Friday, April 20, 2018
Because of the date on the calendar, there is today waaaaaay too much mainstream press coverage of marijuana issues for me to cover in this space. But I cannot ignore it all, and the headline of this post is the headline of this new Atlantic piece by Reihan Salam that seemed worth spotlighting. Here is how it starts and its core proposal:
The marijuana wars are entering a new phase. The first phase, over whether or not to legalize the recreational use of cannabis, is over. The partisans of legalization have won the battle for public opinion. Soon, I suspect, marijuana legalization will be entrenched in federal law. At this point, to fight against legalization is to fight against the inevitable. The only question now is what form America’s legal marijuana markets will take. Will they be dominated by for-profit business enterprises with a vested interest in promoting binge consumption? Or will they be designed to minimize the very real harms caused by cannabis dependence, even if that means minting fewer marijuana millionaires? I fear that the burgeoning cannabis industry will win out—but their victory is not yet assured....
The fundamental challenge, as [Jonathan] Caulkins argues, is that cannabis is a dependence-inducing intoxicant, and a cheap one at that. In Washington state, a marijuana-legalization pioneer, he observes that the cost per hour of cannabis intoxication “has fallen below $1, cheaper than beer or going to the movies.” This is despite the fact that the state’s marijuana growers and distributors operate in a grey zone — legal at the state level, but not legal at the federal level — which leaves them ineligible for the federal tax deductions to which all more straightforwardly legal businesses are entitled.
If marijuana were largely consumed by adults who partake rarely and responsibly, this would not be much of a concern. According to Caulkins, though, only about one in three cannabis users fall into this fortunate category, and they account for no more than 2 percent of total consumption. Meanwhile, daily and near-daily users account for 80 percent of total consumption, and a far larger share of the profits of your friendly neighborhood marijuana business. Yes, there are cancer patients who use regularly marijuana to ease their pain, and there are traumatized veterans who do much the same. I am happy to concede that cannabis abuse is preferable to opioid abuse. But let’s not kid ourselves: Marijuana, Inc., thrives by catering to binge users, many of whom explicitly state that their dependence is getting in the way of their lives. By the time the cost of an hour of cannabis intoxication falls below $1 nationwide, the picture will start to change: The number of people who will turn to marijuana as a form of self-medication, or as a form of escape, will drastically increase. And most of them will be poor and vulnerable people, not the affluent bohemians so affectionately portrayed on HBO dramedies.
In a 2014 essay for Washington Monthly, Mark A.R. Kleiman, who along with Caulkins is one of the country’s leading experts on drug policy, anticipated the outsized role the marijuana industry would play in debates to come: “As more and more states begin to legalize marijuana over the next few years, the cannabis industry will begin to get richer—and that means it will start to wield considerably more political power, not only over the states but over national policy, too.” As a result, he warned, “we could get locked into a bad system in which the primary downside of legalizing pot — increased drug abuse, especially by minors — will be greater than it needs to be, and the benefits, including tax revenues, smaller than they could be.”
Is it possible to legalize marijuana without drastically increasing the number of Americans who find themselves dependent on it? I certainly hope so. In my ideal world, Congess would establish a federal monopoly on the sale and distribution of narcotics, including but not limited to cannabis, with an eye towards minimizing the size of the black market and avoiding the aggressive marketing and lobbying that would inevitably accompany the emergence of a large for-profit industry. But I recognize that this is, for now, a pipe dream.
April 20, 2018 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)
I tend not to be a big fan of the unofficial marijuana holiday known as 4/20, but this new CNN article suggested to me the title of this post. The CNN piece is headlined "Universities meet growing demand with Weed 101," and I am lucky that it mentions the course I teach at The Ohio State University Moritz College of Law. The article has me thinking that everyone should try to learn something new about marijuana and its impacts today. And here are snippets from the article about some teaching efforts in this space:
The facts about marijuana are still at the center of the debate, because while states are more permissive, federal law still puts marijuana in the same category as heroin: a Schedule I drug with "no currently accepted medical use," at least in the eyes of the federal government. That leaves researchers and universities offering classes in uncharted waters.
Despite the limits, a handful of determined professors have stepped up, without textbooks or well-trod academic territory, and created courses to try to ensure that the next generation is prepared to match the public's interest. There seems to be only one "weed major," the medicinal plant chemistry program at Northern Michigan University, but a growing number of weed-themed classes are being offered on campuses across the country in law, business, medicine and general science.
In 2013, the Washington Attorney General's Office provided Beatriz Carlini, a research scientist at the university's Alcohol and Drug Abuse Institute, with funds to develop training modules for health professionals who can get continuing education credit. They learn about how cannabis works and about its best uses; a second module teaches best clinical practices.
Marijuana is legal in its recreational and medicinal forms in Washington, and with more legal access comes a public desire for more education. But unless your doctor is in his or her late 90s and can remember before 1942, when it was legal to prescribe cannabis, more than likely they learned nothing about its benefits in medical school. "Hopefully, we can help patients make good decisions," Carlini said. "People won't wait for these things to resolve federally."
Yu-Fung Lin teaches the physiology of cannabis at the UC Davis School of Medicine. Physiology is a branch of biology that looks at the functions of living organisms and their parts. The elective focuses on how cannabis and cannabinoids impact the body. It also looks at physiological impact, therapeutic values and history. It's the first class of its kind in the University of California system.
Lin, an associate professor who usually teaches medical students, didn't know what to expect from her 55 undergraduates. "I've been quite impressed by their commitment," she said. She hopes her class will inspire future research. "Just knowing what we know, and the limitations of what we know, should inspire students, and they in turn could do research that would be really helpful in this field."
The Larner College of Medicine at the University of Vermont can't create classes fast enough. Its on-campus medical cannabis class was so popular, it had to relocate twice, settling into the largest available lecture hall according to the University. Its online continuing medical education program and the cannabis science and medicine professional certificate program have wait lists. Enrollees have come from as far away as Thailand. It has created webinars and a cannabis speaker series, and even the school's farm extension provides original plant research about hemp.
Dr. Kalev Freeman, an emergency room physician, and Monique McHenry, a botanist, helped create these courses to address several needs. Freeman said he's seen too many people taken off ambulances after overdosing on opioids, and he hopes to offer information about a "safer alternative to the public." McHenry wanted to find a topic attractive to "young minds to get them interested in science."
Their classes focus on basic science, the drug's physiology, molecular biology and chemistry. The professional training also drills down on practical issues like effective dosing, delivery methods and drug interactions. "The more we can do to focus on getting evidence-based facts out to more medical professionals and the public, the more we will have a real success,"
[Cat] Packer, the Los Angeles marijuana czar, would agree. "We're in a real moment of transition," she said. "These conversations about marijuana are incredibly complex. I found I can't have a conversation about the law without talking about health and social justice issues and enforcement issues." It sounds like the perfect material for more college.
