Monday, January 26, 2015
As highlighted in this prior post, earlier this month the RAND Drug Policy Research Center released this big policy/research report on marijuana reform titled "Considering Marijuana Legalization: Insights for Vermont and Other Jurisdictions." This report was produced in response to specific Vermont legislation and expressly "aims to inform the debate in Vermont." Nevertheless, the report's summary ends by asserting that the report's "general themes should be useful to any jurisdiction considering alternatives to marijuana prohibition."
I am certain policy-makers and advocates for and against reform will find this RAND report "useful" in various ways, and I have already required students in my Marijuana Law, Policy & Reform seminar to review the RAND report with an eye on how its analysis might impact consideration of various marijuana reform proposals emerging in Ohio. But I continue to wonder if (and worry that) there is ultimately a strong disaffinity among most marijuana advocates to seriously engage with the kind of "wonkish" cost/benefit analysis that the RAND report represents.
I sense that supporters of marijuana reform are often eager to deny that there are any significant costs likely to result from reform, and likewise that opponents of marijuana reform are often eager to deny that there are any significant benefits likely to result from reform. Consequently, I suspect (and fear) that the most ardent participants in policy debates on both sides may not want something like the RAND report at the center of reform discussions because it presents a more nuanced account of costs and benefits than advocates may want to acknowledge.
Sunday, January 18, 2015
The front-page of today's New York Times has this notable lengthy article about a notable problem increasing in Colorado since marijuana legalization. The piece is headlined "Odd Byproduct of Legal Marijuana: Homes That Blow Up," and here is how the article starts:
When Colorado legalized marijuana two years ago, nobody was quite ready for the problem of exploding houses. But that is exactly what firefighters, courts and lawmakers across the state are confronting these days: amateur marijuana alchemists who are turning their kitchens and basements into “Breaking Bad”style laboratories, using flammable chemicals to extract potent drops of a marijuana concentrate commonly called hash oil, and sometimes accidentally blowing up their homes and lighting themselves on fire in the process.
The trend is not limited to Colorado — officials from Florida to Illinois to California have reported similar problems — but the blasts are creating a special headache for lawmakers and courts here, the state at the center of legal marijuana. Even as cities try to clamp down on homemade hash oil and lawmakers consider outlawing it, some enthusiasts argue for their right to make it safely without butane, and criminal defense lawyers say the practice can no longer be considered a crime under the 2012 constitutional amendment that made marijuana legal to grow, smoke, process and sell.
“This is uncharted territory,” said State Representative Mike Foote, a Democrat from northern Colorado who is grappling with how to address hashoil explosions. “These things come up for the first time, and no one’s dealt with them before.”
Saturday, January 17, 2015
RAND produces big new policy report: "Considering Marijuana Legalization: Insights for Vermont and Other Jurisdictions"
As reported in this local AP piece, headlined "RAND study: Marijuana legalization could be big bucks from sales, tourism," the RAND Drug Policy Research Center has just released a big new report on marijuana reform with a focus on Vermont. The AP piece provides an effective summary of the basics of the RAND report and local political recaction in Vermont:
Vermont could reap hundreds of millions of dollars in tax revenue if it were to legalize marijuana, but only if nearby states didn't also jump on the bandwagon, according to a study released Friday.
The study comes as states across the country increasingly explore the potential budget boost from taxing an underground industry, even while the nascent legal pot business in Colorado and Washington experiences growing pains.
In Vermont, the Rand Corporation found that revenue from marijuana consumers could generate between $20 million and $75 million a year for the state. The larger figure could be reached through what the report calls "marijuana tourism and illicit exports." It also found that nearly 40 times as many marijuana consumers live within 200 miles of Vermont than live in the state.
The preface to the report, which doesn't make a recommendation about whether the state should legalize marijuana, says it's meant to "inform the debate." While it was prepared for Vermont, it says its conclusions could be useful to other states considering marijuana legalization.
Such high revenue is by no means assured, the report said. "If the federal government intervened to stop such cross-border traffic or if another state in the Northeast decided to legalize marijuana and set lower tax rates, these potential revenues might not materialize," it said.
Vermont allows the use of medical marijuana, and the possession of small amounts of marijuana has been decriminalized. Democratic Gov. Peter Shumlin has said he believes the state will follow Washington and Colorado in legalizing it, but he wants to see how it plays out in other states before easing laws. "I continue to support moves to legalize marijuana in Vermont but have always said that we have to proceed with rigorous research and preparation before deciding whether to act," Shumlin said. "This report will help us do that."
The price of marijuana in Washington has plunged since the sky-high prices when pot shops opened six months ago, and now growers complain the state isn't properly regulating supply. Regulators in Colorado have capped production to deter weed from spilling into nearby states, but that has meant more demand than supply.
Last spring, the Vermont Legislature passed a law requiring Shumlin's administration to produce a report about the consequences of legalizing marijuana. No proposals to legalize marijuana have been introduced in the Legislature. After the Friday presentation by the report's authors, portions of it were recounted during a hearing of the House Ways and Means Committee. "It seems to me the big question is do we go forward with this," said Committee Chairwoman Janet Ancel, D-Calais. She said the question on how to tax it is complicated.
The report provided few hard answers. It said that many questions can't be answered in advance, such as whether easing marijuana laws would increase abuse and how to keep it from minors and out of other states. "There is no recipe for marijuana legalization," the report said, "nor are there working models of established fully legal marijuana markets."
Here are links to the full report and materials that RAND released with this report:
January 17, 2015 in Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)
Monday, January 12, 2015
The title of this post is the headline of this notable lengthy new Washington Post article. Here are excerpts:
Mexican traffickers are sending a flood of cheap heroin and methamphetamine across the U.S. border, the latest drug seizure statistics show, in a new sign that America’s marijuana decriminalization trend is upending the North American narcotics trade.
