary to crackdown on illegal operations. The 120 criminal cases recently filed in LA are intended as a loud and clear signal to all cannabis operators that they must follow the licensing regulations, or face the consequences.
--Manda Mosley Maier
Sunday, September 2, 2018
Several medical marijuana dispensaries that have applied to open operations in Fort Lauderdale, FL face denial of their applications as officials have decided to enforce an ordinance that limits the number of medical marijuana dispensaries allowed to open in the city. According to a Sun Sentinel report, the actions by city officials seemingly violate state law:
[S]tate law prohibits cities from limiting the number of dispensaries. A city is allowed to ban them outright, but if a city chooses to allow the marijuana treatment centers, they must be treated like any ordinary pharmacy.
Fort Lauderdale says that's a problem, because its law prohibits more than one dispensary in each of its four districts. City officials plan to reject three of the dispensaries that applied.
City officials have acknowledged that a dispensary wishing to challenge its law can do so in court. And while officials recognize they will likely lose if such a challenge is brought, they are unwilling to forego enforcement of the city ordinance based solely on a potential courtroom battle.
Monday, August 27, 2018
Medical marijuana is coming to Oklahoma, and the state began accepting and approving patient applications on the 25th. In June, Oklahoma voters approved the legalization of medical marijuana via a statewide ballot measure, and it is clear that decision will have major economic ramifications on the state. ABCnews.com has the story:
More than 1,600 people and businesses applied for Oklahoma medical marijuana licenses on the first day that applications were made available.
The online application system went live at 10 a.m. Saturday at www.OMMA.ok.gov for all potential medical marijuana patients, growers, dispensaries, processors and caregivers. Oklahoma State Department of Health spokesman Tony Sellars said that by Saturday evening, the agency had received 1,054 patient, 634 business and three caregiver applications.
Officials awarded 23 licenses to patients Saturday to test the approval process and will resume approving applications Monday, Sellars said.
Sellars added that the state collected $1.5 million in application fees on Saturday.
For those who have followed the saga of legalization in Colorado this is not a huge surprise. In 2017, total marijuana sales in the state reached $1.5 billion, with roughly $416 million of that total coming from medical-use sales. The state collected $247 million in taxes on marijuana that year. Based on these early numbers from Oklahoma, it seems as though the state can look forward to a similar boom in revenues resulting from the introduction of medical marijuana into their economy.
A pro-marijuana group in Oklahoma called Green The Vote has begun collecting signatures to qualify recreational marijuana legalization for a similar statewide ballot initiative, but as of this writing they did not have enough signatures to do so. Perhaps as the effects of medical marijuana legalization ripple throughout the state, Oklahoma voters will embrace the concept of full legalization.
Sunday, August 26, 2018
While many United States citizens are still waiting for their state to legalize adult-use marijuana, some New Brunswick universities are already educating their students on the rules, regulations, and effects of marijuana in preparation of its legalization. The Canadian Broadcasting Corporation (CBC) reports:
The legalization of cannabis is around the corner and, as school gets underway in the coming weeks, New Brunswick universities say they're prepared to roll with it.
Scott Duguay, associate vice-president of enrolment management at St. Thomas University, said he's unsure what type of reaction to expect from students when recreational cannabis becomes legal on Oct. 17, but he doesn't expect things to go up in a blaze of smoke.
Students will be allowed to possess marijuana on campus and in their residence. However, the university hopes to limit marijuana use by prohibiting the smoking of marijuana on campus and in student residences. Additionally, if students are high in class, they will be reported to student services. With Canada's relaxed laws on marijuana use, we will soon see the benefits and disadvantages of legalized marijuana in the college environment.
Tuesday, October 24, 2017
Some New York citizens are attempting to hold a state referendum to convene a state constitutional convention. They hope to accomplish state-goals like dismantling campaign finance laws, enacting term limits, and ending gerrymandering. But other supporters are seeking a state constitutional convention for a very different reason: the legalization of adult-use marijuana. Tom Precious of The Buffalo News reports:
Stymied in their efforts to get the Legislature and Gov. Andrew Cuomo to go along with their idea, these advocates see a convention of delegates brought together to consider changes to the constitution as a means to loosen marijuana laws.
It's not an easy sell. Nowhere on the statewide ballot is there any guarantee that any issue, whether it’s marijuana or anti-corruption ideas, would even be considered in a convention…. Recent polls reveal that 49 percent of New Yorkers support adult-use legalization of marijuana, compared to the 47 percent who remain opposed.
This referendum, known as Proposal 1, is seeking support from left-leaning citizens like proponents of Senator Bernie Sanders and Black Lives Matter. Such support is crucial because of the appeal that a constitutional convention could lead to sweeping changes in the law which would create more equal opportunities and treatment for the state's citizens.
Surprisingly, this effort is not inducing the support of pro-legalization groups like the Washington, DC-based Marijuana Policy Project. These groups are hesitant to support Proposal 1 because of their alliances on broader policy agendas with various groups that actively oppose the referendum.
