Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Friday, September 23, 2016

Are all opponents of marijuana reform ultimately suspicious and critical of capitalism and free markets?

The question in the title of this post came to my mind as I started heading this morning the great book I first flagged here at my sentencing blog: Harvard historian Lisa McGirr's The War on Alcohol: Prohibition and the Rise of the American State.  The start of the book highlights how many early alcohol Prohibitionist were much more troubled by and focused on the "liquor trade" and "liquor trafficking" rather than just individuals drinking.  

I see, of course, a huge parallel in this sense to the leading modern anti-marijuana-reform group, Smart Approaches to Marijuana (SAM), which repeatedly claims that its advocacy is not driven by support for blanket marijuana prohibition enforced by criminal sanctions, but rather is just concerned about the creation of a legal "Big Marijuana" industry.  As SAM explains here at its website

People often ask us what our biggest fear of legalization is.  The answer is simple: Big Pot....

The tobacco and alcohol industries follow similar patterns while hawking their legal, addictive substances. And we know how that story ends: money-hungry industries, targeting the vulnerable, will stop at nothing to increase addiction and profit. Why on earth would we want to repeat that debacle with cannabis?

I bring this up because I have long said and long believed that my affinity for and support of marijuana reform is part of a "conservative" commitment not only to personal liberty but also to capitalism and free markets. Though I fully understand and respect concerns about the long-term political and practical impact of "Big Marijuana" (and/or Big Pharma and/or Big Oil and/or Big Google), I still firmly believe the long-term political and practical impact of Big Government is and should be more worrisome at least to those who are fans of capitalism and free markets.  Ergo, I think it is fair to at least suggest that all opponents of marijuana reform (and even a good number of marijuana reform supporters) are likely fundamentally suspicious and critical of capitalism and free markets.

September 23, 2016 in History of Alcohol Prohibition and Temperance Movements, History of Marijuana Laws in the United States, Medical Marijuana Commentary and Debate, Political perspective on reforms, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Thursday, September 22, 2016

Appreciating the northeastern midwest's magical medical marijuana research opportunities

Corporate_mapAs marijuana reform advocates (and perhaps regular readers) know, 2016 has been something of a banner year for medical marijuana reform in key part of the northern midwest.  Specifically,

--- in April, Pennsylvania's Democratic Governor signed into law the Keystone State's new medical marijuana law (basics here);

--- in June, Ohio's Republican Governor signed into law the Buckeye State's new medical marijuana law (basics here); and

--- in September, as reported here, Michigan's Republican Governor signed into law new medical marijuana regulations.

As a number of folks know, these three states are always interesting to watch and study politically and practically on an array of issues for an array of reasons.  Pennsylvania is at once an urban east-coast state around Philadelphia, an urban midwest state around Pittsburgh, and a rural state in between.  Ohio is the ultimate bellwether state with urban, suburban and rural, northern and southern regions and populations that closely mirror many national realities.  And Michigan likewise has a diverse array of distinctive regions (and, in this context, has a considerable history of a legal but largely unregulated medical marijuana industry).

I could go on and on about why each of these states with their own distinctive (and still developing) medical marijuana laws justify close study individually.  But my point in this post is to highlight the unique and uniquiely important research opportunity presented by the fact that all three of these (connected) states have new and detailed medical marijuana regulations coming on line at roughly the same time.  In particular, I am hopeful that some of the independent research entities following marijuana reform developments closely (e.g., the Brookings Institution and the Rand Corporation) will give particular attention in the months and years ahead to these particular democratic laboratories.

September 22, 2016 in History of Marijuana Laws in the United States, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms | Permalink | Comments (0)

Wednesday, September 21, 2016

"If Brangelina broke up over marijuana, what could it mean for their divorce?"

I genuinely try to avoid covering what might be thought of as fluff stories about marijuana.  But this new Guardian story, which has the headline I am using as the title of this post, was just way too juicy to resist.  Plus, the story actually effectively covers some not-so-fluffy legal realities about various connections between marijuana reform and family law.  Here are excerpts:

The stoner dude who refuses to put down the pipe and pick up the Pampers is an archetype that Judd Apatow has made an entire career out of mining. Internet forums and advice columns teem with queries from spouses who feel widowed by their partner’s relationship with weed. So the announcement that Angelina Jolie has filed for divorce from Brad Pitt – and a report by TMZ that Jolie was “fed up” with Pitt’s marijuana and alcohol use – has set off a bevy of speculation that Pitt never fully left behind his 1993 role as a stoner room-mate in True Romance.

Pitt has spoken openly about using marijuana recreationally in the 1990s, telling the Hollywood Reporter: “I was smoking way too much dope; I was sitting on the couch and just turning into a doughnut; and I really got irritated with myself.” But in a 2009 interview with Bill Maher, Pitt said that he had given up marijuana: “I’m a dad now. You want to be alert.”

Allegations of marijuana abuse have no direct bearing on a divorce filing, according to attorney Daniel Beck, who specializes in California medical marijuana law. That’s because California law allows for “no-fault” divorces, meaning a spouse does not have to sue his or her partner for any specific grievance, such as adultery or abandonment. “What I take away from this so-called allegation has more to do with public relations than it does anything else,” Beck added.

However, marijuana use can be a factor in custody decisions, and Jolie is reportedly seeking physical custody of the couple’s six children. “Marijuana, like any other substance, can be abused,” Beck said. “The question is, what is the effect on the children? Even if someone has a medicinal [marijuana] card, if they imbibe with the children in the room, that could be looked at as something that is not in the children’s best interest.”...

Though the legal and social stigma of marijuana use is declining, studies have shown that it can have a negative impact on marriage.  Researchers Kazuo Yamaguchi and Denise B Kandel have found that marijuana use tends to decrease once individuals get married, and that smoking pot while married “greatly increases the rate of becoming divorced”. Anecdotally, a mismatch in marijuana use is often cited as a reason for conflict in relationships....

Diana Richmond, a family law attorney with 40 years of experience in California, said that substance abuse was a very common reason for divorce but that marijuana was rarely the sole cause.  Much more frequently cited are “alcohol, various prescription drugs, and cocaine”, she said, with occasional instances where “marijuana is used in conjunction with other things”.

Since the legalization of medical marijuana in California, however, the drug has become a frequent topic in custody battles, said Monica Mazzei Potter, a family law attorney with Sideman & Bancroft in San Francisco.  But, she added, marijuana – whether used medicinally or recreationally – is treated more like alcohol by family law judges than like other drugs, such as cocaine. “I don’t think it’s seen in the same category for family law judges,” she said. “Even if [parents] don’t have a license for it, I’m not seeing it as an impediment for custody issues.”  Parents who use marijuana might lose custody of their children if the case involves abuse and neglect, she said, but added: “I’ve never seen a case where there’s a parent using marijuana responsibly, there’s no abuse or neglect, and a parent has lost custody.”

September 21, 2016 in Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Wednesday, September 14, 2016

"Legal Cannabis in the US: Not Whether But How?"

