Friday, October 24, 2014
Patrick Gleason, who is the Director of State Affairs at Americans for Tax Reform, has this notable new commentary at Forbes headlined "Marijuana Taxes On The Ballot This November." Here are excerpts:
Voter approval of retail marijuana sales in Colorado and Washington State in 2012 presented lawmakers in those state capitals with a difficult task not faced before in the U.S.: how to tax and regulate legal recreational marijuana. As Joe Henchman, Vice President at the non-partisan Tax Foundation has pointed out, “Because marijuana can be purchased as a cigarette, an edible, a liquid, or vapor, all with a wide variety of concentrations, a specific excise tax is untenable.” Since then, Colorado and Washington State lawmakers have imposed onerous and excessive taxes on marijuana; but on Nov. 4, Washington State voters will have the opportunity to tell their representatives in the state legislature to reconsider.
During the 2014 session of the Washington legislature, state lawmakers passed Senate Bill 6505, which deemed the marijuana industry to be non-agricultural, thereby removing excise tax protections that apply to the state’s agriculture industry. This redefining of the industry will permit, if allowed to stand, more than $24 million in higher taxes over the next decade than would’ve otherwise been the case. On Nov. 4, Washington residents will vote on Advisory Question Number 8, a ballot measure that would urge the legislature to either maintain or repeal this reclassification of marijuana products as non-agricultural.
Washington State taxes marijuana with a 25 percent assessment on sales from producers to processors, a 25 percent tax on sales from processors to retailers, followed by another 25 percent tax on retail sales. That’s not all. Then there is the Evergreen State’s Business & Occupation gross receipts tax, a 6.5 percent state sales tax, along with local sales taxes. Altogether this brings the estimated effective tax rate on marijuana products to approximately 44 percent. In light of the onerous tax treatment of marijuana products and companies tied to that industry, it would be a positive development for Washington voters to vote repeal on Advisory Question 8 and urge lawmakers in Olympia to reverse the non-agricultural reclassification that will beget such punitive taxation.
But it’s not just at the state level where the marijuana industry faces excessive and unfair taxation. It’s a basic principle of sound tax policy that the code should not pick winners and losers or disproportionately target certain industries or groups of taxpayers. Yet unlike any other business, newly-legalized cannabis dispensaries are not allowed to deduct ordinary and necessary business expenses like equipment, rent, and wages from their federal taxable income....
Section 280E of the tax code denies ‘ordinary and necessary’ business expenses as a deduction against income derived from Schedule 1 substances. Unfortunately, tax law does not make any distinction between illegal street drug sales and state-established, legal cannabis dispensaries. These latter businesses comply fully with state law, pay all applicable taxes, and are vigorously regulated. There is no reason why the tax code should deny ordinary and necessary business expenses to legitimate businesses established under state law. The result is an arbitrary and punitive situation where legal employers face very high average effective tax rates that Congress never sought to impose on businesses.
Colorado, like Washington State and the federal government, exorbitantly taxes marijuana. Between the state’s 15 percent wholesale excise tax, a 10 percent state tax on marijuana retail sales, plus traditional state and local sales taxes, the effective rate on cannabis approaches 30 percent in the Rocky Mountain State.
It’s great to have 50 laboratories of democracy across the U.S., and the trials with legal marijuana taking place in Washington and Colorado will be instructive for other states and the federal government. Yet, when such heavy and unreasonable taxation is imposed, it blunts the positive effects of legal cannabis – such as the eradication of black markets and drug cartels – and makes it impossible to fully learn from the experience. Washington voters and members of Congress have the opportunity to help get it right, if they so choose.
Tuesday, October 21, 2014
This new Denver Post article, headlined "Proposed Colorado marijuana edibles ban shows lingering pot discord," documents the enduring challenges and debates over the best regulatory frameworks for states which have moved away from total marijuana prohibition. Here are excerpts:
Colorado's health department proposed an industry-spinning ban on the sales of nearly all forms of edible marijuana at recreational pot shops Monday but then quickly backed away from the plan amid an industry outcry and questions over legality.
After a heated, four-hour hearing, the public policy Tilt-A-Whirl ride ended where it began: with lawmakers, regulators and stakeholders still in disagreement — now more than 10 months after the start of recreational pot sales — on the best way to manage marijuana in Colorado. "This is by far the simplest recommendation," state Rep. Jonathan Singer, D-Longmont, said of the health department's proposal. "But I don't know if it gets us to where we want to be."
The aim of the state advisory group that met Monday to consider the health department's proposal and several others is to prevent people — mostly kids — from accidentally eating marijuana-infused products. Such accidental ingestions have sent children to the hospital, caused an increase in calls to poison-control hotlines and become one of the key measures lawmakers use in discussing whether legal marijuana sales can fit harmoniously in society.
Sales of infused edibles make up about 45 percent of the legal marijuana marketplace, said Dan Anglin, the chairman of the Colorado Cannabis Chamber of Commerce.
The health department's recommendation was one of 11 proposals the group considered Monday. Most suggested the state create clearer labels for marijuana-infused products or require producers to make edible marijuana items in a unique shape or dyed a unique color.
Many of those proposals, though, quickly met with a familiar back-and-forth. One side would offer the suggestion; the other side would bat it down. Stamp a symbol onto edibles denoting the products contain marijuana? Too easily rubbed off, edibles producers said. Improve labeling and require edibles to stay with their packages? Too easily ignored to spread unmarked edibles, groups concerned about marijuana said.
Require producers to dye their products a specific color or airbrush on a symbol? "You can't force a company to use an ingredient they don't want to," said advisory group member Julie Dooley, an owner of Julie & Kate Baked Goods, an edibles producer.
In the debate, there was talk of Sour Patch Kids and marijuana-infused sodas, discussion of the cost of chocolate molds, and these words: "I think soft candy is such a broad category."
Amid this atmosphere, Colorado health department official Jeff Lawrence presented the department's proposed ban on the sales of all edibles except hard candies and tinctures. Lawrence said the disagreement over more-nuanced regulations pushed the department to propose something more sweeping. "If it couldn't be achieved," he said, "we were looking at something that could be achieved."
