Wednesday, April 9, 2014
Pat Oglesby reports on a surprising piece of data in Colorado. Not only is medical marijuana outselling recreational marijuana, medical marijuana sales have (so far) increased under legalization:
In Colorado, recreational marijuana is making the news, but medical marijuana is dominating the market. The state officially reports that in February, medical marijuana outsold newly legal recreational marijuana better than two to one. And medical sales are growing more than twice as fast.
Taxes may explain the popularity of medical marijuana. Medical marijuana bears only a 2.9 percent sales tax. Recreational marijuana bears, along with that 2.9 percent sales tax, another 10-percent retail tax.
Not only are sales of medical marijuana outpacing recreational sales, they are growing faster. Medical marijuana sales taxes in January were just $$31,500,655. February’s $35,247,448 in medical marijuana sales represents a 11.9 percent increase. Recreational sales grew by only 5.2 percent. So the share of medical sales are growing faster than recreational sales — about 2.29 times as fast.
Given the different tax rates, it makes sense that Coloradans who had medical marijuana cards before legalization would continue to buy medical marijuana after legalization. But why would legalizing recreational marijuana increase medical marijuana purchases?
After all, since getting a medical marijuana card in Colorado isn't all that difficult, we might imagine that most regular users (who account for the bulk of marijuana that is used) would have already had medical cards before legalization.
My own guess (and it is entirely a guess) is that the increase in medical sales is likely being driven by the segment of regular users who had never gotten a card because it seemed like more trouble than it was worth (and/or they were worried that getting a card would put them on some sort of list that could become public.) The sort of person I'm envisioning would have had a regular black market dealer and figured "why bother getting a card."
After legalization, however, these folks started wandering into the newly established recreational stores for their purchases. And when they did, they found two counters: the recreational counter and the medical counter, where the same products were much cheaper becuase of the tax difference. Once they realized how much money they could save, getting a medical marijuana card suddenly seemed well worth the investment.
Of course, my guess may be completely off-base. It might turn out, for example, that the increase in medical marijuana sales is being driven primarily by existing medical marijuana consumers who've increased their consumption (e.g., a medical marijuana user who bought X grams/month before legalization, increasing their purchases to 2X grams/month after legalization.)
In any event, if this trend continues, it is something that will be well worth studying closely.
Monday, April 7, 2014
The Maryland legislature has passed a law to decriminalize the possession of small amounts of marijuana (up to 10 grams or about 1/3 of an ounce.) And Maryland's Governor, Martin O'Malley (whose marijuana politics I blogged about a few weeks ago), is set to sign it:
Possession of small amounts of marijuana will no longer be a crime in Maryland under a law passed Monday and sent to Gov. Martin O'Malley for his expected signature.
Adults caught with less than 10 grams of pot will get a citation that will be treated like traffic ticket and pay a fine, but they could no longer be sent to jail. O'Malley said he plans to sign the law, a reversal from views he held as he gained prominence as Baltimore's tough-on-crime mayor.
"As a young prosecutor, I once thought that decriminalizing the possession of marijuana might undermine the public will necessary to combat drug violence and improve public safety," O'Malley said in a statement. "I now think that decriminalizing possession of marijuana is an acknowledgment of the low priority that our courts, our prosecutors, our police, and the vast majority of citizens already attach to this transgression of public order and public health. Such an acknowledgment in law might even lead to a greater focus on far more serious threats to public safety and the lives of our citizens.”
Thursday, March 27, 2014
As reported in this local article, the "New Hampshire House voted against legalizing marijuana 192-140 yesterday, marking a significant shift after passing the bill by eight votes in January." Here is more:
The Senate was nearly certain to block the bill, and Democratic Gov. Maggie Hassan had promised to veto any bill legalizing marijuana. Hassan signed a medical marijuana bill last year, and last month the House passed a bill to decriminalize possession of up to an ounce of marijuana. Opponents of legalization said the state should take small steps when it comes to marijuana. Hassan has already said she’s unlikely to sign a decriminalization bill. “Good public policy means taking one step at a time,” said Rep. Donna Schlachman, an Exeter Democrat.