The title of this post is the title of this notable and timely new paper authored by Sam Kamin. Here is the abstract:

The 2016 election promises to be a turning point in the history of marijuana regulation in this country.  Although the federal prohibition on all marijuana conduct remains in place, twenty-five states plus the District of Columbia currently authorize the medical use of marijuana and four states plus D.C. have legalized marijuana use by all adults.  Many more states are expected to vote on marijuana law reform this fall and these numbers are almost certain to grow; the end of federal marijuana prohibition may soon be close at hand.

But it is important to remember that federal drug policy – like the state-level drug reform that has preceded it – is not an all-or-nothing choice.  Federal lawmakers will not choose between the current system under which marijuana is prohibited in all circumstances and for all purposes and a world in which there are no limits placed on how marijuana is produced, distributed, and consumed.  

My goal in this essay is to describe the current, tenuous status of marijuana under state and federal law and then to investigate the various alternatives to prohibition available to federal lawmakers seeking to reform the nation’s marijuana laws.  I situate these alternatives on a continuum between the current federal prohibition and a relatively free market model similar to that in place in a state like Colorado.  Each of these models will have pluses and minuses and it is important that lawmakers firmly establish their goals in moving away from the prohibition of marijuana; winners and losers will be chosen in this area far sooner than many realize.

September 14, 2016 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)

Sunday, September 11, 2016

"The NFL Should Let Players Use Marijuana"

The title of this post is the headline of this new Reason article/video, which seems like a fitting topic to highlight on this first big weekend of professional football games. Here is some of the set-up to the five-minute video I have enbedded below:

"I was sitting in the training room one day and I just watched player after player come in to take a Toradol shot just to practice," says former NFL player Ricky Williams. "I realized if we have to take all this medication, all these pharmaceuticals, just to practice it can't be good for our bodies in the long run. And that's when I started to look at my health seriously and look for alternatives."

Williams, the Heisman-winning running back who set multiple rushing records for the Miami Dolphins, was suspended by the NFL and then retired under a cloud of shame in 2003 for testing positive for marijuana. Dolphins fans, the media, and the league all turned on Williams, labeling him an underachiever with a drug problem. Williams ultimately returned in 2005 and played several more seasons in the NFL, but the stigma never went away.

But what if the league and the public were wrong to judge Ricky Williams? What if he was just ahead of his time?

Some researchers are now finding evidence that cannabidiol (CBD) and tetrahydrocannabinol (THC) have two major benefits for athletes: 1) they act as a non-addictive pain reliever and 2) they can protect the brain from injury. These healing properties could be beneficial in a league where opioid addiction and concussions have become significant health concerns.

Williams is now part of a group of former NFL players who are lobbying the league to reconsider its position on marijuana. The former NFL star was one of several athletes in attendance at the 420 Games in Santa Monica, CA this Spring representing the Gridiron Cannabis Coalition, a group dedicated to the advancement of medical marijuana.

Cannabis is a banned substance under the NFL's player agreement and commissioner Roger Goodell has made clear that he will not change league policy to allow medicinal marijuana until research proves it is a legitimate drug. But marijuana is classified as an illegal substance at the federal level, which makes getting grants and approval for research a long and arduous process. So former players are putting up their own money to get around the government's tight regulations and fund their own studies.

"Cannabis has been in the closet. It's been suppressed. It's coming out," says Constance Finley, founder of the cannabis extract firm Constance Therapeutics. Finley is working with the Gridiron Cannabis Coalition to produce the evidence players need to change NFL policy.

"The owners have to see responsible, smart people who are completely mainstream to have their experiences reflected, have their minds opened," says Finley. "I think that we could move past the impasse with the level of research that we're talking about doing. It will be irrefutable."

Players like Ricky Williams are hoping their participation in these studies can lead to change and help future athletes stay healthy long after their playing days are over. "Hopefully as public opinion starts to change the leagues will soften their stance," says Williams. "Especially the NFL. They could really be ahead of the charge as far as getting this medicine to people who really need it."

September 11, 2016 in Medical Marijuana Commentary and Debate, Sports, Who decides | Permalink | Comments (0)

Thursday, September 8, 2016

American Legion urges federal government to reschedule marijuana

AmerLegion_color_EmblemAs this Washington Post piece highlights, the "American Legion, a group representing 2.4 million U.S. military veterans, has called on Congress to remove marijuana from Schedule 1 of the federal Controlled Substances Act and 'reclassify it in a category that, at a minimum will recognize cannabis as a drug with potential medical value'." Here is more (with links from the original):

In a resolution passed at the Legion's annual convention last week, the organization said it hopes that better research into marijuana and an official acknowledgment of its potential medical benefits will hasten the development of new treatments for post-traumatic stress disorder and traumatic brain injuries, ailments that have plagued veterans returning from the wars in Iraq and Afghanistan.

The Legion's resolution, published online by Marijuana.com, noted that the federal Drug Enforcement Administration recently approved the country's first randomized, controlled trial using whole-plant, smoked marijuana to treat PTSD symptoms. That study will be conducted by Sue Sisley, an Arizona researcher who tried for nearly a decade to get a green light for the research but struggled to find an academic institution to sponsor it. The University of Colorado ultimately agreed to fund the research.

Medical marijuana is extremely popular with voters: A June Quinnipiac University poll found that 89 percent supported the use of marijuana with a doctor's recommendation. A separate survey by the Iraq and Afghanistan Veterans of America found that 68 percent of responding members supported legalizing medical marijuana in their state, and 75 percent said that the Department of Veterans Affairs should allow medical marijuana as a treatment option.

 

September 8, 2016 in Federal Marijuana Laws, Policies and Practices, Medical community perspectives, Medical Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Wednesday, September 7, 2016

"Marijuana legalization is having an incredible impact on illegal marijuana use"

The title of this post is the headline of this interesting new Business Insider article, which includes these excerpts:

With legal allowances for both medical and recreational use on the rise all over the US, the favored illegal drug of Americans has never looked more professional. That's because the business of legal marijuana has never been better. We're talking about a $7 billion market, according to ArcView Market Research (a firm that tracks the legal cannabis trade).

The world of dimebags is long gone, replaced with complex breakdowns of Indica vs Sativa percentages on packaging, flavor profiles, and high-end edibles.  The market for legal weed in the US outpaces Girl Scout Cookies....

than ever, buying cannabis in the US is more akin to buying craft beer or charcuterie.  This is to be expected in places like Colorado and Washington, where marijuana is outright legal.  [And] another effect of the ongoing march toward national legalization: marijuana is growing up.  It looks less like a drug transaction and more like a product purchase. It looks normal.

The ripple effect of this maturation — the move away from baggies on street corners to artfully labeled products on store shelves — is creeping into places where legality is dubious at best.... New York City's recreational marijuana dealers are getting more and more professional in their wares. Some offer edible candy, or tinctures of CBD (a non-psychoactive derivative of marijuana used medically), or high-potency THC wax.