But the proposal — word of which spread in an Associated Press report before the meeting — quickly met a buzz saw. Industry advocates questioned whether edibles could be banned under Amendment 64, Colorado's marijuana-legalization measure. Singer worried a ban would create a "marijuana Whac-A-Mole situation" where edibles production moved into the black market. Andrew Freedman, the state's marijuana policy coordinator, said the governor's office did not support a ban.
The health department later in the day put out a news release acknowledging that the department did not consider the proposal's constitutionality or ask the governor's office to review it. Instead, the proposal was put forward to generate discussion. "Considering only the public health perspective, however, edibles pose a definite risk to children, and that's why we recommended limiting marijuana-infused products to tinctures and lozenges," Larry Wolk, the executive director of the department, said in a statement.
The discussion seemed mostly over by the end of Monday's meeting, as talk returned to more incremental forms of edibles regulation. Any final proposals from the advisory group will be presented in a report to the legislature next year. The Department of Revenue, which regulates marijuana businesses, must adopt final rules on the topic by 2016.
Monday, October 20, 2014
This lengthy local article from Oregon provides a detailed look at the state of political debate in Oregon just a few weeks before final votes are cast concerning Measure 91 to legalize recreational marijuana in the state. The piece is headlined "High stakes in marijuana vote: Legalization measure draws nationwide attention," and here are some excerpts that caught my eye:
The flow of campaign cash from out-of-state donors has shifted south across the Columbia River in support of Measure 91. It has fueled an advertising blitz virtually absent two years ago. Meanwhile, opponents of legal recreational pot are struggling to fill a much smaller campaign war chest.
The measure would let adults 21 years and older legally use, grow, produce and store marijuana and associated edibles and drinks at home within set limits. It would let adults provide marijuana as well as marijuana edibles and drinks within the limits to another adult, as long as no cash is exchanged. It also would direct the state to regulate the legal recreational marijuana industry, including growers, producers and retailers. And it projects the state would collect millions of dollars in pot tax revenue to be divided among schools, law enforcement and treatment programs.
The two sides of Measure 91 cite statistics that they say show Washington’s and Colorado’s laws are either failed or sound policy, to buttress their own chief arguments....
New Approach Oregon has raised nearly $3.3 million in cash and in-kind contributions, according to online campaign finance filings with the Oregon secretary of state’s office. New Approach Oregon sponsored the measure on the Nov. 4 ballot and is the main committee supporting its passage. The money has fueled a wave of statewide ads.
Out-of-state donors have put in big money. Drug Policy Action, the political arm of Drug Policy Alliance, has contributed $940,000. Billionaire investor George Soros is a major financier of the alliance, which has a stated aim of ending marijuana prohibition. New Approach PAC, a committee The Oregonian reported was formed by family members of the late billionaire insurance executive Peter Lewis, contributed $750,000. Lewis, who died in November, personally contributed $96,000....
In contrast, the No on 91 campaign has raised just $168,337, state data shows, with the Oregon State Sheriff’s Association and another statewide law enforcement association kicking in almost all the cash.
Clatsop County Sheriff Tom Bergin, past president of the sheriff’s association, acknowledged the campaign hasn’t raised a lot of money. He noted, however, the coffers for the respective campaigns would be similar if out-of-state money going to the pro-measure side were excluded. Bergin said the lack of money going into the No on 91 campaign isn’t apathy but a sign that Oregonians are still dealing with financial hardships. “We’ve got to keep mowing the yard and hope we keep the weeds out, no pun intended,” he said....
The most recent poll, conducted by Portland-based DHM Research on behalf of Oregon Public Broadcasting and a Portland television station, found 52 percent of likely voters supported Measure 91 and 41 percent opposed it, with a 4.3 percentage point margin of error.
John Horvick, DHM’s research director, said it has conducted four polls since last year either on marijuana legalization or the measure. The results have been close, with the percentage in favor running between 49 and 54 percent. He said the outcome could hinge on the youth vote, which is less likely to cast ballots during mid-term elections. “You just have to get over that hump,” he said.
Horvick said he doubts the outcomes in Colorado and Washington will influence how voters here cast their ballots. Rather, he said, the attitudes of voters and their friends and family members shaped by “real-life experiences” with marijuana will have more impact than two-year-old election results in The Highest and Evergreen states.
October 20, 2014 in Initiative reforms in states, Polling data and results, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)
Saturday, October 18, 2014
The question in the title of this post is prompted by this notable AP piece from Oregon headlined "Economist: Benefits of legal pot outweigh societal costs." Here are excerpts:
University of Oregon economist said Thursday the best-case estimates for Colorado's legal marijuana tax revenue were overstated because of a faulty model. Economist Ben Hansen said at the Oregon Economic Forum that misjudgments in Colorado's revenue estimates stemmed from a term familiar to students in Econ 101: Elasticity of demand.
Previous estimates of demand for recreational marijuana only looked at the potential shift from the black market to the legal market. But with the medical market suctioning off some new consumers, revenue forecasts changed. With various substitutes available, from synthetic marijuana to medical and black-market pot, Hansen said, guessing at the potential revenue impact in Oregon remains difficult....
Colorado has decided to spend pot taxes in arrears, meaning taxes aren't projected but spent only once collected. The unusual budgeting maneuver was adopted because the pot market is expected to be highly volatile for the first several years.
Legalizing marijuana increases its supply and drops its price, Hansen said. That price drop makes additional taxes harder for consumers to notice. That's important when the tax rate people pay in Colorado and Washington for legal pot is north of 40 percent. In Oregon, the same rate is anticipated to be about 15 percent.
While police agencies will no longer arrest or fine people caught with marijuana if it's legalized, Hansen says taxes function as a kind of fine for marijuana consumption. "With legalization, we can kind of double-dip," Hansen said. "We're no longer paying to arrest and incarcerate people, and we're getting tax revenue from it."
Hansen also says he doesn't anticipate a dramatic impact on the alcohol market, though he says studies have shown heavy drinking and beer sales decline in markets where medical marijuana is approved.
