Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Friday, April 21, 2017

Heading out to speak at 2017 World Medical Cannabis Conference & Expo

Blogging in this space will be light over the next few days because I am about to travel to Pittsburgh to attend and participate in the 2017 World Medical Cannabis Conference & Expo.   As this schedule details, I am speaking tomorrow afternoon (Saturday) on a panel titled "Higher Education & Its Role in the Industry." Here is how the panel is previewed:

The cannabis industry is set to create more jobs than established industries like manufacturing by 2020.  However, there is still no clear path to getting involved in the industry or clear educational path.  Students need more courses and curriculum that teaches the fundamentals of the industry.  These include all areas of the industry including business, agriculture, research, etc.  This panel will talk about what courses are currently available for students and what still needs to be offered as well as how higher education can translate their findings into commercial services and products the industry can use to advance itself.

April 21, 2017 in Business laws and regulatory issues, Employment and labor law issues, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Friday, April 14, 2017

Another look at banking problems and alternatives for the marijuana industry

As noted in this prior post, this past week a student in my Marijuana Law, Policy & Reform seminar presented on the law, policies and practices surrounding banking activities for the marijuana industry.  But this issue is so big and important, another student also spent the semester looking at this topic, and here are additional resources he sent my way in preparation for his coming coverage of the issue in class:

My paper is on the intersection of the marijuana laws and the banking industry but also details attempted risk management and solutions via technology. Technologies such as cryptocurrencies and third party payment apps such as Paypal and Venmo have all toed the line of anti-money laundering statutes.  Likewise, I address third party apps that perform due diligence for the banking industry by way of seed to sale tracking systems and point of sale systems thereby reducing risk for the banks.

The following are articles relevant to my paper.  I did not want to send FinCEN guidance or the 2014 Cole Memo as they have already been posted here.

An article detailing the secrecy of big banks working with the marijuana industry and suggesting that the banking woes may not be as deep rooted as once thought.

A link to podcasts from past Crypto Cannabis Conferences discussing cryptocurrencies in the marijuana industry.

An article which details one of the many tech startups attempting to reduce risk for banks by performing due diligence in compliance with FinCEN guidance and the Cole memos.

An article describing an alternative payment system for the marijuana industry

April 14, 2017 in Assembled readings on specific topics, Business laws and regulatory issues, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Monday, April 10, 2017

Looking at banking issues and reform for marijuana industry

A student in my Marijuana Law, Policy & Reform seminar is looking closely at the law, policies and practices surrounding banking activities for the marijuana industry, and he has provided for class reading the following links in preparation for his presentation this coming week:

April 10, 2017 in Assembled readings on specific topics, Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices | Permalink | Comments (0)

Sunday, April 9, 2017

Examining ethical marijuana law advertising

A student in my Marijuana Law, Policy & Reform seminar is looking closely at the laws and policies surrounding marijuana advertising, and he has provided for class reading the following cases (and one video) in preparation for his presentation this coming week:

1.  Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748 (1976).

2.  Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S. 557 (1980).

3.  FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 161 (2000).

4.  "First Ever Marijuana TV Ad" Video

April 9, 2017 in Assembled readings on specific topics, Business laws and regulatory issues | Permalink | Comments (0)

Monday, April 3, 2017

Examining distinctive state laws on home growing marijuana for medicinal or recreational purposes

Among the many exciting topics for student presentations in my Marijuana Law, Policy & Reform seminar this coming wee is a look at "recent trends and varying approaches in allowing/restricting home growing marijuana for medicinal or recreational purposes and the plant count and possession limitations these laws impose." As preparation for this topic, my student has provided these links for background reading:

Law review article: Ryan Stoa, “Marijuana Appellations: The Case for Cannabicultural Designations of Origins.”

A research paper expounding upon the possible iterations of a post-legalization marijuana market in the United States. Predictions concerning the form of a future market and the potential regulatory hurdles in the way. The possibility of the marijuana market evolving similarly to the wine industry and avoiding the widespread concern with “Big Marijuana."

Press article: "Costs of Growing Cannabis at Home vs. Buying Bud at a Dispensary"

A helpful guide comparing the costs to a consumer of either cultivating their own marijuana or simply purchasing marijuana from a dispensary.

Press article: "16 people indicted in massive home-grown marijuana operation across Denver area"

A recent article from Denver concerning home grown marijuana entering into the black market.

NORML map with links

A helpful visual summary of which states have adopted medical/recreational marijuana policies.

Press article: "Home Cannabis Cultivation Laws by State"

A quick reference to the laws of each state that has legalized marijuana for recreational or medical purposes with regard to home cultivation.