Thursday, April 19, 2018
The title of this post is the title of this thorough and effective review of myriad economic impacts of the marijuana industry in the first state to have a functioning recreational marijuana market. This piece was authored by the Federal Reserve Back of Kansas City, and I recommend the piece in full to anyone and everyone interested in certain economic realities flowing from legalization and commercialization of recreational marijuana. Here are some snippets from the start and heart of the piece:
In 2012, Colorado voters passed Amendment 64, making Colorado one of the first states to legalize recreational marijuana. Since then, the legalization trend has continued, and today, medical marijuana is legal in 29 states and Washington, D.C., and recreational marijuana is legal in eight states and Washington, D.C. So far in 2018, Vermont’s lawmakers have legalized marijuana starting July 1, and at least 11 other states are considering recreational or medical marijuana legalization. The marijuana industry has had many effects on the state of Colorado since it was legalized. This issue of the Rocky Mountain Economist focuses on the economic impacts of the marijuana industry in Colorado, the first state to open recreational marijuana stores....
Marijuana Sales in Colorado
To put the magnitude of marijuana sales in perspective, personal consumption expenditures on all goods and services totaled $236.3 billion in 2016 in Colorado. Marijuana sales were $1.3 billion in 2016, or 0.55 percent of all personal consumer expenditures. By comparison, spending on food and beverages purchased for off-site consumption made up 7.2 percent of personal consumption expenditures in Colorado....
To get a sense of the magnitude of the marijuana industry, we can compare the total number of marijuana-related business licenses in the state to the number of new entity business filings for all industries in the state. Between the first quarter of 2014 and the fourth quarter of 2017, there were about 431,997 new entity business filings in Colorado. By comparison, slightly more than 3,000 marijuana-related business licenses were active at the end of 2017. If all of these marijuana-related businesses started during the first quarter of 2014 through the end of 2017, then they would represent about 0.7 percent of total new business filings in the state since 2014. The actual percentage likely is lower than 0.7 percent because some marijuana-related businesses existed in Colorado prior to 2014, particularly those serving the medical side of the industry....
Employment in the Marijuana Industry
As of March 2018, there were more than 38,000 issued individual licenses in the marijuana industry, including 1,637 business owners. Of course, not everyone with a license is working in the industry, and the Marijuana Policy Group estimates that one active license equates to 0.467 full-time equivalent positions. Using this estimate, the marijuana industry currently employs about 17,821 full-time equivalent staff, a 17.7 percent increase in employment over the previous year....
Taxation of the Marijuana Industry
In 2017, the state of Colorado collected more than $247 million from the marijuana industry, including state sales taxes on recreational and medical, special sales taxes on recreational, excise taxes on recreational and application and licenses fees. Tax collections since 2014 have increased significantly, though at a slower pace over the past year. Between 2014 and 2015, total collections increased 93 percent. By contrast, collections increased about 28 percent between 2016 and 2017. To put the magnitude of marijuana tax collections in perspective, they equate to about 2.3 percent of Colorado’s 2017 general fund revenue. Although this calculation is useful for perspective, most marijuana revenue does not go into the state general fund....
Potential Costs of Marijuana Legalization
The data on legalization’s impact on public safety is limited, and therefore, the full effects of legalization on public safety are uncertain. Between 2012 and 2014, the number of marijuana arrests fell 46 percent, primarily due to a decline in marijuana possession arrests. In Denver, the number of crimes reported to the Denver Police Department that were determined to have a clear connection to marijuana increased from 234 in 2013 to 276 in 2014, but then fell to 183 in 2017. Of the crimes reported with a connection to marijuana in 2017, 54 percent were burglaries and 74 percent were industry-related.xxviii Fifteen percent of DUI summons issued by the Colorado State Patrol in 2015 were for marijuana or marijuana in combination with alcohol or other drugs although the number of these types of DUIs fell 1 percent between 2014 and 2015. Traffic fatalities with THC-only or THC-in-combination positive drivers rose from 55 in 2013 to 79 in 2014....
As the first state to open recreational marijuana retail stores, Colorado provides a case study to examine the potential economic effects from legalization. Direct employment in the marijuana sector has risen robustly since the passage of Amendment 64, contributing about 5.4 percent of all employment growth in Colorado since January 2014. Despite these solid gains, employment in the sector makes up just 0.7 percent of total employment in the state. Similar to employment, tax collections from marijuana have also increased sharply in recent years, and are equal to about 2 percent of general fund revenues in the state. Although legalization has contributed to employment growth and tax revenues in the state, it is important to weigh those benefits against the potential costs to public safety and health outcomes.
April 19, 2018 in Business laws and regulatory issues, Employment and labor law issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Taxation information and issues | Permalink | Comments (0)
Monday, April 16, 2018
Guest post: "New Database Tracks Local Variation in Implementing Cannabis Legalization in California"
Professor W. David Ball, who has served on California Lt. Governor Gavin Newsom's Blue Ribbon Commission on Marijuana Regulation, was kind enough to alert me to a new database that details how localities in California are implementing the state's marijuana reform laws. He was even kinder to take up my invitation to write up an account of this resource. Here is his terrific guest post:
California's regulated cannabis market is roughly four months old, but within the statewide framework, there are notable local variations. The ballot initiative that legalized adult-use provided for a strong degree of local control and, as this article details, some areas have been quicker (and more willing) to license activities than others. This database provides details about which activities county and municipal governments have decided to permit (sales, testing, manufacturing, growing, and distributing) for both the medical and adult-use market.
The database (and accompanying article) point out a number of dynamics likely to be replicated in other nascent adult-use markets. First, the statewide framework is usually only the beginning -- localities still have a great degree of control over which geographical areas (and which parts of the new market) will be a part of a regulated cannabis regime. California requires local licensing, but even if it didn't, local governments, via land-use regulations and zoning laws, would still be able to exercise a significant amount of control. Focusing only on inter-state differences fails to capture the significant intra-state differences that exist within a given statewide regime. It may be true that, say, the regulations of the San Francisco market have more in common with Seattle than they do with Fresno.
Second, we should remember that regulation is an ongoing process. Proposition 64, the adult-use legalization initiative, gave California the foundation to enact administrative rule-making. These administrative rules, in turn, will be modified as the market develops. Indeed, one bill currently under consideration in the state assembly would cut cannabis taxes in order to lure price-sensitive customers to the legal market. There is no reason to suspect that the database of local regulations won't change on a regular basis. Some localities might expand the scope and depth of permitted activities, some might contract them. This is why it is important both to have a flexible framework and to ensure that stakeholders (including those not participating in the market as either consumers or producers) remain engaged.
With almost 40 million people and a population and landscape that contains almost every kind of diversity one sees in the country, a closer analysis of these local regulations is sure to yield insights normally associated with the federalist conception of "laboratories of democracy." In this instance, though, the laboratories are to be found within a single state, rather than among the 50 states.