Harvard University economist Jeffrey Miron said Thursday that Colorado's medical marijuana market was already commercialized when marijuana was legalized. "The medicinal market was so commercial, so visible, that for all practical purposes, it was legal," said Miron. "Economists consider all that matters are the fundamentals: Can you get access to it, are there barriers to it.
"I just don't think you (in Oregon) will see any kind of dramatic change. You're a long way toward a commercial market already."
October 18, 2014 in Medical Marijuana Commentary and Debate, Medical Marijuana State Laws and Reforms, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)
Wednesday, October 8, 2014
I never tire of the phrase "follow the money," and I generally do not use it as a pejorative complaint about modern politics as much as a useful reminder that capitalism (and capital) explains the realities of American law, policy and reform as much as any other force. With these realities in mind, I found especially interesting this informative lengthy USA Today article headlined "Entrepreneurs eye emerging marijuana markets." Here are some extended excerpts:
When James Howler created his marijuana-infused taffy in 2009, the Colorado entrepreneur had trouble finding an accountant willing to keep the books of a company making legally fuzzy medical marijuana candy. Now, five years later, venture capitalists from New York City want to shower him with money for a stake in his Cheeba Chews and a foothold in a $2.6 billion marijuana industry now operating in nearly half the country.
With medical marijuana legal in 23 states and Washington, D.C., and recreational marijuana legal in Colorado and Washington state, the market for weed is rife with potential, and the people in pinstripes have taken note. As the marijuana companies grow more sophisticated — and profitable — they are attracting the attention of investors and corporations.
Tapping into the green revolution, however, brings unique challenges for entrepreneurs and corporate honchos alike. States may have bucked federal law, which considers marijuana illegal for any purpose, but they have imposed their own complicated, lengthy lists of regulations meant to keep cannabis tightly under control and, in some cases, keep the corporate behemoths out.
But with so much money at stake, industry experts say, it's only a matter of time before corporate giants, already eyeing the market, grab their share, too. "If leaders of these companies are not looking at the cannabis space, then they are not doing their jobs," says Chris Walsh, editor of Marijuana Business Daily, a trade publication based in Denver. "Billions of dollars are here, and no seasoned business executive is going to overlook a billion-dollar industry that they might be positioned to tap."...
If the crowd of 200 executives who jammed the marijuana panel at the Wine & Spirits Summit on June 5 in Denver is any indication, the alcohol industry is paying attention. "Some see it as a threat, and some are interested in being part of the industry," says Emily Pennington, editor of Wine & Spirits Daily, an online trade publication that hosted the summit. "Either way, they are watching it very closely."...
Most major tobacco companies, which explored the possibilities of marijuana in the 1970s, when federal legalization seemed possible, now deny any interest. "Marijuana remains illegal under federal law, and Altria's companies have no plans to sell marijuana-based products," says Brian May, spokesman for Altria, the company that owns tobacco company Philip Morris America....
R.J. Reynolds Tobacco also says it isn't interested in marijuana. "We have no intention to have any involvement when it comes to marijuana," spokesman David Howard says. "We have no interest in that industry."
But tobacco giant Japan Tobacco International entered into a deal in December 2011 with Ploom, the San Francisco-based manufacturer of a pocket-sized smoking device that heats tobacco, vaporizing nicotine and flavor without producing smoke, to commercialize the product outside the United States. Although the company maintains its device is solely for tobacco, the latest version, called Pax, is popular among marijuana users.
At least two pharmaceutical firms, AbbVie and GW Pharmaceuticals, already produce medicines that contain active ingredients from cannabis. GW says it is a traditional pharmaceutical company that won't be dabbling in what it calls the "artisanal" medical marijuana business.The company manufactures Sativex, a cannabinoid medicine for the treatment of spasticity due to multiple sclerosis....
Some states don't allow non-residents to open or have equity investments in marijuana businesses. Colorado, which has more than 1,300 licensed marijuana businesses, requires marijuana investors to have lived in the state for at least two years. The owner, operator and employees must all be residents of the state. Non-state residents can lend money but can't have an equity interest, says Colorado Department of Revenue spokeswoman Natriece Bryant. The state enacted those regulations specifically to keep the giant multinationals out, Bryant says....
Most federally insured banks have opted to stay away from the industry because of legal uncertainty about whether transactions for marijuana businesses could be considered money laundering. That means marijuana businesses have little access to small business loans or even payroll accounts. With banks out of the picture for now, most of the financial backing for growth in the marijuana industry has come from venture capital, angel investors and private loans.
"We've had bankers from New York City asking for a tour of the facilities and wanting to know how they can invest," said Ralph Morgan, chief operating officer of O.penVAPE, which specializes in extraction of purified cannabis oil from marijuana and produces a vape pen that vaporizes the oil to be inhaled. O.penVAPE products are sold in Colorado, California, Washington, Oregon and Arizona. "There are tons of people dumping tons of money into the industry," says Cheeba Chews' Howler. "There is money to be made, and that's why that big money is coming in."...
Ultimately, once corporate America thinks the industry is safe, well-established marijuana companies will be targets for acquisition, says Steve Berg, chief financial officer of O.penVAPE. "By virtue of the success we've had and the powerful brand we've developed, we constantly get inquiries from individuals and companies looking to partner," Berg says. None have come from Big Pharma, Big Tobacco or Big Alcohol, "but we feel like we can feel them out there," he says.
"How could it be otherwise? This is a new industry that is growing very, very rapidly," Berg says. "Any business-development division that has any similarity has to have their eye on this ball."
O.penVAPE's chief operating officer, Ralph Morgan, who worked in medical device sales before he and his wife, intrigued by the medical side of cannabis, decided to open a dispensary in Colorado, says there's nothing mysterious about the marijuana industry. "All the regular business rules apply to the marijuana industry — taxation, regulation, human resources," Morgan says. "It's just a different widget."
Morgan says recreational marijuana businesses are a natural fit for the alcohol industry, which is already accustomed to state-by-state regulation. Marijuana products "could be made and distributed in a similar fashion," Morgan says. "The alcohol industry has done a good job of creating brands."
