Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

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Friday, May 22, 2015

"Senate panel votes to end VA ban on medical marijuana"

The title of this post is the headline of this notable new piece reporting on a notable recent vote in the US Senate.  Here are the basics from the start of the article:

The Senate Appropriations Committee on Thursday advanced a $77.6 billion funding bill for military construction and veterans benefits that includes an amendment allowing Veterans Affairs doctors to recommend the use of medical marijuana.

The amendment from Sens. Jeff Merkley (D-Ore.) and Steve Daines (R-Mont.) won approval in an 18-12 vote. Sen. Mark Kirk (R-Ill.), the chairman of the subcommittee that oversees the funding bill and a veteran of the Navy Reserve, urged his colleagues to vote against the amendment.

A 2011 directive by the Veterans Health Administration prohibits agency doctors from consulting patients about medical marijuana use. “It’s an enormous inconvenience to our veterans,” said Merkley, who explained that current law forces veterans to seek a medical appointment outside of the VA.

House Democrats attempted to add a similar amendment to the lower chamber’s version of the bill, but failed to win enough votes. Overall, the bill is $5.5 billion above the current funding level, but $1.2 billion less than President Obama’s request. The House passed its version of the bill late last month, about $1 billion less than the Senate’s.

May 22, 2015 in Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Political perspective on reforms, Who decides | Permalink | Comments (0)

Tuesday, May 19, 2015

"How D.C. pot legalization has become ‘the dealer-protection act of 2015’"

The title of this post is the headline of this fascinating recent Washington Post article.  Here are excerpts:

Not long ago, a man who had covertly dealt pot in the nation’s capital for three decades approached a young political operative at a birthday party in a downtown Washington steakhouse. He was about to test a fresh marketing strategy to take advantage of the District’s peculiar new marijuana law, which allows people to possess and privately consume the drug but provides them no way to legally buy it for recreational use. Those contradictions have created a surge in demand and new opportunities for illicit pot purveyors.

“Do you like cannabis?” asked the dealer. “Yes,” answered the man, who had recently left his job as a Republican Senate staffer.

So, the dealer recalled, he handed his new acquaintance a tiny plastic bag that contained half a gram of “Blue Dream,” a sweet and fruity strain of marijuana. With the bag he also presented a business card and an offer: If you like what you try, call me. Within days, the man — now a lobbyist — picked up the phone.

The dealer — who, like others interviewed, spoke on the condition of anonymity because what they do remains illegal — said he has used that same in-plain-sight sales pitch at similarly upscale D.C. settings, collecting three new buyers and a pair of new suppliers. The new business is all thanks to the quirks of the District’s legalization, which has boosted the appetite for marijuana as more people become comfortable acquiring it through the black market. “It’s the dealer-protection act of 2015,” he said. “This was a license for me to print money.”

Who is responsible for this unintended consequence depends on whom you ask. In November, Washington voters overwhelmingly approved an initiative that made it legal to possess and grow marijuana, but the following month, Congress enacted a spending prohibition that barred the city from creating a system through which pot could be lawfully bought, sold and taxed.

That means there are only three ways for people in the District to legally obtain marijuana. Someone can give it to them, though the donors, of course, must find their own original source. Residents can each grow as many as three plants to maturity at one time, though that process is complicated, expensive and time-consuming. And with a doctor’s approval, people can get medical-marijuana cards, though supply remains dismal.

“The black market is the obvious choice,” said a 24-year-old government contractor who deals part time. “It’s awesome.”

Rep. Andy Harris (R-Md.), who has led Congress’s charge to thwart the legalization, blamed city leaders, insisting that they should have forbidden possession when he and other lawmakers prevented Washington from creating a controlled marketplace. “There’s no question that demand will go up, and there’s no legal source of supply,” he said. “Clearly, this was not thought out rationally by the city government, which chose to go forward with legalization without regulation.”

John Falcicchio, chief of staff for Mayor Muriel E. Bowser (D), sharply countered that assertion. “In D.C., it shouldn’t be called the black market. It should be called the Harris market,” he said. “If there’s any uptick in the black market, it’s thanks to Harris.”...

That boost in demand, supporters of legalization say, helps explain why lawful use in the District must be paired with lawful sales.   “If you’re going to legalize marijuana, you also have to legalize the supply because you want to get rid of the black market or at least limit the black market,” said Keith Stroup, founder of NORML.  “Right now, they’ve done the exact opposite.”

Delroy Burton, chairman of the D.C. Fraternal Order of Police, said a regulated market would have “pulled the teeth out of the illegal drug trade” and eventually wiped out the violence associated with it.

Jeffrey Miron, an economics teacher at Harvard University, compared marijuana’s potential evolution to that of alcohol after prohibition ended in 1933.   “People seem to prefer going to a legal supplier rather than making beer in their basement,” said Miron, director of economic studies at the libertarian Cato Institute, which supports the legalization of all drugs.

He and others who have studied the topic don’t suggest that illicit sales would disappear overnight, but after several years — even a decade — they argue that the black market could not compete with a controlled market.

Rep. Andy Harris rejected those arguments.  “I think there’s value in keeping the supply chain illegal at this point,” he said, maintaining that it provides “a check on the system.”

The longtime District dealer who now markets his product at chic D.C. gatherings has already considered what he would do if the city regulated pot sales.  He and his friends, he said, would open their own dispensary.  They’d go legit.