Opponents of Proposal 1 fear the uncertain outcomes that could result from a constitutional convention—the United States last held one in 1787, and it led to the creation of an entirely new constitution. And while voters in New York consider whether to hold a state convention every twenty-years, the last one actually held was in 1968 and produced no changes to the state's constitution.
Another problem facing proponents of a state constitutional convention involves being badly outspent by their opponents:
[T]he one anti-Proposal 1 group, funded almost exclusively by an array of labor unions, has raised $1.5 million for its campaign to stop the convention. Four main groups backing the convention question have brought in under $400,000.
Meanwhile, pro-legalization supporters have raised less than $150,000 and spent just $9,700 in campaign expenditures since July. Raising money has proven difficult for supporters due to the overwhelming union opposition and the difficulty in convincing potential donors that the marijuana issue would even be decided if a convention was held.
Labor unions maintain a firm opposition to Proposal 1 because of the possibility that it would strip away hard-won rights, like collective bargaining. Nick Reisman of Spectrum Local News asked New York's AFL-CIO President Mario Cliento his take on Proposal 1:
“With those strong labor protections comes a way of life. We want to be able to protect what we have for ourselves and our families well into the future and that's why the labor movement in this state is so adamantly opposed to a constitutional convention[.]”
While every state that has legalized adult-use marijuana has done so through legislation, some citizens in New York have grown impatient with their state's legislature and thus are pursuing legalization through a different avenue. But this road to legalization contains many uncertainties— the most prevalent being whether the marijuana issue will even be raised if a convention is held.
Monday, October 16, 2017
Marijuana dispensaries for adult use have been operating throughout Nevada since July 1rst of this year. According to the Nevada Department of taxation, Marijuana sales have generated over $3.6 million in taxes during July month alone. Tax officials estimate that Nevada can generate up to $120 million in revenue by July of 2019. As expected, the immense tourism industry in Nevada has largely played a role in the massive economic success surrounding the legalization of adult use. However, with success comes new problems.
The biggest challenge many dispensaries are facing right now is a supply shortage. Dispensary employees are essentially waiting for marijuana plants to grow, so they can re-stock their shelves with fresh product.
According to Stacy Castillo, the General Operation Manager at MYNT Cannabis dispensaries:
"A lot of companies are having an issue with just being able to create production products because there's not a lot of source flower out there; so a lot of companies are moving in the direction of creating more square footage so they can create more grow space and creating more product; so that's why if we do experience any kind of delay in product it's because we're waiting for the product to be made."
But never fear, hopeful Nevada tourists! According to 3 Months into Recreational Marijuana Sales, Nevada Dispensaries Experience Pot Shortages by Olivia DeGennaro, there have been no reports of any Nevada-based dispensaries completely running out of marijuana and marijuana derivatives. Rather, dispensaries have been reported to have run out of select products. An additional problem Nevada-based dispensaries face in meeting demand is the legal battle of the distribution right of products intended for adult use. As the adult use market continues to thrive thanks to the tourism industry, representatives from established cannabis business like Castillo will continue to push for fully integrated dispensaries. By allowing full integration, dispensaries will be able to distribute marijuana products in a more cost-effective manner. In theory, these savings will be passed on to consumer (mainly tourists) which will thus continue to give Nevada a competitive edge in the tourism industry.
Sunday, October 8, 2017
Atlanta has joined a host of cities and states throughout the country which have drastically reduced the penalties for marijuana possession that the federal government established decades ago. Atlanta's unanimous decision to decriminalize marijuana possession has inspired legalization advocates nationwide due to its breaking away from both the federal government and the state its located in. Carl Willis of WSB-TV reports the impact of Atlanta's new law:
The current law allows for a penalty of up to $1,000 and up to six months in jail for anyone caught in possession of less than 1 ounce of marijuana. The new legislation would lower that to just a $75 ticket and no jail time.
Councilman Kwanza Hall proposed this legislation during his current run for Atlanta's mayor. State Senator Vincent Fort, another candidate for mayor, also supported Hall's decriminalization efforts. They have both stated their motivation behind their efforts involves how the former law unfairly punished African-Americans.
Citing studies that show whites and blacks use marijuana at virtually the same rate, they reveal that 92 percent of Atlanta's arrests for marijuana possession under an ounce are African-American.
Stanley Atkins, an Atlanta citizen, supports the new law because a marijuana arrest as a teenager caused him to lose his employment. Atkins explains how the former law ruined lives:
"I have associates who have completely lost jobs. They've lost careers. I know students that have lost scholarships," Atkins said. "That cancels an internship, which later on cancels a potential job opening."
Opponents of the ordinance fear that removing jail time from marijuana possession offenses will be a disservice to young people because "it could encourage them to take more risks with marijuana, which some consider to be a gateway to harder drugs."
Another worry stems from increased driving fatalities. Police believe this law will "contribute to an increased possibility of folks driving under the influence of marijuana."
While this may be a big step towards Georgia pursuing similar laws statewide, the new city ordinance does not supersede state law. Thus, Georgia could withhold funding or send in state police to compel Atlanta to adhere to its state's law, if it so chooses.