A certain death didn’t stop supporters from making a passionate case for legalizing the drug. Rep. Steve Vaillancourt, a Manchester Republican and the bill’s prime sponsor, spoke for 30 minutes about what he thinks are misconceptions about the drug and the revenue it could bring into New Hampshire. A February poll by the UNH Survey Center showed 53 percent of people support legalizing marijuana for recreational use. Legalizing, regulating and taxing the drug is the best way to ensure safe use, Vaillancourt said. “This is the only way to break the back of the black market,” he said.
Rep. Romeo Danais, a Nottingham Republican, encouraged his colleagues to challenge their own misperceptions about the drug. Marijuana is not a gateway drug, he said, but people who buy it from drug dealers might be more easily exposed to harder drugs. Just as with alcohol, legalizing marijuana doesn’t mean people would be allowed to drive or show up to work under its influence, he said. “Just because it’s legal does not mean that anyone would use it,” Danais said....
But opponents of the bill said no state agency testified in favor of legalizing marijuana during a public hearing. The system of regulation and taxation in the bill would have involved the departments of Revenue Administration, Safety, Health and Human Services, Agriculture and the Liquor Commission. The Liquor Commission said it wouldn’t sell marijuana in state liquor stores, said Rep. Patrick Abrami, a Stratham Republican.
Furthermore, opponents said selling marijuana would be a cash-only business because banks would not accept money from marijuana transactions. The bill also raised questions about people growing their own marijuana and making “edibles,” or marijuana baked into food. Several opponents said New Hampshire should see how legalization pans out in Colorado and Washington state before moving forward with a similar plan. “I don’t think New Hampshire wants to be known as the ‘East Coast pot state,’ ” said Rep. Mary Cooney, a Plymouth Democrat.
Among interesting aspects of this story is the apparent reality that at least a few Republicans were the most vocal advocates for legalization, while at least a few Democrats appeared most eager to get behind these reforms. In addition, this story highlights yet again how the experiences in Colorado and Washington over the next few months and years seem certain to have a profound impact on how politicians and other policy-makers view various marijuana reform efforts.
Tuesday, March 25, 2014
The other week a Colorado appellate court held that Amendment 64 applies retroactively, to at least some pre-passage marijuana possession convictions. Just how many marijuana possession convictions remains uncertain, however.
John Ingold of the Denver Post has an article exploring this question today. The headline says it all: "Marijuana ruling could overturn thousands of convictions — or dozens."
Anywhere from a few dozen to more than 10,000 people could be eligible to have their old marijuana convictions overturned as the result of a landmark Colorado Court of Appeals ruling that applied marijuana legalization retroactively.
Colorado defense attorneys are poring through previous marijuana cases, looking for former clients who might be eligible for such relief, but much depends on how subsequent courts apply this month's ruling. On the surface, the ruling appears to have little reach, but attorneys say it is possible courts could follow the reasoning of the ruling to overturn every marijuana case in the state in which an adult was convicted of a crime that stopped being illegal when the state's marijuana-legalization law went into effect in late 2012.
"I think there are thousands of people who could potentially have their convictions overturned," said Sean McAllister, an attorney who specializes in marijuana cases and who said he is already working with several clients to see if their previous convictions could be tossed.
But, in order for that to be true, Colorado courts will have to adopt an expansive reading of the ruling — a scenario prosecutors see as unlikely.
The full article explains the issues and uncertainty in more detail.
Add New Jersey to the list of states which have introduced legalization/recreational marijuana bills this year.
Yesterday State Senator Nicholas Scutari introduced S 1896 which would legalize possession of less than one ounce of marijuana for anyone 21 or older. The bill also allows individuals to grow up to 6 plants. People who are interested in operating a "marijuana establishment" will apply for a license from the newly renamed Division of Alcoholic Beverage and Marijuana Control. A 7% sales tax, which would not apply to medical marijuana, would be used for worthwhile purposes including repairing NJ's transportation infrastructure.
Chris Christie's probable reaction from statements at a town hall-"I will not decriminalize marijuana," Christie said. "I will not permit recreational use, and I will not legalize marijuana, because I think that is the wrong message to send to the children in this state and to young adults."