May 19, 2015 in Criminal justice developments and reforms, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Monday, May 18, 2015

Time magazine devotes cover story to "The Great Pot Experiment"

Final-pot-coverI am very pleased to see that the new issue of Time magazine has a cover with an amusing picture and this text: "The Highly Divisive, Curiously Underfunded and Strangely Promising World of Pot Science."  I have long thought that one of the biggest problems with federal marijuana prohibition has been its significant anti-science impact, and the subheading of this Time cover story highlights this theme: "Legalization keeps rolling ahead.  But because of years of government roadblocks on research, we don’t know nearly enough about the dangers of marijuana — or the benefits."  Here are excerpts from a must-read article:

Welcome to the encouraging, troubling and strangely divided frontier of marijuana science.  The most common illicit drug on the planet and one of the fastest-growing industries in America, pot remains – surprisingly – something of a medical mystery, thanks in part to decades of obstruction and misinformation by the federal government.  Potentially groundbreaking studies on the drug’s healing powers are being done to find treatments for conditions like epilepsy, posttraumatic stress disorder (PTSD), Alzheimer’s disease, Parkinson’s disease, sickle-cell disease and multiple sclerosis.  But there are also new discoveries about the drug’s impact on recreational users.

The effects are generally less severe than those of tobacco and alcohol, which together cause more than 560,000 American deaths annually.  Unlike booze, marijuana isn’t a neurotoxin, and unlike cigarettes, it has an uncertain connection to lung cancer.  Unlike heroin, pot brings almost no risk of sudden death without a secondary factor like a car crash.  But science has also found clear indications that in addition to short-term effects on cognition, pot can change developing brains, possibly affecting mental abilities and dispositions, especially for certain populations.  The same drug that seems relatively harmless in moderation for adults appears to be risky for people under age 21, whose brains are still developing.  “It has a whole host of effects on learning and cognition that other drugs don’t have,” says Jodi Gilman, a Harvard Medical School researcher who has been studying the brains of human marijuana users.  “It looks like the earlier you start, the bigger the effects.”

That relatively measured tone is a far cry from the shrill warnings of Harry J. Anslinger, the first commissioner of the Federal Bureau of Narcotics, who in the 1930s set the standard for America’s fraught debate over marijuana with wild exaggerations. “How many murders, suicides, robberies, criminal assaults, holdups, burglaries and deeds of maniacal insanity it causes each year, especially among the young, can only be conjectured,” he wrote as part of a campaign to terrify the country.  As recently as the 1970s, President Richard Nixon talked about the drug as a weapon of the nation’s enemies. “That’s why the communists and the left-wingers are pushing the stuff,” he was recorded saying in private. “They’re trying to destroy us.”

The official line today is better grounded in data and research.  And the new focus is squarely on brain development. “I am most concerned about possibly harming the potential of our young people,” says Dr. Nora Volkow, the head of the National Institute for Drug Abuse (NIDA).... “That could be disastrous for our country.”  But decades of prohibition and official misinformation continue to shape public views.... 

As states now rush to legalize pot and unwind a massive criminalization effort, the federal government is trying to play catch-up on the science, with mixed success.  The only federal marijuana farm, at the University of Mississippi, has recently expanded production with a $69 million grant in March, and Volkow has expressed a new openness to studies of marijuana’s healing potential.   In the coming months, Uncle Sam will begin a 10-year, $300 million study with thousands of adolescents to track the harm that marijuana, alcohol and other drugs do to the developing brain.  High-tech imaging will allow researchers for the first time to map the effects of marijuana on the brain as humans age.

But scientists and others point out that a shift to fund the real science of pot still has a long way to go.  The legacy of the war on drugs haunts the medical establishment, and federal rules still put onerous restrictions on the labs around the country that seek to work with marijuana, which remains classified among the most dangerous and least valuable drugs.  “We can do studies on cocaine and morphine without a problem, because they are Schedule II,” explains Fair Vassoler, a researcher at Tufts University... who has replicated Hurd’s rat experiment with synthetic pot.  “But marijuana is Schedule I.”

May 18, 2015 in Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Medical community perspectives, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research | Permalink | Comments (1)

Sunday, May 10, 2015

Highlighting the high taxes facing those in the legal business of marijuana highs

DownloadThis New York Times article, headlined "Legal Marijuana Faces Another Federal Hurdle: Taxes," highlights the headaches that tax realities pose for state-legal marijuana regimes. Here are excerpts:

The country’s rapidly growing marijuana industry has a tax problem.  Even as more states embrace legal marijuana, shops say they are being forced to pay crippling federal income taxes because of a decades­-old law aimed at preventing drug dealers from claiming their smuggling costs and couriers as business expenses on their tax returns.

Congress passed that law in 1982 after a cocaine and methamphetamine dealer in Minneapolis who had been jailed on drug charges went to tax court to argue that the money he spent on travel, phone calls, packaging and even a small scale should be considered tax write-­offs.  The provision, still enforced by the I.R.S., bans all tax credits and deductions from “the illegal trafficking in drugs.”

Marijuana business owners say it prevents them from deducting their rent, employee salaries or utility bills, forcing them to pay taxes on a far larger amount of income than non-­marijuana businesses with the same earnings and costs.  They also say the taxes, which apply to medical and recreational sellers alike, are stunting their hiring, or even threatening to drive them out of business.

The issue reveals a growing chasm between the 23 states, plus the District of Columbia, that allow medical or recreational marijuana and the federal bureaucracy, which includes national forests in Colorado where possession is a federal crime, federally regulated banks that turn away marijuana businesses and the halls of the I.R.S.

While President Obama and top federal officials have allowed states to pursue legalization, marijuana advocates say the dissonance between increasingly permissive state laws and federal prohibitions is creating a morass of complications and uncertainty.  The tax rule, an obscure provision referred to as 280E, catches many marijuana entrepreneurs by surprise, often in the form of an audit notice from the I.R.S. Some marijuana businesses in Colorado, California and other marijuana-­friendly states have challenged the I.R.S. in tax court....