The amount of cannabis seized by U.S. federal, state and local officers along the boundary with Mexico has fallen 37 percent since 2011, a period during which American marijuana consumers have increasingly turned to the more potent, higher-grade domestic varieties cultivated under legal and quasi-legal protections in more than two dozen U.S. states.
Made-in-the-USA marijuana is quickly displacing the cheap, seedy, hard-packed version harvested by the bushel in Mexico’s Sierra Madre mountains. That has prompted Mexican drug farmers to plant more opium poppies, and the sticky brown and black “tar” heroin they produce is channeled by traffickers into the U.S. communities hit hardest by prescription painkiller abuse, offering addicts a $10 alternative to $80-a-pill oxycodone.
“Legalization of marijuana for recreational use has given U.S. consumers access to high-quality marijuana, with genetically improved strains, grown in greenhouses,” said Raul Benitez-Manaut, a drug-war expert at Mexico’s National Autonomous University. “That’s why the Mexican cartels are switching to heroin and meth.” U.S. law enforcement agents seized 2,181 kilograms of heroin last year coming from Mexico, nearly three times the amount confiscated in 2009.
Methamphetamine, too, has surged, mocking the Hollywood image of backwoods bayou labs and “Breaking Bad” chemists. The reality, according to Drug Enforcement Administration figures, is that 90 percent of the meth on U.S. streets is cooked in Mexico, where precursor chemicals are far easier to obtain.
“The days of the large-scale U.S. meth labs are pretty much gone, given how much the Mexicans have taken over production south of the border and distribution into the United States,” said Lawrence Payne, a DEA spokesman. “Their product is far superior, cheaper and more pure.” Last year, 15,803 kilograms of the drug was seized along the border, up from 3,076 kilos in 2009....
Mexican cartels continue to deploy people as “mules” strapped with 50-pound marijuana backpacks to hike through the Arizona borderlands and send commercial trucks into Texas with bales of shrink-wrapped cannabis so big they need to be taken out on a forklift. But the profitability of the marijuana trade has slumped on falling demand for Mexico’s “brick weed,” so called because it is crushed into airtight bundles for transport across the border. Drug farmers in the Sierra Madre say that they can barely make money planting mota anymore....
The cartels, and consumers, are turning away from cocaine, too. Last year, U.S. agents confiscated 11,917 kilograms of cocaine along the Mexico border, down from 27,444 kilos in 2011. This reflects lower demand for the drug in the United States, experts say, as well as a cartel business preference for heroin and meth. Those two substances can be cheaply produced in Mexico, unlike cocaine, which is far pricier, and therefore riskier, because it must be smuggled from South America....
Heroin and meth are far easier to transport and conceal than marijuana. Especially worrisome to U.S. officials is a growing trend of more border-crossing pedestrians carrying the drugs strapped under their clothing or hidden in body cavities. “The criminals are trying to blend in among the legitimate travelers, who are 99 percent of the individuals crossing through here,” said Aki, the San Ysidro port director. “That’s the hard part for us.”...
In recent years, Mexican cartels also have begun producing higher-value “white” heroin, typically associated with traffickers from Colombia or Asia, according to DEA officials. “The Mexicans are evolving in their production abilities and getting more sophisticated,” said Payne, the DEA spokesman. “It’s not just black tar anymore.”...
The United States has an estimated 600,000 heroin users, Payne said — a threefold increase in the past five years. But that number is dwarfed by the estimated 10 million Americans who abuse prescription painkillers. Those addicts are the prime target for the booming heroin business. A U.S. crackdown on prescription opiates has driven up the price for drugs such as OxyContin and Percocet, enticing desperate addicts to switch to cheap heroin to fend off withdrawal symptoms.
The profile of U.S. heroin addiction is also changing, said Phil Herschman, chief clinical officer with the CRC Health Group, which operates 170 treatment centers in 30 U.S. states. “Now, we’re seeing housewives coming in who had been addicted to Vicodin for two or three years before switching to heroin, or adolescents who got hooked by snorting it, thinking it was safe, only to end up injecting themselves,” he said.
Advocates for marijuana reform frequently assert that legalization could and would help eliminate the profits reaped by drug cartels and the black market from illegal marijuana production and distribution. This article certainly provides support for this assertion.
Monday, January 5, 2015
The leading anti-marijuana reform group, Smart Approaches to Marijuana (SAM), today released this brief report titled "Lessons After Two Years of Marijuana Legalization - Short Report." According to this press release, SAM believe that the "report outlines both what data we know - and what we need to know - to accurately evaluate the consequences of marijuana legalization in Washington and Colorado."
Unfortunately, the report is not anywhere close to a review of relevant data about legalization and it is entirely focused on stressing what SAM thinks is evidence of problems since legalization. For example, here is some of what appears in a section under the heading "DENVER CITY AND COUNTY CRIME IS UP":
In the city and county of Denver, overall crime is slightly higher through November 2014 than it was during that same time period in 2013. Most crime categories are up, like simple assault and criminal mischief; but some categories show reductions, like sex offenses, kidnapping, and motor vehicle theft.... It's possible that crime statistics have little to do with marijuana law changes, but rampant media reports of “legalization linked with a crime drop” are unsubstantiated.