Alternatively, Atlanta's Chief of Police could ignore the ordinance and continue making marijuana possession arrests. However, State Senator Hall believes this is an unlikely outcome due to police desiring stronger community relations. And when a community unanimously passes such legislation, Atlanta's police may find itself reluctant to go against the public's wishes.
Saturday, September 16, 2017
In Iowa, elected executives are advising the State's Department of Public Health to refrain from corroborating with its neighboring states to obtain cannabis oil. Barbara Rodriguez reports on how the lack of federal enforcement is causing confusion among states concerning how to implement medical marijuana legislation, according to an article in The Des Moines Register:
An unusual attempt by Iowa to work with another state to transport medical marijuana oil across state lines is on hold amid legal concerns it could invite scrutiny from the federal government.
The Iowa Attorney General's office advised the Iowa Department of Public Health this month that it should not implement a small section in Iowa's new medical marijuana law that requires the state, before the end of the year, to license up to two "out-of-state" dispensaries from a bordering state. Those entities would have been expected to bring cannabis oil into Iowa in order to sell it.
That's considered illegal under federal law, which categorizes marijuana as a type of controlled substance that is prohibited from being moved across state lines. But during the final hours of the legislative session in April, some Republicans in the GOP-controlled Legislature suggested adding the language to open the door for a partnership with a neighboring state like Minnesota.
The development is not expected to impact other provisions in the law that call for establishing an in-state production system for cannabis oil by the end of 2018. Still, some GOP lawmakers expressed frustration with the news because the provision was also aimed at creating more immediate access to cannabis oil. Currently, Iowans have no way of getting the product within the state.
House Speaker Linda Upmeyer, R-Clear Lake, noted in a statement that no matter what the Legislature had decided, the state still would have been in violation of federal law.
"As I've said before, the federal government needs to act on this issue or let the states do their work," she said, adding, "The out-of-state distributors are the quickest way to supply sick Iowans with a product that doctors say could be beneficial. If that provision doesn't work out, then people will have to wait another year, and that's disappointing."
Possessing, manufacturing and selling marijuana remains illegal under federal law. In 2013, the Department of Justice issued a memorandum offering assurance that states could proceed with medical marijuana programs without fear of federal prosecution, in part by avoiding agreements that would move marijuana from one state to another.
Geoff Greenwood, a spokesman for the attorney general's office, said in an email that if a state program authorizes or encourages diversion from one state to another, "it is possible that state's program may come under increased scrutiny from the federal government." He said the halt on implementation should remain "until the federal government provides further guidance regarding state medical marijuana programs."
The out-of-state dispensaries provision is tucked into the second-to-last page of a 20-page law, and is separate from requirements that Iowa license up to two cannabis oil manufacturers in Iowa and up to five dispensaries to sell it in-state. The oil would be supplied in Iowa by the end of 2018. Smoking marijuana remains prohibited.
Fear of federal enforcement against states who have legalized marijuana in some form is not new, but rather has steadily increased since the Trump administration assumed office in 2016. Although the Obama administration issued memorandums assuring states with medical marijuana regimes that they would be free from scrutiny if they followed certain standards, that may not be the case much longer. The United States Attorney General, Jeff Sessions, firmly believes marijuana is a dangerous drug and claims he will reconsider existing marijuana policies.
Assuming nothing changes in President Trump's federal enforcement of marijuana, Iowa's proposal to work with neighboring states presents a potential problem, even under the Obama administration's prosecutorial guidelines. The Cole II Memo stated that states could avoid federal intervention of its medical marijuana regime if they followed eight federal priorities. The pertinent priority here being to prevent the diversion of marijuana from legal states to illegal ones.
While Iowa's proposal only includes corroborating with its direct neighbors who have also legalized medical marijuana, the transportation of marijuana products across state lines is considered interstate commerce, thus invoking Congress' authority under the Constitution's Commerce Clause.
Therefore, Iowa's proposal not only clearly contradicts Congress' Controlled Substance Act, but may also trigger judicial review because Congress has clearly preempted the transfer of interstate marijuana. By proposing such a law, Iowa's legislature is inviting scrutiny from all three branches of government, something marijuana advocates attempt to avoid whenever possible.
Friday, September 8, 2017
Manhattan District Attorney Cyrus Vance, Jr., has announced new sentencing guidelines in low-level marijuana possession cases. As reported in an article in PoliticoNewYork, the change will be an encouraging step for supporters of immigrant rights and recreational marijuana use.
The new approach is expected to help some immigrants avoid penalties that could lead to deportation and comes amid backlash from municipalities and states over President Donald Trump's immigration policies — specifically the use of courts to identify and deport undocumented immigrants. Vance announced that his office is also working on a policy, to be implemented in the spring, to end prosecutions for low-level drug possession.
The sentencing guidelines for marijuana possession in the Manhattan DA's office previously offered a 12-month "adjournment in contemplation of dismissal" — or ACD — on the first offense, where the case is adjourned for 12 months and then dismissed and sealed if the defendant isn’t arrested again.
On a second offense, the previous guidelines allowed for the defendant to plea to either a marijuana violation or a disorderly conduct violation.
Now the Manhattan DA will offer an ACD for three months for the first offense and an ACD for six months for the second offense.