A normal business, for example, might pay a 30 percent federal rate on its taxable income, which would represent its gross income minus deductible business expenses.  A marijuana business, on the other hand, might pay the same federal rate on all of its gross income because it cannot take these deductions.  The difference can raise the rate on a marijuana business to 70 percent or more of its profits....

Colorado and a handful of other states have changed their tax laws to let legal marijuana businesses take deductions on their state returns.  And this month, Senator Ron Wyden and Representative Earl Blumenauer, both Democrats of Oregon, which legalized recreational marijuana last year, introduced legislation that would allow marijuana businesses that are following their states’ legalization laws to take regular deductions on their federal returns.  “It’s affecting thousands of businesses, and it’s doubling, tripling, quadrupling their taxes,” Mr. Blumenauer said. “It just cripples them.”  The current system, he said, encourages marijuana sellers to file tax returns that do not follow the law and simply hope the I.R.S. does not spot them....

Accountants and tax lawyers, who are inundated with calls from marijuana shops these days, say the rules are murky and make little sense.  If marijuana retailers dedicate parts of their stores to yoga, drug education or selling non-­drug merchandise, can they deduct part of their rent? If employees split their time between cleaning the store and selling marijuana, are their salaries partly deductible?

“There’s no clear direction,” said Scott Levy, an accountant in Arizona who said that marijuana sellers made up about one-­fifth of his business.  “You find all these weird little strategies that people use to try to parse the definitions.”

Oddly, accountants said, one expense that marijuana retailers can easily take off their taxes is the marijuana itself.  The wording of the tax laws and their interpretation since states began to legalize medical marijuana has allowed businesses to deduct the expenses of wholesale marijuana or growing the plant, from the price of the seeds or baby plants to the water and growing lights needed to produce it.  Only when retailers go to sell those buds, brownies or marijuana-­infused drinks do the tax restrictions kick in.

May 10, 2015 in Federal Marijuana Laws, Policies and Practices, Taxation information and issues | Permalink | Comments (0)

National Review editors urge federal marijuana reform to be on "Constitutionalist Agenda for the GOP"

Images (3)The National Review, an august conservative magazine, has this lengthy new commentary by editors Ramesh Ponnuru and Reihan Salam titled "A Constitutionalist Agenda for the GOP: How to start restoring respect for the Constitution." Here is point five on the agenda:

Allow states to go their own way on marijuana: Public opinion on marijuana is changing rapidly. A narrow majority of Americans now favors marijuana legalization, and a number of states are experimenting with creating their own legal marijuana markets.  The problem is that while there are a number of new marijuana businesses that are legal under state law, they remain illegal under federal law.  This has led to a great deal of uncertainty and confusion, yet it also creates an opportunity for conservatives.

The current marijuana debate highlights the important but much-neglected constitutional distinction between interstate commerce and in-state commerce.  In Gonzales v. Raich, the Supreme Court ruled that Congress had the power to criminalize the local cultivation and use of marijuana under the commerce clause even if state law authorized it.  In his concurring opinion, Justice Antonin Scalia observed that Congress has the power to regulate in-state activities that do not have an impact on interstate commerce when doing so is “necessary to make a regulation of interstate commerce effective.”  But what if regulating in-state activities is not necessary to achieve this goal?  Recently, William Baude, a law professor at the University of Chicago, has argued that constitutional doctrine should recognize that though Congress has the right to regulate interstate commerce, it can regulate in-state commerce only insofar as doing so is essential to achieving a legitimate constitutional purpose.  One could argue that the failure to regulate in-state commerce in marijuana will lead to negative spillover effects that cross state borders.  If a state can demonstrate that it is capable of regulating its in-state marijuana market effectively, however, the justification for federal interference is greatly weakened.

With this principle in mind, Congress could pass a law formally declaring that the federal government would recognize the legal status of marijuana businesses under state law as long as in-state marijuana markets met certain requirements.  The same principle could extend to other policy questions as well, such as the federal role in establishing a minimum drinking age.  If a state moves to lower its drinking age while pursuing various other steps that would reduce the harms associated with alcohol consumption, should the federal government try to make states keep their minimum drinking age at 21? By limiting federal interference in the regulation of in-state markets to what is strictly necessary to achieve legitimate constitutional purposes, we will foster more creativity and experimentation at the state level.

May 10, 2015 in Federal Marijuana Laws, Policies and Practices, Political perspective on reforms, Who decides | Permalink | Comments (0)

Monday, May 4, 2015

SCOTUS asks for views from US Solicitor General on original lawsuit between states over marijuana reform

Via this order list, the US Supreme Court called for the views of the Solicitor General in the original case of Nebraska and Oklahoma v. Colorado.  That is the case, as readers may recall from posts here and here back in December, in which two states filed suit directly in the Supreme Court seeking "a declaratory judgment stating that Sections 16(4) and (5) of Article XVIII of the Colorado Constitution [legalizing and regulating marijuana sales] are preempted by federal law, and therefore unconstitutional and unenforceable under the Supremacy Clause, Article VI of the U.S. Constitution."

I am not sure what the usual timelines tend to be for submission of CVSG briefs during this time of year, but I would think this request from the Justices will just now further slow the resolution of a suit that was filled five months ago and will remain in limbo now until the Solicitor General weighs in.

Prior related posts:

May 4, 2015 in Federal court rulings, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Initiative reforms in states, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Saturday, May 2, 2015

"Do marijuana prisoners deserve amnesty?"

The title of this post is the headline of this notable new CNN commentary authored by Mike Riggs, who is the communications director for Families Against Mandatory Minimums. Though the commentary starts with a discussion of marijuana reforms, its real focus seems to be advocating wholesale federal drug sentencing reform. Here are excerpts: 

Since 2012, when voters in Colorado and Washington approved the tax and sale of recreational marijuana, the cognitive dissonance of America's drug penalties has become even more absurd.  Where we once incarcerated people for growing and selling "just a plant," we're now incarcerating people for growing and selling "just a plant" that tens of millions of people can grow and sell legally.