April 3, 2017 in Assembled readings on specific topics, Business laws and regulatory issues, Medical Marijuana State Laws and Reforms, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Looking at realities and regulations for CBD oil and other cannabis products without THC

One of my Marijuana Law, Policy & Reform seminar students is taking a deep dive into products and processes involving cannabis without THC, giving particular attention to the "murky issues relating to CBD oil and the extraction of oils from all cannaboids." For this topic, my student has provided for posting here "some interesting articles about CBD oil, hemp and the implications for the USDA and FDA [that reveal] some conflicting reports about legality, organic certification and other important matters" as background for his presentation:

USDA Instruction on Organic Certification of Industrial Hemp Production

Press article: "USDA Announces Domestic Grown Hemp Can’t Be Labelled Organic"

Press release: "CBDRx Receives USDA Organic Certification for Its Hemp"

FDA report: "2016 Warning Letters and Test Results for Cannabidiol-Related Products"

Press article: "New DEA Rule Says CBD Oil is Really, Truly, No-Joke Illegal"

April 3, 2017 in Assembled readings on specific topics, Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate | Permalink | Comments (0)

Sunday, April 2, 2017

Diving into issues presented by marijuana in the workplace

As readers know from recent posts, my Marijuana Law, Policy & Reform seminar students deep into their class presentations and we have a big final few weeks afoot. One student this coming week is looking at labor and employment law issues, and here are the materials this student has prepared for background on this topic:

Briefing on "Legal Issues: Marijuana In The Workplace"

Article on "Marijuana Use and Its Impact on Workplace Safety and Productivity"

Article on "Medical Marijuana and the Workplace: What Employers Need to Know Now"

Press report on "Colorado Supreme Court says companies can fire workers for using medical marijuana in their off-hours"

April 2, 2017 in Assembled readings on specific topics, Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Saturday, April 1, 2017

A Survey of Legal Issues & Risk Management Methods for Medical Marijuana Start-ups in Ohio

A terrific guest speaker for part of my last class means that my Marijuana Law, Policy & Reform seminar students are going to be making a large number of class presentations this week.  So, blog readers should be prepared and excited to be seeing a bunch of posting about diverse topics that are the focal point for student work.  For example, one student is focused on medical marijuana "start ups" in the Buckeye State, and he has provided the following synopsis and links as a preview of his presentation:

The conflict of Ohio law and applicable federal law on medical marijuana presents a myriad of legal issues for individuals and businesses to consider when deciding whether to participate in the new cannabis industry.  But because federal law preempts conflicting state law, the primary goal of participants should be to manage the risk of federal enforcement uncertainty to an acceptable level.  For those who are willing and able to manage the risk of uncertainty, participation in the new cannabis industry is not just about making money -it’s also about making history.  Meanwhile, those who are unable to navigate the complex contours of cannabis law are left watching from the sidelines.

1.      Federal Preemption: Risk of Forfeiture. August 2013 Cole Memo; The Role of Local Law Enforcement in Civil Forfeiture

2.      Local Government Law: Risk of Local Zoning/Land Use Restrictions. Ohio H.B. 523; Garcia v. Siffrin Residential Ass'n, 63 Ohio St. 2d 259, 407 N.E.2d 1369 (1980)

3.      Banking Law: Risk of Money Laundering Liability. BSA Expectations Regarding Marijuana-Related Businesses.

4.      Intellectual Property Law: Risk of Unsecured Enforcement Rights. In re Morgan Brown, U.S.P.T.O. Trademark Trial and Appeal Board, Serial No. 86/362,968 (2016); In re Christopher C. Hinton, U.S.P.T.O. Trademark Trial and Appeal Board, Serial No. 85/713,080 (2015).

5.      Tax Law: Risk of Preclusion. Capitalization of Inventoriable Costs; Californians Helping to Alleviate Med. Problems, Inc. v. Comm'r, 128 T.C. 173 (2007).

6.      Employment Law: Risk of Disputes. Ohio HB 523; Casias v. Wal-Mart Stores, Inc., 695 F.3d 428 (6th Cir. 2012).

7.      Bankruptcy Law: Risk of Relief Dismissal. In re Arenas, 514 B.R. 887 (Bankr. D. Colo. 2014); In re McGinnis, 453 B.R. 770 (Bankr. D. Or. 2011).