Monday, March 24, 2014
As reported in this new Denver Post article, headlined "Colorado Supreme Court OKs lawyers to work with marijuana businesses," an notable amendment was made today to the Colorado Rules of Professional Conduct. Here are the basics (with my emphasis added):
Colorado's lawyers now have the state's permission to work with marijuana businesses, after the Colorado Supreme Court approved a rule change Monday that eliminates the threat of ethics sanctions.
The new rule gives lawyers the go-ahead to work with marijuana businesses — even though those businesses are breaking federal law — so long as the lawyers don't help businesses also break state law. The updated rule, signed by Chief Justice Nancy Rice, states that a lawyer "may assist a client in conduct that the lawyer reasonably believes is permitted by these constitutional provisions and the statutes, regulations, orders, and other state and local provisions implementing them." The rule requires lawyers also to advise their clients about federal marijuana laws and policies.
The notice of the new rule states that justices Nathan Coats and Allison Eid dissented, though no explanation was given.
Colorado's constitutional amendments legalizing both medical and recreational marijuana left Colorado lawyers in a professional pickle. Because ethics rules prevent lawyers from helping clients do illegal things, the Colorado Bar Association last year declared that lawyers could be in trouble for doing more than giving basic advice to marijuana businesses. Arranging a lease, negotiating a contract or soliciting financial help would all violate ethics rules, according to the bar association's analysis.
Though no attorney had ever been disciplined for working with a marijuana business, the opinion alarmed the growing number of lawyers in Colorado who specialize in cannabis law. They argued that lawyers are crucial in helping marijuana businesses negotiate Colorado's complicated regulations.
Because I am not an expert on legal ethics and state bar rules, I am not sure it is unprecedented or unusual for a state rule to expressly require a state lawyer to advise certain clients about federal law. My instinct is that it is unusual for a state legal ehtics rule to include such a mandate, which in turn reinforces my view that the laws and regulations surround state-legal marijuana industries will be quirky and complicated as long as federal prohibition remains firmly in place. (In addition, I suspect unexplained dissents from the amendment of state ethics rules is also unusual.)
Thursday, March 20, 2014
Pat Oglesby of newrevenue.org has just posted his analysis of two competing proposals to legalize marijuana in Oregon, focusing on the very different revenue generating models espoused by each proposal.
One proposal proceeds along the lines of what Colorado and Washington have done. It would tax marijuana sold by private vendors, though the Oregon tax would be based (loosely) on the THC content of the marijuana (or more precisely, a heuristic approximating THC content).
The second proposal would be quite novel for marijuana, though states have tried something similar regarding sales of alcoholic beverages. Namely, it would give a state commission a monopoly over the sale of marijuana. Since the state would set the price of (legal) marijuana and would cut out the middle-man (i.e., private dealers), this proposal could generate more revenue for
the state than the more common tax model (especially one with a low tax rate). However, as I’ve explained before (p. 25 and 34) – and as Pat notes – a law creating state owned and operated marijuana stores would probably be preempted by the federal Controlled Substances Act, so this novel proposal might be a non-starter for Oregon. Pat’s analysis is short, insightful, and accessible – well worth the read.
Wednesday, March 19, 2014
Yesterday, the National Journal published an article asking how Maryland Governor Martin O'Malley's marijuana prohibitionist outlook might impact his possible 2016 bid for the Democratic presidential nomination. The piece ran with this subheadling: "Would Democrats support an antimarijuana candidate for president? O'Malley may be about to find out."
The story is another sign of how quickly the conventional political wisdom is changing when it comes to marijuana. And it raises an interesting question. Is it possible that marijuana reform could become a litmus test for Democratic candidates in the coming years?
Though marijuana reform and marriage equality are often compared (perhaps too often), I can't help but think back to the reaction when Gavin Newsom began marrying same sex couples. I think a lot of people have forgotten that, at the time, Democrats couldn't run away from him fast enough. Even more striking: just a year earlier, in the 2004 Presidential race, many people argued Howard Dean was unelectable because he had signed a civil union bill in Vermont (as it turned out, yelling into a bad sound system is what made him unelectable).