Marijuana is legal only in certain states, and illegal under federal law.  Still, it's worth asking what Congress would do with the thousands of pot offenders sent to federal prison each year if we repealed, or even just reformed, federal pot laws.

In 2010, Congress voted to change federal penalties for crack cocaine with the Fair Sentencing Act.  Prior to the law's passage, 5 grams of crack cocaine triggered the same mandatory minimum sentence as 500 grams of powder cocaine. Congress reduced that disparity, from 100-to-1 to 18-to-1, which significantly reduced crack cocaine sentences.  But Congress did nothing to change the sentences of the more than 8,000 federal crack prisoners who were locked up when the bill was signed into law.

So the repeal of federal marijuana laws could likely leave us with many thousands of federal pot prisoners serving sentences longer than what they'd receive in a post-reform courtroom....

If Congress changes marijuana laws without allowing currently imprisoned pot offenders to seek new sentences, should this president or the next simply throw open the gates?   Clemency feels particularly appropriate for marijuana prisoners, who sit in cells for trafficking and dealing while state legislators argue over how to spend the revenues generated from pot taxes and newspapers tell us how to incorporate the plant in our cooking....

In 2014, then-Deputy Attorney General James Cole announced a Justice Department initiative to review the petitions of federal prisoners serving sentences longer than what they'd receive if sentenced today, and to grant clemency to those whose early release would not compromise public safety.  The second wave of clemencies granted since the initiative launched included both crack offenders and a single marijuana offender.

But clemency, by its very nature, benefits only a small number of people. Even if President Obama were to grant 2,000 commutations over the next 21 months — an unprecedented number — there are roughly 100,000 drug offenders in federal prison. The vast majority would be left to serve excessively long sentences.

Our drug policies — and not just those pertaining to marijuana — require sweeping, comprehensive, grand reform....  All drug offenders are getting a raw deal from our criminal justice system. It would be a mistake to say, "Let out the people who sell a drug that I'm comfortable with, and to hell with all the rest." Federal and state legislators need to address bad policies for all drug types, and then establish a clear route to resentencing for pot dealers — and everybody else.

May 2, 2015 in Criminal justice developments and reforms, Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (1)

House of Representatives narrowly rejects allowing VA doctors to recommend medical marijuana for vets

As reported in this Hill article headlined "House rejects proposal to let VA doctors recommend medical marijuana," another significant pro-marijuana reform amendment almost got a thumbs up from the GOP-controlled US House of Representatives. Here are the details:

The House rejected a proposal Thursday to allow doctors at Department of Veterans Affairs hospitals to discuss the use of medical marijuana with patients.  Rep. Earl Blumenauer's (D-Ore.) amendment to the first fiscal 2016 appropriations bill of the year, which funds the VA and military construction projects, failed narrowly by a vote of 210-213.

A total of 35 Republicans voted in favor of the amendment, while eight Democrats voted against it.  Boos ensued from the Democratic side of the House chamber when Republicans closed the vote despite the razor-thin margin.

Medical marijuana is legal in more than 30 states and the District of Columbia.  But VA doctors are prohibited from completing patient forms seeking recommendations or opinions regarding medical marijuana to treat conditions like post-traumatic stress disorder (PTSD).  A 2012 VA report found nearly 30 percent of veterans who served in Iraq and Afghanistan suffer from PTSD or depression.

Lawmakers from both parties argued veterans should at least be able to receive recommendations from their doctors about the drug's merits. They stressed the amendment wouldn't force doctors to recommend medical marijuana or authorize marijuana possession at VA facilities. "Let's lift the gag order. We owe it to our veterans to give them complete information when they ask for it, even if the means discussing medical marijuana," said Rep. Sam Farr (D-Calif.).

Rep. Dana Rohrabacher (R-Calif.) said fellow Republicans should support allowing free discussion about medical marijuana between veterans and their doctors. "As Republicans, we supposedly believe in the doctor-patient relationship. But apparently some of my colleagues believe that relationship is not relevant when it comes to VA doctors and their patients," Rohrabacher said during floor debate.

"It is criminal that we send our men and women off to war where their minds and bodies are broken and then deny them the ability to obtain a recommendation from a legitimate VA doctor upon their return home," Rohrabacher added. But other Republicans warned that a drug that remains illegal in many states shouldn't be prescribed for veterans with psychological problems.

"Why in the world would we give a drug that is addictive, that is prohibited under Schedule I, that is not accepted for any specific mental disease or disorder and enhances psychosis and schizophrenia, why are we going to give that to our veterans, especially those with PTSD? That is just absolutely insane," said Rep. John Fleming (R-La.), a physician.

Blumenauer offered the same amendment to the VA appropriations bill last year. It was defeated by a vote of 195-222, a much wider margin than Thursday's. Marijuana legalization advocates interpreted the close vote as a sign lawmakers don't view the issue as politically risky as in the past.

May 2, 2015 in Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Wednesday, April 22, 2015

Is resignation of current DEA head a very big moment for federal marijuana policy?

The question in the title of this post is prompted by a number of stories I have seen in the wake of yesterday's news that Michele Leonhart is resigning as Administrator of the Drug Enforcement Administration.  Here are links to some of these stories:

  • From Bloomberg here, "Marijuana Activists Cheer Michele Leonhart's Exit from the DEA"

  • From the Daily Caller here, "Marijuana Advocates Thrilled At DEA Administrator’s Expected Resignation"

  • From The Hill here, "Marijuana advocates push for new pot-friendly DEA chief"

The last story linked here highlights what will really determine the answer to the question in the title of this post: if President Obama nominates somebody for this position who expresses openness to federal marijuana reforms and a serious commitment to a more public-health oriented approach to all drug enforcement issues (e.g., Dr. Sanjay Gupta?), the transition at the top of DEA could end up being a very big deal.