Vance explained the decision in a statement saying that a year is too long to have an open criminal case for a low-level, non-violent offense because it is publicly searchable online and can interfere with applications for college financial aid, housing or a job.
The city expects that some 4,100 individuals a year will be affected by the change. The program is set to being in the Spring of 2018. Proponents expect that it will mean fewer deportations for low-level possession.
-- Clarissa Dauphin
Monday, September 4, 2017
Despite the passage of legislation legalizing recreational cannabis in Alaska, local government remains an obstacle for some marijuana businesses. One business owner was able to successfully set up shop on the historic main street of an Alaskan tourist town -- Talkeetna, Alaska -- in an unincorporated municipality, all thanks to an omission in the legislation. The drafters don't always cover every base, and here we see that playing out. From Leafly.com:
“Small towns in Alaska are harder than anywhere to break into and sort of become accepted,” McAneney said.
His store got its approval from the borough on a technicality when the assembly was writing regulations for marijuana businesses in unincorporated areas, like Talkeetna, and inadvertently omitted special land use districts — like the town’s Main Street. Talkeetna has no local governing body, only a nonvoting community council whose sole power is sending recommendations to borough officials roughly 75 miles (120 kilometers) away.
State regulators approved the store’s permit on a 3-2 vote last spring.
“There’s people that are upset about it, but it’s legal,” said Sue Deyoe, the Talkeetna Historical Society and Museum’s executive director.
-- Christopher Daves
Colorado is at the forefront for many things cannabis. but its laws aren’t always so friendly. Smoking weed in public has been illegal in Colorado, but Denver voters last year approved a measure to allow licensed social clubs where marijuana could be consumed on the premises. An Associated Press report notes that startup businesses are now seeking to fill the gap in available places for legal users to smoke. But it's not easy. Detailed restrictions include prohibitions against serving alcohol or being within a certain distance from places that do, restricting the ability to dispense marijuana on site, and license fees in the thousands of dollars. From the report:
"There are plenty of places where you can consume alcohol. Let's give people a place to go to consume marijuana," said Jordan Person, head of Denver NORML, which advocates for pot-friendly public policy.
But Denver's would-be "social use" clubs have faced one delay after another.
First, the state liquor board prohibited pot use at any place with a liquor license, making bars and many restaurants off-limits. And pot shops can't allow consumption on the premises.
That left gathering places like coffee shops, art galleries and yoga studios. Furthermore, would-be clubs must stay twice as far as liquor stores from schools and anywhere children congregate, including playgrounds and sports fields.
"We can't be in places where it makes sense," said Kayvan Khalatbari, a Denver marijuana consultant who helped run last year's club campaign.
City officials say the rules are as flexible as possible given stiff resistance from some community groups and marijuana skeptics. The voter-approved club measure also says the club licenses are a pilot program and neighborhood groups must agree to allow a club before it could open.
The voter-approved club measure also says the club licenses are a pilot program and neighborhood groups must agree to allow a club before it could open.
"There were no surprises in the rules," said Dan Rowland, spokesman for the Denver department that regulates marijuana businesses. "They reflect all the comments we got from the community."
One hopeful applicant says the regulations are stringent but still a step forward for the industry.
"A lot of us are hoping this will ... open the doors for a new kind of business," said Connor Lux, who runs a co-work space for the cannabis industry and plans to apply for a social use license to hold public, weed-friendly events at his business just north of downtown Denver. Applying for a license costs $1,000; the licenses itself is $1,000 a year.
-- Clarissa Dauphin
Tuesday, January 12, 2016
Some new neighborhoods may be getting marijuana dispensaries in Seattle, thanks to a decision by the City Council to reduce buffer zones around cannabis-related businesses. A combination of zoning rules and the state's default 1,000-foot buffer zone rules meant that large chunks of the city had no such businesses. That's changed, as of yesterday:
On Monday, the City Council unanimously set buffer zones for producers and processors at 250 feet.
For retailers, the new buffer will be 250 feet downtown and 500 feet elsewhere in the city.
No more than two pot businesses can be within 1,000 feet of each other.
The 1,000-foot buffer had led to vast areas of the city without marijuana businesses and clusters in areas like SODO, where James Lathrop runs Cannabis City, the first legal marijuana store to open in Seattle.
"We're a block away from the dump. We're here because of this crazy zoning," Lathrop said.
Lathrop was among the marijuana business people who advocated for smaller buffer zones.
Supporters said loosening the buffer zones will help the state's legal marijuana system succeed by competing with the illicit market, and make it more available to visitors.
Some in the industry are also opposed to smaller buffer zones.
They urged the council to slow down, arguing that pot shops in more neighborhoods could lead to public backlash and businesses failing under competition.
Thursday, January 7, 2016
Marijuana businesses, with their associated smells, traffic, and crime, are not being located in affluent white residential areas. That's according to a piece this week in the Denver Post. Rather, they're being zoned into commercial and industrial areas which is where poor people and minorities disproportionately reside. The Post has an interactive map, a snapshot of which is above.
The Denver Post used a city database of more than 600 marijuana business licenses to examine where industry growth has occurred and which neighborhoods faced the biggest transformations.