The title of this post is the title of this revised ABA Book Publishing text authored by Michael Newton Widener. Here is the start of the text's introduction:
Initially published in 2012, in its revised edition, this book remains the only work inviting careful thought about the commercial landlord’s risk and reward scenarios in leasing to marijuana businesses. And Joint Tenancies gives the prospective tenant a valuable background in how to coordinate with potential landlords to address concerns about the occupancy of these businesses. While it is not written to be a pageturner or to offer readers entertainment, there’s no point in ignoring these basic facts: Today, possession, transportation, and sale of Cannabis remain federal crimes under the Controlled Substances Act of 1970 (sometimes referred to in this book as the “CSA” or the “Act”).
Until Cannabis is rescheduled to permit its use under that federal Act or the CSA is disposed of by federal legislation such as the 2017-introduced Marijuana Justice Act, the operation of a marijuana dispensary or store, or a grow site, is a federal crime punishable under the federal courts’ sentencing guidelines, which impose fines and jail time. The fact that marijuana sales are legal under your state’s law does not change one basic principle. Legal compliance with state laws governing marijuana business operations is not a defense to federal drug or money laundering charges.
As explained in the main text, property leasing to a marijuana business today, whether it’s a retail operation or a cultivation or “grow” location (abbreviated as an “MBE” in this book), exposes a landlord to civil and criminal penalties. One commercial landlord in Montana (Jonathan Janetski) went to federal prison in 2012 for leasing his warehouse to an MBE that violated the law governing cultivation sites.1 Among other penalties available to federal authorities is forfeiture of a landlord’s property. Forfeiture, as explained later, means the government takes away a citizen’s real estate and doesn’t give it back and doesn’t pay money or other consideration for its forfeiture. Nothing lighthearted or entertaining there, is there?
Wednesday, April 11, 2018
Former US House Speaker and former Massachusetts Gov join advisory advisory board of major marijuana corporation
As reported in this company press release, "Acreage Holdings (“Acreage”) (www.acreageholdings.com), one of the nation’s largest, multi-state actively-managed cannabis corporations, announced the appointments of former Speaker of the United States House of Representatives John Boehner and former Governor of the State of Massachusetts Bill Weld to its Board of Advisors." Here is more from the announcement:
As members of the Board, Speaker Boehner and Governor Weld will bring an immense, collective and unique set of experiences in government affairs, unmatched leadership and guidance to help drive Acreage towards its strategic mission. In concert with this announcement, Speaker Boehner and Governor Weld have issued this joint statement:
While we come at this issue from different perspectives and track records, we both believe the time has come for serious consideration of a shift in federal marijuana policy. Over the past 20 years a growing number of states have experimented with their right to offer cannabis programs under the protection of the 10th amendment. During that period, those rights have lived somewhat in a state of conflict with federal policy. Also, during this period, the public perception of cannabis has dramatically shifted, with 94% of Americans currently in favor of some type of access, a shift driven by increased awareness of marijuana’s many medical applications.
We need to look no further than our nation's 20 million veterans, 20 percent of whom, according to a 2017 American Legion survey, reportedly use cannabis to self-treat PTSD, chronic pain and other ailments. Yet the VA does not allow its doctors to recommend its usage. There are numerous other patient groups in America whose quality of life has been dramatically improved by the state-sanctioned use of medical cannabis.
While the Tenth Amendment has allowed much to occur at the state level, there are still many negative implications of the Federal policy to schedule cannabis as a Class 1 drug: most notably the lack of research, the ambiguity around financial services and the refusal of the VA to offer it as an alternative to the harmful opioids that are ravishing our communities.
We are excited to join the team at Acreage in pursuit of their mission to bring safe, consistent and reliable products to patients and consumers who could benefit. We have full confidence in their management team and believe this is the team that will transform the debate, policy and landscape around this issue....
Both the Speaker and the Governor have agreed to immediately join the Company’s Board of Advisors and have committed to join the Company’s Board of Directors once it has been formed and other qualified directors have been appointed.
Tuesday, April 10, 2018
This recent Forbes article authored by Tom Angell, headlined "Marijuana Is The Fastest-Growing Job Category, Top Recruiting CEO Says," highlights a key economic development story within the modern marijuana reform. Here are excerpts:
The head of a leading firm that connects businesses with job seekers says that employment in the legal marijuana industry is growing faster than any other field. "You know what the fastest-growing job category in the United States is?" ZipRecruiter.com co-founder and CEO Ian Siegel asked. "Marijuana."
And he should know. His company calls itself the "fastest growing employment marketplace" and claims to have "helped over 1 million businesses and 100 million job seekers find their next perfect match."
"Twenty-nine states have legalized marijuana. There's 445% job growth in job listings in the category year over year," he said at a conference hosted by U.S. News & World Report on Friday. "Let me put that in perspective for you," Siegel said, reporting that technology jobs are at 245% growth and healthcare positions are rising at 70%....
"Our Q4 data for 2017 revealed an especially dramatic leap in the number of new cannabis industry job posts," the report said. "The number of cannabis industry job posts increased 693% year over year and 79% quarter over quarter."
At the Friday conference, Siegel used the rapid growth of the marijuana industry as an example of how the education system can't necessarily plan on the continuance of workforce trends from the time kids are in school "The things that happen societally, and the way we try to predict what you should teach kids, they happen so fast and they often happen in ways that are jarring enough that it's hard to get our brains around it," he said. "I would never encourage the members of the audience to try to predict the future and adjust curriculum based on that. I don't think that's a viable strategy."
Though understand the notion that early childhood education cannot easily adjust for predicted job trends a decade later, I think institutions of higher education can and should be recognizing the job-creation potential of modern marijuana reform and be open to developing new curriculum accordingly. As regular reader know, I have been teaching a Marijuana Law, Policy & Reform class at The Ohio State University Moritz College of Law for the last four school years, and next year the College of Law will also be offering a new class focused more on the busines law side of marijuana reform titled "Cannabiz: Exploring the 'Legalized' Cannabis Industry." I am very proud that my institution is eager to ensure law students have a way to learn about various aspects of an industry that seems to be on a continued significant growth curve.
Sunday, April 8, 2018
The title of this post is the title of this new paper recently posted to SSRN authored by Richard Thompson Ainsworth and Brendan Magauran. Here is its abstract:
On January 4, 2018, the Trump Administration through Attorney General Sessions rescinded an Obama-era policy that discouraged federal prosecutors from bringing charges in all but the most serious marijuana cases under the federal Controlled Substances Act, as well as under the Bank Secrecy Act. Federal law is at odds with state law in the majority of states on the legalization and subsequent state taxation of marijuana. Twenty-eight states and the District of Columbia have at least partially legalized marijuana. Eight of these states have legalized both medicinal and recreational use. With limited exceptions, legalized sales of marijuana are taxed.
Aside from “compassionate use” of medicinal marijuana, the States have seen real business development and job creation opportunities by legalizing the marijuana trade – estimates of 250,000 new jobs by 2020 are common.