April 22, 2015 in Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (1)

Monday, April 20, 2015

New Brookings series starts by identifying "12 key people to watch in marijuana policy"

Regular readers already know that The Brookings Institution has been committed to doing thoughtful and cutting-edge research, reports and blogging on the legal, political and social realities surrounding modern marijuana reform.   Today, the front-page of the Brookings website has this announcement and link:

In the past few years, marijuana policy has emerged as a key issue in American politics. In this post — the first in the FixGov blog's 4/20 blog series — John Hudak lays out 12 people to watch in the future of marijuana policy.

I very much like John's list of a dozen key marijuana reform players, and here I will note how he introduces his list and a few of its first four notable names:

Marijuana policy has emerged as a key issue in American politics, particularly over the past few years. The issue is being debated at local, state, and federal levels, and has captured the attention of media organizations and research institutions nationwide and around the world.

Navigating the policy terrain and understanding what is happening in this fast-paced, dynamic, and changing arena is often tough.  Knowing who is influential can be even more difficult. Because of the expansive nature of the policy conversation there are hundreds of key players making a difference — on both sides of this issue — and that list is seemingly ever growing.

In this post, I list 12 people who each bring something interesting to the table and may play an important role in the future of this policy area.  They may not be the most important, though surely some of the people on this list could be considered so. Nor is this list ranked in order of importance or impact. Instead, it offers a brief overview of how these 12 individuals may help shape the future of cannabis policy....

1. Hillary Clinton, 2016 Presidential Candidate

2. Rand Paul, U.S. Senator & 2016 Presidential Candidate

3. Vivek Murthy, U.S. Surgeon General

4. Loretta Lynch, U.S. Attorney General designee

April 20, 2015 in Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Friday, April 17, 2015

"Dr. Sanjay Gupta: It's time for a medical marijuana revolution"

150414135452-weed-3-sanjay-gupta-medium-plus-169The title of this post is the headline of this new CNN commentary by Dr. Sanjay Gupta, which is something of a preview of a new documentary on medical marijuana titled "Weed 3: The Marijuana Revolution" airing at 9 pm Sunday on CNN. Here is how the commentary starts:

I see signs of a revolution everywhere.  I see it in the op-ed pages of the newspapers, and on the state ballots in nearly half the country.  I see it in politicians who once preferred to play it safe with this explosive issue but are now willing to stake their political futures on it.  I see the revolution in the eyes of sterling scientists, previously reluctant to dip a toe into this heavily stigmatized world, who are diving in head first.  I see it in the new surgeon general who cites data showing just how helpful it can be.

I see a revolution in the attitudes of everyday Americans.  For the first time a majority, 53%, favor its legalization, with 77% supporting it for medical purposes.  Support for legalization has risen 11 points in the past few years alone.  In 1969, the first time Pew asked the question about legalization, only 12% of the nation was in favor.

I see a revolution that is burning white hot among young people, but also shows up among the parents and grandparents in my kids' school.  A police officer I met in Michigan is part of the revolution, as are the editors of the medical journal, Neurosurgery.  I see it in the faces of good parents, uprooting their lives to get medicine for their children -- and in the children themselves, such as Charlotte, who went from having 300 seizures a week to just one or two a month.  We know it won't consistently have such dramatic results (or any impact at all) in others, but what medicine does?

I see this medical marijuana revolution in surprising places.  Among my colleagues, my patients and my friends.  I have even seen the revolution in my own family.  A few years ago, when I told my mother I was investigating the topic for a documentary, I was met with a long pause.

"Marijuana...?" She whispered in a half questioning, half disapproving tone.  She could barely even say the word and her response filled me with self-doubt.  Even as a grown man, mom can still make my cheeks turn red and shatter my confidence with a single word. But just last week she suddenly stopped mid-conversation and said, "I am proud of you on the whole marijuana thing." I waited for the other shoe to drop, but it didn't. Instead, she added, "You probably helped a lot of people who were suffering."

April 17, 2015 in Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Medical community perspectives, Medical Marijuana Commentary and Debate | Permalink | Comments (0)

Thursday, April 16, 2015

Distinct comments on marijuana policy from Prez Obama and one wanna-be successor

Two notable new stories about notable new marijuana comments made by notable chief executives caught my eye this morning.  Here are the headlines, links and the basics:

  • From The Daily Caller here, "Obama Reiterates Enthusiastic Support Of Medical Marijuana":

In a CNN special to be aired on Sunday, not only will President Barack Obama state his full support of medical marijuana, he’ll also advocate for alternative models of drug abuse treatment which don’t involve incarceration.  The television special, called “Weed 3,” features CNN’s chief medical correspondent Sanjay Gupta, a neurosurgeon who came to support medical marijuana after reviewing the evidence. This time around, he’ll be delving into the politics of medical marijuana research and interviewing President Barack Obama, according to an email obtained by The Daily Caller News Foundation.

  • From Hot Air here, "Chris Christie: As president, I’ll enforce federal drug laws in states where selling marijuana is legal":

Even within the GOP, which remains skeptical of liberalization on drugs, a majority thinks the feds should defer to the states. You can indeed be anti-marijuana and pro-federalism. Screw that, says Christie.  When it comes to deciding whether marijuana’s too dangerous for the citizens of a state to sell, he’ll happily trump your state legislature and local PD. And to think, they call him a big-government Republican.

It is both notable and telling, of course, that a President often accused of trampling state and individual rights is here saying he respects on-going state reforms, while a state Governor representing from a party that claims it favors a smaller federal Government is asserting he wants to make sure states do not even try to forge a different part with respect to the war on drugs. And this is why I find marijuana law, policy and reform so politically interesting: it help reveal, in a way few other issues do, just which particular policies and which particular principles are ultimately most important to which particular politicians.