Many are already brands unto themselves, professional packaging and all. We spoke with dealers from several services that all function as retail outlets without physical locations (delivery only); all asked not to be named....

The benefit for NYC's cannabis consumers is clear: more transparency into what they're buying and consuming, to say nothing of consumer choice. People we spoke with from the service say it's a measure of consumer demand as much as it is a measure of availability.

Customers visit places where marijuana is either partially or entirely legal, like California or Oregon, and have their eyes opened to [new] stuff ... And dealers in NYC are increasingly stepping up to that demand, which leads to the bizarre juxtaposition of illegality alongside professional branding we have here.

September 7, 2016 in Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Monday, August 29, 2016

"Democrats Hope Marijuana Will Help Elect Hillary Clinton. But experts say it might be a pipe dream."

2016_marijuana_legalization_efforts_countrywide_potlocatorThe title of this post is the headline of this notable new Mother Jones article.  Here are excerpts:

With Donald Trump and Hillary Clinton both viewed unfavorably by the majority of Americans, Democrats are hoping that if the top of the ballot doesn't excite voters this November, maybe the bottom will.  Marijuana liberalization and minimum-wage hikes will get a vote in a handful of swing states for the presidential candidates.  But there's reason to think these issues might not galvanize voters the way they once did.

In previous presidential elections, down-ballot races have helped turn out voters in key states. In 2004, proposed same-sex marriage bans helped President George W. Bush secure reelection.  President Barack Obama appears to have gotten a boost in Colorado in 2012 as residents there voted to legalize marijuana.

Marijuana is on the ballot in nine states this year — five voting on legalization and four voting on medical marijuana — and Democrats hope the measures will be a draw for liberal voters.  The conventional wisdom, says Josh Altic of the nonpartisan political reference site Ballotpedia, is that marijuana measures attract a lot of young voters who support legalization but wouldn't otherwise vote, and that these voters overwhelmingly support Democrats.

In 2012, exit polls in Colorado showed the state defied the typical gender gap, with men more likely than women to vote for Obama.  Pollster Ann Selzer of the Iowa-based firm Selzer & Co. speculates that the legalization vote drew more young men to the polls and helps explain this unusual gender breakdown.  Floridians voted in 2014 on a medical marijuana measure that failed but attracted more than double the number of new young voters that had turned out in 2010, says Ben Pollara, who heads the United for Care campaign, which is supporting another medical marijuana measure in the state this year.

But as support for legal marijuana grows, the vote-yes camp is becoming more diverse.  Multiple polls in the last two years have shown majority support for legalization. A Gallup poll last year found older demographic groups are starting to support legal marijuana, with 64 percent of people between the ages of 35 and 49 in favor along with 58 percent of those between the ages of 50 and 64.

Young voters of both parties overwhelmingly support legalization, including 63 percent of Republican millennials, according to a Pew poll from 2014. Millennials favor Clinton, but marijuana ballot initiatives might attract voters of both parties this fall.  "A random person who said, 'Yeah, I'm going to vote for marijuana legalization,' I would no longer assume they were going to vote Democrat," says Altic.

"We're seeing Democrats, Republicans, Libertarians, even people from the Green Party be a part of this," says Carlos Alfaro, the Arizona political director for the Marijuana Policy Project, which backs a marijuana legalization measure in the state.  "The Democrats see this as a good way to get voters out there, but I don't think it's in any way a partisan issue, just based on the amount of responses we've gotten." Alfaro, a Republican, says many people in the legalization campaign are conservatives and that the state has a real "libertarian streak."

In Florida, Pollara's internal polling shows 77 percent support for the legalization initiative. "You simply do not get numbers like that without having broad support among, basically, every age, demographic, geographic, racial, ethnic group," he says.

Even as the effect of marijuana initiatives on presidential voting grows murkier, Altic expects votes on the minimum wage and gun-related initiatives to remain more partisan.... There are several other swing-state measures that could bring out voters, including a universal health care initiative in Colorado and an anti-union proposal in Virginia.  But experts say it's important not to overstate the influence of any of these measures.  "This stuff is very much on the margins, and it might help a little bit, but the presidential race is the main driver of turnout," says Skelley. "It's tough to say that these things are going to make much of a difference in the end.  But I guess it can't hurt to try."

I agree that with the sentiment that "it's important not to overstate the influence of any of these measures" on the Presidential race, although it will still surely be useful to try to assess after the election numbers come in the fall whether and how marijuana ballot initiatives, especially in notable "swing" states like Arizona, Florida and Nevada, might have had an impact on voting patterns in at least some key states. Moreover, and perhaps arguably of greater long-term political significance, is whether any surprising 2016 "down-ticket" results might get attributed to a candidates support or opposition to marijuana reform.

August 29, 2016 in Campaigns, elections and public officials concerning reforms, Initiative reforms in states, Medical Marijuana Commentary and Debate, Political perspective on reforms, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (2)

Monday, August 22, 2016

A darker view of a recent medical marijuana court victory: "10 things to hate about the McIntosh decision"

In this post over at my other blog, I flagged last week's Ninth Circuit panel ruling in US v. McIntosh, No. No. 15-10117 (9th Cir. Aug. 16, 2016) (available here), on a series of appeals concerning "whether criminal defendants may avoid prosecution for various federal marijuana offenses on the basis of a congressional appropriations rider that prohibits the United States Department of Justice from spending funds to prevent states’ implementation of their own medical marijuana laws."  That ruling was hailed by many marijuana reform advocates as a victory because the court concluded that "at a minimum, § 542 prohibits DOJ from spending funds from relevant appropriations acts for the prosecution of individuals who engaged in conduct permitted by the State Medical Marijuana Laws and who fully complied with such laws." 

But astute followers of the law and policies surrounding marijuana reform know that there is rarely simple story around any aspect of federal marijuana laws and policy, and John Hudak has this recent posting at a Brookings blog explaining reasons why "medical marijuana advocates should [still] worry" after the McIntosh decision.  Here are excerpts from the start and the headings of his commentary:

[M]arijuana reform advocates applauded a federal appeals court decision limiting the power of the Department of Justice to prosecute certain marijuana growers. In United States v. McIntosh, the three judge panel (two Republican and one Democratic appointee) dealt explicitly with the Rohrabacher amendment — a rider to a congressional spending bill that barred the DOJ from spending funds on enforcing the Controlled Substances Act in states with medical marijuana reform laws.

Despite the rider being signed into law—by President Obama—the Obama administration continued to bust growers in medical marijuana states. The defendants in the 10 cases grouped together in this appeal hail from California and Washington and were indicted on a variety of federal charges. They fought the charges in lower courts on the basis of the rider without success, and brought their case to the 9th Circuit Court of Appeals.