State marijuana revenue measures are not harmonized today. Both the tax rates and the commercial stages at which marijuana transactions are taxed diverge widely. Rates range from zero for medicinal use (in Delaware, DC, Maine, Massachusetts, New Hampshire, New Mexico, North Dakota, and Oregon) to roughly 47% (for recreational marijuana, slightly less for medicinal) in Washington. For the most part, state marijuana taxes cascade with excise taxes appearing in the retail sales tax base.
This paper proposes to analyze state marijuana enforcement and taxation through the lens of European value added taxes (VAT). There is a closer harmony between the EU and the US in this area than might be expected. EU VAT proposals for tax harmonization and enforcement, and applies them to the US. The proposals are technology-intensive. They integrate well with the digital track and trace systems employed by US States to control legalized marijuana. The first proposal is to place the central portion of the marijuana supply chain on a private blockchain that is shared among the states. Transactions in marijuana will be preserved in real-time (locally and centrally). Data will be shared among State authorities to aid enforcement, and tax collection.
The second proposal is for a limited-purpose cryptotaxcurrency. This would be a crypto-token like VATCoin that is digitally minted by the government. For example, CALCoin. CALCoin would be the only currency allowed for marijuana-related purchases within California. Frauds related to excessive “home grown” marijuana, and the use of Dark Cloud-based Zappers in retail dispensaries are also considered.
Monday, March 26, 2018
As reported in this new AP article, the "U.S. Senate’s top leader said Monday he wants to bring hemp production back into the mainstream by removing it from the controlled substances list that now associates it with its cousin — marijuana." Here is more:
Senate Majority Leader Mitch McConnell told hemp advocates in his home state of Kentucky that he will introduce legislation to legalize the crop as an agricultural commodity. The versatile crop has been grown on an experimental basis in a number of states in recent years. “It’s now time to take the final step and make this a legal crop,” McConnell said.
Kentucky has been at the forefront of hemp’s comeback. Kentucky agriculture officials recently approved more than 12,000 acres (4,856 hectares) to be grown in the state this year, and 57 Kentucky processors are helping turn the raw product into a multitude of products.
Growing hemp without a federal permit has long been banned due to its classification as a controlled substance related to marijuana. Hemp and marijuana are the same species, but hemp has a negligible amount of THC, the psychoactive compound that gives marijuana users a high.
Hemp got a limited reprieve with the 2014 federal Farm Bill, which allows state agriculture departments to designate hemp projects for research and development. So far, 34 states have authorized hemp research, while actual production occurred in 19 states last year, said Eric Steenstra, president of the advocacy group Vote Hemp. Hemp production totaled 25,541 acres (10,336 hectares) in 2017, more than double the 2016 output, he said.
The crop, which once thrived in Kentucky, was historically used for rope but has many other uses, including clothing and mulch from the fiber, hemp milk and cooking oil from the seeds, and soap and lotions. Other uses include building materials, animal bedding and biofuels.
Hemp advocates fighting for years to restore the crop’s legitimacy hailed McConnell’s decision to put his political influence behind the effort to make it a legal crop again. “This is a huge development for the hemp industry,” Steenstra said. “Sen. McConnell’s support is critical to helping us move hemp from research and pilot programs to full commercial production.”
Brian Furnish, an eighth-generation tobacco farmer in Kentucky, has started making the switch to hemp production. His family will grow about 300 acres (120 hectares) of hemp this year in Harrison County. He’s also part owner of a company that turns hemp into food, fiber and dietary supplements. Furnish said hemp has the potential to rival or surpass what tobacco production once meant to Kentucky. “All we’ve got to do is the government get out of the way and let us grow,” he told reporters.
McConnell acknowledged there was “some queasiness” about hemp in 2014 when federal lawmakers cleared the way for states to regulate it for research and pilot programs. There’s much broader understanding now that hemp is a “totally different” plant than its illicit cousin, he said. “I think we’ve worked our way through the education process of making sure everybody understands this is really a different plant,” the Republican leader said.
McConnell said he plans to have those discussions with Attorney General Jeff Sessions to emphasize the differences between the plants. The Trump administration has taken a tougher stance on marijuana. The Department of Justice’s press office did not immediately respond to an email seeking comment.
McConnell said his bill will attract a bipartisan group of co-sponsors. He said the measure would allow states to have primary regulatory oversight of hemp production if they submit plans to federal agriculture officials outlining how they would monitor production. “We’re going to give it everything we’ve got to pull it off,” he said.
In Kentucky, current or ex-tobacco farmers could easily make the conversion to hemp production, Furnish said. Equipment and barns used for tobacco can be used to produce hemp, he said. Tobacco production dropped sharply in Kentucky amid declining smoking rates.
March 26, 2018 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Political perspective on reforms, Who decides | Permalink | Comments (1)
Tuesday, March 13, 2018
One of many great lines in the great musical Hamilton is "Everything is legal in New Jersey." But that is not quite right with respect to marijuana yet, though the recent election of a Governor who ran advocating for marijuana reform led to many reform advocates thinking the Garden State could become the next big legalization state. But, as is often the case, legislative reform is full of complications, and this New York Times article highlights how completing views on racial justice is shaping the debate in New Jersey. The piece is headlined "Racial Justice Drives Fight for, and Against, Legal Pot in New Jersey," and here are excerpts:
During his campaign for governor of New Jersey, Philip D. Murphy, a Democrat, pledged to legalize the recreational use of marijuana, telling Democrats at a party conference last year in Atlantic City that creating a new tax revenue was not what was motivating him.
“People ask me all the time, ‘Hey, are you sure you can generate $300 million from the legalization of marijuana?” Mr. Murphy said, citing a figure that his campaign had trumpeted. “I say, ‘You know what, I’m not sure, but that’s not the question. We’re not doing it for the dollars. We’re doing it for social justice.’”
Mr. Murphy argues that the disproportionate number of African-Americans who are jailed on marijuana charges is a main reason to legalize the drug, and he has the support of civil rights groups, cannabis business lobbyists, lawyers, doctors who prescribe medical marijuana and out-of-state cannabis growers.
But now that Mr. Murphy occupies the governor’s office, a major legislative obstacle is emerging: Ronald L. Rice, the state’s longest-serving black senator and the leader of its Black Caucus. “It’s always been said the issue is not money, the issue is social justice,” said Mr. Rice, a Democrat and a former Newark police officer. “But, it’s being sold on the backs of black folk and brown people. It’s clear there is big, big money pushing special interests to sell this to our communities.”
Medical marijuana became legal in New Jersey under former Gov. Jon Corzine, a Democrat, but his successor, Gov. Chris Christie, a Republican, rejected proposals to make recreational cannabis use legal.
The growing and selling of marijuana has already generated billions of dollars in the nine states where it is legal — but it is an industry that is overwhelmingly white. Mr. Rice fears the consequences would be dire in cities like Newark, which is already wrestling with a variety of problems, including widespread heroin addiction and a foreclosure crisis. Cannabis stores, he believes, would proliferate in black communities, much like liquor stores, and would produce a new generation of drug abusers....
