Cannabis Law Prof Blog

Texas A&M Professors Relatively Well Endowed

I'm glad to see that the institution I work for is doing pretty well financially.  The latest reports on university endowments show that Texas A&M, at north of $11 billion, has the seventh largest endowment of any American university.  We trail only Harvard, Yale, Stanford, Princeton, MIT, and a school down in Austin whose name I can never recall . . . .

 

 

Dianne Feinstein: Do Her Views on Pot Make Her Too "Old School" for California?

Yes, says a Los Angeles Times cartoonist in an opinion piece for the paper.  Ted Rall, in a column entitled "Sen. Feinstein's anti-marijuana stance shows she's too old school for California," argues that "up to 60%" of California voters favor legalizing pot, and suggest to Feinstein that her views are "wildly divergent from those of your constituents."

It's true that there are actually peaks in the Sierra Nevada mountain range are younger than Sen. Feinstein.  And I believe legalization is a good idea.  But if Sen. Feinstein decides to run again for reelection in 2018, I can think of few things less likely to influence the election than her views on marijuana.

Ohio State Officials: Legalization is Not a Good Idea

Four statewide officials in Ohio are against moving toward legalization in the Buckeye State.  That's a according a report of comments at a legislative preview forum yesterday.

    Attorney General Mike DeWine, whose office must certify the language of the  proposed amendment, called it “a stupid idea.”

    Ohio Treasurer Josh Mandel allowed that it would lead to “increased sales of  Girl Scout cookies.”

    Auditor David Yost suggested that the next logical step would be for one  state-licensed brothel in each of Ohio’s 12 largest counties.

    Secretary of State Jon Husted said it may be the worst idea he’s ever  heard.

All four are Republicans, as are Governor John Kasich and Lieutenant Governor Mary Taylor. 

The Ohio constitutional amendment that's backed by a group called "ResponsibleOhio" would grant state monopolies over marijuana to a limited number of producers -- exactly the kind of approach that, in my view, fails to curtail illegal sales and greatly increases opportunities for bribes and corruption.  It seems that some of the hostility to the amendment is rooted in the monopoly aspect:

    During the forum, Mr. DeWine said legalization of marijuana has backfired in  Colorado, and he cited hospitalizations and two deaths from ingesting  pot-infused food and drink.

    “I don’t see how any Ohioans can be in favor of creating a monopoly for a  handful of people to make a bunch of money,” Mr. DeWine said.

    Mr. Husted said “it is offensive to think we would be asked to give a  Constitutional monopoly to the marijuana industry for a handful of individuals  without the proper oversight and regulation to protect the people of Ohio.”

    ResponsibleOhio contends that its amendment will provide for extensive  regulation and transparency through a seven-member Marijuana Control  Commission.

    Mr. Mandel said legalizing marijuana will worsen a problem that Ohio  employers already have — finding skilled young people who can pass a drug  test.

    Mr. Yost called on the Constitutional Modernization Commission to craft an  amendment that would prohibit any business monopolies being tied to ballot  issues.

It's possible that at least some of this opposition would go away with a better proposal.  Mr. Mandel, in particular, seems to be a bright guy with a sense of humor. 

What Effect Should Medical Marijuana Use Have on Child Custody?

That's the question the Maine Supreme Judicial Court faced decision released yesterday.  In Daggett v. Sternick, 2015 ME 6 (Jan. 29, 2015), the father of a toddler was a heavy medical marijuana user who had "a great deal of marijuana, in many forms, all over the house."  Friends often came by to "obtain or ingest" pot, and the toddler had been exposed to the stuff.

Maine's Medical Use of Marijuana Act specifically provides that "A person may not be denied parental rights and responsibilities with respect to or contact with a minor child as a result of acting in accordance with this chapter."  The father argued that his use complied with the law and the trial court should not have taken his marijuana use into account in awarding custody to the mother.

No, said the court.  The statute goes on to provide "unless the person's conduct is contrary to the best interests of the minor child."  Here, evidence showed that marijuana use actually distracted the father (who failed in one case to get medical attention for his daughter), that he kept substantial amounts of marijuana edibles in places where the child had access, that he locked the child in a bedroom while he smoked downstairs, that the child's clothes "reeked of marijuana butter," and that, in short, his marijuana use adversely impacted his parenting abilities.

The decision seems entirely correct.  A lawful prescription for opiates, for example, shouldn't affect a custody decision, but leaving the opiates lying around where the child can get them and getting too stoned to hear the child crying should.