After the usual judicial hoops of establishing jurisdiction and the appropriateness of the court stepping in at this time to intervene in an ongoing prosecution, the court ruled on the merits of the case.  The 9th circuit decision explains that even though “the rider is not a model or clarity” (24) it “prohibits DOJ from spending funds from relevant appropriations acts for the prosecution of individuals who engaged in conduct permitted by the State Medical Marijuana Laws and who fully complied with such laws” (27).

If you’re a marijuana reform advocate, a grower, a cannabis enterprise executive, a patient, or otherwise related to the medical marijuana industry, this is great news, right?

Well, yes and no.  The cork popping over the ruling in McIntosh may have been a bit premature.  While the central holding of the case is a tremendous victory for the movement and offers a real barrier against executive enforcement power in the context of marijuana, the details of the decision are a bit more mixed.  Namely, for the medical marijuana community, there are 10 things to hate about the McIntosh decision.

  1. The ruling has limited scope...
  2. McIntosh is about medical marijuana only...
  3. The Cole Memos are not the Great Savior many believe...
  4. State-level marijuana reforms do not legalize marijuana...
  5. State-level marijuana reforms do not legalize marijuana...
  6. This ruling may not always help current defendants or marijuana law violators...
  7. This ruling may not always help future defendants...
  8. This ruling may not always help future defendants...
  9. This ruling may not always help future defendants...
  10. This ruling may not always help future defendants

August 22, 2016 in Business laws and regulatory issues, Court Rulings, Federal court rulings, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Sunday, August 21, 2016

Noting the lack of racial diversity in recipients of first Maryland medicial marijuana licenses

This Washington Post article, headlined "Missing from Maryland’s legal marijuana growers? Black business leaders," reports on an all-too-common business pattern that tends to emerge as a state gets started with modern marijuana reforms.  Here is how the article gets started:

Maryland set up its legal medical marijuana industry with hopes of racial diversity and equity in spreading profits, but none of the 15 companies that were cleared this week for potentially lucrative growing licenses is led by African Americans.

Some lawmakers and prospective minority-owned businesses say this is unacceptable in a state where nearly a third of the population is black, the most of any state with a comprehensive legal pot industry.  They say the lack of diversity is emblematic of how, across the country, African Americans are disproportionately locked up when marijuana use is criminalized yet are shut out of the profits when drug sales are legalized.  “We are not going to see this industry flourish in the state of Maryland with no minority participation,” said Del. Cheryl D. Glenn (D-Baltimore), chairwoman of the Legislative Black Caucus.

Glenn was a key player in the legalization battle, and the commission that awards medical marijuana business licenses and oversees the industry is named after her mother, Natalie LaPrade, who died of cancer.  She is considering filing a legal injunction to halt the licensing process and is weighing other options, such as pushing the commission to award additional licenses to minority-owned companies.

The law legalizing medical marijuana says regulators should “actively seek to achieve” racial and ethnic diversity in the industry.  But the commission did not provide extra weight to applications submitted by minority-owned businesses because a letter from the attorney general’s office suggested that preferences would be unconstitutional without there being a history of racial disparity in marijuana licensing to justify the move.

A spokeswoman for the Maryland Medical Cannabis Commission said there will be future opportunities to expand minority participation when the agency awards dispensary licenses and when it considers issuing more cultivation licenses in 2018 if supply doesn’t meet demand.  Businesses must also submit annual reports on the racial breakdown of their ownership and workforce, providing a more comprehensive look at the industry’s diversity.  “The Commission believes a diverse workforce is in the best interest of the industry,” said Vanessa Lyon, the spokeswoman.

But Glenn and other critics say the state hasn’t done enough to ensure diversity in the blossoming business that’s already worth billions nationwide.

August 21, 2016 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms, Race, Gender and Class Issues | Permalink | Comments (0)

Friday, August 19, 2016

Timely new report on benefits of marijuana reform from West Virginia Center on Budget & Policy

This local article, headlined "Could legalizing marijuana be West Virginia's pot of gold?," reports on this interesting new policy brief released by the West Virginia Center on Budget & Policy suggests. The article summarizes the themes of the report, which is titled "Modernizing West Virginia's Marijuana Laws: Potential Benefits of Decriminalization, Medical Marijuana and Legalization." This summary comes directly from the first two pages of the full 27-page report:

Over the last two decades, states across the country have modernized their marijuana laws to reflect the growing evidence that doing so will help reduce criminal justice costs, help treat some medical conditions, and boost tax revenues and their state’s economy. As of 2016, four states and the District of Columbia have legalized the recreational use of marijuana for adults, 25 states (and DC) allow for marijuana to be used for medical purposes, and 21 states have decriminalized possession of small amounts of marijuana. With several states considering ballot measures this November and public support for legalization rapidly growing (53% of Americans support legalization) among all age groups, the number of states taking action to undo restrictions on marijuana is likely to grow.

While most states have taken at least one step toward modernizing their marijuana laws, West Virginia has not. However, bi-partisan legislation has been introduced in West Virginia over the last several years to legalize medical marijuana and tax marijuana for retail sales to adults. A 2013 poll found that a majority of West Virginians supports decriminalizing marijuana and legalizing it for medical use, while 46 percent supported regulating it like alcohol.

As West Virginia continues to be plagued by large budget deficits (a projected $300 million for FY 2018), an undiversified economy with a fading coal industry, and poor health outcomes, modernizing the state’s marijuana laws could be a step in addressing these problems and could help save the state money in the long run.

This report provides an overview of the states that have modernized their marijuana laws in recent years– including decriminalization, medical marijuana, and recreational use – and the implications for West Virginia if it decided to pursue a similar path. It provides an overview of federal and state marijuana laws (Section 1), an estimation of the potential tax revenue from legalizing recreational marijuana in West Virginia (Section 2), an evaluation of some potential benefits from modernizing West Virginia’s marijuana laws (Section 3), and recommendations on reforming West Virginia’s marijuana laws (Section 4).

KEY FINDINGS

  • If marijuana was legalized and taxed in West Virginia at a rate of 25 percent of its wholesale price the state could collect an estimated $45 million annually upon full implementation. If 10 percent of marijuana users who live within a 200-mile radius of West Virginia came to the state to purchase marijuana, the state could collect an estimated $194 million.

  • In 2010, it is estimated that West Virginia spent more than $17 million enforcing the state’s marijuana laws. Legalizing or decriminalizing marijuana in West Virginia could reduce the number of marijuana-related arrests, especially among African Americans, which in turn, could reduce criminal-justice-related costs.

  • The marijuana industry has the potential to add jobs both directly and indirectly. As of September 2015, Colorado had 25,311 people licensed to work in its marijuana industry and over 1,000 retail marijuana businesses. If marijuana were legal in West Virginia it could also have the effect of increasing tourism to the state, particularly in regions with outdoor recreational activities.

  • Marijuana may potentially have a positive impact on West Virginia’s opioid-based painkiller and heroin epidemic by offering another, less-addictive alternative to individuals who are suffering from debilitating medical conditions.