Most critically, the report say nothing about the metrics and factors stressed by those who push for marijuana reform such as (1) avoiding harms/costs that result from (racially skewed) arrests and enforcement of low-level marijuana criminal laws, (2) generating revenues from marijuana taxes, licenses and fees (3) allowing police to focus on more serious crimes, and (4) increasing monies available for drug prevention and addiction programs, (5) creating jobs/incomes from a new regulated legal industry and taking jobs/monies away from drug cartels and gangs involved in the black market.
In addition, though the title of this short report promises to provide "Lessons" from legalization, I struggled to draw any lessons from this report (other than that SAM is mostly interested in trumping up existing data to claim legalization is problematic when the extant evidence is anything but clear). That all said, this report merits credit for noting and lamenting that "no robust public tracking system by federal or state authorities has been implemented" and for noting that "more sophisticated data are sorely lacking with respect to marijuana in Colorado and Washington."
Friday, January 2, 2015
The title of this post is the headline of this notable new AP article, which includues these passages:
To see the tax implications of legalizing marijuana in Colorado, there's no better place to start than an empty plot of land on a busy thoroughfare near downtown Denver. It is the future home of a 60,000-square-foot public recreational center that's been in the works for years.
Construction costs started going up, leaving city officials wondering whether they'd have to scale back the project. Instead, they hit on a solution — tap $3.2 million from pot taxes to keep the pool at 10 lanes, big enough to host swim meets.
The Denver rec center underscores how marijuana taxation has played throughout Colorado and Washington. The drug is bringing in tax money, but in the mix of multibillion budgets, the drug is a small boost, not a tsunami of cash.
Much of the drug's tax production has been used to pay for all the new regulation the drug requires — from a new state agency in Colorado to oversee the industry, to additional fire and building inspectors for local governments to make sure the new pot-growing facilities don't pose a safety risk....
In Colorado, where retail recreational sales began Jan. 1, 2014, the drug has a total effective tax rate of about 30 percent, depending on local add-on taxes. Through October, the most recent figures available, Colorado collected about $45.4 million from sales and excise taxes on recreational pot sales.
That puts the state on pace to bring in less than the $70 million a year Colorado voters approved when they agreed to a statewide 10 percent sales tax and 15 percent excise tax on recreational pot. Voters set aside the first $40 million in excise taxes for school construction; so far that fund has produced about $10 million.
But adding fees and licenses and the taxes from medical marijuana sales, Colorado had collected more than $60 million through October. Local governments can add additional taxes, too. That's what led to additional revenue streams like Denver's $3.2 million for a bigger pool at its rec center.
In Washington, where recreational pot sales began in July, recreational weed is taxed on a three-tier system as the plant moves from growers to processors to retailers. The total effective tax rate is about 44 percent. State tax officials are just getting a look at the first few months of pot taxes, and the money is coming in slowly because there aren't many stores there yet. State economists have predicted pot sales will bring in $25 million by next July.
The state anticipates a $200 million increase by mid-2017, and about $636 million to state coffers through the middle of 2019.
Wednesday, December 31, 2014
The Denver Post has a notable series of articles taking stock of the experiences and perceptions of Colorado through the year-long experience with legalization recreational sales in the state. This main article, headlined "Colorado's cannabis experiment puts it into a global spotlight," includes these excerpts:
Only one year in, Colorado's unprecedented jump into marijuana legalization has become the stuff of legend. For opponents and supporters, the state comes up repeatedly in the evolving discussion about marijuana. It is perhaps the most underappreciated consequence of legalization. By becoming the first place in the world to actually legalize commercial sales of marijuana to anyone over 21, Colorado made the worldwide debate over pot more vibrant than it has ever been.
Those in favor of legalization now think of Colorado — and, to a lesser extent, Washington state, which debuted a smaller marijuana market later in the year — as a kind of political homeland. The states' campaigns and resulting industries were the inspiration for pro-pot successes in two more states this fall and are the blueprints for coming 2016 campaigns in as many as a half-dozen states. They helped foment never-before-seen congressional rebellion against federal enforcement of marijuana laws....
Those opposed to legalization, though, see Colorado as a cautionary tale — hard evidence of the kinds of dangers that they previously had been able to warn of only in the abstract. In speeches in states and countries considering legalization, marijuana opponents now talk about accidental pot ingestions, lower-than-predicted tax revenue, gaudy industry advertising and even deaths. They cite examples of each from Colorado's first year of legalized sales....
The on-the-ground reality, of course, has been less stark than either side's version. Marijuana legalization has changed Colorado. It's just tough to say exactly how.
Marijuana is more available in Colorado than ever before, but it's unclear whether marijuana consumption has risen as a result. Teens are less likely to think that marijuana is harmful, and marijuana arrests at Denver schools are up, but that hasn't yet translated into measurably increased use. More people may be driving stoned, but traffic fatalities are down....
Tourism to the state hit record levels this year. But how much of that has to do with marijuana?
After a full year, legal marijuana sales are an experiment still very much in progress. "People are trying to jump to conclusions much faster than the data allows," said Andrew Freedman, the man in charge of coordinating Colorado's policy efforts on marijuana legalization.
The jumps are even bigger because of Colorado's data-collection woes. The state lacks systems for quick, accurate measurements of youth use, marijuana-related incidents at schools, stoned driving and many other questions. State officials this year commissioned a 74-page report titled "Marijuana Data Discovery and Gap Analysis" just to address the problem. One person in the Department of Public Safety is now in charge of coordinating data-collection efforts for 2015....
Even when there are numbers to measure legalization's impacts, they often tell unexpected tales. For instance, state tax revenues from recreational marijuana once were predicted to top $100 million in the current fiscal year. They're on pace for a little more than half that. And, aside from the dollars constitutionally mandated to go to school construction, state officials haven't seen the revenue as a budgetary windfall. They've instead proposed the money all go toward marijuana-related issues.