April 1, 2017 in Assembled readings on specific topics, Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Monday, March 27, 2017

Analyzing risks, restrictions, and barriers for those providing medical marijuana recommendations

As readers know from recent posts, my Marijuana Law, Policy & Reform seminar students deep into their class presentations. And a student this coming week is "analyzing and comparing the risks, restrictions, and barriers providers face for providing recommendations." Here are the materials this student has prepared for background on this topic:

CNN article about physician medical marijuana education

ABA article about Malpractice Liability

Nurse Practitioner article about APRN recommendations

ACP article about Marijuana Hospital Policies

Ohio Medical Marijuana Control Program - Advisory Committee - Physician Rule Presentation - Notice and Comment Review on Proposed Rule

Ohio's Proposed Rule for Physicians (draft as of 03/21)

March 27, 2017 in Business laws and regulatory issues, Medical community perspectives, Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Monday, March 20, 2017

Providing advice to a potential Ohio medical marijuana business

As noted in recent posts, my Marijuana Law, Policy & Reform seminar students, after a well-deserved Spring Break, are hearing presentations this week about marijuana reform's intersection with immigration (background here) and education (background here). If these presentations (or other realities) end up inspiring my students to want to get into the marijuana industry in the Buckeye State, a third student presentation this week has them covered. Specifically, a student this coming week is presenting on "advising a marijuana dispensary in Ohio," and here are the materials this student has assembled for the planned presentation:

Article discussing 501(C)(4) tax emption (webpage includes link to a law review article for those interested)

Posting on taxation of marijuana dispensaries (includes text of 280E as well as a link to the IRS memo regarding taxation, Memo 201504011, for further optional reading)

---- For further reading on the taxation issue: "Tax Planning for Marijuana Dealers"

Memo summarizing Ohio dispensary rules (with changes after comment period)

---- For further reading, check out the “Dispensary Rules” section of OMMCP website

For more information (not Ohio specific) about industry activity as cultivator or processor and for more general business advice, see "Marijuana Business: How to Open and Successfully Run a Marijuana Dispensary and Grow Facility" (free on Amazon’s Kindle unlimited)

March 20, 2017 in Assembled readings on specific topics, Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Taxation information and issues | Permalink | Comments (0)

Sunday, March 12, 2017

"Medical marijuana business in New York is a bust so far"

NEW-YORKThe title of this post is the headline of this lengthy new local article from Buffalo.  Here are excerpts:

The state health commissioner last year declared New York’s medical marijuana program a success. But the five companies that the state selected in 2015 to get marijuana into the hands of people suffering from debilitating and sometimes terminal diseases such as cancer, AIDS and multiple sclerosis tell a different story.

“Our company is not close to break-even yet," said Ari Hoffnung, president of Vireo Health of New York, which has a marijuana-growing facility in Fulton County and dispenses its products in two downstate and two upstate locations. “And based on my understanding, no one has made a dime here in New York."

If other states were a guide, New York should be preparing for at least 200,000 patients enrolled in the program, the industry estimates. But since medical marijuana went on the market in New York State a little over a year ago, just over 14,000 patients have enrolled to buy the drug at one of the 20 dispensaries scattered around the state. Only half of those are regular customers. Many stopped taking the drug because of high costs, distances they must travel to get it or because they died, industry executives say. Fewer than 900 doctors signed on to certify patients to use the drug.

“There are two things the program is lacking: physicians and patients," said Sen. Diane Savino, author of the bill that opened up medical marijuana treatment in New York State. Now, while the five companies producing medical marijuana struggle to stay alive for lack of customers, the Cuomo administration wants to add five more grow-and-distribution licenses.

At the same time, the administration is not opening up a new bidding process. Instead, the Cuomo administration is turning to five companies – from the original 43 bidders – that lost in the application process two years ago. All of this is worrying the companies still trying to stay afloat. “Every single one of them is financially struggling," Savino said....

Instead of adding new grow facilities, the existing licensees say, New York should more aggressively attract physicians to participate and put dispensaries in more locations. Savino, the Staten Island senator who sponsored the legislation, said she is pushing the Cuomo administration to award new “retail license” dispensaries, but to bar the five existing grower/dispensary firms from owning them. She said the administration does not understand how the medical marijuana marketplace works and that adding new growers while supplies exceed demand is “a big mistake.”

Marijuana companies say they are not arguing more licenses should never be issued to grow and sell marijuana. “No one is making any money here. Twenty percent of us have already failed," said Hoffnung, president of Vireo Health, referring to one of the original licensees that sold out to a California company because of financial problems.

March 12, 2017 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Monday, March 6, 2017

Pennsylvania's Auditor General suggests marijuana legalization could help state close budget deficit

Regulating Marijuana FINALA notable bean-counter is making a notable case for marijuana reform in the Keystone State. This official press release, headlined "Auditor General DePasquale Recommends Regulating, Taxing Marijuana as Right Move to Help Deal with Critical Issues: Result would bring in revenue, create jobs, reduce corrections costs," explains:

Auditor General Eugene DePasquale said today Pennsylvania should strongly consider regulating and taxing marijuana to benefit from a booming industry expected to be worth $20 billion and employ more than 280,000 in the next decade. “The regulation and taxation of the marijuana train has rumbled out of the station, and it is time to add a stop in the Commonwealth of Pennsylvania,” DePasquale said during a news conference at the state capitol.