Trip Keber, who four years ago founded Dixie Elixirs to make marijuana-infused drinks, chocolates and lotions, says he, too, has had inquiries from investment bankers, hedge funds and venture capitalists. And at conferences, he has fielded questions from alcohol industry executives. "Four years ago, I couldn't get anyone to return my calls," Keber says. "Now the tables have turned. We are too big to ignore."
One of the biggest signs that the industry has matured is the influx of top-notch professionals — lawyers, accountants, advertising execs — willing to take jobs at the marijuana companies, Berg says. Full legalization in Colorado and Washington was a watershed event for many business professionals, who could then feel it was safe to join the industry, Berg says. "One of the major themes or trends in the legal cannabis industry is the professionalization of the industry," Berg says. "Professionals are crossing over from the more conventional industries because they see a lot of opportunity and a lot of challenge."...
Changes in societal attitudes toward marijuana caught attorney Barry Peek's attention a few years ago. Peek, a labor and employment lawyer at the 65-lawyer New York firm Meyer, Suozzi, English and Klein, did some reading, attended a few conferences and then gathered a group of three or four attorneys in his firm to study the issues around medical marijuana. He concluded that medical marijuana would turn out to be big business. And if it's a new business, Peek says, people will need legal advice.
When New York Gov. Andrew Cuomo signed the state's medical marijuana law on July 5, Peek's firm was ready. "We are advising clients on how to maneuver through those regulations," Peek says. "We have a full-service law firm, so if there is a company that needs to get into the business, we can handle corporate issues, tax issues, land-use issues, whatever they need."
Interest in New York is widespread, from farmers in Upstate New York who have idle land that could grow marijuana to doctors who want to dispense it, Peek says. "It will be a growing sector in the legal community," Peek says. "And once the smaller companies get a foothold and become profitable, they will get bought out by larger companies."
Tuesday, October 7, 2014
As reported in this local article from Colorado, headlined "Candidates: Marijuana legalization ‘reckless’: Both oppose cannabis; differ on corrections, education," the current Governor of Colorado continues to criticize a law that a significant majority of his state voters supported back in 2012. Here are the basics:
Gov. John Hickenlooper said Monday during a gubernatorial debate with Republican challenger Bob Beauprez that Colorado voters were “reckless” to legalize recreational marijuana in 2012. The Democratic governor’s opposition to marijuana legalization has hardly been a secret. But the statement is his clearest admonishment for 55 percent of the electorate that backed the initiative.
“To a certain extent you could say it was reckless. I’m not saying it was reckless because I get quoted everywhere. But if it was up to me, I wouldn’t have done it. I opposed it from the very beginning. What the hell. I’ll say it was reckless,” Hickenlooper said....
Some thought Hickenlooper might be warming to the cannabis industry after attending a fundraiser in August hosted by some of the biggest marijuana businesses in Colorado. But he made it clear on Monday that he remains committed to presenting a tough hand. “We’re not only the first state to do this, we’re the first country,” Hickenlooper said. “There are serious challenges when you build something from scratch.”
There are few differences between Hickenlooper and Beauprez on the subject of marijuana. Beauprez also strongly opposed legalization. “We have to regulate as tight as the law allows,” Beauprez said.
Also notable were these two comments to the article by readers appearing right after the piece:
Art Jaquez: "This is what is wrong with the two party system, no one represents the people."
Jordan Maynard: "Funny that a Republican is touting the 'tightest allowable regulation' regarding something the people voted in, but when they run for office they proclaim less regulation is best. The Hypocrisy of Politicians never ceases. They hate the laws the people vote for, and suddenly it's good to have heavy handed regulation. If we could have government without politicians things might actually work."
Monday, October 6, 2014
The New York Times has this new editorial headlined "Yes to Marijuana Ballot Measures: Alaska, Oregon and the District of Columbia Should Legalize Pot." Here is how it begins:
The decision by California voters in 1996 to legalize medical marijuana produced a wave of similar initiatives around the country. Less than two decades later, over half the states allow at least limited medical use. Now it looks as though recreational use of the drug may follow the same path.
In 2012, Washington State and Colorado legalized recreational marijuana. This November, voters in Alaska, Oregon and the District of Columbia will decide whether to do the same — effectively disregarding the misguided federal ban on a drug that is far less dangerous than alcohol. Decades of arresting people for buying, selling and using marijuana have hurt more than helped society, and minority communities have been disproportionately affected by the harsh criminal penalties of prohibition.
Since Alaska, Oregon and the District of Columbia already allow medical marijuana, taking the next step makes good sense. There are some differences in their proposed initiatives, but they are all worthy of passage.
Sunday, October 5, 2014
The title of this post is the title of this notable symposium planned for later this month. The event takes place at the University of California Irvine School of Law, and is presented by the Center for Land, Environment, and Natural Resources (CLEANR) and Brown Rudnick LLP, and here is how the event is pitched at this website:
Despite stringent regulation at the federal level, an increasing number of U.S. states have adopted laws legalizing the use of marijuana for medical or recreational purposes. Marijuana production activities are being openly conducted without prosecution, but a suite of land use and environmental laws may nonetheless regulate such conduct, including environmental impacts of farming, consumer product safety, pesticide use, the siting and location of farms and dispensaries, and use of public lands.
Attorneys also face uncertainty as to their ability to advise clients in the marijuana industry about these activities. This symposium explores these many issues, guided by leading practitioners and policymakers deeply involved at the interface of federal and state marijuana use and control.
Alejandro E. Camacho, Professor of Law, Director, Center for Land, Environment, and Natural Resources at UC Irvine School of Law, and Geoffrey K. Willis, Partner, Brown Rudnick LLP, will serve as moderators.
Tuesday, September 30, 2014
Gina S. Warren of Texas A&M School of Law has posted a very interesting looking new article to SSRN: "Regulating Pot to Save the Polar Bear: Energy and Climate Impacts of the Marijuana Industry."
