Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

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Monday, January 27, 2014

Why local governments should NOT be allowed to opt out of legalization (or prohibition)

I’ve heard it said that if you like federalism, you’ll love localism. The idea is that some of the key benefits of devolving policy onto the states, such as the ability to tailor policies to fit geographic preferences, can be realized to an even greater degree by devolving policy onto localities. If control of marijuana policy is handed to the states, for example, then the people of Mississippi can ban the drug while the people of Colorado legalize it. More people are happy with this outcome than the same policy were foisted on both states. But if local communities within both states were allowed to opt out of the choice made by their respective state majorities, even more people would be happy with the outcome. What is more, since most of the costs and benefits of marijuana likely fall upon people who live near users and distributors (e.g., the cost of drugged driving accidents), such devolution would not present a collective action problem. Perhaps this is why Doug welcomes the idea of legalization states like Colorado giving local governments the ability to ban marijuana in their borders. Let the voters of each locality decide what to do because they’ll ultimately bear the costs and benefits of their choices.

I can see the upside of granting local control. But I think giving local governments a say over whether marijuana is legal has some overlooked costs, and these costs could outweigh the benefits of localism.

First, there is a cost to adding one more decision-maker into the mix. If localities are empowered to ban (or legalize) marijuana, policy advocates will now have to lobby three (or even more) different layers of government to secure their preferred policy outcome. The time and resources spent trying to persuade Congress, the Executive branch, 50 state legislatures (and electorates), 50 state governors, and literally thousands (if not tens of thousands) of localities about how best to regulate marijuana represents a significant cost. Perhaps it’s the price of democracy. But I suspect the arguments that would be made before local city councils would be (and are) largely a rehash of well-worn arguments already being heard on national and state stages: Is marijuana safe? Is prohibition effective? Is this mic on? and so on. I doubt the gains from granting every local government the ability to opt out of legalization (or prohibition) outweigh the costs of having to make the same basic decision again and again and again.

A second related cost stems from the complexity inherent in such a dis-uniform localist regime. This cost will be greater the more leeway local governments have in dealing with marijuana. Indeed, there could be endless variation in terms of how local governments choose to regulate the drug. And such variation wouldn’t necessarily reflect the unique and deep seated preferences of local voters, as opposed to what the different officials assigned to translate mandates into legal text had for lunch. But the variation would increase the costs of compliance, as businesses will have to spend more to understand differences in regulations across the jurisdictions in which they operate.

Third, the variation in local laws makes it more difficult to learn from the experiments now underway. Variation is, of course, inherent in any experiment. Indeed, other states could potentially learn a great deal from the novel policies now being crafted by Colorado and Washington: how much tax revenue can be raised, how much usage will rise, etc., in the wake of legalization. But it’s much tougher for other states to learn when the experiment is not carefully controlled. If the 64 counties comprising Colorado all adopt different marijuana regulations, we may never know whether state reforms have impacted usage rates, driving fatalities, crime rates, etc., especially since some data are simply available only on a state-wide level.

Fourth, the policy choices made by local governments can impose indirect externalities on other parts of the state. For example, if one county were to ban the sale of marijuana, its residents might flock to neighboring counties to buy the drug. To be sure, there’s an upside to this: counties that allow distribution would enjoy a tax windfall from marijuana tourism. But those counties might prefer not to be deluged with the added car traffic and its attendant costs. The problem is, there may be no legal or practical way for them to exclude non-residents from their borders.

Of course, similar problems arise when state governments break from federal policy, but the costs are likely to be much lower given the larger size and relatively small number of state governments. At bottom, I doubt there is a strong normative justification for allowing local governments to opt-out of marijuana prohibition or legalization. I suspect granting them this choice may simply reflect a political compromise, designed to lessen opposition to state legalization in more conservative parts of the states.