“I make this recommendation because it is a more sane policy to deal with a critical issue facing the state. Other states are already taking advantage of the opportunity for massive job creation and savings from reduced arrests and criminal prosecutions. In addition, it would generate hundreds of millions of dollars each year that could help tackle Pennsylvania’s budget problems.”...

In 2012, Colorado voters approved legalizing, regulating and taxing marijuana. Last year, Colorado – which has less than half the population of Pennsylvania – brought in $129 million in tax revenue on $1 billion in marijuana sales from the new industry that had already created an estimated 18,000 jobs. “The revenue that could be generated would help address Pennsylvania’s revenue and spending issue. But there is more to this than simply tax dollars and jobs,” DePasquale said. “There is also social impact, specifically related to arrests, and the personal, emotional, and financial devastation that may result from such arrests.”

In Colorado’s experience, after regulation and taxation of marijuana, the total number of marijuana arrests decreased by nearly half between 2012 and 2014, from nearly 13,000 arrests to 7,000 arrests. Marijuana possession arrests, which make up the majority of all marijuana arrests, were nearly cut in half, down 47 percent, and marijuana sales arrests decreased by 24 percent. “All told, this decrease in arrest numbers represent thousands of people who would otherwise have blemished records that could prevent them from obtaining future employment or even housing,” DePasquale said. “Decriminalization also generates millions in savings from fewer arrests and prosecutions.”

DePasquale said Pennsylvania has already benefited by some cities decriminalizing marijuana. In Philadelphia, marijuana arrests went from 2,843 in 2014 to 969 in 2016. Based on a recent study, the RAND Corporation estimated the cost for each marijuana arrest and prosecution is approximately $2,200. Using those figures, that’s a savings of more than $4.1 million in one Pennsylvania city. Last year, York, Dauphin, Chester, Delaware, Bucks and Montgomery counties each had more arrests for small amounts of marijuana than Philadelphia. Those counties had between 800 and 1,400 arrests in 2015.

“Obviously, regulation and taxation of marijuana is not something that should be entered into lightly,” DePasquale said. “Should Pennsylvania join the growing number of states benefiting financially and socially from the taxation and regulation of marijuana; there are many things to consider, including details about age limits, regulatory oversight, licensing, grow policies, sale and use locations, and possession limitations.

“As I said earlier, the train has indeed left the station on the regulation and taxation of marijuana,” DePasquale said. “It is time for this commonwealth to seriously consider this opportunity to generate hundreds of millions of dollars in new revenue.”

March 6, 2017 in Business laws and regulatory issues, Criminal justice developments and reforms, Political perspective on reforms, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, Taxation information and issues , Who decides | Permalink | Comments (0)

Wednesday, February 22, 2017

New report projects extraordinary job growth in US marijuana industry

This new Forbes article, headlined "Marijuana Industry Projected To Create More Jobs Than Manufacturing By 2020," highlights some of the economic development potential that is forecast by some in the marijuana arena. Here are the details:

Jobs. That is what the marijuana industry hopes will keep the Trump administration from cracking down on cannabis companies.

A new report from New Frontier data projects that by 2020, the legal cannabis market will create more than a quarter of a million jobs. This is more than the expected jobs from manufacturing, utilities or even government jobs, according to the Bureau of Labor Statistics. The BLS says that by 2024 manufacturing jobs are expected to decline by 814,000, utilities will lose 47,000 jobs and government jobs will decline by 383,000. This dovetails with data that suggests the fastest growing industries are all healthcare related.

The legal cannabis market was worth an estimated $7.2 billion in 2016 and is projected to grow at a compound annual growth rate of 17%. Medical marijuana sales are projected to grow from $4.7 billion in 2016 to $13.3 billion in 2020. Adult recreational sales are estimated to jump from $2.6 billion in 2016 to $11.2 billion by 2020. New Frontier bases these projections on the markets that have already passed such legal initiatives and don't include additional states that could come on board by 2020....

“These numbers confirm that cannabis is a major economic driver and job creation engine for the U.S. economy,” said Giadha Aguirre De Carcer, Founder and CEO of New Frontier Data. “While we see a potential drop in total number of U.S. jobs created in 2017, as reported by Kiplinger, as well as an overall expected drop in GDP growth, the cannabis industry continues to be a positive contributing factor to growth at a time of potential decline. We expect the cannabis industry’s growth to be slowed down to some degree in the next three to five years, however with a projected total market sales to exceed $24 billion by 2025, and the possibility of almost 300,000 jobs by 2020, it remains a positive economic force in the U.S.”