In 2014, police said marijuana legalization would cost more for them to enforce than marijuana prohibition. Employers tightened their drug-testing policies, even though it was legal for their employees to use marijuana. More people became registered medical marijuana patients, despite the presence of a less-restrictive recreational market. "The big assumption here was that human behavior is a light switch," said Skyler McKinley, Freedman's deputy, "that you legalize marijuana and everything changes overnight."
That resiliency of old ways proved a boon to state regulators trying to implement legalization. Because Colorado already had a robust medical marijuana industry — and because the recreational marijuana industry initially was restricted to people who already owned a dispensary — the transition into legal sales was more of an evolution than a revolution....
Toni Savage, the owner of 3D Cannabis Center, said the most she ever grossed in a single year operating a medical marijuana dispensary was $400,000. This year, she's on track to top $3.5 million in sales — with more than half of those coming from out-of-state tourists.
But bigger sales means bigger tax bills. Not only is she paying nearly $100,000 a month in state and local taxes, she also expects to have a $500,000 federal tax bill because she can't deduct business expenses in the same way that stores that aren't illegal under federal law can. "I made a ton of money," she said, "but I owe more than I have."
The situation could get even tougher in 2015 because the state has started to allow newcomers into the recreational marijuana business. Savage said stores fear a glut of marijuana, which could drive down prices that have budged only slightly since the beginning of 2014. "If you're in the business, it's going to get really ugly," she said.
It's the change in the amount of attention Colorado has received from outside the state that defines the first year of legal marijuana sales. This was the year a New York Times columnist got stoned in a Denver hotel room, hallucinated that she had died, then wrote about the whole experience. Snoop Dogg recorded a theme song for a Colorado gubernatorial candidate, and Bill O'Reilly, upset over legalization, mused about running for the same office.
Saturday, December 27, 2014
This Denver Post article reports on some new marijuana use data that suggests Colorado marijuana consumption has gone up considerably in recent years. But, as the title of this post highlights, I cannot help but wonder if legalization has really led to marijuana use spiking up or just honest reporting of use going up. Here are the data:
As marijuana legalization took hold in Colorado, the estimated percentage of regular cannabis users in the state jumped to the second-highest level in the country, according to new federal data. When asked, roughly one out of every eight Colorado residents over the age of 12 reported using marijuana in the previous month. Only Rhode Island topped Colorado in the percentage of residents who reported using marijuana as frequently.
The results come from the National Survey on Drug Use and Health and represent the average of estimates gathered in 2012 and 2013.
The numbers are among the first measurements of marijuana use in Colorado to be released after it became legal in late 2012 for people over 21 to use and possess marijuana in the state. But because they do not include data from this year, the numbers aren't able to answer the question experts have watched Colorado closely for: How will widespread commercial sales of marijuana impact use?
"This is not surprising, given what's going on on the medical side," Mark Kleiman, a University of California-Los Angeles professor who studies marijuana policy, said of the increase, referring to the uptick in medical marijuana patients in Colorado in the same period. "I don't think this tells us about the long-term impacts of legalization."
State-specific data from the survey are averaged over two-year periods to compensate for relatively small sample sizes. For the 2011-12 period, 10.4 percent of Coloradans 12 and older reported using marijuana in the month prior to being surveyed. That placed Colorado seventh in the country for monthly marijuana use. Monthly use in Colorado jumped to 12.7 percent — a 22 percent increase — in the 2012-13 data. The result means the survey estimates about 530,000 people in Colorado use marijuana at least once a month.
Nationally, monthly marijuana use by people 12 and older nudged upward by about 4 percent to 7.4 percent. In Washington state — which, like Colorado, in 2012 legalized marijuana use and limited possession for adults — monthly marijuana use rose by about 20 percent to 12.3 percent....
Monthly marijuana use increased across all age groups in Colorado, according to the new survey numbers. The number of people who reported using marijuana in the past year also increased in Colorado in the 2012-13 data, but the state ranked only sixth nationally in the measurement. Measurements for alcohol consumption and illicit drug use increased, as well.
This month, a different federally funded survey found that teen marijuana use had not increased nationally, despite marijuana legalization. A Colorado survey released this year found no increase in marijuana use by high schoolers in 2013.
Tuesday, December 16, 2014
The title of this post is the headline of this notable new USA Today article reporting on new data that seems likely to be trumpted by those advocating for continued reform of marijuana laws. Here are the basics:
Marijuana use among teens declined this year even as two states, Colorado and Washington, legalized the drug for recreational use, a national survey released Tuesday found. University of Michigan's Monitoring the Future study, now in its 40th year, surveys 40,000 to 50,000 students in 8th, 10th and 12th grade in schools nationwide about their use of alcohol, legal and illegal drugs and cigarettes.
"There is a lot of good news in this year's results, bu the problems of teen substance use and abuse are still far from going away," Lloyd Johnston, the study's principal investigator, said.
After five years of increases, marijuana use in the past year by students in all three grades declined slightly, from 26% in 2013 to 24% in 2014. Students in the two lower grades reported that marijuana is less available than it once was, the survey found. Among high school seniors, one in 17, or 5.8%, say they use marijuana almost daily this year, down from 6.5% in 2013.
Synthetic marijuana, chemical concoctions meant to simulate a marijuana high and sold at convenience stores and gas stations, have also fallen out of favor. In 2011, when the survey first asked about the drugs, known as K2 and Spice, 11% of 12th graders said they had used the drugs in the past year. In 2014, that number had dropped to 6%. "Efforts at the federal and state levels to close down the sale of these substances may be having an effect," Johnston said.