Fast forward ten years. Today, opposition to marriage equality would be a deal breaker in a statewide Democratic primary in many (perhaps most) parts of the country. Some might remember a period of media focus last year on the Democratic Senators who still opposed same sex marriage to the point where it became sort of a count down.
I'm not sure we can say whether marijuana will ever reach that same tipping point. There are reasons to think it may not. Unlike same sex marriage, which directly relates to equality under the law (a core Democratic value), marijuana reform's relationship to civil rights principles is arguably much less direct.
Either way, the prospect of marijuana as a Democratic litmus test is certainly interesting to consider. The National Journal article notes, for example, that O'Malley will soon have to take action on a marijuana decriminalization bill and asks: "Can O'Malley possibly veto this sort of bill and go on to be taken seriously as a national Democratic contender for president?"
This will be something to watch very closely in 2016. If the Democratic presidential candidates (assuming there is more than one) feel the need to voice support for marijuana reform (even limited support like for decriminalization), it could have a huge ripple effect.
(Hat tip to Eric Sterling for sending the article my way.)
Monday, March 17, 2014
Financial news outlets are increasingly paying attention to marijuana businesses. As a result, they've also taken an interest in marijuana laws. This weekend, for eample, the Motley Fool ran a story under the headline "Your State Could Legalize Marijuana Sooner Than You Think."
There has been no end to the wild speculation over the amount of money legalized marijuana sales would bring in. And with no data to report, speculation is pretty much all anyone could do. But now with Colorado's recent announcement that it took in $2 million in tax revenues on $14 million in sales, the great debate over the economic merits of legalization is about to heat up to another level. With numerous U.S. states still saddled with crippling budget deficits, this could be a huge opportunity for them to generate some extra cash to turn things around.
For example, Pennsylvania's Senate Bill 528, which would legalize and regulate recreational use of marijuana, is currently in committee, and I'd be willing to bet that Colorado's revenue has come up in recent discussions. The state is currently facing a budget deficit of more than $1 billion due to other tax changes, and could really use any help it can get to bridge the gap.
I wonder to what extent this sort of outlook helped to drive the explosion in marijuana stock prices at the beginning of the new year (which has since been dialed back considerably over the past few weeks).
As a marijuana legalization supporter, I'd be glad to see state legislatures embrace reform more quickly than anticipated. And I can see how investors might look at polls showing more than half of voters favoring legalization (in combination with tax revenue numbers) and conclude that this is what will happen.
But let's not forget: even though support for medical marijuana has hovered around the 75% range for 15 years or so, less than half the states have medical marijuana laws.
There are certainly reasons that the pace might be faster for legalization than it has been for medical marijuana. The political tide has now turned decidedly against the drug war, so politicians who shied away from marijuana reforms in the past may begin to realize there is political value in supporting them. And the fact that investors are taking interest could itself help to move the chains by expanding the world of people actively seeking reform beyond advocates driven exclusively by public policy concerns.
Still, the fact that California Governor Jerry Brown still hasn't caught on makes me very skeptical that the Pennsylvania legislature will be backing legalization this session or the next. So although I think we'll see legalization take hold more quickly than medical marijuana has (assuming current political trends continue), it's important to take account of the unique politics of drug policy in general and marijuana in particular before reading too much into the impact that current polling and Colorado tax revenue numbers will have on elected officials.
Thursday, March 13, 2014
The interwebs are abuzz with news today that some pre-Amendment 64 marijuana offenders may be able to get their possession convictions wiped away. The appellant, Brandi Jessica Russell, was convicted of possessing less than one ounce of marijuana in August 2011 based on conduct that "occurred twenty months beforeAmendment 64's effective date."
In Colorado, courts presume a change in the law has prospective application only, absent an express intent to the contrary. This presumption can be overcome, however, in some circumstances. Specifically: "Section 18-1-410(1)(f)(I), C.R.S. 2013, permits a defendant to receive postconviction relief if 'there has been significant change in the law, applied to the applicant’s conviction or sentence, allowing in the interests of justice retroactive application of the changed legal standard.'"