Here is the abstract:
It goes by many names -- cannabis, marijuana, pot, chronic, grass, reefer, weed, Mary Jane. Whatever the name, the trend is clear: the shwag is legal but the herb ain’t green. Nearly half of all U.S. states have enacted -- or have pending -- legislation to legalize, decriminalize, or in some way permit the use and cultivation of marijuana. As a result, marijuana has become a significant topic of conversation in the U.S. -- especially in the areas of social policy and criminal law. One conversation yet to reach fruition, however, is the industry’s projected impacts on energy demand and the climate. As the industry grows, so will its negative externalities. Indoor cannabis cultivation is the most energy-intensive industry in the U.S., requiring electricity to power lamps, to maintain consistent temperature and humidity levels, and to power fans for ventilation, among other things. This energy consumption, unless otherwise mitigated, results in significant greenhouse gas emissions. This article explores the opportunities that legalization brings in addressing the negative impacts on energy usage and climate change. It concludes that simply incorporating the marijuanaindustry into the existing energy regulatory framework will do little to address its negative impacts. It recommends that state and local policymakers take advantage of the unique opportunity to require indoor cultivators to utilize carbon-free electricity as a condition of licensing.
Thursday, September 25, 2014
As two recent articles highlight, advocates of marijuana of legalization in two states are not waiting to see how the 2014 election goes before getting a running start on 2016 campaigns. Here are headlines and starting paragraphs reporting these developments:
"Marijuana advocates kick off 2016 initiative": "Supporters of an effort to legalize recreational marijuana in 2016 have filed paperwork with state elections officials, allowing them to raise money to campaign for the citizens initiative. The Marijuana Policy Project of Arizona initiative almost certainly will be modeled after the voter-approved marijuana program in Colorado."
"Marijuana legalization effort begins in California": "A U.S. marijuana advocacy group took steps Wednesday to begin raising money for a campaign to legalize recreational pot use in California in 2016, a move with potential to add a dose of extra excitement to the presidential election year."
Tuesday, September 23, 2014
As highlighted in this Washington Post Wonkblog piece, headlined "Survey: Support for legal weed drops 7 points in the past year," a few recent polls suggest a reversal of recent trends of growing support for marijuana legalization. Here are excerpts from the report (with key links preserved, and my emphasis added):
National support for legalized marijuana has slipped by seven percentage points in the past year, from 51 percent in 2013 to 44 percent today, according to the Public Religion Research Institute. PRRI asked 4,500 Americans about the intensity of their support for or opposition to legalizing marijuana. The year-over-year drop in overall support was concentrated among those who favored marijuana legalization last year, but not strongly. Opposition increased greatest among those who strongly opposed legal marijuana.
These numbers suggest that people who only slightly supported legalization last year have changed their minds, and that people who slightly opposed legalization now feel more strongly about it....
An October 2013 Gallup poll found strong support for marijuana legalization nationally, with 58 percent in favor and 39 percent opposed. The PRRI and Gallup numbers are not directly comparable, since the questions were worded differently in each survey. Moreover, survey responses on marijuana legalization tend to be highly sensitive to particular question wording.
Still, the year-over-year drop within this one poll is significant and well outside the poll's 1.8 point margin of error. If other surveys show similar findings, it could mean that Americans generally don't like the news coming out of Colorado and Washington - even if that news has been largely positive.
I have emphasized an important line in this discussion of this latest poll data because I think all polling on marijuana reform can be subject to a lot of varied responses among a significant number of folks who are not strongly for or strongly against reform in principle. Thus, I tend to view polling on specific ballot proposals in specific states as more important than broad national polls on these matters. But every bit for data about public opinion on this fast-evolving issue is still notable and potentially consequential.
Monday, September 22, 2014
This local article from Alaska, headlined "KTVA reporter quits on-air, reveals herself as owner of Alaska Cannabis Club," reports on how one TV personality decided to use her time on air to provide a marijuana-business-driven decision to tell her bosses to "take this job and shove it." Here are the details:
Reporter Charlo Greene quit on-air during KTVA-TV's 10 p.m. newscast Sunday, revealing herself as the owner of the medical marijuana business Alaska Cannabis Club and telling viewers that she would be using all of her energy to fight for legalizing marijuana in Alaska.
Greene had reported on the Alaska Cannabis Club during Sunday night’s broadcast, without revealing her connection to it. At the end of the report, during a live shot, she announced that she was the club's owner and would be quitting.
“Now everything you've heard is why I, the actual owner of the Alaska Cannabis Club, will be dedicating all of my energy toward fighting for freedom and fairness, which begins with legalizing marijuana here in Alaska," she said. "And as for this job, well, not that I have a choice but, fuck it, I quit.” And with that, she walked off camera....
Reached later, Greene said KTVA had no idea she was going to quit, or that she was connected to the Alaska Cannabis Club. Asked why she quit in such a dramatic way, she said, "Because I wanted to draw attention to this issue. And the issue is medical marijuana. Ballot Measure 2 is a way to make medical marijuana real ... most patients didn’t know the state didn’t set up the framework to get patients their medicine."
"If I offended anyone, I apologize, but I’m not sorry for the choice that I made," she said. In a statement posted on KTVA's Facebook page Sunday night, news director Bert Rudman said, "We sincerely apologize for the inappropriate language used by a KTVA reporter during her live presentation on the air tonight. The employee has been terminated."
Started in April, the Alaska Cannabis Club connects medical marijuana cardholders with other cardholders who are growing cannabis. Growers are offered "donations" as reimbursement for the costs of growing marijuana, the club said in an interview with Alaska Dispatch News in August. The club said it hopes to increase access to medical marijuana patients, despite operating in a legal gray area within Alaska's murky medical marijuana laws. Video clips of the broadcast were quickly uploaded to YouTube and shared on Reddit Sunday night.
Saturday, September 20, 2014
The title of this post is the headline of this recent lengthy and informative Forbes article by Jacob Sullum. Here is how it gets started:
During a visit to the Dixie Elixirs & Edibles plant in Denver last summer, I saw the machines the company uses to produce cannabis concentrates, the kitchen where it makes marijuana-infused chocolates, and the bottling line for its THC-spiked sodas. Toward the end of the tour, I had a semi-serious question for the company’s CEO, Tripp Keber: “Where do you keep your piles of money?”