Abuse of all prescription drugs, including narcotic painkillers, sedatives and amphetamines, declined from 16% in 2013 to 14% in 2014 among 12th graders, the survey found. Narcotic painkiller use, in decline since 2009, dropped again from 7% in 2013 to 6% in 2014. Heroin use, which has grown among adult populations, remained stable for teens.
Teens considered narcotic pain relievers, such as OxyContin and Vicodin, safer than illicit drugs such as heroin and cocaine, because they are prescribed by doctors, Nora Volkow, director of the National Institute on Drug Abuse, said. "There's a very strong and aggressive campaign about educating the public on the risk of opioid medications as it relates to overdoses and deaths," Volkow said. "That has made teenagers aware that they are not so safe as they thought they were."
Teen use of both alcohol and cigarettes dropped this year to their lowest points since the study began in 1975, the survey found. Teens may be trading conventional cigarettes for e-cigarettes. In 2014, more teens used e-cigarettes than traditional tobacco cigarettes or any other tobacco product, the study found. "E-cigarettes have made rapid inroads into the lives of American adolescents," Richard Miech, a senior investigator of the study, said....
Alcohol use and binge drinking peaked in 1997, when 61% of the students surveyed said they had drunk alcohol in the previous 12 months. In 2014, 41% reported alcohol use in the previous year, a drop from 43% in 2013, the survey found. Since the 1997 peak, "there has been a fairly steady downward march in alcohol use among adolescents," Johnston said....
"Even though the indicators are very good news, at the same time we cannot become complacent," Volkow said. "This is a stage where their brains are most vulnerable. We need to continue our prevention efforts."
Friday, November 28, 2014
The question in the title of this post is prompted by this recent Reason commentary by Jacob Sullum, which is headlined "A Cannabis Crackdown Contracts: After rising dramatically, marijuana arrests are falling and the trend seems likely to continue." Here are some data and context from the piece:
In 1992, when Americans elected a president who said he had smoked pot without inhaling, the number of marijuana arrests in the United States began a steep climb. It peaked in 2007, during the administration of a president who refused to say whether he had smoked pot because he worried about setting a bad example for the youth of America. Since 2009, when a president who "inhaled frequently" because "that was the point" took office, the number of marijuana arrests has fallen steadily — a trend that continued last year, according to FBI numbers released this month.
It's not clear exactly why pot busts exploded during the last decade of the 20th century and the first decade of the 21st century, when the annual total rose from fewer than 288,000 to almost 873,000 — a 200 percent increase. There does not seem to be any consistent relationship between the level of marijuana consumption and the number of arrests, the vast majority of which (nearly nine out of 10 last year) involved simple possession rather than cultivation or distribution. Judging from survey data on marijuana use, arrests did not rise in response to increased consumption; nor did the cannabis crackdown have a noticeable deterrent effect. The risk of arrest for any given pot smoker rose substantially between 1991 and 2007 but remained small.
In 1991, according to the National Household Survey on Drug Abuse (NHSDA), about 15 million Americans smoked pot. That year there were about 288,000 marijuana arrests, one for every 52 cannabis consumers. In 2007, according to the National Survey on Drug Use and Health (successor to the NHSDA), about 25 million Americans smoked pot. That year there were about 873,000 marijuana arrests, one for every 29 cannabis consumers.
Although the overall risk of arrest is small, it is decidedly higher for blacks and Latinos. In 2010, according to a report from the American Civil Liberties Union, blacks were nearly four times as likely to be arrested for marijuana possession as whites, even though survey data indicated they were no more likely to smoke pot. In some jurisdictions the black-to-white risk ratio was even higher. It was 8 to 1 in the District of Columbia, which helps explain the dramatic turnaround in black Washingtonians' opinions about marijuana legalization.
The good news is that the downward trend in marijuana arrests since 2009 seems likely to continue, helped along by the spread of decriminalization and legalization. In recent years California, Colorado, Maine, Massachusetts, and Washington have changed their marijuana laws so that people caught with small amounts are no longer arrested. That change has eliminated tens of thousands of marijuana arrests each year — more than 50,000 in California alone. Under ballot initiatives approved this month, Alaska and Washington, D.C., will eliminate all penalties for possessing small amounts of marijuana. (Possessing up to an ounce was already a citable offense in Oregon, where voters also approved marijuana legalization this month.)...
Even in New York City, where the cannabis crackdown has been especially noticeable, police are arresting fewer pot smokers, a trend that is likely to accelerate as a result of a policy change that took effect last week. Low-level marijuana possession arrests by the New York Police Department (NYPD) skyrocketed from about 3,000 in 1994, when Rudolph Giuliani took office as mayor, to more than 51,000 six years later. The crackdown continued during Michael Bloomberg's administration, when the NYPD arrested an average of nearly 39,000 pot smokers each year, compared to 24,487 under Giuliani, 982 under David Dinkins, and 2,259 under Ed Koch, according to data gathered by Queens College sociologist Harry Levine.
As the question in the title of this post highlights, I am eager to attach some kind of benefit (and perhaps cost) metric to these data about reduced arrest. In the context of incarceration changes, we know each prison year served costs the government about $30,000 taxpayer dollars (while also potentially preventing some criminal activity which is much harder to quantify). I am inclined to speculate that there must be $100 in administrative costs associated with formal arrests, which would mean that every 10,000 fewer marijuana arrests benefits taxpayers with about $1,000,000 in savings.