New Frontier based its projections on analysis from the Marijuana Policy Group which was hired by Colorado for an economic analysis. According to annual surveys of cannabis professionals by the Marijuana Business Daily, the industry already employs 100,000 to 150,000 workers and nearly 90,000 are in plant-touching companies....

Many employees in the industry seem thankful for their jobs and are genuinely happy with their employment. The alternative culture appeals to many who have no interest in cubicle jobs or working for a big corporate giant. It is increasingly pulling professionals from more traditional industries who are looking for new challenges and different work environments. “The governments and the programs that they've instilled into these (legalized) states have created great job opportunities and excellent business opportunities for entrepreneurs,” said Mark Lustig, Chief Executive Officer of CannaRoyalty. “They've created the right competition.”

February 22, 2017 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research | Permalink | Comments (0)

Saturday, February 18, 2017

Highlighting free market fuzziness for GOP when marijuana involved

This Florida newspaper commentary by John Romano, headlined "Doesn't medical marijuana deserve a free market too?," effectively shines a light on the notable fact that the affinity of some Republican leaders for less government regulation and more marketplace freedom often wanes when the commodity at issue is marijuana.  Here is a portion of the commentary:

Around here, free market is the answer. And it doesn't even require an actual question.

Education gap? Let the business community fix it. Health insurance? Keep the government out of it. Minimum wage? Leave it up to the job creators. Yes, free market competition will always be the solution in Tallahassee.

Except when it comes to medical marijuana. Apparently, that's an industry in serious need of a government-sponsored cartel.

When first venturing into the marijuana business a couple of years ago, the state handpicked a small group of well-connected nurseries in a highly suspect procurement process. Now that a constitutional amendment has marijuana on the precipice of becoming a billion-dollar industry, the state is considering a plan to reward that same group of nurseries with a huge head start in the marketplace. And that contradicts everything our state leaders normally preach.

Think I'm exaggerating? State Sen. Rob Bradley, R-Fleming Island, recently introduced legislation to repeal the state's "certificate of need" programs for hospitals. The program allows the state to regulate where hospitals open, ostensibly to make sure private facilities do not cater to an affluent population and ignore the poor. Bradley calls it a "cumbersome process" used to "block expansion" and "restrict competition." He says eliminating the program will create jobs and drive down prices.

And yet Bradley is also the sponsor of a bill that restricts the number of nurseries allowed to produce medical marijuana, which critics say will create price gouging and limit available product. In effect, it would create the same problems Bradley says hamper the hospital industry....

Personally, I'm waiting for House Speaker Richard Corcoran to get involved.  This is a man who does not believe in compromising his principles. He's so committed to free market ideals in education that he called teachers "evil" for pushing back against the privatization of public schools.  He once said he would go to war to fight Obamacare's Medicaid expansion.

Not long ago, Corcoran laid out his political principles in a forceful speech: "No economic system has done more to benefit mankind than the free enterprise system … but when judges or legislatures or local governments continually rewrite the rules or attempt to pick winners and losers, that is when markets fail.  We need to reverse the damage that has been done, untangle the red tape and tear down all these barriers to entry."

Glad to hear it, Mr. Speaker. Looking forward to you joining the fight.

February 18, 2017 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Tuesday, February 7, 2017

"The Effect of Medical Marijuana Laws on the Labor Supply of Older Adults: Evidence from the Health and Retirement Study"

The title of this post is the title of this intriguing paper available via SSRN authored by Lauren Hersch Nicholas and Johanna Catherine Maclean. Here is the abstract:

We study the effect of state medical marijuana laws on labor supply among older adults; the demographic group with the highest rates of many health conditions for which marijuana may be an effective treatment.  We use the Health and Retirement Study to study this question and estimate differences-in-differences regression models.  We find that passage of a state medical marijuana law leads to increases in labor supply among older adults. These effects should be considered as policymakers determine how best to regulate access to medical marijuana.

February 7, 2017 in Business laws and regulatory issues, Medical Marijuana Data and Research | Permalink | Comments (0)

Friday, February 3, 2017

Detailing regulatory realities and challenges for marijuana reform states

Sln_jan27_mapA busy week prevented me from finding time earlier to blog about this notable Stateline piece headlined "As More Voters Legalize Marijuana, States Left With Regulatory Hurdles."  Here are some highlights:

The battle to legally grow, sell, buy and smoke pot in California has been a long one. Voters in the state ushered in medical marijuana 20 years ago, but took until last fall to approve a plan to legalize and regulate recreational marijuana.

Now, California officials are faced with setting rules for a product that has been outlawed by the federal government since the 1930s — a challenge that lawmakers and regulators in the other states that chose some form of marijuana legalization in the November election also are confronting.