August 19, 2016 in Business laws and regulatory issues, History of Marijuana Laws in the United States, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Taxation information and issues | Permalink | Comments (0)

Thursday, August 18, 2016

"Can the Next U.S. President Reschedule Marijuana?"

USP1310-CE-T2The question in the title of this post is the headline of this timely Inc. article, which essentially answers the question via its lengthy subheadline: "The DEA denied the most recent petition to reschedule marijuana, citing a lack of scientific evidence to prove its medical benefits. But here's how Obama, or the next U.S. president, can reschedule the drug." Here is more from the article:

The U.S. Drug Enforcement Administration has denied the most recent petitions to reschedule marijuana. But Hillary Clinton says that if she becomes president, she will move marijuana to the same category as oxycodone and other opioid painkillers available by a doctor's prescription. Clinton, through her senior policy adviser Maya Harris, told The Cannabist that she will reschedule marijuana from its position as a Schedule I substance to Schedule II under the Controlled Substances Act.

"Marijuana is already being used for medical purposes in states across the country, and it has the potential for even further medical use," said Harris in a statement. "As Hillary Clinton has said throughout this campaign, we should make it easier to study marijuana so that we can better understand its potential benefits, as well as its side effects."

Presidential candidates make all sorts of promises, but could a president actually reschedule marijuana unilaterally? The answer is yes, but not with a stroke of a pen.

John Hudak, senior fellow at the Brookings Institute, explains that there are certain procedures in the Controlled Substances Act that must be followed. "A president cannot reschedule a substance by executive order, that is against the Controlled Substance Act," says Hudak. "It is against the letter of the law." Hudak says there is a suggestion in the CSA that the attorney general might be able to reschedule a substance unilaterally through an order, but that would fly against the long-established administrative procedure and might bump up serious legal challenges.

Mark Kleiman, a professor of public policy and the director of the Crime Reduction & Justice Initiative at New York University's Marron Institute, explains how Hillary, if she wins, can follow through on her promise. "She is not making it up. She can reschedule marijuana. It's not that complicated," says Kleiman. The power to reschedule a substance, Kleiman says, has been delegated to the attorney general (who in turn delegates to the DEA) and to the Department of Health and Human Services (which in turn delegates its clinical testing to the FDA). "But, yes," he adds. "Those people work for the president, and, yes, the president can tell them to reschedule marijuana."

The logistical process of rescheduling, Kleiman says, would involve redefining what "current accepted medical use" means in the Controlled Substances Act. Again, it's up to the agencies (attorney general with the DEA; HHS with the FDA) to define what that term means. "All the DEA has to do is explain how they have overruled themselves and will be going back to what DEA administrative law judge Francis Young said in 1988, that 'medical use' means a bunch of physicians believe something is useful," says Kleiman. "The DEA could say how they take notice that a lot of physicians are recommending marijuana and how 25 state legislatures agree with the doctors. We are now saying this has accepted medical use, but it still has high abuse potential; we're putting it in Schedule II."

As the CSA gave authority to the attorney general, who in turn delegated to the DEA, those agencies are allowed to interpret statutes in varying degrees, unless the decisions are "obviously unreasonable, arbitrary, or capricious," says Kleiman. That means if Clinton wanted to reschedule marijuana if she makes it to the White House, she could....

It should be noted, however, that rescheduling will not make the state-sanctioned recreational markets in Alaska, Colorado, Oregon, Washington state, and Washington, D.C. legal, nor will it make the medical marijuana markets in 25 states legal. If marijuana becomes a Schedule II drug, it will still be illegal federally to use, produce, or manufacture. If marijuana were down-scheduled, it would still be federally illegal to produce and sell because Schedule II drugs cannot be given out without a prescription. A prescription can only be written for an FDA-approved drug, and there are no FDA-approved drugs made with the whole cannabis plant. (Marinol, which is FDA approved, is made with synthetic THC.)

As for the industry's hope that the whole plant will be FDA-approved, Hudak says not a chance. Hudak says if cannabis-based medicines are approved in the future, the medicines will not be botanical. Like other FDA-approved drugs, specific chemicals will be extracted and isolated at the molecular level in a method that is replicable and consistent. "You might see cannabinoid compounds rescheduled and put on the market, but whole flower smoked marijuana will never be approved," says Hudak.

August 18, 2016 in Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Medical community perspectives, Medical Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Tuesday, August 16, 2016

"Marijuana Appellations: The Case for Cannabicultural Designations of Origin"

The title of this post is the title of this notable new paper authored by Ryan Boudin Stoa and available via SSRN.  Here is the abstract:

As the era of marijuana prohibition draws to a close, one can’t help but wonder how the legal marijuana industry will take shape.  The legalization movement is largely driven by ballot initiatives at the state level, and state regulators and lawmakers often lack easy answers to tough questions facing the industry.  Marijuana legalization presents challenges on a number of fronts, including distribution, financing and taxation, consumption, security, and public health.

The agricultural dimension of the marijuana industry presents a number of regulatory challenges as well, with important questions that have not been answered.  One of these questions is paramount: will marijuana agriculture become consolidated and commoditized, producing vast quantities of indistinct marijuana, or will small-scale farmers thrive by producing unique and localized marijuana?

This Article presents the case for American Cannabicultural Areas (ACAs). Adopting a system of appellations (in which designations of origin are legally protected) offers several benefits to farmers, consumers, and regulators.  Appellations protect state and local economies and farming communities, create a market for unique agricultural products, and allow regulatory bodies to establish minimum standards for cultivation to ensure that marijuana agriculture is safe and sustainable.  Challenges to this model are significant but not intractable.  The legal marijuana industry is still in its infancy, but ACAs represent a promising regulatory model for marijuana agriculture.

August 16, 2016 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Sunday, August 14, 2016

Highlighting myriad challenges for doctors in a world of widespread state medical marijuana reforms

Dt_160517_medical_marijuana_cannabis_800x600This recent USA Today piece, headlined "As states OK medical marijuana laws, doctors struggle with knowledge gap," puts a needed spotlight on what I think may be the most under-examined aspect of modern state medical marijuana reforms. Here are excerpts:

Medical marijuana has been legal in Maine for almost 20 years.  But Farmington physician Jean Antonucci says she continues to feel unprepared when counseling sick patients about whether the drug could benefit them.  Will it help my glaucoma?  Or my chronic pain?  My chemotherapy’s making me nauseous, and nothing’s helped.  Is cannabis the solution? Patients hope Antonucci, 62, can answer those questions.  But she said she is still “completely in the dark.”

Antonucci doesn’t know whether marijuana is the right way to treat an ailment, what amount is an appropriate dose or whether a patient should smoke it, eat it, rub it through an oil or vaporize it.  Like most doctors, she was never trained to have these discussions. And, because the topic still is not usually covered in medical school, seasoned doctors, as well as younger ones, often consider themselves ill-equipped.  Even though she tries to keep up with the scientific literature, Antonucci said, “it’s very difficult to support patients but not know what you’re saying.”