The Court held that "Amendment 64, by decriminalizing the personal use or possession of one ounce or less of marijuana, meets the statutory requirement for 'a significant change in the law' and eliminates and thus mitigates the penalties for persons convicted of engaging in such conduct." In reaching this decision, the Court relied on a 1970s-era precedent that reduced some marijuana offenses from serious felonies to misdemeanors. The earlier case seems to be directly on point. Though I do not know anything about this area of the law, the Court's discussion leaves the impression that its decision is on pretty firm ground and unlikely to be overturned in the event the government appeals.
The decision does not appear to open the door for everyone who has a Colorado marijuana possession. The opinion notes that the 1970s case applies to defendants "on direct appeal" and the holding on this issue concludes: "Because defendant’s convictions were pending appeal when Amendment 64 became effective on December 10, 2012, her convictions for possession of marijuana concentrate and less than one ounce of marijuana must be reversed and vacated."
Similarly, because the decision is based on Colorado state law, I suspect it is unlikely to have any significant impact in other states (e.g., Washington), unless those states have similar retroactivity statutes.
Though the decision is limited (both inside Colorado and in its likely impact outside the state), it will give Coloradans with marijuana possession convictions on direct appeal the opportunity to get their record (at least for that charge) cleared. The case also raises the question of whether state legislatures may want to consider going further and permitting those with older convictions to seek expungement.
You can read the decision here (PDF).
Monday, March 10, 2014
Over the weekend, I had an exchange on twitter about the impact of marijuana legalization on "cartels" (a term that often seems to be used as shorthand for the black market though of course "drug cartels" are only one part of the black market.) Twitter doesn't lend itself to explanation, so I thought I would extend my comments into blog form.
Dan Riffle of the Marijuana Policy Project tweeted (in response to a comment by Kevin Sabet about big marijuana) "Pete Coors sucks, but he beats Al Capone." This led Kevin (who I had had the pleasure of hosting at TJSL in the fall and liked very much) to reply with the following:
I jumped in, saying that eliminating cartels is a straw man in the marijuana legalization debate. No one suggests (except maybe in hyperbole) that marijuana legalization will "eliminate" the cartels. But marijuana legalization will certainly cut into their profits and reduce black market violence. To say "we can't eliminate cartels completely so there's no reason to legalize marijuana" is a bit like saying "I'll never have six-pack abs so there's no reason to exercise!"
Tony Dokoupil (of NBC News) responded to this with another line of argument I hear fairly often but have always found--to be frank--totally baffling.
When I was doing debates during the Proposition 19 campaign, I ran into this argument all the time: "marijuana legalization won't actually result in any black market reduction because black market actors can always just diversify and/or expand existing revenue streams!"
With all respect, anyone who believes this needs to think it through a bit more.
Let's imagine Apple's CEO found out that Samsung was cutting into their smart phone market share. Do you think he would say: "No worries, if people stop buying iPhones we can just sell more computers! Or maybe we can release a watch!"? No, of course not. Every dollar of lost iPhone sales is one less dollar in Apple's pocket. That's true even if the company is still selling plenty of computers and iPads. Or if it invents a fancy new watch to sell.
And this is also true when it comes to the black market and marijuana. Every dollar of marijuana sales that is moved from the black market to the legitimate market is one less dollar going to--for lack of a better word--"criminals."
To be sure, reasonable people can disagree about how much marijuana legalization will reduce black market profits/violence in general or the power of "drug cartels" in particular. We don't know how exactly much of the "drug cartel" revenue comes from marijuana relative to other sources. We don't know exactly how much of the marijuana market would remain underground in any given legalization system, due to tax avoidance, etc. (We can guess at all of these things--and some guesses are sophisticated enough that we could call them estimates--but we don't know.)
So there is room for debate about how much of a benefit, in terms of reduction in black market violence, marijuana legalization would bring. There is also, of course, room for debate about whether that benefit of legalization (and other benefits, like tax revenue) outweigh any negatives of legalization.
But there can be no debate that legalization would take a significant amount of the marijuana market away from "criminals." As a result, the black market violence that comes with illegal marijuana sales (see here and here for just two recent awful examples) will likewise diminish. And all of this is a very clear and certain "win" of marijuana legalization.