Seattle Pot Seller Looks to Score on Super Bowl

Green is the color of the NFC Champion Seattle Seahawks, who will be playing the New England Patriots in this Sunday's Super Bowl.  It's also the color of money.  And, coincidentally, it's the color of the Evergreen State's newest industry.  Talk about cosmic alignment, dude!

At least one marijuana retailers in Washington state is expecting record amounts of marijuana consumption this weekend as folks gather indoors (it's expected to be 52 and raining in Seattle) to watch the game.  NBC News has the story:

    A Seattle-based medical marijuana retailer is anticipating Seahawks fans will want a "super bowl" for Sunday's big game. That's why employees at Solstice are working to roll a staggering number of joints — 12,000 in all — for its special "12th Pack" promotion ahead of Sunday, when the Seahawks face the New England Patriots in Super Bowl XLIX. That works out to roughly 180 to 220 joints made during an eight-hour shift — double the normal pace, NBC affiliate KING5 reported. "It's not like I go home with cramps or anything," a smiling employee, Katy Filippone, told the station.        

    The so-called 12th Pack, which is only being sold to medical marijuana users, is a play on the 12th man — the nickname referring to football fans. Solstice says the 12th Pack is filled with a special "Seahawks Blend," and hopes to make it available to Washington state's recreational pot users by next season, KING5 reported. Solstice isn't the only pot producer hoping to earn some extra green from the Seahawks' fan base. Last season, a Seattle marijuana delivery service called Green Umbrella began offering a homemade strain named after running back Marshawn Lynch, calling it "Beast Mode O.G." — a nod to his nickname. For this year's game, the company has rolled out a new strain called Beast Mode 2.0.

The video at the linked story is pretty good. 

Colorado Residents to Get Marijuana Tax Rebate

From Rolling Stone:  "The Centennial State's citizens in line to receive $7 each because  decriminalized weed was too successful":

As the residents of Colorado are about to find out, legal pot pays. The decriminalization of  marijuana in the  Centennial State has been so  successful that every Colorado adult is in line to receive a $7.63  refund, Associated Press reports (via High Times). Residents may be eligible for the refund due  to the economic stimulus provided by legal marijuana, a 30 percent tax  on that weed and a 1992 state amendment that puts a cap on how much the state  could receive from taxpayer money.

Remarkably, both Colorado's Democrats and Republicans have joined in unison  to try and repeal – or at least limit – a 1992 voter-approved amendment called  the Taxpayers' Bill of Rights that refunds citizens "when the state collects  more than what's permitted by a formula based on inflation and population  growth." In the case of marijuana revenues, the total amount is $30 million.

However, the amendment was enacted before Colorado ever imagined that  marijuana would be a taxable item thanks to a "dangerous" law, and now that $30 million in tax surplus is headed back to  the taxpayer instead of school construction. Government officials are scrambling  to bring a bill to voters that would make pot taxes exempt from that 1992  amendment, but not every Colorado resident is in favor of giving up that $7 and  change.

"I don't care if they write me a check, or refund it in my taxes, or just  give me a free joint next time I come in. The taxes are too high, and they  should give it back," Aurora, Colorado resident David Huff told High  Times.

Interesting.  We'll see how fond Colorado legislators are of marijuana taxes if they don't get to spend them.

Tribal Marijuana Conference Slated for Feb. 27 at Tulalip Casino

The prospect of legalization in American tribal lands is a hot topic, not only with the tribes themselves but with non-members who would be able to buy and consumer marijuana at casinos and resorts.  The upside is the potential to make big money.  The downside is the potential increase in substance abuse problems.

Those issues are going to get some airing at an event February 27, 2015, at the Tulalip Resort Casino in Washington.  Here's a report on the upcoming get-together from Indian Country Today:

    The legalization of marijuana is a growing trend in discussions from  Washington, D.C. to state government offices and most recently on tribal  reservations. In February the subject matter will be placed front and center at  a groundbreaking national conference focusing on legalization in Indian  country.

    The legalization of pot in Indian country came into focus as the federal  government announced in 2014 that it would allow tribal nations to legalize  marijuana on their reservations.

    According to media reports, as of December there were only three tribes  showing interest in entering the marijuana business. In a December ICTMN story,  it was reported that it is always “a good thing anytime the federal government  moves to let Indian nations control their own affairs.” But could marijuana  legalization be too much of a good thing? This conference will hopefully help  answer that question.