April 16, 2015 in Federal Marijuana Laws, Policies and Practices, Initiative reforms in states, Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms, Political perspective on reforms, Who decides | Permalink | Comments (0)

Wednesday, April 15, 2015

Understanding the tax issues and problems posed by Section 280E

As highlighted in many prior posts, students in my marijuana law school seminar are in the midst of assembling readings and leading discussions concerning the research topic(s) that are the focal point for class project(s).  This week, besides the prior topics noted here and here that still on the agenda, is for review of the impact of a federal tax code provision that creates unique problems for state-legal marijuana businesses.  Cribbing from this on-point commentary, my student provides this introduction to this issue:

In 1982, Congress enacted Section 280E of the Tax Code as a way to punish drug traffickers . . . This provision of the Tax Code disallows all deductions and credits for business expenses related to the trafficking of illegal drugs. Since the federal government classifies marijuana as a schedule I narcotic, marijuana falls under this regulation. In 2007, in Californians Helping to Alleviate Medical Problems Inc. (CHAMP) v. Commissioner of Internal Revenue, the U.S. Tax Court ruled that IRC 280E applies to cannabis businesses operating legally pursuant to state law.
 
Despite the foregoing, marijuana operators are able to mitigate some of the impact of 280E in two ways, costs of goods sold (COGS) and deductions for non-trafficking services and expenses.  Per the CHAMP case, marijuana businesses can still take COGS.  Namely, COGS should amount to those costs that go into the production and/or manufacturing of the cannabis.  But it has never been clear what the IRS will actually accept as cannabis COGS.
 
On January 23, 2015, the IRS released an internal legal memorandum outlining how Section 280E should be applied in the cannabis industry.  Though this memorandum may not be used or cited by taxpayers as precedent, it outlines how some IRS officials analyze Section 280E and how to determine COGS.  In the IRS memorandum, marijuana retailers and producers are required to compute COGS under inventory rules that predate the enactment of Section 280E . . .
 
Ultimately, the memorandum outlines a very narrow reading of the costs that can be included in COGS by suggesting that the IRS will not allow cannabis businesses to allocate purchasing, handling, storage, and administrative costs to COGS.
 
In addition to COGS, CHAMP also dictates that a marijuana business that provides other non-cannabis related services, like yoga, massage, or education, can deduct expenses related to those other lawful services . . . For example, a cannabis business can maximize the physical floor space it devotes to other services and minimize the floor space it devotes to cannabis sales. It could give employees not directly involved in cannabis distribution job tasks that do not involve cannabis. This way, the marijuana business can place the greatest amount of expenses in the “deductible” column, resulting in a smaller tax hit.
 
Cannabis businesses will only attain full relief from Section 280E when Congress amends the Tax Code or when Congress re-schedules or decriminalizes marijuana.  (See also: Olive v. Commissioner).
 
My student also provided links to these stories highlighting the practical impact of Section 280E:

April 15, 2015 in Federal Marijuana Laws, Policies and Practices, Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)

Tuesday, April 14, 2015

Fascinating tale of legal challenges facing NJ medical marijuana dispensary

This recent lengthy article from New Jersey, headlined "Lawyers afraid to defend N.J. medical marijuana dispensary," spotlights some of the intricate legal issues and problems created by the disparity between state and federal marijuana laws. The full article merits a full read, but here is the start which provides an overview:

The co-founder of the medical marijuana dispensary in Egg Harbor Township will appear in court Wednesday to dispute claims he blocked his employees' attempts to join a union in a case that is being watched across the nation. And this isn't even David Knowlton's biggest problem.

Knowlton, board chairman of the nonprofit Compassionate Care Foundation dispensary, is not a lawyer, and he can't find one to represent him before the National Labor Relations Board. State law created a medicinal marijuana program, but to the federal government, growing and possessing marijuana remain illegal activities. Rules of professional conduct say attorneys cannot advise or assist their clients engage in "conduct a lawyer knows is criminal or fraudulent."

The law firm of Ballard Spahr of Philadelphia offered to represent the financially struggling dispensary for free but later withdrew the offer out of concern its attorneys could face ethics charges and put their licenses at risk, Knowlton said.

"It's a difficult position to be in," said Knowlton, who is also CEO for a health policy think tank, the Health Care Quality Institute of New Jersey. "I am used to being in a world where everyone knows what the rules are — you have a right to counsel, a hearing and due process — and it is being cast aside because the state and the feds can't agree."

The quandary is just the latest legal landmine people in the medicinal marijuana industry face in the netherworld between state and federal law, where it's nearly impossible to obtain a simple bank loan.

The case pitting the United Food and Commercial Workers Union and the dispensary promises to test the murky limits of both state and federal laws in ways that would set a precedent, according to legal experts.

April 14, 2015 in Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms | Permalink | Comments (1)

Thursday, April 9, 2015

Effective coverage of the legal land mine of the DOJ spending restriction in medical marijuana cases

As previously noted in posts here and elsewhere, a provision buried in H.R. 83, the 1700-page Cromnibus spending bill passed late last year, directed the US Department of Justice not to use any funds to interfere with state-legalized medical marijuana regimes. Today the New York Times has this extended and informative discussion of this provision and its uncertain meaning and impact four months after its passage.  The article is headlined "Legal Conflicts on Medical Marijuana Ensnare Hundreds as Courts Debate a New Provision," and here are excerpts:

In December, in a little­-publicized amendment to the 2015 appropriations bill that one legal scholar called a “buried land mine,” Congress barred the Justice Department from spending any money to prevent states from “implementing their own state laws that authorize the use, distribution, possession or cultivation of medical marijuana.”