We can only estimate how big a "win" this would be. But anyone who does not acknowledge this as a win is either in serious denial or is uninformed about how business works or the history of organized crime after alcohol prohibition or both.
Over the weekend, the California Democratic Party had its annual convention as did the national Conservative Political Action Conference. As a sign of the times, both groups voiced support for marijuana law reform.
At CPAC, a straw poll "found that 41% of the attendees believe it's time to fully legalize marijuana and tax it, while another 21% said it should be legalized only for medicinal purposes. Just 31% said it should remain illegal in all cases."
And at the California Democratic Convention, delegates added a call for marijuana legalization to the Party's platform by a voice vote. This is a big move from the Party's position in 2010, when it declined to endorse marijuana legalization initiative Proposition 19.
Saturday, March 8, 2014
The Drug Policy Alliance hosted a call with Michelle Alexander, author of the New Jim Crow earlier this week. With respect to marijuana enforcement and legalization, Alexander noted an interesting and unsettling dynamic: though the criminalization of marijuana has disproportionately impacted people of color, it seems the emerging marijuana industry is largely white.
“When I see images of people using marijuana and images of people who are now trying to run legitimate marijuana businesses, they’re almost all white," she said, noting she supports legalizing pot.
“After 40 years of impoverished black men getting prison time for selling weed, white men are planning to get rich doing the same things," she added. "So that’s why I think we have to start talking about reparations for the war on drugs. How do we repair the harms caused?"
You can listen to the call in its entirety here.
I'm not aware of any data on ethnicity and marijuana businesses. But I think this is an issue well worth tracking. I will be especially curious to see if data emerges on race and marijuana license applications and outcomes.
To the extent that marijuana legalization laws limit people with criminal records from obtaining a license, it may unintentionally cement racial disparity in the legal market. Though there are clear political and policy reasons for criminal history license exclusions, we know that people of color are far more likely to be arrested and prosecuted for drug crimes than whites. As a result, a white illegal marijuana grower or dealer may be less likely to have a record and more likely to be eligible to get a license (so he or she can move into the legitimate market) than a similarly situated person of color.
Of course, the impact depends on what sort of criminal history results in an exclusion. For example, Washington State's point system--which excludes anyone with a felony conviction within the past 10 years--seems likely apply to most drug sale convicts, since trafficking crimes like sale and possession for sale are usually classified as felonies. However, the regulation does state that if a person has a single prior conviction involving marijuana that may be considered "for mitigation on an individual basis" .
In any event, I think this dynamic is something drafters of reform laws and the regulators that implement them should be attuned to. If formerly illegal white dealers and growers are able to get licenses in legalization states (because they have avoided criminal convictions) while people of color are shut out, it is certainly a cause for concern.
Friday, March 7, 2014
Colorado's Department of Transportation has released three new public service announcement ads on marijuana and driving. The ads aim to remind people that while using marijuana is now legal in the state, driving while high is still a crime. I think they're pretty effective, using humor to grab people's attention. (Of course, driving while impaired is no laughing matter, but the use of humor here seems like a good way of breaking through the clutter with these ads.)
Here's my favorite of the three:
Wednesday, March 5, 2014
From the Washington State Liquor Control Board comes news that it has issued its first marijuana producer and processor licenses:
Kouchlock Productions is licensed to produce and process recreational marijuana. It holds a restricted tier-three license to produce marijuana initially up to a maximum of 21,000 square feet. Kouchlock Productions is one of over 2,800 producer license applications that the WSLCB is currently processing. Licenses will be continuously issued as they are ready.
The WSLCB will update weekly its list of pending and active marijuana licenses on the frequently requested lists page of the public records section of its website.
Friday, February 28, 2014
The title of this post is drawn from the title of this recent published scholarly article that, on the surface and even in substance, seems be about a lot of topics other than marijuana law, policy and reform. But the title caught my eye, and I think all would-be marijuana reform advocates ought to check out the article, because I strongly believe the marijuana tax stories and regulations that that emerge in state and federal law and policies in the months and years ahead will be the most important predictor of whether pot prohibition eventually gets fully repealed or lives on and on in the United States.