    Tribal leaders, executives, entrepreneurs and Native health and social work  professionals, and law enforcement personnel will be on hand to examine the  legal, political and social policy implications of marijuana legalization in  Indian country, as many tribal governments are already addressing the subject  matter. The conference will be held February 27 at the Tulalip Resort Casino in  Quil Ceda Village, Washington.

    Odawi Law PLLC and Harris Moure, PLLC are co-sponsoring the conference to  help “leaders in Indian country fully understand the wide-ranging issues  associated with embarking on the development of tribal marijuana legislation and  considerations of commercial marijuana cultivation, manufacture and distribution  in tribal jurisdictions,” according to a press release.

    Robert Odawi Porter, conference co-sponsor and organizer, is a leading  attorney in tribal sovereignty and treaty rights protections and former  president of the Seneca Indian Nation where he witnessed first-hand issues  surrounding the selling of another plant based product – cigarettes.

    Porter has witnessed a change in social attitudes towards marijuana use which  is paving the way for the significant numbers of new legislation in states  across the country.

    "Given recent developments, we are excited to announce this historic  opportunity for tribal leaders to gain a better understanding of the  implications of marijuana legalization in their territories," Porter said. "We  are bringing together some of the best, most experienced lawyers and  commentators at the intersection of Indian law and marijuana law to share their  experience in addressing the evolving issues surrounding recreational and  medicinal marijuana usage in Indian country. Our goal is to pursue a balanced  discussion of the important legal, business, social, and cultural questions that  would inevitably affect Native societies were legalization to occur."

    Medicinal marijuana is legal in 33 states, and legal for persons over the age  of 21 in four states. Legalized recreational use, however, is currently in two  states: Washington and Colorado. The United States Department of Justice in  October of last year issued a “Policy Statement Regarding Marijuana Issues in  Indian Country.” Within the statement, the DOJ addressed law enforcement  concerns by stating it will continue its enforcement priorities “in the event  that sovereign Indian Nations seek to legalize the cultivation or use of  marijuana in Indian country.”    

    The Tribal Marijuana Conference is also co-sponsored and co-organized with on  of the foremost legal experts and premier cannabis business attorneys in the  country – Hilary Bricken. The cannabis attorney provides a wealth of knowledge  and experience with marijuana regulations, including testifying in front of  state and federal government panels.

    “There exists enormous new market potential for commercial marijuana  initiatives on Native lands,” Bricken said. “This conference will extract the  regulations and the legal and policy issues that are in place to assist Native  leaders as they consider the myriad possibilities before they begin to embark on  a path of commerce involving cannabis. This is an unparalleled opportunity for  tribes to participate in a growing sector of commerce and diversify their  economies, yet there is much to be considered to ensure successful  implementation of tribal policy and law."

Tech Investors Gather for Marijuana Investment Event

Marijuana is (or will be) America's fastest-growing industry, say some enthusiasts.  That seems to have ben evident at the big marijuana "Shark Tank" event held this week at Nob Hill's "posh" Fairmont Hotel in San Francisco, sponsored by ArcView Group, an outfit that works to pair marijuana businesses with potential investors.

USA Today has a story on the event.  Here's the intro:

    Some Silicon Valley venture capitalists are high on the profit potential of pot.

    In an ornate ballroom of the posh Fairmont Hotel atop Nob Hill,  entrepreneurs of the quasi-legal marijuana trade sat down for two days this week with high tech moguls looking to get in on  the ground floor of the booming, multibillion-dollar business of selling marijuana in states where it is permitted.

    "This is the fastest growing industry in America,'' says Troy Dayton, CEO of ArcView Group, an investor network focused on the cannabis business. "Despite all the stigma, people are recognizing this could be the next great American industry.''

    The gathering and locale, under crystal chandeliers, are signs of the pot  industry's rapid maturation. With institutional investors and big corporations scared away by continuing federal prohibitions on marijuana, the growing list of states allowing marijuana for medical or recreational use has created opportunity for smaller investors willing to take the risks of investing in a business whose legality is far from settled.

    "This is a basement industry looking to put on its big-boy pants,'' says Tom Bollich, CEO of Surna, a Colorado-based company that provides climate-control hardware and software for marijuana growers as well as management systems to track the product from seed to sale.