Facilities that grow recreational pot have concentrated along the I-70 corridor to the north and the Santa Fe Drive and I-25 corridors to the south, in neighborhoods where residential and light industrial areas mix.
Other marijuana-related businesses — medical dispensaries, retail outlets and marijuana-infused-product factories — have pocketed along thoroughfares such as Colfax Avenue, Federal Boulevard and Broadway, the analysis shows, and the neighborhoods that surround them.
"Many low-income neighborhoods are next to industrial sites. That’s just the lay of the land," said Charlie Brown, a former Denver city councilman who led committees that studied and recommended rules on where the businesses could go. "To change the rules today is tricky."
Neighborhood residents and business leaders say they’ve been concerned since the beginning that Colorado’s new marijuana industry would settle into their backyards and that communities of color and lower incomes would see a disproportionate share of those businesses.
"You would think we’ve borne our fair share already," said Candi CdeBaca, a member of the Cross Community Coalition in Globeville and longtime resident there. Her home — in the family since her great-grandfather — faces a large marijuana grow operation.
So zoning drives unpleasant uses into poor neighborhoods and away from rich ones? Who could have seen that coming?
Tuesday, January 5, 2016
Boulder, Colorado, is implementing a marijuana education plan for teenagers, according to a piece on Colorado Daily.com.
A survey last year by the city showed that a substantial majority of teenagers believed that binge drinking was harmful, but that regular use of marijuana was not. The city of plans to make $250,000 available this year to change the perceptions of young people on marijuana.
Those in charge suggest that the program will focus on comprehensive substance abuse education, not just marijuana. The fear is if that you focus on one and not the other then you are telling the kids that one is less harmful than the other. The program wants to instill that the abuse of any substance can be harmful.
Substance abuse, say supporters, rarely happens in isolation and the program will work on helping kids with their “refusal skills.” Those in charge say that the money fueling the program will go to groups that have already been working on substance abuse programs in Boulder. The basic game plan is to fund these groups for three to five years and use an evidenced based approach -- as as opposed to simple scare tactics -- to change public perceptions. From the article:
Even as the perception of risk is going down, the 2013 Healthy Kids Colorado Survey found that the number of teenagers who had ever tried marijuana declined from 39 percent in 2011 to 37 percent in 2013 and those who had used it in the last 30 days declined from 22 percent in 2011 to 20 percent in 2013. The decrease was not considered statistically significant. The 2015 Healthy Kids survey is being conducted now, with results to be released in 2016.
The city may also give money to efforts to educate parents about preventing accidental ingestion of edibles by young children. Hospital admissions for accidental ingestion have increased threefold since recreational marijuana was legalized, according to the Colorado Department of Public Health and Environment.
Shawn Coleman, a lobbyist who represents marijuana businesses in Boulder, said it's not surprising that the city would put money into education, as that was one of the allowed uses for a special marijuana tax approved by voters in 2013. However, without evidence that teen use is increasing, he would like to see some of that money go for more clerks and inspectors so that it is easier for businesses to renew their licenses and expand their businesses.
In addition to regular sales tax, Boulder has an additional 3.5 percent sales tax on recreational marijuana and a 5 percent excise tax, approved by voters in 2013. The ballot language says that tax revenue should go first for administration and law enforcement resources related to marijuana, then for "treatment, education, responsible use, intervention and monitoring with an emphasis on youth," then for the general fund.
In 2014, those marijuana-specific taxes generated $1.05 million, and the city had collected $1.6 million as of September of this year, the most recent month for which final sales tax numbers are available.
Stetson Cromer is a 3L student at Texas A&M Law School in Fort Worth.
Monday, January 4, 2016
An Arizona company in November won approval from a town in Maryland to open a cultivation in exchange for offering the city a 5% equity stake in the company. Residents of Hancock, Maryland (pop. 1,545) were split between excitement over the increased funding and feeling bribed into gaining an advantage for one of the limited number of Maryland licenses. Lawyers reviewed and addressed the legality of this type of agreement and city officials signed the agreement with Harvest, Inc., in early October.
The State of Maryland is offering 15 growing licenses to the entire state and over 400 applications have been received. The CEO and president Harvest, Steve White said the agreement with the town is not a bribe because it is the state and not the city that determines who gets the 15 growing licensees for all of Maryland. While the agreement with the town does not necessarily seal the deal, they will more than likely be granted a license based heavily on the agreement.
Because marijuana is still federally illegal, states like Colorado and Washington have had to be very careful with cities that do not want legalization in order to sidestep the preemption issue. To have a city that is not only willing, but also invested in a certain company obtaining a license illustrates to officials that there is one less city for them to worry about. It also starts a trend that gets cities on board one way or the other. Currently, Colorado applicants are restricted to a mere 33% of the state allowing operations in their city. In Washington there are zoning disputes left and right because the state law does not expressly prohibit cities from opting out of the state law, and thus cities are finding every way they can to keep these licensees out. If cities were able to bargain reasonably and not extort licensees I could imagine those currently suffering through zoning disputes would gladly offer up 5% equity in exchange for operating under the support of the City.