In the most advanced test of the law yet, Mr. Lynch’s lawyers have asked the Ninth Circuit Court of Appeals to “direct the D.O.J. to cease spending funds on the case.” In a filing last month, they argued that by continuing to work on his prosecution, federal prosecutors “would be committing criminal acts.”

But the Justice Department asserts that the amendment does not undercut its power to enforce federal drug law. It says that the amendment only bars federal agencies from interfering with state efforts to carry out medical marijuana laws, and that it does not preclude criminal prosecutions for violations of the Controlled Substances Act.

With the new challenge raised in several cases, federal judges will have to weigh in soon, opening a new arena in a legal field already rife with contradiction....

The California sponsors of the December amendment, including Representatives Sam Farr and Barbara Lee, both Democrats, and Representative Dana Rohrabacher, a Republican, say it was clearly intended to curb individual prosecutions and have accused the Justice Department of violating its spirit and substance. “If federal prosecutors are engaged in legal action against those involved with medical marijuana in a state that has made it legal, then they are the ones who are the lawbreakers,” Mr. Rohrabacher said.

Mr. Farr said, “For the feds to come in and take this hard­line approach in a state with years of experience in regulating medical marijuana is disruptive and disrespectful.” The sponsors said they were planning how to renew the spending prohibition next year.

Some prior related posts:

April 9, 2015 in Federal court rulings, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Monday, April 6, 2015

Background reading on banking issues for the marijuana industry

As mentioned in prior posts here and here, students in my marijuana law school seminar spend the last few weeks of class presenting readings and leading discussions concerning the research topic(s) that are the focal point for their class project(s).   This week, one of the presentations will be focused on "baking issues pertaining to the marijuana industry, why there has been little movement on these issues, and why these issues may not be that bad for the banks and the marijuana retailers."  Here are some background on these topics:

April 6, 2015 in Assembled readings on specific topics, Federal Marijuana Laws, Policies and Practices | Permalink | Comments (0)

Friday, April 3, 2015

Impact of the 2015 federal budget's medical marijuana spending restriction remains unclear

The 2015 federal budget contained a noteworthy medical marijuana spending provision.  The amendment blocks the Department of Justice from using funds “to prevent . . . States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.”

The brief House floor debate of the proposal left little doubt that Congress meant for the provision to (at the very least) shield state-legal medical marijuana patients and providers from federal prosecution.  But the DOJ has taken a different view of the amendment's language, arguing that it only prohibits the prosecution of state and local officials, not private parties.  

The dispute is starting to work its way up through the courts, perhaps most notably in the recent prosecution of the so-called "Kettle Falls Five".

Today, the authors of the spending restriction spoke out today, arguing that the DOJ's interpretation is far too restrictive (from the Huffington Post):

The DOJ believes the law only stops it from "impeding the ability of states to carry out their medical marijuana laws," department spokesman Patrick Rodenbush said in a statement, portions of which were previously published in the Los Angeles Times. “Consistent with the Department’s stated enforcement priorities, we don’t expect that the amendment will impact our ability to prosecute private individuals or private entities who are violating the Controlled Substances Act.”

 

But Reps. Dana Rohrabacher (R-Calif.) and Sam Farr (D-Calif.), the co-sponsors of the historic amendment that prohibits the DOJ from using funds to go after state-legal medical marijuana programs, told The Huffington Post that the department is incorrect in its understanding of the law.

 

"The congressman believes the amendment's language is perfectly clear and that the DOJ's self-referential interpretation is emphatically wrong," said Rohrabacher spokesman Ken Grubs.

April 3, 2015 in Federal Marijuana Laws, Policies and Practices | Permalink | Comments (1)

Saturday, March 28, 2015

Colorado files SCOTUS brief responding to neighbors' lawsuit (and other states provide amicus support)

As reported in this Denver Post piece, headlined "Colorado officials defend marijuana legalization at U.S. Supreme Court," Colorado state lawyers have now officially responded, four months after the initial complaint, to the lawsuit filed by Oklahoma and Nebraska about marijuana reform in the Mile High State. Here are the basics:

Arguing that two neighboring states are dangerously meddling with Colorado's marijuana laws, state Attorney General Cynthia Coffman on Friday urged the U.S. Supreme Court to reject a landmark lawsuit filed by Nebraska and Oklahoma over marijuana legalization. In a brief submitted in response to the lawsuit, Coffman wrote that Nebraska and Oklahoma "filed this case in an attempt to reach across their borders and selectively invalidate state laws with which they disagree."

The two states' lawsuit seeks to strike down Colorado's licensing of recreational marijuana stores. Nebraska and Oklahoma officials argue that the stores have caused a flood of marijuana into their states, stretching their law enforcement agencies thin and threatening their sovereignty.

But Coffman argued the lawsuit, if successful, would only worsen problems involving black-market marijuana in all three states. Colorado's regulations for marijuana stores "are designed to channel demand away from this black market and into a licensed and closely monitored retail system," she wrote. If the stores are closed, Colorado would be left with laws that legalize marijuana use but do not regulate its supply. "This is a recipe for more cross-border trafficking, not less," Coffman wrote.

Friday's brief is the first time Colorado officials have had to make a full-throated argument in favor of the state's marijuana legalization laws. In doing so, the brief spends several pages noting states' lengthy history of trying to regulate marijuana, "a product whose use is staggeringly widespread." Nearly half of all states now have laws legalizing recreational or medical use of marijuana, the brief states....

Nebraska and Oklahoma filed their lawsuit directly with the Supreme Court because it involves a dispute between states. Before the lawsuit gets a hearing, the nation's highest court must first decide whether to take up the case. There is no timeline for the decision.