Keber laughed but quickly turned serious. “We actually have strong banking relationships,” he said. “We don’t talk about them. Asking someone about their banking is like asking them what they wear to bed at night. It’s an intensely personal question, even within the industry.” You can begin to understand why banking is such a touchy subject for the newly legal cannabusinesses in Colorado and Washington (as well as growers and dispensaries in the 21 states that allow medical but not recreational use of marijuana) if you consider the federal laws a financial institution violates when it does business with a state-licensed company like Keber’s.
“By providing [a] loan and placing the proceeds in [a] checking account, the institution would be conspiring to distribute marijuana,” writes University of Alabama law professor Julie Andersen Hill in a paper she presented at a conference on marijuana and federalism last week. “By facilitating customers’ credit card payments, the institution would be aiding and abetting the distribution of marijuana. And by knowingly accepting deposits consisting of revenue from the sale of marijuana, the institution may be acting as an accessory after the fact.”
That is not the end of the possible charges. “A financial institution that knowingly processes transactions for marijuana-related businesses commits the crime of money laundering,” Hill notes. Failure to meet the detailed monitoring and reporting requirements of the humorously named Bank Secrecy Act (BSA), which requires financial institutions to keep an eye out for suspicious activity, also can be treated as a felony.
Bank employees, officers, and directors can be prosecuted for these crimes, some of which may, depending on the amount of marijuana involved, trigger five- or 10-year mandatory minimum sentences. BSA violations are punishable by up to 10 years in prison when combined with other federal offenses. Money laundering can get you up to 20 years, and life is the maximum for participating in a marijuana conspiracy. In addition to the daunting threat of criminal penalties, financial institutions that deal with cannabusinesses have to worry about offending federal regulators with the power to impose millions of dollars in fines or sentence a bank to death by revoking its deposit insurance.
It is little wonder, then, that financial institutions are wary of cannabusinesses, or that the growers, manufacturers, and retailers who are lucky enough to obtain banking services do not want to talk about how they managed to do that. The lack of banking services, which Aaron Smith, executive director of the National Cannabis Industry Association, calls “the most urgent issue facing the legal cannabis industry today,” makes it difficult for marijuana entrepreneurs to raise capital and forces most of them to deal exclusively in cash, which creates administrative, logistical, and security headaches.
Friday, September 19, 2014
From Marijuana Business Daily, a new poll shows 65% of registered voters in support of Washington D.C.'s Initiative 71, a quasi-legalization measure on the ballot this November.
Initiative 71 is a bit different from previous marijuana ballot measures. Though the campaign appears to be promoting the measure as a vote for legalization, it would really enact something that is much closer to decriminalization. Legalization really refers to some sort of legal and regulated marketplace. All I-71 would make legal is possession, home cultivation (of up to 6 plants) and transfer without payment between adults. Removing criminal penalties for use is usually referred to as decriminalization, not legalization. And I think permitting home cultivation and non=profit transfers also fit best in the same category since the reforms are really targeted at removing criminal penalties for users (who grow for themselves or share with friends).
My sense has always been that "decriminalization" polls better than "legalization," so it is curious that I-71 is using the legalization language. Since it seems to be comfortably ahead, perhaps the backers are confident of the outcome and want to be able to promote it as a win for "legalization" and so are using that language in the campaign.
Opponents of the initiative launched their campaign this week, so it will be interesting to see if the current numbers hold.
Wednesday, September 17, 2014
The title of this post is drawn from the headline of this notable new AP article. Here are excerpts:
Tired of Cheech & Chong pot jokes and ominous anti-drug campaigns, the marijuana industry and activists are starting an ad blitz in Colorado aimed at promoting moderation and the safe consumption of pot. To get their message across, they are skewering some of the old Drug War-era ads that focused on the fears of marijuana, including the famous "This is your brain on drugs" fried-egg ad from the 1980s.
They are planning posters, brochures, billboards and magazine ads to caution consumers to use the drug responsibly and warn tourists and first-timers about the potential to get sick from accidentally eating too much medical-grade pot. "So far, every campaign designed to educate the public about marijuana has relied on fear-mongering and insulting marijuana users," said Mason Tvert, spokesman for the Marijuana Policy Project, the nation's biggest pot-policy advocacy group.
The MPP plans to unveil a billboard on Wednesday on a west Denver street where many pot shops are located that shows a woman slumped in a hotel room with the tagline: "Don't let a candy bar ruin your vacation." It's an allusion to Maureen Dowd, a New York Times columnist who got sick from eating one on a visit to write about pot.
The campaign is a direct response to the state's post-legalization marijuana-education efforts. One of them is intended to prevent stoned driving and shows men zoning out while trying to play basketball, light a grill or hang a television. Many in the industry said the ads showed stereotypical stoners instead of average adults.
Even more concerning to activists is a youth-education campaign that relies on a human-sized cage and the message, "Don't Be a Lab Rat," along with warnings about pot and developing brains. The cage in Denver has been repeatedly vandalized. At least one school district rejected the traveling exhibit, saying it was well-intentioned but inappropriate.
"To me, that's not really any different than Nancy Reagan saying 'Just Say No,'" said Tim Cullen, co-owner of four marijuana dispensaries and a critic of the "lab rat" campaign, referring to the former first lady's effort to combat drug use....
The advocacy ads tackle anti-drug messaging from year past. Inside pictures of old TV sets are images from historic ads. Along with the fried-egg one is an image from one ad of a father finding his son's drug stash and demanding to know who taught him to use it. The kid answers: "You, all right! I learned it by watching you!"
The print ad concludes, "Decades of fear-mongering and condescending anti-marijuana ads have not taught us anything about the substance or made anyone safer." It then directs viewers to consumeresposibly.org, which is patterned after the alcohol industry's "Drink Responsibly" campaign.