Thursday, November 20, 2014
A helpful reader helpfully alerted me to this notable new Congressional Research Service report titled "Federal Proposals to Tax Marijuana: An Economic Analysis." Here is the detailed report's summary:
The combination of state policy and general public opinion favoring the legalizing of marijuana has led some in Congress to advocate for legalization and taxation of marijuana at the federal level. The Marijuana Tax Equity Act of 2013 (H.R. 501) would impose a federal excise tax of 50% on the producer and importer price of marijuana. The National Commission on Federal Marijuana Policy Act of 2013 (H.R. 1635) proposes establishing a National Commission on Federal Marijuana Policy that would review the potential revenue generated by taxing marijuana, among other things.
This report focuses solely on issues surrounding a potential federal marijuana tax. First, it provides a brief overview of marijuana production. Second, it presents possible justifications for taxes and, in some cases, estimates the level of tax suggested by that rationale. Third, it analyzes possible marijuana tax designs. The report also discusses various tax administration and enforcement issues, such as labeling and tracking.
Economic theory suggests the efficient level of taxation is equal to marijuana’s external cost to society. Studies conducted in the United Kingdom (UK) and Canada suggest that the costs of individual marijuana consumption to society are between 12% and 28% of the costs of an individual alcohol user, and total social costs are even lower after accounting for the smaller number of marijuana users in society. Based on an economic estimate of $30 billion of net external costs for alcohol, the result is an external cost of $0.5 billion to $1.6 billion annually for marijuana. These calculations imply that an upper limit to the economically efficient tax rate could be $0.30 per marijuana cigarette (containing an average of one half of a gram of marijuana) or $16.80 per ounce. An increased number of users in a legal market would raise total costs, but not necessarily costs per unit.
Some could also view excise taxes as a means to curtail demand, particularly as the price of marijuana can be expected to drop from current retail prices of up $200-$300 per ounce to prices closer to the cost of production at $5-$18 per ounce, if broadly legalized. The demand for marijuana is estimated to be relatively price inelastic, meaning that consumer demand is relatively insensitive to price changes. Although previous studies of marijuana demand largely examine consumers willing to engage in illegal activities, it appears that higher tax rates would have a minor effect on reducing demand. With this said, tax policy, coupled with adequate law enforcement, could be an effective tool to limit marijuana consumption among youth, as empirical studies indicate that their demand is more sensitive to price than non-youth.
Excise taxes on marijuana could also be levied primarily to raise revenue, as has been historically the case with tobacco and alcohol. As an illustration, assuming a total market size of $40 billion, a federal tax of $50 per ounce is estimated to raise about $6.8 billion annually, after accounting for behavioral effects associated with price decreases following legalization.
The choices in administrative design could affect consumer behavior, production methods, evasion rates, or the tax base of a federal marijuana excise tax. Some of the more significant choices include whether to exempt medicinal uses or homegrown marijuana from tax.
November 20, 2014 in Federal Marijuana Laws, Policies and Practices, Medical Marijuana Data and Research, Recreational Marijuana Data and Research, Taxation information and issues , Who decides | Permalink | Comments (0)
Monday, October 27, 2014
Dr. Jeffrey Miron, who is director of economic studies at the Cato Institute and director of undergraduate studies in the Department of Economics at Harvard University, has just produced this significant new Cato working paper titled "Marijuana Policy in Colorado." The paper is relatively short, though it includes lots of data, and here is its Executive Summary and its closing paragraphs:
In November 2012, voters in the states of Colorado and Washington approved ballot initiatives that legalized marijuana for recreational purposes. Alaska, Oregon, and the District of Columbia are scheduled to consider similar measures in the fall of 2014, and other states may follow suit in the fall of 2016.
Supporters and opponents of such initiatives make numerous claims about state-level marijuana legalization. Advocates believe legalization reduces crime, raises revenue, lowers criminal justice expenditure, improves public health, improves traffic safety, and stimulates the economy. Critics believe legalization spurs marijuana use, increases crime, diminishes traffic safety, harms public health, and lowers teen educational achievement. Systematic evaluation of these claims, however, has been absent.
This paper provides a preliminary assessment of marijuana legalization and related policies in Colorado. It is the first part of a longer-term project that will monitor state marijuana legalizations in Colorado, Washington, and other states.
The conclusion from this initial evaluation is that changes in Colorado’s marijuana policy have had minimal impact on marijuana use and the outcomes sometimes associated with use. Colorado has collected non-trivial tax revenue from legal marijuana, but so far less than anticipated by legalization advocates....
The evidence provided here suggests that marijuana policy changes in Colorado have had minimal impact on marijuana use and the outcomes sometimes associated with use. This does not prove that other legalizing states will experience similar results, nor that the absence of major effects will continue. Such conclusions must await additional evidence from Colorado, Washington, and future legalizing states, as well as more statistically robust analyses that use non-legalizing states as controls.
But the evidence here indicates that strong claims about Colorado’s legalization, whether by advocates or opponents, are so far devoid of empirical support.
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.
Thursday, October 2, 2014
The Center on Juvenile and Criminal Justice has produced this interesting new research report titled "Reforming Marijuana Laws: Which Approach Best Reduces The Harms Of Criminalization? A Five-State Analysis." Here is what the report's Introduction:
The War on Marijuana is losing steam. Policymakers, researchers, and law enforcement are beginning to recognize that arresting and incarcerating people for marijuana possession wastes billions of dollars, does not reduce the abuse of marijuana or other drugs, and results in grossly disproportionate harms to communities of color. Marijuana reforms are now gaining traction across the nation, generating debates over which strategies best reduce the harms of prohibition.