The article is authored by Susannah Camic Tahk, it is published at 50 Harvard Journal of Legislation 67 (2013), and it is available here via SSRN. Here is its abstract:
In contrast to major legislative reform packages in the 20th century, the Affordable Care Act of 2010 took the form of a tax bill. Although this legislation is the first massive social and regulatory overhaul completed through the tax code, in the past twenty-five years the U.S. Congress and Presidential administrations have substantially increased their use of tax law for non-revenue-raising purposes. Growing reliance on the tax code represents a structural transformation of how Congress and Presidential administrations have come to approach lawmaking goals. This transformation defies the near-consensus of previous tax scholarship, which, following Stanley Surrey, disapproves of embedding programs in the tax code. However, that dominant view rests on assumptions that have become outdated. This Article analyzes the ongoing structural transformation by observing and explaining the advantages that accrue from pursuing social and regulatory objectives through the tax code. In particular, this Article identifies a number of legislative and normative advantages that tax-embedded policies offer.
Wednesday, February 26, 2014
The past few days have seen changes in marijuana tax estimates in Washington and Colorado. Pat Oglesby has some insightful thoughts on these developments, and the difficulty of estimating marijuana tax revenue generally, in this post for the Huffington Post today:
While marijuana revenue could be a promising new source of income for states, a wide range of expectations underscores how little we know so far about what mature markets will look like one day. Last week, early projections for marijuana revenue in the first two legalizing states gave way to new ones. In Colorado, expectations rose; in Washington, they collapsed. As projections zig-zag, other states considering legalization don't know what to expect.
In Colorado, the number jumped by 60 percent, from $67 million to $107 million. That's for the first fiscal full year of marijuana excise taxes. The old, lower number came from the Legislature last August; the new, higher one came from the Governor on February 18.
In Washington, the number collapsed from $1.6 billion to $129 million -- a drop of over 90 percent. Oops. Those numbers are for marijuana excises by the end of Fiscal 2017. The old, higher number came from a criticized 2012 legislative estimate; the new, lower, more plausible one came from the state's official Forecast Council on February 19.
That's confusing. But even comparing the official forecasts is confusing. The numbers above are just for excise taxes.
Tuesday, February 25, 2014
Following on Doug's post about the recent Ohio poll, Denver is one of the finalists for the 2016 Republican National Convention. One of the politicians leading the bid thinks Colorado's legalization law may help attract the gathering, since leaders from other states may want to learn more about how the policy is playing out.
"There's an easy political case to be made," former Rep. Bob Beauprez, a Republican and the chair of the bid committee, said.
Beauprez argued that even the state's recent legalization of recreational marijuana could be a plus because it shows how Colorado is on the political cutting edge. "Other governors and mayors will want to come here and see how it's working out," he said, noting that ballot measures to legalize the drug are anticipated in several other states.
Whether or not the RNC comes to Denver in 2016, Colorado's swing state status will make the presidential politics of marijuana legalization especially interesting to watch. If Denver does manage to get the convention, it will only add to the dyamic.
Friday, February 21, 2014
Last week, Rob posed an interesting question: should states reform marijuana laws through ballot measure or legislation. As his post notes, recent state medical marijuana laws have come mostly in the form of legislation. Earlier reforms were mostly by ballot measure.
Of course, the ballot measure model has been a matter of political necessity to a large degree. It took a string of ballot measure victories to begin to convince politicians that supporting medical marijuana might actually be a smart political move.
If marijuana legalization is going to follow a different path, with greater reliance on legislative reform, politicians will need to be quicker to embrace the issue than they were with medical marijuana.
This brings me to a notable development, noted by Toke of the Town today. It appears that all of the Democratic candidates for governor have come out (in some form or another) for marijuana law reform. Most interesting to me, the most recent candidate to do so cited his belief that legalization may now be inevitable in explaining his position:
Maryland Attorney General Doug Gansler this week told the Baltimore Sun that he feels the legalization of cannabis is going to happen, and that as governor he would ensure laws are implemented "the right way" if such a change were to happen while he is in office.
If this idea takes hold in the political world--that marijuana legalization is inevitable--I think we may start to see marijuana legalization by legislation happen much more quickly than we did for medical marijuana.