But how conscionable it is for cities to receive tax benefits from the State from sales generated by retail sales as well as a 5% equity on a cultivation company, just for the ability of the company to operate as normally as any other business would? The facility White anticipates for his cultivation is gated and all operations take place inside of a large manufacturing plant. There is no eyesore, noise, or other operating conditions which would even merit an additional permit from the city, and yet the company still felt the need to ensure a harmonious relationship by way of a 5% equity. That is unsettling for owners of cannabis businesses, most of whom are mom and pop start-ups with limited start-up capital. The tax revenue generated by retail sales alone should be enough to encourage cities to be supportive, and welcoming to these new highly profitable businesses.
Kayla Brown is a 3L student at Texas A&M Law School and is the Executive Director of the Texas Cannabis Industry Association.
Friday, May 8, 2015
The well-oiled crony-capitalist marijuana ballot initiative in Ohio may find itself with some competition come election time. The Buckeye State'sattorney general has initially certified the "Legalize Marijuana and Hemp in Ohio" ballot initiative, sponsored by a group called "Better for Ohio." which means it can now start collecting some 300,000 signatures by July 1 to qualify as a ballot initiative.
But there's not a lot of difference between the proposal already being pushed by "ResponsibleOhio," a group of rich and politically connected people who are trying to get a state-granted monopoly on weed built into the state constitution. The LMHO initiative basically sticks to that monopoly -- even using the same 10 properties ResponsibleOhio plans to use for growing and processing weed -- but it does add the options for individuals to own a few plants of their own withpout state registration, which may make it more attractive to some voters.
There's also a strange provision that seems to allocated licenses based on serial numbers of several mysterious $100 bills now locked in a safe, but whose serial numbers would under the bill become part of the Constitution of Ohio. Owners of those specific bills would apparently get the license. I'm a lawyer and I find that part of the amendment baffling at first (and second) read -- and the backers don't seem to have offered an explanation about how at works.
Tuesday, March 24, 2015
As Douglas Berman pointed out, Derek Siegle, executive director of the federally funded Ohio High Intensity Drug Trafficking Area Program, presented a guest column piece today at cleveland.com, in which he included nearly every argument he could imagine in opposition to ending marijuana prohibition. His article presents a wonderful (if stream-of-consciousness) summary of all the main talking points currently used by HIDTA officials around the country. This seems like a great opportunity to dispel some of the dire warnings we often hear. I’m cherry picking here, since there are so many arguments, a full response rather longish. But here are some of the more commonly used, and abused, arguments I see out there.
Not that many people are arrested for marijuana possession, so the impact on the criminal justice system isn't that great.
I never really understood this argument. It seems to be saying "we could be jailing everyone, but we really aren't doing it all that much - so that's good, right?" If it is so rarely invoked, then why allow for jail time at all? It seems to suggest that even the system recognizes that jail is not an appropriate sanction.
Of course, lots of people (particularly African Americans) are arrested for possession, so this argument might not be as compelling for those lucky contestants who win a free police escort to their local jail. But more to the point, the criminal justice system is far more than incarceration. Jailable offenses mean court appointed attorneys or private counsel, courtroom time, and the time law enforcement spends processing cases. On the back end, it can mean the loss of personal property and money in asset forfeiture proceedings, along with probation. Even technical violations of probation rules can lead to (re)arrest and incarceration, which would not show up in the claim that possession doesn't often lead to jail time. And then there is a criminal drug conviction that could show up in background checks for jobs, school, and housing for a lifetime.
Heavy consumers may find that the accumulation of THC in their system can affect them in a variety of ways, both physically and mentally.
If this is true, it is a compelling reason to not over-consume, but there is no reason to believe that criminalizing behavior changes people’s practices. Research has shown that teen use does not go up when penalties go down. Nebraska and Mississippi removed the possibility of jail in the 1970s, and teen use is lower in those states than in neighboring Texas, which treats possession as a crime. Studies also generally show that raising penalties for use does not deter behavior, and lowering penalties does not encourage behavior. The bottom line is that while marijuana over-consumption could possibly be a health concern, making it a crime does not deter consumption nor deal with the actual concern mentioned here - health.
Marijuana is more potent than it used to be.
There is some evidence that marijuana is more potent that it was several decades ago, but unlike both narcotic medications and alcohol — which take the lives of tens of thousands of Americans every year — there are no known incidents of overdose deaths attributable to marijuana at any time. Despite its increased potency, it is still a safer alternative than substances we already regulate and control.
Potential tax revenue will only cover about 15 percent of the collateral costs to our community: increased drug treatment, emergency room visits, crime, traffic accidents and school "dropouts."
While it is not clear where HIDTA's statistics come from, the Congressional Research Service did an analysis of the revenue potential of a federally taxed adult marijuana market, published in November 2014, which is directly on point. It found these costs manageable with a modest tax:
Economic theory suggests the efficient level of taxation is equal to marijuana’s external cost to society. Studies conducted in the United Kingdom (UK) and Canada suggest that the costs of individual marijuana consumption to society are between 12% and 28% of the costs of an individual alcohol user, and total social costs are even lower after accounting for the smaller number of marijuana users in society. Based on an economic estimate of $30 billion of net external costs for alcohol, the result is an external cost of $0.5 billion to $1.6 billion annually for marijuana. These calculations imply that an upper limit to the economically efficient tax rate could be $0.30 per marijuana cigarette (containing an average of one half of a gram of marijuana) or $16.80 per ounce. An increased number of users in a legal market would raise total costs, but not necessarily costs per unit.