From the story, I have to say my favorite outfit pitching its products is the one who makes the $20,000 blown-glass banjo that doubles as a bong.  The obvious question is where are they going to find a customer who (a) plays the banjo, (b) has $20,000, and (c) is bright enough to figure out how to use a bong?

AG Nominee Lynch: Marijuana is More Dangerous Than Alcohol

Marijuana legalization proponents aren't likely to get much support from President Obama's nominee for Attorney General, Loretta Lynch.  Ms. Lynch told Senators at her confirmation hearing that she doesn't support legalization and disagrees with the President's views on the relative harmlessness of pot.  Matt Ferner at HuffPo has a summary.  Here are the highlights:

    Loretta Lynch, the nominee for attorney general, said Wednesday during her confirmation hearing that she does not support the legalization of marijuana, and that she disagrees with President Barack Obama's remarks about the drug being no more dangerous than alcohol.

    During her hearing before the Senate Judiciary Committee, Sen. Jeff Sessions (R-Ala.) asked, "Do you support the legalization of marijuana?"

    "Senator, I do not," Lynch replied.

    Sessions then went on to quote a 2014 New Yorker profile of Obama in which the president discussed his marijuana use as a young person. In that article, Obama called pot a "bad habit and a vice" and said he views it as more or less similar to the cigarettes he also used to smoke. "I don’t think it is more dangerous than alcohol," Obama said of the drug.

    When Sessions asked Lynch if she agreed with Obama's remarks about his marijuana use, she appeared to take a harder line than the president.

    "I certainly don't hold that view and don't agree with that view of marijuana as a substance," Lynch said. "I think the president was speaking from his personal experience and personal opinion, neither of which I'm able to share. But I can tell you that not only do I not support legalization of marijuana, it is not the position of the Department of Justice currently to support legalization, nor would it be the position if I were confirmed as attorney general."

    . . .

    Under federal law . . . marijuana remains entirely illegal. States that have proceeded with legalization have been able to do so because of Department of Justice guidance that urges federal prosecutors to refrain from targeting state-legal marijuana operations.

    Earlier in the afternoon, Sen. Lindsey Graham (R-S.C.) asked Lynch if she considered the DOJ's guidance "good policy."

    Lynch didn't directly answer, but said that the DOJ's guidance still allows federal prosecutors to go after marijuana cases that involve at-risk children, driving under the influence of the drug or marijuana crossing state lines -- especially when it's going from a state where marijuana is legal into a state where it isn't. She also said the DOJ is looking at the availability of edible products "and the risk of those products falling into the hands of children and causing great harm there."

    When asked what advice she might give to officials in a state that's considering the legalization of marijuana, Lynch simply said she'd refer them to current DOJ policy on narcotics, and that she'd tell them federal laws would be enforced.

Assuming she's telling the truth and not just trying to tell Senate Republicans what she thinks they want to hear, this is discouraging.  Not unexpected, but discouraging.

New Bill Would Authorize CBD Oil in Texas

Two more Texas legislators are apparently getting interested in the marijuana issue.  As I noted last month, State Representative Joe Moody (D-El Paso) introduced a marijuana decriminalization bill that would, in effect, turn possession of an ounce or less of pot into a civil offense.

Now two GOP legislators have introduced their own bill to authorize the use of cannabidiol (CBD) oil for people with intractable epilepsy.  The pair are State Senator Kevin Eltife (R-Tyler) and State Representative Stephanie Klick (R-Fort Worth).  Both are fairly conservative legislators from conservative districts, so I view the willingness to consider medical marijuana in any situation to be a significant movement.  

Sen. Eltife, who is usually described as a strong proponent of free enterprise, was the author of major legislation last year that loosened regulation on the state's microbreweries.  He's an influential guy, serving on both the Finance Committee and the Administration Committee, and chairing the important Committee on Business & Commerce.

Rep. Klick has been a registered nurse for 30 years and has extensive experience with the catastrophically injured and developmentally disabled.  Although first elected in 2012, she is chair of the Tarrant County (Fort Worth region) delegation in the House.

Obviously, the bill is extremely narrow, and many pro-legalization people may be tempted to oppose it because it doesn't go far enough.  The Dallas Observer, in a fairly typical display of political tone-deafness, headlined its story, "Two Texas Republicans Have a Crappy Plan to Sorta, Not Really Legalize Medical Marijuana."