Of course, whether that is a good thing or not--Rob's question--is a different story. All things being equal in terms of substance, I think reform by legislation is better than by ballot measure for many of the reasons Rob points out.
The catch is that reforms by the legislature may tend to be much more cautious than by ballot measure. In the case of Maryland, the AG says he wants to make sure it is implemented "the right way." If I had to guess, I would imagine the Maryland AG's thinking about "the right way" would involve a much more restrictive law than what we see in Colorado and Washington.
Chris Christie said much the same thing about medical marijuana in New Jersey, for example. The result is a medical marijuana law that, at least some advocates say, doesn't seem to be really serving its purpose:
Patients in need of medical marijuana in more than half the state have a tough time getting the drug because the program is too bureaucratic, too expensive and few doctors are willing to participate, patient advocates and a dispensary owner told a state legislative committee today.
To be sure, it could be that some legislatures would enact reforms that are as good or better (in terms of substance) than what we would get from a ballot measure. And the flexibility that reform via the legislature provides is a big plus, as Rob discusses.
But, there is the possibility that (at least in some states) the question facing advocates going forward may be whether it is better to have very modest reform by legislation or more robust reform by ballot measure.
Wednesday, February 19, 2014
For some time, we have put mind-altering substances into one of three boxes: (1) acceptable for recreation (e.g., alcohol and tobacco), (2) acceptable for use as a medicine but for no other use (e.g., substances in Schedules II through V of the CSA) or (3) not acceptable for any use (e.g., all Schedule I substances.) Kimani Paul-Emile wrote an interesting article (PDF) discussing this, and advancing an alternative framework for thinking about drug control, a few years back.
There isn't a lot of modern precedent for a substance regulated under the law for both medicine and recreation. (Of course, there was medicinal alcohol during prohibition. But after repeal, interest in alcohol as a medicine faded pretty fast.)
With evidence of marijuana's value as a medicine only mounting as time goes on, it doesn't seem likely that interest in the medical use of marijuana will vanish anytime soon. And so, as marijuana legalization takes hold, regulating the medicinal and recreational uses of marijuana may pose difficult legal and policy challenges.
In Colorado, legalization left medical marijuana largely untouched (at least in terms of legal regulation). Recreational pot stores have one "menu" and set of prices for registered medical patients and a different "menu" for recreational buyers (with medical marijuana subject to less tax and, as a result, cheaper). Colorado already had a robust set of medical marijuana regulations, which may have helped the state implement this system. So far, Colorado medical marijuana patients seem to be OK with how things are going.
Washington is a different story. There, the State's pre-legalization medical marijuana law was much more open-ended. And, as a result, regulators and lawmakers have been struggling over what to do about medical marijuana now that they are implementing legalization.
Earlier this week, Washington state legislators passed a measure that would bring medical users into the recreational system. And so far, medical marijuana patients do not seem happy about the development.
Jacob Sullum has the story at Forbes:
Last night the Washington House of Representatives approved a bill that would abolish medical marijuana dispensaries, a.k.a. “collective gardens,” and impose new restrictions on patients who use cannabis for symptom relief. H.B. 2149, which passed by a vote of 67 to 29, would thereby eliminate some of the unregulated competition for the state-licensed pot stores that are expected to start opening this summer under I-502, the legalization initiative that Washington voters approved in November 2012. Supporters of the bill, which was introduced by Rep. Eileen Cody (D-West Seattle), hope that banning dispensaries will help maximize tax revenue and mollify the feds.
The bill requires patients to buy their cannabis from the same stores that serve recreational customers, which would be the only legal sellers of medical marijuana as of May 1, 2015, when the provision allowing collective gardens would be repealed. Patients could continue to grow marijuana for their own use, but the maximum number of plants would be reduced from 15 to six (three of them flowering). The ceiling on possession by patients would be cut from 24 ounces to three. The bill instructs the state Department of Health, together with the Washington State Liquor Control Board (which is charged with regulating marijuana growers, processors, and retailers), to produce a report by November 15, 2019, on the question of whether it is appropriate to continue allowing home cultivation.