His position on cannabis legalization not only puts him at odds with the governor and members of his party, but also with many African-Americans.
In New Jersey, African-Americans are three times more likely to be charged with marijuana possession than whites, even though both populations use the drug at similar rates. That has galvanized civil rights groups like the N.A.A.C.P. and the American Civil Liberties Union of New Jersey to support legalization. “All the collateral consequences that come with an arrest — jail time, losing your job, losing your housing — are disproportionately falling on communities of color,” said Dianna Houenou, a lawyer with the A.C.L.U. of New Jersey. “Through legalization we can begin to address the harms that have been inflicted.”
A statewide coalition of black pastors, the N.A.A.C.P. and the New Jersey chapter of the Drug Policy Alliance is pushing for legalization as a social justice issue, but only if it is linked to some type of compensation for the harm they say was done to black and brown families whose sons were incarcerated. The pastors said they wanted to make sure members of their communities were able to participate in the billion-dollar cannabis industry as growers and sellers, not just workers. They are frustrated that the wealth being generated in the other states where marijuana is legal is not reaching people of color.
Researchers at Marijuana Business Daily, an industry news site based in Denver, found that 81 percent of cannabis business owners were white, while less than 4 percent were black....
At a marijuana legalization forum held recently at Bethany Baptist Church in Newark, the Rev. Charles Boyer of Bethel A.M.E. Church in Woodbury said the worst thing that could happen was for communities most harmed by the prohibition to not have a say about legalization. “Do we want to be the ones responsible for playing a part in a system that will make tons of young white millionaires after years of making hundreds of thousands of poor black felons?” Pastor Boyer said.
The Drug Policy Alliance is lobbying for a bill that includes the automatic and retroactive expungement of criminal records for possession, making permits for cannabis shops affordable so that the market is accessible to lower-income entrepreneurs, and a commitment that a portion of the revenue from marijuana sales be used to provide education and job training for people of color. Some social justice activists are also calling for allowing people to grow their own cannabis plants.
State Senator Nicholas Scutari, a Democrat from Linden, is the author of a bill that would legalize the possession of small amounts of marijuana for anyone over 21 and would establish a state Division of Marijuana Enforcement. But it does not include any language discussing compensation. Mr. Scutari agrees that arrests for marijuana possession are disproportionately higher for blacks and Latinos and says his bill addresses the issue of social justice. “The individuals that are previously convicted of marijuana possession will no longer be subject to prosecution,” Mr. Scutari said....
For his part, Mr. Rice has proposed his own marijuana bill that would decriminalize the possession of 10 grams or less of marijuana, and make carrying more a disorderly persons charge that would impose only a fine. It would also expunge criminal records and release incarcerated people serving sentences for possessing small amounts of marijuana. But Mr. Scutari said that decriminalization would simply create an open-air drug market that would allow drug dealers to get richer without creating any kind of regulatory system to control how marijuana is sold.
Ultimately, any effort to promote civil rights could depend on what kind of bill Mr. Murphy is willing to sign. In a statement, Daniel Bryan, a spokesman for the governor, said that Mr. Murphy was committed to “the goal of building a stronger and fairer New Jersey, and supports the legalization of marijuana to advance the cause of social justice and combat the racial disparities in our criminal justice system.”
March 13, 2018 in Business laws and regulatory issues, History of Marijuana Laws in the United States, Political perspective on reforms, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)
Wednesday, March 7, 2018
The title of this post is the headline of this notable lengthy new Bloomberg Businessweek article. I am tempted to politicize this post by saying that a true "America First" President ought to be quite concerned about the sub-headline of this piece: "Why? Because the feds are bogarting the weed, while Israel and Canada are grabbing market share." I recommend the piece in full, and here are excerpts:
Lyle Craker is an unlikely advocate for any political cause, let alone one as touchy as marijuana law, and that’s precisely why Rick Doblin sought him out almost two decades ago. Craker, Doblin likes to say, is the perfect flag bearer for the cause of medical marijuana production—not remotely controversial and thus the ideal partner in a long and frustrating effort to loosen the Drug Enforcement Administration’s chokehold on cannabis research. There are no counterculture skeletons in Craker’s closet; only dirty boots and botany books. He’s never smoked pot in his life, nor has he tasted liquor. “I have Coca-Cola every once in a while,” says the quiet, white-haired Craker, from a rolling chair in his basement office at the University of Massachusetts at Amherst, where he’s served as a professor in the Stockbridge School of Agriculture since 1967, specializing in medicinal and aromatic plants. He and his students do things such as subject basil plants to high temperatures to study the effects of climate change on what plant people call the constituents, or active elements....
In June 2001, Craker filed an application for a license to cultivate “research-grade” marijuana at UMass, with the goal of staging FDA-approved studies. Six months later he was told his application had been lost. He reapplied in 2002 and then, after an additional two years of no action, sued the DEA, backed by MAPS. By this point, both U.S. senators from Massachusetts had publicly supported his application, and a federal court of appeals ordered the DEA to respond, which it finally did, denying the application in 2004.
Craker appealed that decision with backing from a powerful bench of allies, including 40 members of Congress, and finally, in February 2007, a DEA administrative law judge ruled that his application for a license should be granted. The decision was not binding, however; it was merely a recommendation to the DEA leadership. Almost two years later, in the last week of the Bush administration, the application was rejected. Craker threw up his hands. He firmly believed marijuana should be more widely grown and studied, but he’d lost any hope that it would happen in his lifetime. And he had basil to attend to.
Then, in August 2016, during the final months of the Obama presidency, the DEA reversed course. It announced that, for the first time in a half-century, it would grant new licenses. Doblin, who has seemingly endless supplies of optimism and enthusiasm, convinced the professor there was hope—again. So Craker submitted paperwork, again, along with 25 other groups. The university’s provost co-signed his application, and Senator Elizabeth Warren (D–Mass.) wrote a letter to the DEA in support of his effort. He’s still waiting to hear back. “I’m never gonna get the license,” Craker says.
Pessimism isn’t surprising from a man who’s been making a reasonable case for 17 years to no avail. Studies around the world have shown that marijuana has considerable promise as a medicine. Craker says he spoke late last year at a hospital in New Hampshire where certain cannabinoids were shown to facilitate healing in brain-damaged mice. “And I thought, ‘If cannabinoids could do that, let’s put them in medicines!’ ” He sighs. “We can’t do the research.”
Another sigh. “I’m naive about a lot about things,” he says. “But it seems to me that we should be looking at cannabis. I mean, if it’s going to kill people, let’s know that and get rid of it. If it’s going to help people, let’s know that and expand on it. … But there’s just something wrong with the DEA. I don’t know what else to say. … Somehow, marijuana’s got a bad name. And it’s tough to let go of.”....