September 17, 2014 in Current Affairs, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)
Monday, September 15, 2014
This Wisconsin State Journal article, headlined "Police chief: Legalize marijuana, use tax revenue to fund drug treatment," reports on a local police chief's notable response to reports highlighting racial disparities on who gets arrested for marijuana offenses. Here are excerpts from the article:
Madison Police Chief Mike Koval endorsed the legalization of marijuana last week, saying the drug should be regulated and taxed, with revenues used to fund treatment programs for harder drugs.
The comments came during an interview with the State Journal Wednesday about data showing African-Americans in Madison were arrested or cited for marijuana offenses at about 12 times the rate of whites in the city.
Koval called efforts to enforce laws against marijuana an “abject failure,” and said the same about the broader war on drugs. “We’ve done such an abysmal job using marijuana as a centerpiece of drug enforcement, that it’s time to reorder and triage the necessities of what’s more important now,” Koval said.
Referring to the states of Washington and Colorado, which have legalized the drug for recreational use and sell it at state-regulated stores, he said it was time for Wisconsin to consider doing the same.
Koval said he would like to see the state “acknowledge the failure” of marijuana prohibition and instead focus on the “infinite amount of challenges” posed by drugs such as heroin. Taxes from the legal sale of marijuana, he said, would create state revenue that could then be used to fund drug treatment and expand the capacity of drug court programs that divert addicts from the criminal justice system....
The cause has not advanced as far in Wisconsin, though, where the drug remains completely illegal. State Rep. Melissa Sargent, D-Madison, introduced a bill to legalize marijuana earlier this year, but the legislation stands little chance of becoming law.
Saturday, September 13, 2014
The title of this post is the headline of this very intriguing piece from the Seattle Times, which spotlights a very interesting new lawsuit filed in Washington concerning a local ban on marijuana sales. Here are the details:
The growing number of cities and counties in Washington opting out of Washington’s marijuana legalization experiment is eating away at the foundation of Initiative 502, as a Seattle Times editorial in Thursday’s paper suggested. The lack of stores in widening swaths of the state perpetuates the black market and maintains underground access of youth.
A new lawsuit filed in Benton County Superior Court against Kennewick’s ban takes the argument further: Bans are also racially discriminatory. The suit, filed on behalf of a would-be marijuana company, suggests that Kennewick’s ban (as well as similar prohibitions in all three Tri-Cities and Franklin County) push the underground marijuana trade to poorer neighborhoods. Since marijuana is a cash cow for gangs, they’ll continue to battle for turf.
The lawsuit makes some broad assumptions, including that white marijuana users primarily buy from “friends,” and most transactions occur in private homes.... “Minorities and minority children, who reside in racially segregated, high poverty rate neighborhoods in Kennewick, where black market transactions do not occur in private between friends, but instead on the public streets, are therefore disproportionately subjected to violence as a product of the black market trade as compared to whites.”
Attorney Liz Hallock, who filed the suit on behalf of American Weed LLC, summed it up: “This is white people who don’t see the effect of a ban on their street corners.”
The case is scheduled for a hearing next week. Whether it is successful or not, the legality of these municipal bans is likely headed to the state Supreme Court, as another lawsuit, against Fife, is being directly appealed to the high court. These cases will hinge on a lack of specific authority in I-502 for cities and counties to opt out. Attorney General Bob Ferguson issued a non-binding opinion in January that they have an implied right under the state Constitution, which spurred jurisdictions queasy about marijuana to drop the curtain on I-502.
The ACLU’s Alison Holcomb, the architect of the initiative, believes the question about the bans falls to the Legislature: “Are we going to allow opt-out (from I-502), and under what circumstances?” State liquor laws, for example, require an alcohol ban to be put to voters. If state law now treats marijuana like liquor, shouldn’t voters get a say on pot bans?
The Legislative debate is likely to center on whether cities and counties get some of the 25 percent marijuana excise taxes in exchange for accepting state-licensed I-502 businesses. Holcomb said municipalities should have to justify their costs, because legalization, in theory at least, would lower criminal justice costs. “Cities and counties need to make the case and tie the request to the needs,” she said.
Until the Legislature, or the court, acts, the bans are here to stay.
Monday, September 8, 2014
Regular readers of this blog may surmise that I think (as do perhaps some other blog contributors) that the ways in which the National Football League formally and informally deals with marijuana issues in the months and years ahead could play a huge role in how much of the nation formally and informally deals with marijuana issues. Consequently, I found notable this new New York Times piece by Michael Powell, headlined "Football’s in the Air, and in Denver, So Is the Sweet Smell of Herb: Marijuana Seeps Into Tailgating Rituals at Mile High in Colorado." Here is an excerpt:
I’m standing in a parking lot overlooking the stadium known prosaically as Sports Authority and poetically as Mile High. That handle is metaphorically apt, too, as I’m engaged in the all-American sport of tailgating, with Corey and the Wookie and four friends....
The tall, red-bearded professional chef with excellent shades who insists his friends know him as the Wookie fires up the pipe and, amid clouds, talks legalized weed and the world that has followed on its heels. “Why do you think Peyton Manning invested in pizza places after legalization? Boom! Stoners love pizza.”...
Herbaceous tailgating, truth be told, is in its infancy. The Mile High Cannabis dispensary stands across the street from the stadium, and watching its game-day traffic of orange-clad customers calls to mind the week leading up to Christmas. “We’re glad to do our part in getting people amped for the game,” says budtender Erin Catalano....
But the Broncos, following in the prim footsteps of the N.F.L., have taken a position of sniffy disapproval. Go to the team’s website under the heading of marijuana. “Any form of marijuana consumption,” it says, “is prohibited on Sports Authority Field at Mile High property during public events, including in stadium parking lots.” That goes for edibles; you must leave the gummy bears at home.
The N.F.L. insists it is enforcing Colorado law. Whatever. The Colorado Symphony has taken a laid-back path of no resistance whatsoever. It has “Classically Cannabis: The High Note Series.” (This is not to argue that all has gone well with legalization. Meth heads have embraced the herb and hash oil explosions have become a clear and present danger in Colorado, proving that stupidity grows apace with social change.)