Should marijuana be decriminalized or legalized? Should it be restricted to people 21 and older? Advocates of the latter strategy often argue their efforts are intended to protect youth. However, if the consequences of arrest for marijuana possession — including fines, jail time, community service, a criminal record, loss of student loans, and court costs — are more harmful than use of the drug (Marijuana Arrest Research Project, 2012), it is difficult to see how continued criminalization of marijuana use by persons under 21 protects the young. Currently, people under 21 make up less than one-third of marijuana users, yet half of all marijuana possession arrests (ACLU, 2013; Males, 2009).
This analysis compares five states that implemented major marijuana reforms over the last five years, evaluating their effectiveness in reducing marijuana arrests and their impact on various health and safety outcomes. Two types of reforms are evaluated: all-ages decriminalization (California, Connecticut, and Massachusetts), and 21-and-older legalization (Colorado and Washington). The chief conclusions are:
• All five states experienced substantial declines in marijuana possession arrests. The four states with available data also showed unexpected drops in marijuana felony arrests.
• All-ages decriminalization more effectively reduced marijuana arrests and associated harms for people of all ages, particularly for young people.
• Marijuana decriminalization in California has not resulted in harmful consequences for teenagers, such as increased crime, drug overdose, driving under the influence, or school dropout. In fact, California teenagers showed improvements in all risk areas after reform.
• Staggering racial disparities remain— and in some cases are exacerbated — following marijuana reforms. African Americans are still more likely to be arrested for marijuana offenses after reform than all other races and ethnicities were before reform.
• Further reforms are needed in all five states to move toward full legalization and to address racial disparities
Tuesday, September 23, 2014
The title of this post is the title of this new paper by Julie Andersen Hill now available via SSRN. Here is the abstract:
Although marijuana is illegal under federal law, twenty-three states have legalized some marijuana use. The state-legal marijuana industry is flourishing, but marijuana-related businesses report difficulty accessing banking services. Because financial institutions won’t allow marijuana-related businesses to open accounts, the marijuana industry largely operates on a cash only basis — a situation that attracts thieves and tax cheats.
This article explores the root of the marijuana banking problem as well as possible solutions. It explains that although the United States has a dual banking system comprised of both federal- and state-chartered institutions, when it comes to marijuana banking, federal regulation is pervasive and controlling. Marijuana banking access cannot be solved by the states acting alone for two reasons. First, marijuana is illegal under federal law. Second, federal law enforcement and federal financial regulators have significant power to punish institutions that do not comply with federal law. Unless Congress acts to remove one or both of these barriers, most financial institutions will not provide services to the marijuana industry. But marijuana banking requires more than just Congressional action. It requires that federal financial regulators set clear and achievable due diligence requirements for institutions with marijuana business customers. As long as financial institutions risk federal punishment for any marijuana business customer’s misstep, institutions will not provide marijuana banking.
Tuesday, August 26, 2014
The title of this post is the title of this terrific new Brookings research paper which takes a close look at Washington state’s early experience in legalization of recreational marijuana. Here is how the report is summarized on the Brookings website:
Voters in Washington state decided in November 2012 to legalize marijuana in their state, inspired by a campaign that emphasized minimizing the drug’s social costs and tightly controlling the legal recreational market. Joined to this drug policy experiment is a second innovative experiment that emphasizes knowledge: the state will fund and develop tools necessary to understand the impact of legalization on Washington’s law enforcement officials, communities, and public health.
This second reform, though less heralded than the attention-grabbing fact of legalization, is in many ways just as bold. Washington’s government is taking its role as a laboratory of democracy very seriously, tuning up its laboratory equipment and devoting resources to tracking its experiment in an unusually meticulous way, with lessons that extend well beyond drug policy.
Brookings’ Philip Wallach interviewed advocates, researchers, and government policymakers in Washington to learn about the state’s novel approach. In this report, he highlights several noteworthy features:
- Building a funding source for research directly into the law: a portion of the excise tax revenues from marijuana sales will fund research on the reform’s effects and on how its social costs can be effectively mitigated.
- Bringing to bear many perspectives on legalization by coordinating research efforts across multiple state agencies, including the Department of Social and Health Services, the Department of Health, and the Liquor Control Board.
- Mandating a cost-benefit analysis by the state’s in-house think tank, which will be nearly unprecedented in its scope and duration.
Wallach makes a number of suggestions to ensure that Washington’s knowledge experiment can be made to work, including:
- Ensure political independence for researchers, both by pressuring politicians to allow them to do their work and by encouraging the researchers themselves to refrain from making political recommendations
- Gather and translate research into forms usable by policymakers
- Counter misinformation with claims of confident uncertainty
- Have realistic expectations about the timeline for empirical learning, which means cultivating patience over the next few years
- Specify which reliable metrics would indicate success or failure of legalization
August 26, 2014 in History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms | Permalink | Comments (1)
Monday, August 11, 2014
The title of this post is the headline of this new commentary by Jacob Sullum at Forbes. Here are excerpts:
Two consequences that pot prohibitionists attribute to marijuana legalization—more underage consumption and more traffic fatalities—so far do not seem to be materializing in Colorado, which has allowed medical use since 2001 and recreational use since the end of 2012.