We do not know what the wholesale or retail sales rate would be under the better-known legalization effort in Ohio, or if they are comparable to prices in other parts of the country for similar products. If they were, a tax rate of 15% would be considerably higher than $16.80 per ounce.
States that do not tax medical marijuana find that their adult consumers cheat and sign up as medical marijuana patients. And most medical marijuana patients are under 40.
First of all, the “most are under 40 argument” is simply false. According to state marijuana program statistics, the average age of patients in Colorado is 42. The average in Montana is 47, and the average in Arizona is between 40 and 50.
Secondly, in states that have both medical marijuana and adult use, whether or not people are gaming the system is a question for regulators, not an argument in favor of maintaining the criminality of marijuana use. It is worth noting that according to research by the Toronto-based Center for Addictions and Mental Health and the Canadian Centre for Substance Abuse, there are somewhere between 400,000 and 1 million self-reported medical cannabis users in Canada, or approximately 4% of the adult population, while only around 1/10 that number are registered patients. It is hard to speculate how many adult consumers would qualify as patients. But at the end of the day, it took a medical professional - not a law enforcement officer - to recommend medical use of marijuana in the first place.
Legalization will lead to greater use by our youth.
This statement is directly contradicted by peer-reviewed studies, which show that teen use either remained constant, or more often than not, dropped in medical marijuana states. (One interesting question is whether or not teen use of alcohol went up or down after alcohol Prohibition ended. Incidents of reported alcoholism actually did drop based on medical records from the time, but I have never seen this issue researched with respect to teen use.)
Marijuana is a gateway drug.
No anti-marijuana opinion piece is complete without the gateway drug myth, which has been repeatedly debunked by those who have actually studied it, most notably in a White House-commissioned study by the Institute of Medicine in 1999. That study found that marijuana "does not appear to be a gateway drug to the extent that it is the cause or even that it is the most significant predictor of serious drug abuse.” The gateway myth confuses causation and correlation. As recently explained by Susan Weiss, a psychologist with the National Institute on Drug Abuse, “[p]eople tend to use marijuana before they use other illicit drugs, but that’s probably because it’s much more available, and it’s the drug that people are more likely to come in contact with.” Just like alcohol does not cause people to use marijuana, marijuana does not cause use of harder drugs.
I would also point out that California has allowed practically unregulated medical marijuana since 1996 without any perceptible increase in hard drug use. 22 other states and D.C. followed. Where are all the new cocaine and heroin users ushered in by these laws? But hey, it sure sounds scary.
Accidents and fatalities on the highway will increase if marijuana is more available as it has in Colorado.
The Colorado Department of Transportation has called out HITDA for misusing state statistics in the law enforcement agencies' repeated efforts to advance this argument. In reality, very recent research by federal government’s own National Highway Traffic Safety Administration (NHTSA) found THC-positive drivers possess no elevated risk of motor vehicle accident, after adjusting for drivers’ age and gender. NHTSA acknowledges that this is the largest US-based crash risk assessment ever performed. They also note that their findings are ‘in line’ with other well-controlled studies also finding little to no increased risk.
If marijuana is medicine why isn't it prescribed?
This is one of my personal favorites. Here’s why not:
- The Food and Drug Administration (FDA) studies and approves or rejects drugs for prescription use.
- It doesn't study a substance for medical benefit if the drug is already scheduled as having no medical benefits - it needs to be rescheduled first as something with at least theoretical medical benefit.
- The DEA has the authority to reschedule marijuana, thus enabling the FDA to begin study in earnest, but refuses to do so until there are studies on its medical benefit.
- Any studies on medical benefit (or any other use) must use marijuana provided by the National Institute of Drug Abuse (NIDA).
- NIDA has an institutional policy, imposed by Congress, to only make marijuana available for research if that research examines its harmful effects.
The lack of study is based on the federal government’s general policy to refuse to make it available for studies on its benefits – not because marijuana actually does lack medical benefit.
Crime went up in Colorado after legalization.
No, it did not. Well, some types of crime did go up, while other categories dropped. The claim that crime increased selectively reports the data in order to fit the theory, ignoring the crime rates that dramatically fell. In fact, it's probably too early to really know what has happened to crime rates, although street cops in Denver don't seem to think it made much difference.
As I mentioned in the comments section following Doug’s post, the real problem with these sorts of arguments is that they lack any solution except "maintain the status quo – or else!" All they really do is present the possible harm to society/kids/budgets/crime rates if things change. But in reality they have been changing for decades and the sky is still, well, in the sky. If there really were horror stories to tell based on what states have been doing since reducing criminal laws since the 70’s, or adopting medical marijuana laws since the 90’s, or legalizing marijuana since 2013, we would not be arguing about hypotheticals.