I mean, you have two good, solid, conservative Republicans who at least are willing to talk about medical marijuana, and the first thing you do is insult them?  With luck, the more seasoned heads in the Texas MMJ movement will take this as an opening and try to work with two important legislators who would be invaluable allies.  Maybe they don't really want to see the bill passed -- though for me, if it helps just one sufferer it's worthwhile -- but there's no reason to try to cut off what could be potentially a fruitful dialogue.

D.C. Mayor: Speaker Boehner Not Much Interested in Repealing Legalization

House Speaker John Boehner seems to be more interested in dealing with the "national agenda" than getting involved in the legalization issue in the District of Columbia.  That's according to D.C. Mayor Muriel Bowser, who met recently with Mr. Boehner (a Republican) and two top Congressional Democrats.  That Washington Post's Mike Debonis reports on the meetings, and here's an excerpt:

    Mayor Muriel E. Bowser climbed Capitol Hill on Tuesday for a series of meetings with federal lawmakers — including two Democrats holding ranking positions on key committees, as well as the man who, more than any other, controls the fate of District matters in Congress: House Speaker John A. Boehner.

    After the meetings, Bowser (D) said she was encouraged that Boehner (R-Ohio) was too busy dealing with the national issues on his plate — including soon-to-lapse homeland security appropriations and an expiring debt ceiling authorization — to try to micromanage District affairs. That includes, she said, the marijuana legalization initiative passed by D.C. voters on Nov. 4, which is now on Capitol Hill for a 30-legislative-day review period.

    “He really reiterated his focus on a national agenda, and we talked about some things that are important to us,” Bowser said. “[Marijuana] came up in that I expressed to him, certainly, our interest in respecting the will of the voters. And I think that, again, his focus is not on the local affairs of D.C.”

        . . .

    Before meeting with Boehner in his Capitol office, they met with Sen. Thomas R. Carper (D-Del.), ranking member of the Senate Homeland Security and Governmental Affairs Committee, and with Rep. Elijah Cummings (D-Md.), ranking member of the House Oversight and Government Reform Committee. Both panels have jurisdiction over D.C. affairs.

    Carper said after his meeting with the new mayor that the marijuana initiative was not among the topics that came up. Instead, he said, they focused on “issues of fairness.”

The article as a whole leaves the impression -- which may or may not be correct -- that Mr. Boehner might lay off the legalization issue if D.C. officials show more willingness to support school voucher programs.  Stay tuned.

 

"Cutbacks Are Looming for Law School Income-Based Repayment Programs"

. . . is TaxProf Paul Caron's take on a couple of recent stories about IBR programs.  The bad news, IMO, is that taxpayers are going to be less and less willing to subsidize student loans for would-be lawyers, especially when they think they won't be repaid.

The good news is that the real rate of tuition is down markedly over the past few years.  Students with average credentials, by shopping around, can find schools that will give them a steep discount off of the law school's MSRP tuition. 

The Devil is Always in the Details, Isn't It?

I haven't had a chance to digest the new research report that RAND did for Vermont on  marijuana legalization.  On first glance, it looks like a pretty even-handed and thoughtful piece, and clarifies the fact that there are downsides to both legalization and prohibition of marijuana.

Over at Marijuana Law, Policy & Reform, Doug Berman has some thoughts that I entirely agree with:

    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.

I hope to have my own thoughts about the report after I have time to read it closely.

Pediatricians Call for Rescheduling of Marijuana

This is actually a pretty big deal:

    For the first time, the American Academy of Pediatrics is recommending the U.S. Drug Enforcement Agency reclassify marijuana so that more research can be conducted in the hopes of finding benefits for children. The influential medical society also proposes that marijuana should be made available on a compassionate use basis for children with debilitating or life-threatening illnesses.

    Specifically, the AAP wants marijuana to be removed from the DEA’s Schedule 1 listing for controlled substances, which are not considered to have any “currently accepted medical use in the U.S., a lack of accepted safety for under medical supervision and a high potential for abuse.” Other drugs in this category include heroin, acid and ecstasy.

    Instead, the medical society wants marijuana downgraded to the list of Schedule 2 drugs, which are considered to have a “high potential for abuse which may lead to severe psychological or physical dependence.” These include various widely prescribed narcotics, such as oxycodone and fentanyl, as well as morphine and codeine, which are used for medical purposes.

    “A Schedule 1 listing means there’s no medical use or helpful indications, but we know that’s not true because there has been limited evidence showing [marijuana] may be helpful for certain conditions in adults,” says Seth Ammerman, a clinical professor in pediatrics at Stanford University and a member of the AAP national committee on substance abuse, who co-authored the new policy statement.