Survey data released last week by the Colorado Department of Public Health and Environment (CDPHE) indicate that marijuana use among high school students continues to decline, despite warnings that legalization would make pot more appealing to teenagers. In the 2013 Healthy Kids Colorado survey, 37 percent of high school students reported that they had ever tried marijuana, down from 39 percent in 2011. The percentage who reported using marijuana in the previous month (a.k.a. “current” use) also fell, from 22 percent in 2011 to 20 percent in 2013. The CDPHE says those drops are not statistically significant. But they are part of a general downward trend in Colorado that has persisted despite the legalization of medical marijuana in 2001, the commercialization of medical marijuana in 2009 (when the industry took off after its legal status became more secure), and the legalization of recreational use (along with home cultivation and sharing among adults) at the end of 2012.... Traffic fatalities also have generally declined since Colorado began loosening its marijuana laws. Fatalities rose in 2001, the year that Colorado’s medical marijuana law took effect, but by 2003 had fallen below the 2000 level. Since peaking in 2002, fatalities have fallen by more than a third. Legal sales of recreational marijuana began in January, and so far this year traffic fatalities are down. According to to the Colorado Department of Transportation, there were 258 fatalities from January through July, compared to 263 during the same period last year. In short, Colorado’s experience does not provide much evidence that less repressive marijuana laws make the roads more dangerous (and they might even make the roads safer by encouraging the substitution of cannabis for alcohol).
August 11, 2014 in Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research | Permalink | Comments (0)
As reported in this new AP article, "June was the best-selling month yet for recreational pot in Colorado, with $24.7 million in total sales, according to state tax collections reported Friday." Here is more:
Recreational pot sales were up more than 19 percent from June sales, an increase likely attributable to more stores opening. Since January, Colorado has reaped $29.8 million in taxes from marijuana, according to June collections reported by the state Department of Revenue. That figure includes taxes, licenses and fees from both medical and recreational pot.
Recreational pot is inching toward medical pot in total sales. In January, Colorado's statewide sales tax on medical pot produced nearly twice the taxes produced by recreational pot. By June, the statewide 2.9 percent sales tax from medical pot brought in less than 20 percent more than the same tax on recreational weed. Estimates for how much tax revenue legal weed would produce varied widely, with no preceding legal pot taxes on which to guess sales....
In Washington state, where recreational pot sales started last month, pot sales numbers were also released Friday. That state reported 18 stores selling about $3.8 million worth of marijuana in July — a higher number than Colorado's first month of recreational sales.
Sunday, August 3, 2014
In this recent post, I highlighted to potent work done by folks at the Washington Post concerning marijuana research and data in this detailed Wonkblog piece highlighting all the problems with all the science claims by the federal government to justify marijuana prohibition. I now just saw this notable follow-up piece by Christopher Ingraham at Wonkblog headlined "The federal government’s own statistics show that marijuana is safer than alcohol." Here are excerpts:
Opponents of marijuana legalization return to one particular number over and over in their arguments: the number of emergency room visits involving marijuana. [An] ONDCP fact sheet breathlessly reports that "mentions of marijuana use in emergency room visits have risen 176 percent since 1994, surpassing those of heroin." The Drug Enforcement Administration's "Dangers and Consequences of Marijuana Abuse," a 41-page tour-de-force of decontextualized factoids, reports that marijuana was involved in nearly half a million E.R. visits in 2011, second only to cocaine.
The problem, of course, is that these numbers are meaningless without knowing how many people are using those drugs to start with. When you consider that there are approximately 70 times more marijuana users than heroin users in the United States, it makes sense that more of the former are going to the hospital than the latter.
Since the government doesn't provide these comparisons in a meaningful way, I've done it myself....
For 2010, the latest year for which complete alcohol data are available, I grabbed the number of regular users from the National Survey on Drug Use and Health. "Regular," in this case, means people who report using a given substance in the past month. I then grabbed 2010 E.R. visits involving these substances from the Drug Abuse Warning Network. This is a hospital reporting system that collects detailed data on all E.R. admissions involving a given drug. These E.R. visits can involve the use of multiple substances, so the numbers for each drug involve all visits for which that drug was listed as a contributing factor....
The figures clearly show that on a per-user basis, marijuana is considerably less likely to send you to the E.R. than heroin, cocaine or meth. Marijuana users are also 75 percent less likely to face an E.R. visit than prescription drug abusers.
But most surprisingly, marijuana is significantly safer to use than alcohol. For every thousand regular alcohol drinkers there are eight more trips to the E.R. than for every thousand marijuana users. Or in other words, alcohol is about 30 percent more likely to send you to the E.R. than marijuana.
These are all the federal government's own numbers, and they show that marijuana is considerably less harmful to users than alcohol. At the risk of sounding like a broken record, this comports with just about every other credible study of the drug.
Friday, August 1, 2014
"Colorado’s Rollout of Legal Marijuana Is Succeeding: A Report on the State’s Implementation of Legalization"
I highlighted and celebrated in this post a few months ago that The Brookings Institution was committed to "researching the new marijuana industry, not as advocates, but as social scientists, interested in how our federal system comes to terms with statewide decisions to legalize a substance that is illegal in the rest of the country, and how states implement those policy changes." The first significant report resulting from that research carries the title that is the title of this post. And here are excerpts from the start of this notable 35-page Brookings report:
In November 2012, Colorado voters decided to experiment with marijuana. Formally, they approved Amendment 64, modifying the state constitution. This move was historic and did something which, to that point, no other state or modern foreign government had ever done: legalize retail (recreational) marijuana. As part of the amendment, the state was required to construct legal, regulatory, and tax frameworks that would allow businesses to cultivate, process, and sell marijuana not simply to medical patients — as had been happening in Colorado for over a decade—but to anyone 21 and older. This change came despite existing federal prohibition of marijuana and opposition from the governor, state attorney general, many mayors, and the law enforcement community.
At its heart, this report is about good government and takes no position on whether the legalization of retail marijuana was the correct decision. Instead, it takes for granted that Amendment 64 and its progeny are the law and should be implemented successfully, per voters’ wishes. The report examines what the state has done well and what it has not. It delves into why, and how, regulatory and administrative changes were made. Finally, it offers an evaluation of how effective the implementation has been.
Prior related post:
August 1, 2014 in Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)