Many people expect the Republican-controlled Congress to follow its recent tax overhaul by looking for ways to slash costs in Medicaid and Medicare. Legitimate research into the medicinal properties of marijuana could help. Studies show that opioid use drops significantly in states where marijuana has been legalized; this suggests people are consuming the plant for pain, something they could be doing more effectively if physicians and the FDA controlled chemical makeup and potency. A study published in July 2016 in Health Affairs showed that the use of prescription drugs for which marijuana could serve as a clinical alternative “fell significantly,” saving hundreds of millions of dollars among users of Medicare Part D....
Among those who’ve advised Craker is Tony Coulson, a former DEA agent who retired in 2010 and works as a consultant for companies developing drugs. Coulson was vehemently antimarijuana until his son, a combat soldier, came home from the Middle East with post-traumatic stress disorder and needed help. “For years I was of the belief that the science doesn’t say that this is medicine,” he says. “But when you get into this curious history, you find the science doesn’t show it primarily because we’re standing in the way. The NIDA monopoly prevents anyone from getting into further studies.”
Coulson blames the Obama administration for not acting sooner, creating a situation in which the decision on granting new growing licenses was passed down to Attorney General Jeff Sessions, who has publicly declared his belief in the dangers of marijuana. The NIDA monopoly is now his to change. “Sessions has a 1930s Reefer Madness view of the marijuana world,” Coulson says. “It’s not realistic, and it’s not what rank-and-file DEA really are concerned about. DEA folks have moved beyond this.”
“I guess I take a nationalist approach here,” says Rick Kimball, a former investment banker who’s raising money for a marijuana-related private equity fund and is a trustee for marijuana policy at the Brookings Institution. “We have a huge opportunity in the U.S.,” he says, “and we ought to get our act together. I’m worried that we’re ceding this whole market to the Israelis.”
March 7, 2018 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Medical community perspectives, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Who decides | Permalink | Comments (0)
Sunday, March 4, 2018
It has now been a full two months since Attorney General Sessions decided to rescind the Cole Memo which expressly stated that federal prosecutors would not prioritize criminal enforcement against state-compliant marijuana businesses. A lot could have happened in those two months, but for now it still seems, as I suggested in this prior post, that in the short term the Justice Department may have been impacted more by rescission of Cole Memo than marijuana industry. But this new Forbes article, headlined "How Cannabis Entrepreneurs Feel About Sessions' Reversal Of The Cole Memo," provides some industry-player perspectives on this front. I recommend the piece in full, as it provides "opinions from a collection of industry experts discussing Sessions’ reversal of Cole’s memorandum [which} cover investment strategies, regulatory compliance, disintermediation and yes blockchain." Here are a few of the quotes I found interesting:
Wil Ralston, President of SinglePoint (OTCMKTS: SING), a publicly-traded cannabis and technology holding company specializing in acquisitions of small to mid-sized companies with an emphasis on mobile technologies and emerging markets:
"Entrepreneurs seeking opportunities in the cannabis industry are still pushing full speed ahead. As an entrepreneur, you're always analyzing the risk:reward of your decision-making; as of right now, the potential success that can be realized in the cannabis industry is such that entrepreneurs will likely continue to find their way, even through the reversal of the Cole Memo. We've already seen quite a bit of pushback to Sessions' reversal of the memo, from the general public to government officials, and in the absence of a seriously damaging development, entrepreneurs will keep running towards the cannabis industry, not away from it."...
Leslie Bocskor, President of Electrum Partners, an advisory services firm specializing in medical and recreational cannabis and ancillary businesses:
“My take is that the sleeper technology for the cannabis industry will be blockchain and cryptocurrency. Whereas many think crypto is a solution for transactions, and it may be, my take is a little different. Since cannabis is the red-headed step child of the venture and early stage finance world, due to the federal illegality, we will see cryptocurrency ‘tokenomics’ (not my word, Thomas Carter of Dealbox; www.dlbx.io) be used to disintermediate the venture capital world, first in cannabis companies and then beyond. Using cryptocurrencies with registered compliant offerings to speed up and simplify the capital formation process will be the news we read about one year from now, having been done successfully for cannabis companies first.”
Sunday, February 25, 2018
In this post from last summer, I flagged the announcement from the office of the Mayor of Los Angeles that Mayor Eric Garcetti had appointed Cat Packer as Executive Director of the newly-established Los Angeles Department of Cannabis Regulation. This news was so very pleasing and exciting because Director Packer was a 2015 graduate of The Ohio State University Moritz College of Law, and as a star student in my marijuana seminar in Spring 2015, she has impressively and swiftly vindicated my representation to students that they could become leaders in the field of marijuana law and policy relatively quickly.
Director Packer's vision and activities are sure to have a profound impact on marijuana reform realities in California, and this new Vice piece headlined "LA's 'Pot Czar' Cares Who Cashes in on Legal Weed," provides a Q&A perspective on her work. Here is the piece's start and excerpts:
As cannabis laws across America continue to soften, states and local communities are beginning to come to terms with the destruction wreaked by the war on drugs, especially on black communities. Some cities are already beginning to make amends by going beyond mere legalization. They have started the process of overturning thousands of cannabis-related convictions. These policies would never manifest, however, without the help of activists who take their passion for social justice from the protests outside of city halls to the offices within them.
Cat Packer, who was recently appointed as the executive director of Los Angeles’s newly formed Department of Cannabis Regulation, has been given a unique opportunity to help create pot policy for one of the largest cities on the planet. As a woman of color with a background in drug policy reform, Packer is hyper-aware of the negative impact of past drug laws and the challenges those miscarriages of justice will present for her going forward.
I spoke to Packer to discuss how she plans to navigate the bureaucratic era of legal pot through the lens of activism and empathy.
LA is now the largest pot-friendly city in America. With that distinction and the rest of the country’s eyes on us, what sort of expectations or pressures are you fielding from others or putting upon yourself?
It's not really secret that Los Angeles has an opportunity to be a leader in cannabis policy. It’s going to be interesting because, as the largest city to take on this regulatory responsibility, and as a place that’s often regarded as the largest cannabis market in the world, we understand that cannabis and its impact are probably going to be felt the heaviest here.
We have communities here who have had very negative experiences, not only with cannabis policy, but are looking for a way forward. Voters across California and in the city of Los Angeles have voted overwhelmingly in support of responsible regulation and moving away from criminalization. That’s a huge shift in public opinion, and it’s a huge shift in public policy, and it’s going to take us some time to implement this policy effectively, but we’ve been given directions from voters, so we want to do everything we can to set up a responsible framework.
With many [dispensaries] having operated in a legally gray area for so long, what kind of resistance to this regulatory shift are you encountering and what are you doing to ensure it isn't just favoring large entities with the funds to quickly become compliant and crushing the small businesses currently operating in LA’s cannabis space?