As the number of states allowing medical marijuana grows – the total has reached 25 plus the District of Columbia – some are working to address this knowledge gap with physician training programs.  States are beginning to require doctors to take continuing medical education courses that detail how marijuana interacts with the nervous system and other medications, as well as its side effects.

Though laws vary, they have common themes. They usually set up a process by which states establish marijuana dispensaries, where patients with qualifying medical conditions can obtain the drug.  The conditions are specified on a state-approved list. And the role of doctors is often to certify that patients have one of those ailments. But many say that, without knowing cannabis’ health effects, even writing a certification makes them uncomfortable.  “We just don’t know what we don’t know. And that’s a concern,” said Wanda Filer, president of the American Academy of Family Physicians and a practicing doctor in Pennsylvania.

This medical uncertainty is complicated by confusion over how to navigate often contradictory laws.  While states generally involve physicians in the process by which patients obtain marijuana, national drug policies have traditionally had a chilling effect on these conversations.  The Federation of State Medical Boards has tried to add clarity. In an Aug. 9 JAMA editorial, leaders noted that federal law technically prohibits prescribing marijuana and tasks states that allow it for medical use to “implement strong and effective ... enforcement systems to address any threat those laws could pose to public safety, public health and other interests.”  If state regulation is deemed insufficient, the federal government can step in.

That's why many doctors say they feel caught in the middle, not completely sure of where the line is now drawn between legal medical practice and what could get them in trouble. In New York, which legalized marijuana for medicinal purposes in 2014, the state health department rolled out a certification program last October. (The state’s medical marijuana program itself launched in January 2016.)  The course, which lasts about four hours and costs $249, is part of a larger physician registration process. So far, the state estimates 656 physicians have completed the required steps.  Other states have contacted New York’s Department of Health to learn how the training works.

Pennsylvania and Ohio are also developing similar programs.  Meanwhile in Massachusetts, doctors who wish to participate in the state medical marijuana program are required to take courses approved by the American Medical Association. Maryland doesn’t require training but encourages it through its Medical Cannabis Commission website, a policy also followed in some other states.

Physicians appear to welcome such direction.  A 2013 study in Colorado, for instance, found more than 80% of family doctors thought physicians needed medical training before recommending marijuana.  But some advocates worry that doctors may find these requirements onerous and opt out, which would in turn thwart patients’ access to the now-legal therapy, said Ellen Smith, a board member of the U.S. Pain Foundation, which favors expanded access to medical cannabis.

Education is essential, given the complexity of how marijuana interacts with the body and how little physicians know, said Stephen Corn, an associate professor of anesthesiology, perioperative and pain medicine at Harvard Medical School.  Corn also co-founded The Answer Page, a medical information website that supports the New York program and is also bidding to supply information for the Pennsylvania program, Corn said....

From a medical standpoint, the lack of information is troubling, Filer said. “Typically, when we’re going to prescribe something, you’ve got data that shows safety and efficacy,” she said.  With marijuana, the body of research doesn’t match what many doctors are used to for prescription drugs.

Still, Corn said, doctors appear pleased with the state training sessions. More than 80% of New York doctors who have taken his course said they changed their practice in response to what they learned.  But even now, whenever Corn speaks with doctors about medical marijuana, people ask him how they can learn more about the drug’s medical properties and about legal risks.  Those two concerns, he said, likely reduce the number of doctors comfortable with and willing to discuss marijuana’s place in medicine, even if it’s allowed in their states.

August 14, 2016 in Federal Marijuana Laws, Policies and Practices, Medical community perspectives, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms, Who decides | Permalink | Comments (2)

Saturday, August 13, 2016

Rounding up reactions to DEA's modest marijuana moves

As reported in prior posts here and here, the Drug Enforcement Agency this past week made only a modest change to federal marijuana policies.  Not surprisingly, the failure of DEA being willing to do a lot more has generated criticisms and various expressions of concern and analytical perspectives.  Here are some of these reactions from various traditional and non-traditional media sources:

  • From Business Insider here, "Here's what the DEA's big decision on marijuana means for users and 'potrepreneurs'"

  • From Forbes here, "DEA's Hypocritical Marijuana Decision Ignores The Evidence"

  • From Marijuana.com here, "DEA No, Clinton Yes: As POTUS, Hillary Would Reschedule Marijuana"

  • From the New York Times here, "Stop Treating Marijuana Like Heroin"

  • From Quartz here, "The DEA's sop to pot advocates won't boost marijuana research very much at all"

August 13, 2016 in Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Friday, August 12, 2016

"7 Scientific Effects of Marijuana That Experts Want to Study"

The title of this is the headline of this new Time article that serves as a somewhat fitting follow-up to the (big?) news the DEA delivered this week about marijuana scheduling and research.   Here are excerpts:

On Thursday the U.S. government announced that marijuana would continue to be classified as a Schedule 1 drug, meaning it has a high potential for abuse.  However, the feds are allowing more research on marijuana’s medicinal uses by making it easier for researchers to grow it.

Many researchers, both those who view marijuana as beneficial and those who are skeptical, argue that the government’s stance still hinders research.  “I understand the cautious nature of the government, whose role is basically to protect its citizens, but it is disappointing that marijuana continues to be included on the DEA’s list of the most dangerous drugs,” says Dr. Yasmin Hurd of Mount Sinai, who studies the effects of marijuana on the brain.

Though more than 20 states have legalized marijuana for medicinal uses, there’s still a lot scientists don’t know about it.  “It’s actually quite amazing how little we really know about something that has been used for thousands of years,” says Sachin Patel of Vanderbilt University who studies cannabis.  “We desperately need well-controlled unbiased large scale research studies into the efficacy of cannabis for treating disease states, which we have very little of right now.  Without these studies we are basically flying blind with regard to medical marijuana in my opinion.”

Scientists argue that studying marijuana is safe, and researching it shouldn’t be such a difficult process.  “A question that is not on the lips of researchers is whether or not the consumption of cannabis-based medicines is safe,” says Gregory Gerdeman, an Assistant Professor of Biology at Eckerd College.  “In the biomedical research community, it is universally understood that cannabis is a very safe, well-tolerated medicine.”

Here’s what researchers tell TIME they want to know about marijuana.

Is marijuana an effective cancer therapy?...

What does it do to the brain?...

What dosage or strains have the best use in medicine?...

Can marijuana help brain and cognitive problems?...

What about anxiety?...

Can pot help end the opioid epidemic?...

Are there long term consequences of using pot?

August 12, 2016 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, Who decides | Permalink | Comments (0)

Thursday, August 11, 2016

DEA concludes that there is "no substantial evidence that marijuana should be removed from schedule I"

2000px-US-DrugEnforcementAdministration-Seal.svgThe language quoted in the title of this post is from the letter, dated July 19, 2016, in which the Drug Enforcement Administration (DEA) announced that it had "formally denied a petition to initiate rulemaking proceedings to reschedule marijuana."   This lengthy document makes this letter and related materials publically available with this explanation: "Because the DEA believes that this matter is of particular interest to members of the public, the agency is publishing below the letter sent to the petitioner which denied the petition, along with the supporting documentation that was attached to the letter."  