Less comprehensible is why the N.F.L., that most gladiatorial of our major sports, continues to embrace reefer madness. It tests for pot in infinitesimal quantities and suspends repeat offenders for entire seasons....
A linebacker in Colorado can limp into the locker room with dislocated fingers, twisted ligaments and bruises like leprosy splotches. He will get legally shot up and prescribed various and many opiates. Or he can grab a 12-pack of the N.F.L.’s official beer and drink himself into sweet oblivion. But if he goes home and dips into his legal stash of cannabis indica and dozes off in front of his television? He is a threat to American sport, not to mention that one-armed bandit of an industry known as the N.F.L. The players union is trying to force the league to negotiate a more sane policy on marijuana as part of a new drug testing program.
Colorado fans, let it be said, do not put herb in your face. No one gets gnarly.... The fans insist that pot leaves them mellower. They get their orange jerseys and scream fiercely and all that. But this isn’t New York or Philadelphia. Fighting is extremely unchill.
My colleague Ken Belson was in Seattle on Thursday for the Seahawks’ opener. Parking spots there go for $80 a pop, which is a buzz kill itself. And cops enforce the same sanctions against public consumption of weed. That said, he reported that stoners tended to persevere. The sweet smell of herb mixed with the tang of organic, grass-fed, much-loved cows as they became burgers on the grill. After the game, he shared a Trickster IPA or three, and he reported having to first sweep a few grams of loose buds off his table.
As the title of this post suggests, I would be surprised to learn that use of marijuana at some tailgating locales is truly a new reality. But prominent articles about marijuana tailgating in the New York Times surely is.
Some prior NFL related posts:
- "NFL Seeks Right Answer for Marijuana Use"
- Leafly and Americans for Safe Access team up on NFL ads
- NFL reportedly plans to decrease punishments for marijuana use
- NFL player on marijuana use "we're just going to do it anyway"
- Should the NFL fund medical marijuana studies?
Thursday, September 4, 2014
The title of this post is the headline of this notable new USA Today article, which gets started this way:
Every time he goes to work, Harvard-trained lawyer Andrew Freedman faces federal prosecution thanks to the source of his paycheck: Colorado's burgeoning marijuana industry.
Freedman, the governor's chief marijuana adviser, faces prison time if federal prosecutors decide to step in. That's because federal law still considers marijuana as dangerous as heroin or cocaine, and prosecutors could easily bring drug-trafficking charges if they choose. Freedman's salary is paid by the taxes collected on legal marijuana sales. "I'm in murky territory every day," Freedman said.
He's not alone. Tens of thousands of marijuana growers, bud tenders, edibles makers, store owners and couriers working in Colorado and Washington and any of the other 21 states and the District of Columbia that have legalized recreational or medical marijuana face the same penalties.
The risk is even greater for dozens of former cops and soldiers working as armed guards in the marijuana industry because federal drug-trafficking laws prescribe far stiffer penalties for anyone using a firearm while handling drugs and money. Several of the guards interviewed by USA TODAY say they chose to work for Blue Line acknowledged the legal risks they're taking, but said it was safer than being shot at by insurgents or dealing with violent criminals daily.
So far federal prosecutors have held off bringing charges against security firms protecting and servicing the marijuana industry, even though they're aware of the flagrant violations. USA TODAY in July published numerous photos of a Colorado-based security-firm workers carrying pot, cash and weapons -- photos federal agents and prosecutors confirm they saw.
The situation highlights the tenuous balance federal prosecutors strike as they monitor the sale of legalized marijuana. Marijuana remains illegal at the federal level, even though voters in Colorado and Washington have allowed adults to possess and consume it for fun. Federal officials say they're trying to balance state law while keeping pot out of the hands of kids and profits away from drug cartels.
Marijuana-industry workers acknowledge the risks they're taking, but say they're assuming federal prosecutors will leave them alone as long as they keep to the strictest interpretation of the state law. "If you touch the product, then you're at risk for federal prosecution," said Michael Jerome, a spokesman for Blue Line Protection Group, which provides armed guards to transport marijuana and cash for pot-shop owners. "That's why we're trying to make it safe and legitimate and responsible, so we can respect the wishes of the voters of the state of Colorado and keep the federal government out of it."
September 4, 2014 in Criminal justice developments and reforms, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)
Monday, September 1, 2014
A few weeks ago, Talkingpointsmemo.com posted a long-form article, available only to TPM Prime subscribers, title "Can Big Pot and Big Alcohol Get Along?". I finally had a chance to read it. Though a lot of points in the article will be familiar to those who follow this issue, it has one of the most comprehensive looks at the alcohol industry's reaction to marijuana legalization that I've seen. And, as the article notes, the alcohol industry now views legalization as inevitable:
Beer, wine and liquor do not care that legalization isn’t technically on the books. For them, it’s already a foregone conclusion. And that means that weed is already a real competitor.
Beer and wine may be as American as a baseball game, but Big Alcohol doesn’t feel at all relaxed about this debate. At alcohol trade association meetings, pot is already spoken of as a key competitor. A vigorous internal discussion has been taking place within the industry to figure out how they can establish working relationships with the marijuana world, and what to do if they can’t.
At the National Alcohol Beverage Control Association’s annual legal symposium, which draws state regulatory agency officials, corporate counsel, industry policymakers and private attorneys, a representative from the Marijuana Policy Project spoke. Attendees said that during the Q&A, “a couple people stood up and kind of attacked her” about MPP’s alcohol-bashing tactics.
While Big Alcohol has expressed that they would prefer to co-exist amicably in the marketplace, in their minds, the marijuana industry has to make a choice: pot can choose to be their friend, or to be their enemy. And if Big Pot decides they want to continue to launch regular attacks on alcohol, then alcohol will ultimately fight back.
The whole piece is well worth reading. Unfortunately, to do so, you'll need a subscription (at $50/year)--not really worth it for just this one article. But TPM is one of the best independent journalism sites around and subscribing is a great way to support a valuable news source (not to mention a good value for those who closely follow political/policy news.) So, if you're a TPM reader who has thought about signing up for the Prime subscription before, this article could provide a bit of an extra incentive.