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I agree with Robert, at least with respect to Oregon Senate Bill 1531. Unfortunately, the people who are in the worst shape will be the ones most affected. My thoughts are here:

Posted by: Oregon Cannabis Law Group | Jan 27, 2014 8:10:52 PM

Oregon Cannabis Law Group makes a good point in the link above, which I’ll relate here: Legalization opponents stand to gain very little by securing for local communities a right to “opt out” of state legalization. One reason is that county / city borders are almost non-existent, and most residents can easily travel from one town to the next to buy marijuana (which they can then use in their home district). I seriously doubt any county government could do much to curb marijuana use, or possibly even small scale illicit sales, within their borders.
It’s also important to note that the value of these “opt out” provisions is further limited because as written they tend to grant local governments very limited power, e.g., the power to ban distribution but not possession (which is a much easier charge to sustain). There may be some limited role for local governments going forward (control over the location of distributors, etc.), but I doubt it will amount to much.

Posted by: Rob Mikos | Jan 28, 2014 8:02:59 AM

Isn't democratic control a "normative justification for allowing local governments to opt-out of marijuana prohibition or legalization"?

Your review of costs are interesting, but they do not seem to saddle harmfully all the localism that impacts state-wide gaming or alcohol markets. I am pretty sure I would be violating local law if I tried to open a mini-casino or a mini-brew-pub in my residential neighborhood, even though casinos and beers are legal in Ohio. Especially because there is a reasonable basis for local communities to be wary about the externalized aspects of local grow/sales, why not let them zone business in this field like is done in so many?

Posted by: Doug B. | Jan 28, 2014 4:03:19 PM

Doug makes some great points, but I’m still doubtful that empowering localities makes sense as anything other than a political compromise. For one thing, we already have two layers of “democratic control” over marijuana (federal and state). And while Congress suffers from a democratic deficit, the states (esp. those with ballot initiatives) do not. So how much is democracy bolstered by giving people a third bite at the same apple?
In any event, from a libertarian perspective (not mine, necessarily) personal freedom generally trumps democratic control. For example, not many people would support giving localities the choice whether or not to ban abortion, execute criminals, etc., simply because it would bolster democratic control. Hence, people who support legalization as a matter of personal freedom might reasonably reject the democratic control argument out of hand.
Of course, as Doug suggests, marijuana has externalities that justify some government regulation. But are local governments really better suited than the states or the federal government to address those externalities? I’m skeptical, in large part because I don’t think those externalities will vary from one location to the next. And the federal government and the states, by virtue of their comparative size, experience, and resources, will generally have more and better information concerning marijuana’s harms and benefits and the efficacy of policy responses.
In addition, there’s the danger that local governments might simply redistribute these externalities onto neighbors. Suppose, for sake of argument, that opening a marijuana shop increases DUI incidents nearby. If the people of a ritzy, Denver suburb decide to ban those shops, but still have the right to buy pot in neighboring communities, they will simply shift some DUI accidents onto their neighbors.
The comparison to local control over casinos is a bit off, since you can’t take the slot machines home with you when you visit another town. The comparison to alcohol regulation is more on point, but I think local power over alcohol is tightly circumscribed in many states (e.g., localities can decide where and when, but not whether, alcohol will be sold). And while it’s true that local control (such as it exists) hasn’t killed alcohol markets, it does have costs (e.g., needing to drive to another county to buy booze on Super Bowl Sunday). At bottom, are we really any better off having counties (rather than states) decide whether alcohol will be sold on Sundays, etc.? I’m skeptical.

Posted by: Rob Mikos | Jan 29, 2014 10:40:31 AM

Couple of quick points:

1. I think democracy is always better with more not less levels of control, especially concerning controversial issues.

2. Localities cannot make pot use illegal, I assume, so the only freedom at issue is freedom to sell, not freedom to use marijuana.

3. Local bans will drive up cost of access, but that may be exactly what a local community wants for its businesses and residents. if you think access costs need to be very low, you may want to ensure a pot shop is allowed to open on every block. But if you think restrictions serve some valid interests, why not let each locality make that call?

Posted by: Doug B. | Jan 31, 2014 3:02:12 AM

One last thought experiment: would you advocate against a locality being permitted to ban any national chain fast-food restaurants within a county because of local concerns about childhood obesity and failure to pay employees a living wage?

In short, I cannot help but wonder if it is often just underlying policy preferences, rather than just local control concerns, that may drive much of the disaffinity for local bans

Posted by: Doug B. | Jan 31, 2014 3:09:00 AM

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