Here are some excerpts from the letter:

In accordance with the CSA scheduling provisions, after gathering the necessary data, DEA requested a scientific and medical evaluation and scheduling recommendation from the Department of Health and Human Services (HHS). HHS concluded that marijuana has a high potential for abuse, has no accepted medical use in the United States, and lacks an acceptable level of safety for use even under medical supervision. Therefore, HHS recommended that marijuana remain in schedule I. The scientific and medical evaluation and scheduling recommendation that HHS submitted to DEA is attached hereto.

Based on the HHS evaluation and all other relevant data, DEA has concluded that there is no substantial evidence that marijuana should be removed from schedule I. A document prepared by DEA addressing these materials in detail also is attached hereto. In short, marijuana continues to meet the criteria for schedule I control under the CSA because:

1) Marijuana has a high potential for abuse. The HHS evaluation and the additional data gathered by DEA show that marijuana has a high potential for abuse.

2) Marijuana has no currently accepted medical use in treatment in the United States. Based on the established five-part test for making such determination, marijuana has no ‘‘currently accepted medical use’’ because: As detailed in the HHS evaluation, the drug’s chemistry is not known and reproducible; there are no adequate safety studies; there are no adequate and well-controlled studies proving efficacy; the drug is not accepted by qualified experts; and the scientific evidence is not widely available.

3) Marijuana lacks accepted safety for use under medical supervision. At present, there are no U.S. Food and Drug Administration (FDA)-approved marijuana products, nor is marijuana under a New Drug Application (NDA) evaluation at the FDA for any indication. The HHS evaluation states that marijuana does not have a currently accepted medical use in treatment in the United States or a currently accepted medical use with severe restrictions. At this time, the known risks of marijuana use have not been shown to be outweighed by specific benefits in well-controlled clinical trials that scientifically evaluate safety and efficacy....

Although the HHS evaluation and all other relevant data lead to the conclusion that marijuana must remain in schedule I, it should also be noted that, in view of United States obligations under international drug control treaties, marijuana cannot be placed in a schedule less restrictive than schedule II.  This is explained in detail in the accompanying document titled "Preliminary Note Regarding Treaty Considerations."

Accordingly, and as set forth in detail in the accompanying HHS and DEA documents, there is no statutory basis under the CSA for DEA to grant your petition to initiate rulemaking proceedings to reschedule marijuana.  Your petition is, therefore, hereby denied.

A second similar publication is available at this link, and the DEA has this press release explaining:

DEA has denied two petitions to reschedule marijuana under the Controlled Substances Act (CSA). In response to the petitions, DEA requested a scientific and medical evaluation and scheduling recommendation from the Department of Health and Human Services (HHS), which was conducted by the U.S. Food and Drug Administration (FDA) in consultation with the National Institute on Drug Abuse (NIDA). Based on the legal standards in the CSA, marijuana remains a schedule I controlled substance because it does not meet the criteria for currently accepted medical use in treatment in the United States, there is a lack of accepted safety for its use under medical supervision, and it has a high potential for abuse

August 11, 2016 in Federal Marijuana Laws, Policies and Practices, Medical community perspectives, Medical Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Sunday, August 7, 2016

Following all the new private monies and mojo in the marijuana marketplace

Break-into-private-equityOne reason I have started to consider repeal of blanket marijuana prohibition inevitable is because there are now ever so many monied interests and individuals eager to profit from repeal and now ever fewer such interests and individuals who profit from prohibition.  And in a capitalist-driven economy and society, this is a very big deal.  Further evidence of these realities comes from this interesting recent Business Insider article about marijuana capital headlined "Private equity is 'seeing more excitement than it can handle' in the marijuana industry." Here are excerpts:

The cannabis industry is starting to see some serious investment activity. Over the last few years, a new wave of cannabis-finance companies have formed to capitalize on the green rush.

Companies like Tuatara Capital, Seventh Point, Poseidon Asset Management, and Privateer Holdings have dived headfirst into the industry.  While the first three are brand new, having been founded in the last few years, Privateer started in 2011.  The fund bills itself as the first in the US to focus solely on cannabis-related endeavors.

These private-equity firms invest specifically in companies operating in the legal-cannabis industry,as well as providing capital for new startups to generate returns down the road.  "It's never a dull day," Al Foreman, the CIO of Tuatara and a 16-year veteran of the private-equity industry, told Business Insider.  "It's fascinating to be part of a new and emerging industry."

Retail sales of legal cannabis, including both medical and recreational, are projected to hit $4.3 billion in 2016, according to Marijuana Business Daily's 2016 fact book. And sales will likely skyrocket to $11 billion by 2020, with recreational sales representing an ever larger portion of the market.  Some outlets are predicting even higher sales, with estimates ranging as high as $22.8 billion by 2020.

So far, the money's pouring in. Forty-seven percent of active investors in the cannabis space plan on sinking $10 million or more into private cannabis companies in the next year, according to the fact book.  On its own, Seventh Point, named for the seven points of a cannabis leaf, is looking at completing $75 million worth of fundraising this year, according to the firm's CEO, Steve Gormley, who has over 15 years of experience in private equity.  "It's like a floodgate," Gormley told Business Insider.  "We oversubscribed [raising more money than intended] our first two funds. I haven't seen anything like this in my career."

While most of the money in the industry is still coming from family offices and people's personal bank accounts, 18% of entrepreneurs who have started cannabis companies in the past year have landed funding from venture-capital and private-equity investors, according to the fact book.  "We're getting more excitement than we can handle," Gormley continued.  "I cut my teeth in the dot-com era.  I lived through the housing bubble.  This is something completely unto itself."

Founders Fund, the legendary Silicon Valley venture-capital firm, sank $75 million into Privateer Holdings in 2015, according to PitchBook.  Even Roger Mcnamee, an early Facebook investor, sank a chunk of his personal fortune into a series B round for MJ Freeway, a cannabis software and compliance firm based in Colorado, the company's cofounder, Jessica Billingsley, told Business Insider.

But he industry still faces numerous regulatory challenges.  Though states like Colorado and Washington have set up markets for recreational marijuana, the plant is still a Schedule I drug at the federal level, and most banks refuse to deal with cannabis companies for fear of federal repercussions.  Firms that invest in the cannabis space need to be particularly careful about where their money goes.  They only invest in states that have specific rules allowing for the commercialization of recreational or medicinal marijuana.

Companies registered with the Securities and Exchange Commission cite ongoing federal prohibition, banking issues, as well as potential civil and criminal penalties as the top risks to investing in the cannabis sector, according to Law360.  But there are ways to get around these risks: Some companies, like Cannakorp, build products used for the consumption of marijuana — but don't actually touch the plant themselves.  This exposes investors to far less legal risk as opposed to dealing with, say, a dispensary.