    “By placing this on Schedule 2, it would allow the FDA to be involved [in pediatric research] as the agency is in any study. Unless scheduling changes, this won’t happen. And there could be therapeutic benefits. The AAP is not opposed to medical marijuana, per se, but we feel it’s important that this be explored within the [framework of the] FDA process, where you have standardization.”

    Epilepsy has been high on the list of potentially beneficial uses. Last year, the Epilepsy Foundation called on the DEA to reschedule marijuana so to improve and bolster research, reflecting a growing belief that medical uses can combat the affliction. Since marijuana became legal in some states, there have been reports that cannabis compounds may reduce the frequency or severity of seizures.

    To what extent the Obama administration will consider making such a change remains unclear. There have been numerous proposals and recommendations made over the years to change the DEA scheduling. In 2008, the American College of Physicians suggested a review. But the federal government has resisted relisting over debate about the kind of scientific evidence that would warrant a change.

    Although 23 states have legalized medical marijuana for those who receive recommendations for use by physicians, there is no accepted medical use on a federal level. The FDA is conducting an analysis – at the request of the DEA – to determine whether marijuana should be downgraded on the Controlled Substances list. We have reached out to the FDA for comment and will update you accordingly. The DEA, meanwhile, last year approved an  increase in the amount of marijuana that government researchers can use for studies.

    The AAP recommendation, meanwhile, is potentially significant. By adopting such a policy, the influential medical society is lending its voice to a growing national debate over the veracity of using marijuana for medical purposes. And any steps that lead toward new research may also open the door to further investment from a variety of companies that view marijuana as a growing, if risky market.

    “Most people realize AAP advocacy is for the well-being of children,” says Ammerman. “As pediatricians, we’re into prevention and early intervention. So having this voice will be important. We’re advocating for the kids and if it leads to research that establishes [that marijuana offers] a benefit – whoever conducts the research – then what we’re doing could help improve pediatric care.”

    An FDA spokeswoman says the agency "can’t comment on the suggestion to change the schedule for marijuana, as the latest FDA review of the issue (known as the 8-factor analysis) is currently ongoing. However, FDA agrees with the call by the AAP for rigorous scientific research into the uses of marijuana. The FDA has an important role we are playing to support scientific research into the medical uses of marijuana and its constituents as part of the agency’s drug review and approval process. As a part of this role, the FDA supports those in the medical research community who seek to study marijuana."

Rescheduling is obviously the first step -- even if it's dangerous, pot ought to be in the same class as heroin and cocaine, which also have medical uses -- and it ought to be pretty easy, assuming that Attorney General Holder realizes that Congress gave him the power to do it.  Played the right way, it might even be a win-win for the Administration: pursuing medical research while still keeping it highly illegal.  "Hey, we're still treating it just like heroin!"

H/T Chris Lindsey

ATL Launches New Marijuana Column

Legal tabloid  Above the Law is featuring a new columnist on marijuana.  She's Hilary Bricken, of Seattle's Harris Moure LLP.  Ms. Bricken -- who only graduated from law school in 2010 -- has already been making a name in cannabis circles in Washington State, handling appeals in cases involving local pot restrictions.  Based on her appellate briefs and my email exchanges with her, she'll be great.

Her first column, which is kind of a "Marijuana Legal Issues 101" guide, is a nice background piece on how business continues to be hamstrung by the the looming federal menace.  I'm looking forward to hearing what she's got to say in the future.

Is there a way to subscribe to one columnist without having to go through the rest of ATL?

 

It's Tax Season for Marijuana Businesses: Welcome to the Hellmouth

Hard to believe, I know, but the Internal Revenue Service is making life difficult for, and extracting large amounts of taxes from, marijuana entrepreneurs.  Dealing with the IRS is difficult enough when rules are nice and clear--but when the rules get vague the agency turns into something you might find in Buffy the Vampire Slayer.  

It's almost like they don't want to help your business succeed.  CNBC has a rundown of a recent conference on the topic:

    Pot may be illegal in the eyes of the federal government. But the people selling it legally still have to pay their taxes.

    Owners of recreational "adult use" marijuana operations in Colorado and Washington are preparing to file their first federal tax returns, and they're learning some hard lessons. The IRS is not allowing all the usual business deductions under what's called section 280E. The cost of growing marijuana is deductible under the federal tax code, but not the cost of selling it.