Like California, Maine, Massachusetts and Nevada voted to legalize recreational marijuana. They also will need rules about where pot shops can be located and whether dispensaries can sell food and candy infused with marijuana. They will also have to dovetail their recreational regulations with an existing medical marijuana industry, while Arkansas, Florida and North Dakota will be building medical systems from the ground up.

It could take several years. Colorado and Washington paved the way for recreational marijuana by legalizing it in 2012, but they are still sorting out policy details.

There is often a gap between the language of ballot measures like California’s and the detailed regulations needed to get marijuana markets off the ground. And the referendums that voters approve often call for quick implementation, giving legislators and regulators little or no time to enact policies before the drug becomes legal. “There’s no perfect implementation, there’s no perfect legalization effort,” said Michael Correia, a federal lobbyist for the National Cannabis Industry Association. “There’s going to be hiccups.”...

Arkansas and Massachusetts already are discovering the difficulty of setting up a regulatory system. Arkansas has delayed the launch of its medical marijuana program to give public agencies more time to prepare and lawmakers have introduced bills to restrict how the drug is used. Massachusetts lawmakers delayed the opening of marijuana shops by six months and proposed bills that would limit how much can be grown and possessed.

States also face banking challenges, licensing skirmishes and drugged driving debates. But despite all the difficulties, more states are expected to jump into the legalization fray. Already this year, at least 12 states are considering legislation to legalize and regulate marijuana. Another seven are looking at measures to decriminalize simple possession of marijuana and nearly 30 ballot measures related to marijuana are being considered for elections in 2017 and 2018....

Three years after marijuana could first be bought and sold in Colorado, officials are still working through regulatory changes. This year already, bills have been introduced that would create a licensing system for marijuana smoking clubs, prohibit advertising marijuana without a sales license, and allow the use of medical marijuana for stress disorders.

Similarly in Washington, which legalized marijuana on the ballot in 2012, lawmakers are considering legislation that would allow retailers to sell marijuana merchandise like clothing that bears a store’s logo, regulate in-home marijuana production, and standardize the packaging and labeling of edible marijuana products....

One test of how well legalized marijuana is working will be when California, with about 39 million people and the sixth largest economy in the world, opens its recreational marijuana shops. Market researchers estimate that the California cannabis market will grow by 18.5 percent annually over the next five years, reaching $6.5 billion by 2020. By comparison, revenue in Massachusetts and Nevada, which also legalized recreational marijuana in November, is expected to be about $1.07 billion and $629.5 million, respectively.

But regulating the California market won’t be easy. Already there are rumblings of pushing implementation back a year from 2018 to 2019. And it won’t be entirely up to the state. Local governments will have a lot of say in determining when and where marijuana is bought and consumed.

February 3, 2017 in Business laws and regulatory issues, Medical Marijuana State Laws and Reforms, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

"If President Trump wants to help American businesses, he should start by legalizing marijuana"

The title of this post is the title of this notable new Los Angeles Times commentary authored by Mark Stefanos.  Here are excerpts:

Trump himself has been all over the board on pot, expressing support for medical marijuana but also concerns about Colorado, where it’s recreationally legal. He generally seems to favor leaving it up to the states to decide.

Sure, it’s hard to picture Trump as marijuana’s champion. Unlike the last three presidents, Trump claims he’s never toked. He doesn’t drink, he orders his steak well-done and it’s unlikely anyone will ever pass a blunt to the self-described germaphobe.

But if legalizing marijuana federally isn’t on Trump’s legislative agenda, it should be. And a conservative Congress should back him. It’s politically expedient, fits neatly into Trump’s game plan and there are principled conservative arguments to be made on legalization’s behalf.

Outside of his core issues, our new president is no ideologue, and instead seems to be fixated on — and can be swayed by — public opinion. If his inauguration speech was any indication, Trump is doubling down on populism — and legalizing pot is incredibly popular.

The latest Gallup poll shows 60% of Americans favoring legalization, including 77% of 18- to 34-year-olds. With some of the weakest approval ratings for an incoming president, he should be looking to capitalize on low-hanging-fruit policies like these. Trump shouldn’t worry too much Trump shouldn’t worry too much about legalization alienating his base. The same Gallup poll shows that 42% of Republicans support legalization, up from 20% in 2005. And if anyone needs convincing, Trump can make the case.

He can appeal to the right by reminding us that the government isn’t our mommy. We’ve already learned the lesson that prohibition doesn’t work from alcohol, a far more dangerous drug. Enforcement of prohibition is a pointless and wasteful priority. After all, why should the government work so hard to keep people from smoking weed when China is manipulating its currency and Islamic State is burning people alive in cages?

Perhaps most importantly, however, legalization makes sense fiscally. If there’s one issue Trump has been consistent on since he launched his presidential bid, it’s economic protectionism. Today, the American marijuana industry employs 100,000 to 150,000 people nationally. Marijuana spending is estimated at $30 billion annually, according to market-research firm the Cowen Group, but only a fifth of that is spent on legal products. If legalized, the market is expected to grow to $50 billion annually by 2026.