There are folks on all sides of the spectrum, as to be expected. There are folks who are frustrated with the process, folks who are excited about the economic opportunity that comes from business ownership and jobs and opportunity. But I think that folks are realizing that this is a first-time policy for the city of Los Angeles, and we’re trying to make sure we do it the right way. One of the things we’re prioritizing is social equity.
We’re making sure that within these new cannabis laws and policies, we take a moment to look at these issues through a social justice lens. We have an opportunity to, at the very least, address the harm that communities here have experienced as a part of the enforcement of the war on drugs and as a part of the disproportionate enforcement of cannabis laws against certain communities. So we want to take a moment to acknowledge those communities and do what we can, as a city, to give folks meaningful access to what is going to be a multimillion dollar industry.
February 25, 2018 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)
Friday, February 23, 2018
"E.U. Regulation Will Revolutionize Global Data Privacy. How Will This Affect The Regulated Cannabis Sector?"
In prior posts here and here, I spotlighted articles published at the Cannabis Law Report discussing federal tax treatment of cannabis businesses authored by Chris Nani, a student in my Marijuana Law & Policy seminar last semester. I am now pleased and proud to spotlight that Chris Nani has branched out by authoring this new piece with the title that serves as the title of this post. Here is how it starts and ends:
A European Union regulation may soon shape the way U.S. cannabis companies create their privacy policies and standards. The European Union will fully implement the General Data Protection Regulation (GDPR) by May 25, 2018....
Data security is tantamount to consumers and companies that comply with the GDPR will have an advantage over others and their clients will appreciate the additional security.
Sunday, February 18, 2018
The title of this post is the title of this short paper recently posted to SSRN authored by Ian Stewart and Francis Joseph Mootz. Here is its abstract:
Legal adult-use marijuana is associated with risks that may cause bodily injury and property damage. Many of these risks have been well documented and widely discussed in the media, including theft, fire, motor vehicle accidents and consumption-related injuries. T he potential for an increase in the number and value of cannabis-related product liability claims and lawsuits, however, is of particular concern to the cannabis and insurance industries. The production, distribution and sale of an ingestible product that has psychoactive effects – accompanied by a wide range of anticipated labeling and marketing representations – will certainly result in robust product liability litigation.
Thursday, February 15, 2018
SAM releases report asserting Connecticut would face cost from marijuana legalization double projected tax revenues
The leading national group opposed to modern marijuana reform, Smart Approaches to Marijuana (SAM), today released this big new report titled "The Projected Costs of Marijuana Legalization in Connecticut." Here is how its "Introduction/Summary" gets started:
Much has been said about the revenue that marijuana legalization might bring to Connecticut. Few, however, discuss the costs of such a policy. Omitting costs is a critical oversight: no policy or business plan would be complete without discussing both sides of the balance sheet.
Although a full cost accounting of marijuana legalization would be impossible at present, enough data exists to make rough-and-ready estimates of certain likely direct and short-term costs, such as:
1. Administrative and enforcement costs for regulators
2. Increased drugged-driving fatalities
3. Increased drugged-driving injuries
4. Increased property damage to vehicles related to drugged driving
5. Short-term health costs
a. More emergency room visits for marijuana poisonings
b. Injuries from marijuana-concentrate extraction lab explosions/fires
6. Increased rates of homelessness
7. Workplace costs
a. Increased absenteeism
b. More workplace accidents among full-time employees
Initial approximations of these preliminary costs indicate that it is unlikely that revenues from legalization would ever exceed its costs. This report concludes that even a conservative cost estimate limited to only the issues above would cost Connecticut approximately $216 million in 2020, which would be the third year of legalization if the policy was implemented in 2018. (According to data from the Connecticut General Assembly’s Office of Fiscal Analysis, the legalization program will only be fully operational in its third year of operation.)
Such costs exceed, by more than 90 percent, the maximum projected official revenue estimate of $113.6 million for the third year of the proposed legalization program. (These costs are almost 300 percent of the minimum revenue estimate of $54.4 million, but to be conservative, this report uses the maximum estimate.)
February 15, 2018 in Business laws and regulatory issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms | Permalink | Comments (1)
Saturday, January 27, 2018
Last week I spotlighted this article published at the Cannabis Law Report titled "An Introduction To The Internal Revenue Code For Cannabis Businesses." The piece was authored by Chris Nani, a student in my Marijuana Law & Policy seminar last semester, and now available here via the Cannabis Law Report is another part of his taxing treatment. The piece is titled simply "Part II: My Proposed Tax Break," and here is an excerpt:
While there is still federal prohibition, Congress should incentivize current marijuana businesses to perform desirable social policy goals in exchange for tax deductions. Because taxes are so astronomically high for marijuana businesses such as dispensaries, by adding an amendment to § 280E Congress could specifically tailor it to marijuana businesses or include all scheduled I and II drugs. I elected to make it about all scheduled I and II drugs.
Under § 280E, the proposed amendment would read:
“Any scheduled I or II drug business that pays federal income taxes, regardless of its legality, is applicable to deduct from its expenses any activities that meet the following: (i) educational programs that demonstrate health risks and safety procedures for the drug(s) the business is involved with (ii) informational programs that display the short and long-term risks of the drug(s) the business is involved with and (iii) informational programs that educate on how to identify the signs of an overdose and how to properly treat it for the drug(s) the business is involved with.”
Just like any statute, my proposed § 280E amendment is vulnerable to abuse, but hopefully the legislative history would be able to give guidance to the IRS and courts if litigation arose. The social goal aimed at this amendment is public health. By increasing awareness and knowledge of a drug, the user will be able to make better judgment calls and more accurately understand the consequences of their actions.
Now, to fully dissect the language of my proposed amendment. The first sentence applies to any scheduled I or II drug regardless of its legality. This includes drugs such as heroin, LSD, and marijuana along with prescribed drugs such as Adderall, Fentanyl, and OxyContin. All of the drugs listed have side effects and can damage the human body. By educating the public on the health risks and safety procedures for the drug, heroin dealers and marijuana dispensaries both could reduce their federal income taxes. I believe it’s better for a heroin addict to understand the deadliness of the drug and how to properly use it beforehand to help minimize the chance of death. Similarly, for marijuana, dispensaries could receive a deduction while showing consumers how to properly use a bong or smoke a blunt while discussing the health consequences of smoking. It would allow dispensaries to showcase their products and demonstrate any new innovative ways to use marijuana while additionally educating the public on how to properly use a device.
Prior related Post:
January 27, 2018 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Taxation information and issues | Permalink | Comments (0)
Saturday, January 20, 2018
The title of this post is the title of this new article published at the Cannabis Law Report. I am distinctly proud of this article because it was authored by Chris Nani, a student in my Marijuana Law & Policy seminar last semester. Here is a portion of this piece:
Marijuana-related businesses face an additional hurdle other businesses do not. Congress specifically implemented § 280E to prevent any business trafficking illegal drugs from receiving deductions. 26 U.S.C. §280E. The provision prohibits any deductions or credits to businesses trafficking schedule I or II illegal drugs within the meaning of the Controlled Substances Act of 1970. Marijuana is currently classified as a schedule I drug. Because marijuana-related businesses such as dispensaries or farmers traffic marijuana they either are not applicable for any tax deductions under § 162 or are extremely limited on what they can deduct.