March 24, 2015 in Decriminalization, Drug Policy, Federal Regulation, Law Enforcement, Legislation, Local Regulation, Medical Marijuana, News, Politics, Recreational Marijuana, Research, State Regulation, Taxation | Permalink | Comments (0)
Tuesday, March 10, 2015
Little North Bonneville, Washington (pop. 968) has opened the first government-owned marijuana store in the country. The city, which lies up the Columbia River an hour east of Portland, Oregon, sees selling weed as a key to promoting itself and raising some badly needed money for the city coffers. USA Today has the story:
The Cannabis Corner in North Bonneville, Wash., opened over the weekend. The store is run by the town's public development authority, which the town specifically created to open it. The town loaned the store $15,000 to get the store going, a loan the authority has since paid back with money raised from private investors.
"It's great. It's a mixture of excitement and relief," said Mayor Don Stevens. "It's been a real community effort and it's absolutely rewarding to see."
Under Washington's legal marijuana system — the first legal sales began July 8, 2014 — store licenses are handed out based on population and geography. By snagging one of Skamania County's two available licenses, North Bonneville ensures that government officials play a major role in marijuana sales, which they say will help them keep pot out of the hands of kids while benefiting the town's bottom line.
In an extensive Q&A posted on the town's website, town officials note their lagging economy, property values and sales tax collections. Stevens said the town also hopes to persuade marijuana growers and processors to buy or lease land in the town, bringing with them possibly dozens of jobs. North Bonneville is inside the Columbia River Gorge, nearly 50 miles east of Portland, Ore.
"The reality is that our property values are already at record lows. It's hard to imagine how being in the forefront of an emerging era with the increased tourist traffic, greater economic opportunities and a national media (presence) could lower property values any further," the town said. "The only way appears to be up."
Washington state only permits 334 licensed marijuana stores statewide, although far fewer have actually opened their doors. Colorado, in contrast, put no limit on the stores and already has about 336 of them, although all are privately owned. The entire industry, of course, remains in violation of federal law, although the Justice Department has said it will generally leave alone marijuana stores that are doing a good job keeping pot away from kids and profits out of the hands of drug cartels.
By running the store, the town gets to keep any profits. Under state law, marijuana tax revenues go back to Washington state. In Colorado, cities and towns can collect their own sales taxes on pot purchases made at retail stores.
Stevens said he expects other Washington cities and towns will seek their own marijuana stores once they see the success North Bonneville expects. He said the fact that national news outlets are covering the story indicates the town is on the right track.
"I think this store is one more facet of the total package we have to offer," he said.
Other towns may start to look at North Bonneville if the project proves successful.
ADD: City mayor is the first customer, buys "one-gram packages of four varieties. He said he had tried two of them, Nobama Diesel and Blue Magoo, and found them 'quite enjoyable with a calming effect that made my evenings very relaxing.'"
Wednesday, March 4, 2015
There are fair weather libertarians, and then there are Texas Libertarians. Rep. David Simpson is most certainly the latter. As noted by Prof. Snyder, he has presented a bill in Texas that utterly removes penalties for marijuana. All of them, for everyone. No regulatory system, either.
The press around the bill so far has centered on his reasons for doing so: God made the plant and put it here, why do we need to micro-manage it? (I would add to that argument by mentioning that for those of you who believe in a Creator, God also built our brains with cannabinoid receptors and then placed exactly one plant on Earth that just so happens to make cannabinoids. And our government has banned it.)
But I applaud Rep. Simpson for doing something few “libertarians” are really willing to do – apply his unapologetic ideals to marijuana. For many, libertarianism is really just a way to frame traditional conservative talking points. It’s easy to hate Obamacare and claim it’s because of libertarian views if enough voters in your district hate President Obama.
But step outside the traditional conservative talking points, and those very same ideals can quickly disappear. Take for instance a popular refrain of libertarians - state’s rights. Recently, former Oklahoma Attorney General Scott Pruitt, self-proclaimed champion of state’s rights, lobbed a hand grenade into the legalization debate when he joined with his counterpart in Nebraska to file a lawsuit with SCOTUS intended to block Colorado from proceeding with its adult market. Here is a state’s rights advocate, jumping up and down on the playground demanding that the federal government go make Colorado cut it out. Who cares what the citizens of Colorado voted for. And still support.
And then there is Arizona Rep. Bob Thorpe, another one of these so-called libertarians, who saw a ballot initiative coming in 2016 that would impose a legalization system like Colorado’s. He presented a bill this year that would require that voter initiatives designed to establish state laws that are inconsistent with federal law can only pass with a 75% or greater majority vote. It was so obviously inconsistent with his own platform he was even called out by reporters in the course of announcing the bill.
Good ol’ Cannabis sativa L. It sure does have a powerful effect. For some, it gets them high. For others, it can alleviate pain or help them sleep. For fair weather libertarians, it can make them forget their talking points. Thank you Rep. Simpson for reminding us what it really means to be libertarian.
March 4, 2015 in Decriminalization, Drug Policy, Federal Regulation, Local Regulation, Medical Marijuana, Politics, Recreational Marijuana, State Regulation, Voter Initiatives | Permalink | Comments (0)