For the same reasons Trump believes we should be buying cars and air-conditioners manufactured domestically, it follows that he should be making every effort to ensure America dominates the global marijuana industry. Americans should be smoking American weed. This requires the government’s ban be lifted so the market can flourish.

Legalization should be particularly attractive to Trump and his base, considering the main competitors to America’s pot industry are the very criminals and gangs he likes to target in his speeches. In 2008, nearly two-thirds of the pot consumed in the United States came from Mexico, according to the Rand Corp. Since then, Mexican drug cartels have had to compete with American pot farms operating in an increasingly legal landscape that produces a higher quality product and drives profits down.

Today, consumption of Mexican weed in America has been decreased to less than a third, according to an estimate by Alejandro Hope, a Mexico City based security and drug analyst. Full American legalization may put the nail in the coffin on cartel profits from weed. Trump knew this in 1990 when he said, “We're losing badly the war on drugs. You have to legalize drugs to win that war. You have to take the profit away from these drug czars."

Finally, legalizing marijuana would allow Trump to make good on his campaign promise to help “inner-cities.” Instead of paying lip service to urban communities and insulting them with rhetoric describing them as crime-ridden, Trump could actually help those communities by legalizing pot, and making sure no one else has their life ruined because they got caught smoking a joint....

The policy benefits of legalization are many, and Trump shouldn’t wait to capitalize on the political opportunity. Legalization would be a deal that allows the government to save on the costs of enforcing prohibition and fighting a failing drug war. Pot would become safer as it becomes controlled and regulated, and the government could do a better job at youth drug prevention. Taxation from legal pot sales will provide state and local governments a healthy revenue stream, at the expense of our trade competitors. Most importantly, it would shore up support for his presidency from demographics he needs, while growing the economy and jobs.

That would be a lot of winning.

February 3, 2017 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (2)

New Textbook on Marijuana Law, Policy, and Authority

I’m happy to announce that my first-of-its-kind textbook on Marijuana Law, Policy, and Authority will soon be published by Aspen. It will be out in April (in e form) and May (in print). The teacher’s manual and a companion website will be available soon thereafter. Many thanks to Doug and others who have provided helpful feedback on this book over the last 2.5 years!

The book covers a lot of ground, befitting a field that implicates so many different areas of law. The first chapter of the book is now available on SSRN. That chapter provides more details about the book’s coverage and approach, and it also explains why this is such an interesting and worthwhile area of law to study – and not just for those who are interested in practicing in this burgeoning field.

Not coincidentally, I will be posting more this month (both here and at Prawfsblawg) on topics drawn from the book. My first post at Prawfsblawg briefly laid out the case for teaching and writing about marijuana law. Even though most people who read this blog are already sold on the subject, I’ll copy the relevant passage here:

“For one thing, state marijuana reforms and the federal response to them have sparked some of the most challenging and interesting legal controversies of our day. May the states legalize a drug while Congress forbids it? Even so, are state regulations governing marijuana preempted by federal law? Does anyone (besides the DOJ) have a cause of action to challenge them as such? Can the President suspend enforcement of the federal ban? Do state restrictions on marijuana industry advertising violate the First Amendment? These are just a handful of the intriguing questions that are now being confronted in this field.

Just as importantly, there is a large and growing number of people who care about the answers to such questions. Forty-three (43) states and the District of Columbia have legalized possession and use of some form of marijuana by at least some people. These reforms – not to mention the prohibitions that remain in place at the federal level – affect a staggering number of people. Roughly 40% of adults in the U.S. have tried marijuana, and more than 22 million people use the drug regularly. To supply this demand, thousands of people are growing and selling marijuana. In Colorado alone, for example, there are more than 600 state licensed marijuana suppliers. There are also countless third parties who regularly deal with these users and suppliers, including physicians who recommend marijuana to patients, banks that provide payment services to the marijuana industry, firms that employ marijuana users, and lawyers who advise all of the above.

All of these people need help navigating a thicket of complicated and oftentimes conflicting laws governing marijuana. Colorado, for example, has promulgated more than 200 pages of regulations to govern its $1 billion a year licensed marijuana industry. Among many other things, Colorado’s regulations require suppliers to carefully track their inventories, test and label their products, and limit where and how they advertise. These regulations are complicated enough but doubts about their enforceability (highlighted in the questions above) only add to the confusion and the need for informed legal advice.”

In the coming weeks, I will blog about some of the questions noted above. In the meantime, if you are interested in teaching a course or a unit on any aspect of marijuana law, contact me – robert<dot>mikos<at>vanderbilt<dot>edu -- I would be happy to chat.