The lawsuit does not challenge Colorado's laws for medical marijuana use or sales, nor does it seek to strike down laws legalizing recreational marijuana use and possession. Instead, Nebraska and Oklahoma argue in the lawsuit that Colorado's licensing of marijuana stores "has created a dangerous gap in the federal drug control system."...

In a statement Friday, Coffman — a Republican who opposed marijuana legalization — said she shares Nebraska and Oklahoma's concerns about illegal marijuana trafficking. Coffman's brief, though, pins the blame for that trafficking not on Colorado's marijuana stores but on "third parties who illegally divert marijuana across state lines." The brief points to the recent indictments of 32 people accused in a massive marijuana-smuggling ring as evidence that Colorado authorities are continuing to bust traffickers.

Colorado's laws received support Friday from Coffman's counterparts in Washington state and Oregon — where recreational marijuana is also legal. In a friend-of-the-court brief filed Friday in support of Colorado's laws, Washington and Oregon attorneys general argue that Colorado's laws don't hurt Nebraska and Oklahoma's abilities to enforce their own laws.

"Nebraska and Oklahoma retain the constitutional powers of every other sovereign State in the nation," the brief argues. "They can investigate and prosecute persons who violate their laws; neither is powerless to address marijuana within their borders."

The full 35-page brief filed by Colorado is available at this link.

I tentatively predict that the Supreme Court will refuse to hear this case, but I confidently predict that most everything about modern marijuana law and policy is pretty darn unpredictable.

Some prior related posts:

March 28, 2015 in Court Rulings, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Tuesday, March 24, 2015

"2016 Will Be the Marijuana Election"

The title of this post is the headline of this lengthy Newsweek commentary authored by John Hudak of The Brookings Institute.  Here are excerpts:

In some ways marijuana policy is the perfect issue for a presidential campaign. It has far reaching consequences that both parties have reason to engage. Not to mention, it’s an edgy topic that media just can’t resist....

The Clinton, Bush and Obama administrations have responded to state marijuana policies in a variety of ways—from legal challenges to laissez-faire enforcement—but regardless, marijuana has garnered presidential attention. The issue will only become more pressing as more states decide to loosen their laws through decriminalization, medical expansion or outright legalization. Because marijuana is an issue that no president will be able to ignore, it is an issue no presidential candidate will be able to avoid....

Views diverge among Republicans. Some candidates, like Rand Paul, have come closer to embracing legalization—at least those efforts at the state level—in an effort to connect to younger and libertarian voters. Others have been far more open-minded about medical marijuana, either endorsing such systems or appearing comfortable with a hands off approach. Still others, like Jeb Bush and Marco Rubio, have taken a more hardline, war-on-drugs approach to the topic.

This diversity is a magnificent thing for Republicans and Republican voters. Among (prospective) candidates who, at times, seem to be policy clones, marijuana offers voters the ability to distinguish positions. As a result, candidates must have positions on the topic....

Marijuana policy will likely play a noticeable role in the general election, too. The issue has implications for states that truly matter in presidential campaigns. Recreational legalization is a reality in swing states like Colorado. Other marijuana measures may appear on ballots in which presidential candidates frequently look for votes (Florida, Maine) or campaign money (California).

In addition, medical marijuana policy — now the law in many places — means that swing state voters will be interested in what their next president will have to say on the topic. The issue engages a variety of issues that reach beyond marijuana itself, posing serious leadership questions for any prospective chief executive. It involves issues of law and regulatory enforcement, federal research policy, medical and pharmaceutical policy, state-federal relations, criminal justice, privacy, agriculture, commerce, small business policy and banking and financial regulations.

March 24, 2015 in Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Calling out political hypocrisy in discussion of marijuana reform

This recent commentary about marijuana reform from The National Memo, which is headlined "Half A Heart On Marijuana Better Than No Heart At All," makes a powerful point about what some politicians say about modern marijuana reform in light of their own admitted history with this drug. Here are excerpts from the piece which caught my attention:

Jeb Bush admits to having smoked pot in high school.  Actually, Bush’s dorm room at Phillips Academy Andover reportedly served as stoner central, where students would smoke hash to the strains of Steppenwolf’s “Magic Carpet Ride.”

Kids from modest backgrounds were being jailed at that time for doing far less.  Today, even a minor drug conviction bars one from many jobs, including joining the military. Yet Florida’s former Republican governor evidently doesn’t think his illegal behavior should disqualify him from serving as commander in chief.  Why would he?  The current holder of that job, President Barack Obama, also admitted to smoking pot, as did his predecessor, Jeb’s brother George W. Bush.

If Jeb owned up to the rank injustice and fully supported ending the war on marijuana, that might lighten the hypocrisy factor.  But Bush piously insists that he’s against legalizing marijuana.  If states want to do it, that’s OK, he says.  But that leaves the vast majority of Americans subject to arrest for smoking a joint after dinner.

Here’s an idea.  Why doesn’t Bush volunteer to do the time behind bars that youths from less powerful families were being sentenced to in the 1960s?  He could share a cell with Patrick Kennedy, the former liberal congressman from Rhode Island.

In the wee hours of May 4, 2006, Rep. Kennedy crashed his car into a barricade on Capitol Hill while under the influence of who knows how many controlled substances. He served in Congress for four more years, leaving at a time of his choosing.  Kennedy is now a staunch foe of legalizing marijuana, but, like Bush, has not offered to do his time. Given Kennedy’s decades of addiction, that would be no small piece of change.

Many argue that marijuana at high potency and in great quantity can be harmful.  That may be so, but the same is true of many things we can legally consume.  If states’ rights is the excuse for easing up on the ludicrous drug war, so be it. Any change that makes life less miserable for good people — and saves the taxpayers huge sums — is to be cheered. But oh, the waste!

March 24, 2015 in Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)