The IRS’ current stance on what marijuana-related businesses can deduct is summarized in Chief Counsel Advice 201504011. It allows for marijuana businesses to deduct some of their cost of goods sold (COGS). The memo allows for deductions under § 471 as long as they comply with § 280E. § 471 allows for the inventoriable cost of any good that can be capitalized to be deductible. 26 U.S.C. § 471. Meaning, raw materials or labor costs are deductible because they are used within a year to create a product. Although the IRS updated the tax code with § 263A to permit additional expenses included under inventoriable cost, the IRS memo prohibits marijuana-related businesses from using § 263A in their calculation of COGS.
Friday, January 12, 2018
US Attorney for Oregon, expressing "significant concerns about the state's current regulatory framework," plans summit in response to new AG enforcement policy
Billy J. Williams, the United States Attorney for the District of Oregon, has this fascinating new newspaper commentary under the headlined "U.S. Attorney: A call for transparency and action on marijuana." Here is most of what it says:
Earlier this month, Attorney General Jeff Sessions issued a memorandum rescinding existing Justice Department guidance on marijuana enforcement. The move gives U.S. Attorneys wide latitude to develop district-specific strategies and deploy department resources without Washington, D.C. artificially declaring some cases off limits. Before developing a strategy for Oregon, however, we need more information from the state.
Here's what we know right now. Oregon has a massive marijuana overproduction problem. In 2017 alone, postal agents in Oregon seized 2,644 pounds of marijuana in outbound parcels and over $1.2 million in cash. For comparison, postal agents in Colorado seized just 984 pounds of marijuana during a four-year period beginning in 2013.
Overproduction creates a powerful profit incentive, driving product from both state-licensed and unlicensed marijuana producers into black and gray markets across the country. This lucrative supply attracts cartels and other criminal networks into Oregon and in turn brings money laundering, violence, and environmental degradation.
A survey of recent federal cases in Oregon illustrates alarming trends: in the last six months, federal agents and port police have seized over $1 million in cash linked to marijuana transactions passing through Portland International Airport; law enforcement partners from 16 states have reported marijuana seizures from Oregon. In the first half of 2017, in-state production of butane hash oil resulted in six separate lab explosions. And police and sheriff deputies regularly encounter vehicles with hundreds of pounds of marijuana on highways heading out of state.
We also know that even recreational marijuana permitted under state law carries ill-effects on public health and safety, as Colorado's experience shows. Since 2013, marijuana-related traffic deaths have doubled in Colorado. Marijuana-related emergency and hospital admissions have increased 35 percent. And youth marijuana use is up 12 percent, 55 percent higher than the national average. We must do everything in our power to avoid similar trends here in Oregon.
As U.S. Attorney, I have traveled throughout the state to meet with community leaders and citizens to discuss distinctive issues facing rural Oregonians. Many of these conversations quickly turn to marijuana. Landowners throughout central and southwestern Oregon have legitimate concerns that marijuana cultivation has had a detrimental effect on water rights, public lands and livability.
Rural communities simply do not have the resources to fund the additional police and sheriff deputies needed to address these issues. While state officials have allocated a portion of marijuana tax revenues to public safety organizations including the Oregon State Police, the net effect on enforcement remains an open question. Moreover, can 20 Oregon Liquor Control Commission marijuana enforcement specialists adequately police thousands of recreational licensees?
We don't know the answer to these questions, in part, because the state has yet to release a final version of its report evaluating out-of-state diversion, distribution to minors, cultivation on public land and violent crime associated with marijuana in Oregon. We need this information to move forward smartly, effectively, and transparently.
In sum, I have significant concerns about the state's current regulatory framework and the resources allocated to policing marijuana in Oregon.
Congress's judgment on marijuana activity is reflected in the Controlled Substances Act. Before charting a path forward for the enforcement of marijuana in Oregon, we must see how the state mitigates the public safety and health issues raised here. The time for informed action is now.
In the coming days, I will send invitations to federal, state, local and tribal law enforcement, public health organizations, Oregon marijuana interests and concerned citizen groups to attend a summit to address and remedy these and other concerns.
This summit and the state's response will inform our federal enforcement strategy. How we move forward will depend in large measure on how the state responds to the gaps we have identified. Until then it would be an inappropriate abdication of my duties to issue any blanket proclamations on our marijuana enforcement strategy in light of federal law.
This commentary and its coming echoes confirms what has been one of my thoughts since Attorney General Sessions' recent decision to rescind the Cole Memo (basics here and here): each US Attorney in each US district is now able to be (and perhaps inevitably will become) the chief regulatory officer for marijuana reform in that jurisdiction. This commentary is a clear statement that this US Attorney is concerned that Oregon's state reforms and regulations are not working, and he is going to have a quasi-regulatory hearing with interested parties, and then (perhaps) he will issue some "regulations" in the form of some explanation of the types of federal marijuana crimes and criminals he will be eager to prosecute in the near future.
January 12, 2018 in Business laws and regulatory issues, Criminal justice developments and reforms, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)
Saturday, January 6, 2018
Two major news sources have run two major recent pieces about efforts in California to enhance minority participation in the marijuana industry:
From the Washington Post here, "California cities try to atone for war on drugs with help for minority marijuana entrepreneurs." An excerpt:
At least four California cities — Los Angeles, Oakland, Sacramento and San Francisco — have created “equity programs” to help people personally affected by the war on drugs or who come from communities that bore the brunt of it get an early stake in the legal cannabis business.
The goal is to attempt to atone for past policies that perpetuated generational poverty and to diversify an industry whose profile is overwhelmingly young, white, male and wealthy. “The folks who are profiting don’t look anything like the people bearing the brunt of the war on drugs,” said Greg Minor, who runs Oakland’s cannabis program.
From the Los Angeles Times here, "Despite helping hand from L.A., drug offenders would face obstacles in cannabis industry." An excerpt:
As California’s legal cannabis industry heats up, officials in Los Angeles and other cities say they want to make sure early players in the pot business who were selling it when it was still illegal aren’t pushed out of the market. In Los Angeles and Oakland, city cannabis rules provide for so-called social-equity programs, which provide a leg up to marijuana business license applicants who either have been convicted of a marijuana crime or live in neighborhoods disproportionately affected by marijuana arrests.
But many of the entrepreneurs who might benefit from those programs would face a huge obstacle: Most banks won’t open accounts for marijuana businesses, and the few institutions that are willing to do so are likely to refuse to serve businesses whose owners or managers have criminal records, even if those records are for selling marijuana.
January 6, 2018 in Business laws and regulatory issues, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)