Because of this often confusing regulation, where different rules exist in each state, Foreman says that investing in cannabis requires "professional, full-time focus" to successfully navigate the industry.  "The market is so fragmented," Foreman said.  "Each individual state is a separate market.  If you're an investor who's accustomed to looking at companies or sectors that are national or global — to retrain that mindset to focus on an individual state market is an obstacle that needs to be overcome."

While neither Gormley nor Foreman could say who specifically invested in their funds, both mentioned that private investors, rather than institutional, provided the bulk of their fundraising.  Foreman added that he thinks institutional investors — who have largely steered clear of the marijuana industry so far — have been warming up to the industry as recently as the past few months as more markets open....

Initially, mostly cultivators and producers who had been successful were taking their profits and reinvesting, according to Gormley.  Then, high-net worth individuals, who have a much higher risk tolerance than institutional investors, started getting into the space.  Once these individuals started taking the industry seriously, the basket of investors started to broaden.

Roughly nine months ago, a proliferation of family offices jumped into the space, Gormley found. "Now, we've got venture capitalists and hedge fund operators and private-equity senior managers coming in as individuals," he said.

These firms, specifically focused on the cannabis industry, are trying to bring a level of financial maturity to a complex industry.  "We launched Tuatara to create an entry point for sophisticated investors," Foreman said. "That's the next phase of evolution for the capital-raising and the capital-accumulation process."  Foreman thinks that because so many new markets are expected to open up as states like California vote on legalization in November, the "argument around market fragmentation" will start to go away, he said.  "The overall landscape will have reached a point of critical mass, and the industry will be too big to ignore," Foreman added.

Gormley, for his part, was much more direct. "I'm seeing the profile of the cannabis-industry investor thawing," Gormley said.  "Whereas it was only cowboys, I'm seeing people who are more traditionally bottom-line driven and conservative coming off the sidelines."  He even likens attitudes he's seen about cannabis in the US to marriage equality. "When I was growing up, it was inconceivable," Gormley said, regarding marriage equality. "And then it started to happen at the state level, and then there was just this massive cultural shift."

August 7, 2016 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Wednesday, August 3, 2016

"Marijuana Agriculture Law: Regulation at the Root of an Industry"

The title of this post is the title of this notable forthcoming paper authored by Ryan Boudin Stoa available via SSRN.  Here is the abstract:

Marijuana legalization is sweeping the nation.  As many as thirty marijuana legalization initiatives may appear on election ballots in 2016, legalizing the recreational or medicinal use of marijuana in as many as 17 states and adding to the growing number of states that have already legalized marijuana.  Many of these legalization initiatives propose to regulate marijuana in a manner similar to alcohol, and many titles are variations of “the regulate marijuana like alcohol act.”  For political and public health reasons the analogy makes sense, but it also reveals a regulatory blind spot.  States may be using alcohol as a model for regulating the distribution, retail, and consumption of marijuana, but marijuana is much more than a retail product. It is also an agricultural product, and by some measures, the largest cash crop in the United States.  Since marijuana prohibition laws were passed long before any regulations for cultivation were developed, states are facing an unprecedented challenge: regulate, for the first time ever, one of the country’s largest agricultural industries.

There are major regulatory challenges ahead, and how states respond to those challenges will shape the course of the marijuana industry.  At present there is a gap in understanding the regulatory challenges presented by marijuana agriculture, and the options states have to address them.  This Article identifies those challenges and the regulatory approaches most capable of addressing them.  The study begins by describing the existing state of marijuana agriculture regulations.  States are likely to find that the marijuana industry’s unique characteristics justify a tailored regulatory approach; relying on existing agricultural policies may be ineffectual or lead to perverse outcomes.  

Next, fundamental questions about the “marijuana fragmentation spectrum” are explored.  Will the industry come to be dominated by agricultural conglomerates mass-producing a marijuana commodity, as many have feared?   Or will governments and the industry adopt the appellation model favored by the wine industry, to protect local farmers and differentiate between products?  The major environmental impacts of marijuana agriculture are analyzed as well, including regulations that address water allocation, water quality, energy, organic certification, and crop insurance.  Finally, the study addresses power distribution trade-offs within marijuana agriculture regulation frameworks, including local vs. state, and consolidated vs. fragmented, regulatory authority dilemmas.  The findings suggest that responsible and sustainable marijuana agriculture can be fostered at the state level, but only if regulations are responsive to the unique and unprecedented challenges that marijuana agriculture presents.

August 3, 2016 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Friday, July 22, 2016

"Legalize marijuana and reduce deaths from drug abuse"

The title of this post is the headline of this notable recent commentary from The Hill authored by Ike Brannon. Here are excerpts:

It seems as if everyone has woken up to the problem of opioid abuse at once and wants to do something about it. In March, Politico assembled a working group to “confront the opioid epidemic.”  In May, New York Gov. Andrew Cuomo (D) announced the creation of a statewide heroin task force that he charged with ending the heroin and opioid crisis in the state.  And in June, a Senate Appropriations Subcommittee approved a 93 percent increase in funding to combat opioid addiction nationwide.

The problem of opiate abuse is growing.  There were an estimated 16,000 deaths caused by prescription opioid overdoses in 2010, the last year for which we have reliable data, three timesas many who died in 1999.  More people die from drug overdose each year as are killed by firearms.

As deaths from opioid abuse grow, the proposals to address this crisis have remained the same: Doctors should be more judicious about prescribing painkillers, governments should invest more in treatment facilities, and the courts should mete out stricter punishments for those who illegally sell these drugs.  All of this, of course, is more or less what we’ve been doing the last five decades, with little success.

However, the data tell us that there is a possible deterrent to growing opioid addiction that has shown real promise: the wholesale legalization of marijuana.

Several states have made the drug legal in some form for over a decade — whether via medical marijuana or, more recently, the outright legalization of the drug — and the data generated from these state-level experiments suggests that the easier it is to acquire marijuana, the less opioid abuse there is.  For instance, in 2014, researchers from the Johns Hopkins Bloomberg School of Public Health and the Philadelphia Veterans Affairs Medical Center found that opioid overdose deaths decreased by nearly 25 percent in a state following the passage of medical marijuana laws.

A recently published study by the RAND Corporation also found a decrease in opioid addiction and overdoses in states with medical marijuana dispensaries.  And last month, investigators at the University of Michigan published a retrospective survey of 244 patients suffering from chronic pain who frequented medical marijuana dispensaries and discovered that they frequently substituted medical marijuana for opiates, with many of them judging medical marijuana as being more effective at treating chronic pain.  Medical marijuana use was associated with a 64 percent decrease in opioid use, as well as a reduction in the amount and severity of the side effects of medications and an improved quality of life....

It’s hard to dispute that legalizing marijuana would reduce opiate abuse and save lives.  There are other reasons to end its prohibition, but its role in solving what appears to be an otherwise intractable problem claiming thousands of lives a year seems like a compelling one. 

July 22, 2016 in Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)