February 3, 2017 in Assembled readings on specific topics, Books, Business laws and regulatory issues, Current Affairs, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms, Political perspective on reforms, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, State court rulings, Who decides | Permalink | Comments (2)

Thursday, February 2, 2017

Spotlighting the (inevitable?) mixture of marijuana, regulators, money and lobbying

The Hill has this notable lengthy article, headlined "Marijuana lobby goes mainstream," highlighting the . Here are excerpts:

In a sign that the budding marijuana industry is moving away from the fringes and into the political mainstream, into the political mainstream, a number of officials once tasked with managing the growing legal cannabis sector are leaving their government positions to take jobs in the sector.

Many are advising states and cities as voters loosen marijuana restrictions across the country. Others are becoming industry advocates, lobbying the former colleagues and coworkers they left behind to craft more favorable rules and regulations.

In Colorado, Andrew Freedman, once the state’s director of marijuana coordination, and Lewis Koski, who headed the state Marijuana Enforcement Division, teamed up to form a consulting firm that advises local and state governments on crafting new marijuana regulations. Laura Harris, Koski’s predecessor at the Marijuana Enforcement Division, took a post this month as director of the Colorado Cannabis Chamber of Commerce.

Manny Munson-Regala, who oversaw Minnesota’s medical marijuana program, now runs a consulting firm of his own. John O’Brien resigned his post overseeing New Jersey’s medical marijuana program to take a job as chief compliance officer of a New York cannabis company. And several former top officials at Washington State’s Liquor and Cannabis Board have left in recent years to form their own firms.

“That’s how America works. You work for the government, then you become a lobbyist,” said Ian Eisenberg, a leader in the legal marijuana industry who runs Uncle Ike’s, a dispensary in Seattle, Wash. “I don’t think it’s any different than the defense industry.”

Those who have made the jump from the government sector to the private sector say they offer a valuable service, both to governments that need to establish new rules and to the businesses that need to navigate complex regulatory schemes that have never been implemented before. “We’re the only ones to have stood this up before,” said Freedman, who now consults with governments looking to set up their regulatory structures. “There’s a real opportunity to come in and show lessons learned quickly.”...

But opponents of legalized pot, and some government transparency groups, say the relationship between the marijuana industry and its regulators should be treated like any other. “The revolving door from government to private sector isn’t anything new, but it represents the worst of our politics. This isn’t the paper clip or oven mitt lobby, this is the drug lobby,” said Kevin Sabet, who heads Smart Approaches to Marijuana, a group that opposes legalization. And we know that the pot lobby wants to make money, just like big tobacco executives do.”

Aaron Scherb, legislative affairs director at the government transparency group Common Cause, said states should implement a cooling-off period between the time when a regulator leaves government service and when he or she begins working on behalf of the industry. “These individuals are the most familiar with the rules and regulations of a particular industry, and their experience means they’re able to exploit loopholes,” Scherb said. “At least some minimal amount of time is appropriate so we can avoid this revolving door problem.”

At least one state, Minnesota, required its regulators to take a year off before returning to work in the field they oversaw. Munson-Regala, the former head of the state’s medical marijuana program, said that reminded him of other industries he helped regulate, like the insurance business. “Embedded in that one-year cooling off period was an understanding that regulators are in a good position to help folks who are being regulated, in part because they understand what it takes to be compliant,” Munson-Regala said in an interview.

The revolving door is just one of the ways an industry that was once seen as the domain of hippies is trying to professionalize. Just a few years ago, proponents of legalizing marijuana brought 1970s-era stoner icon Tommy Chong to Capitol Hill to woo lawmakers. Today, Chong is gone, replaced by a booming industry of cultivators and retailers — and the trade shows, consultants and lobbyists who offer services to boost their business.

On Tuesday, the National Cannabis Industry Association kicked off a two-day Seed to Sale trade show in Denver, focusing on business practices for producers and retailers. The group’s first trade show several years ago attracted 800 participants; this year, they expect 2,000 vendors — and 4,000 to 5,000 at the annual Cannabis Business Summit and Expo, said Taylor West, the group’s deputy director. In November, 10,000 people showed up to another trade show in Las Vegas. “This industry is not slowing down,” West said.

Around the country, hundreds of lobbyists are already bending lawmakers’ ears on marijuana measures. In Colorado alone, 81 lobbyists reported advocating on marijuana proposals before the state legislature, according to data filed with the Secretary of State’s office.

February 2, 2017 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Medical Marijuana Commentary and Debate, Political perspective on reforms, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Monday, January 23, 2017

Terrific UC Davis Law Review Symposium papers on "Disjointed Regulation: State Efforts to Legalize Marijuana"