    "Labor for rolling joints is deductible," said Denver CPA Jim Marty of Bridge West, who adds that retail rent, labor and advertising are not deductible. Why does the IRS differentiate the two? "They just are making it up," he said.

    Marty joined other accountants and tax attorneys at a marijuana tax symposium in San Diego put on this week by the National Cannabis Industry Association. Some CPAs and attorneys have started challenging the IRS' special treatment of the marijuana industry.

    "These folks want to comply, they want to be part of the system, they want to pay their fair share of taxes, they just don't want to be penalized," Marty said. He admits that pretax profits in the legal pot industry "are very good—you can sell a pound of marijuana for about three to four times what it costs you to grow," but he added that without deductions for retail expenses "it puts you, at best, in the 60-70 percent tax bracket, and at worse, your tax bracket can actually exceed 100 percent."

    "I think you have to be very careful in dealing with the IRS, because 280E is the biggest threat that is happening to the cannabis industry at this time," said Henry Wykowski, a former federal prosecutor who is now an attorney for the marijuana industry in California.

    He has taken the government to court twice on the tax code, and succeeded in coming up with some legal workarounds. For example, retail pot enterprises can deduct the cost of goods for non-cannnabis retail products in their stores, like T-shirts and pipes, to help offset the lack of other deductions. "If you do not handle your deductions properly," Wykowski said, "there's no way you can make enough money to remain in business."

    Then there's the issue of how to pay the IRS the taxes it's due when you're dealing with an all-cash business. Some stores find workarounds to avoid carrying bags of cash to IRS offices (none will divulge how they do it), though Marty said cash is accepted now in some places in Colorado. "Actually, at my suggestion the IRS in Denver got cash counting machines, and now they have a separate line for cash," he said.

    Aaron Justis is president of the Buds & Roses medical marijuana dispensary in Los Angeles, which has been filing tax returns since at least 2010. Justis came to the conference to learn more. He said paying taxes has put him at a competitive disadvantage with other dispensaries. "I would say in Los Angeles, 4 out of 5 are operating illegally, so chances are they're not paying their fair share of taxes." So why does he file returns? "I'm in it for the long haul."

My favorite part of the story is perhaps the least relevant.  The Internal Revenue Service refused to accept U.S. currency--"legal tender for all debts public and private"--for paying taxes?

President: "I suspect" More States Will Look at Legalizing Marijuana

Why thanks, Captain Obvious! 

All right, so that's a little unfair, though that's basically the headline the Washington Post put on an interview that Mr. Obama did with "YouTube" stars.  There are actually some more interesting comments.  The Post's summary is here.  The video below features the discussion at about the 11-minute mark.

 

 

"Can medical marijuana curb the heroin epidemic?"

. . . is the title of an article by sociology professor Miriam Boeri of Bentley University.  She studies addiction, and it's the second part of a three-part look at alternative means of treating the problem.  Here are some of the key points:

    Massachusetts, like many states across the US, has seen a dramatic rise in opioid addition fueled by the increase in opiate prescription pills. In Boston, heroin overdoses increased by 80% between 2010 and 2012, and four out of five users were addicted to pain pills before turning to heroin.

    Meanwhile, the leading cause of death among the Boston’s homeless population has shifted from AIDS complications to drug overdoses, with opiates involved in 81% of overdose deaths. This is an alarming finding given recent expansion in clinical services for the city’s homeless.

    Addiction specialists and health care professionals in Boston have been at the forefront of integrating behavioral and medical care. Naloxone and methadone are currently the main solutions to address the growing opiate addiction and overdose problem. But Naloxone is an overdose antidote, not a cure or a form of preventative therapy.

    Methadone, like heroin and other opioids, has a very narrow therapeutic index (the ratio between the toxic dose and the therapeutic dose of a drug). This means that a small change in dosage can be lethal to the user. Marijuana, however, has one of the safest (widest) therapeutic ratios of all drugs.

    Research shows that marijuana has been used as a form of self-treatment, where users take cannabis in lieu of alcohol, prescription opiates, and illegal drugs. That’s one reason why researchers are calling for marijuana to be tested as a substitute for other drugs. In this capacity, marijuana can be thought of as a form of harm reduction. While researchers don’t seek to discount some of the drug’s potential negative effects, they view it as a less damaging alternative to other, harder drugs. Despite these findings, marijuana is rarely incorporated in formal drug treatment plans.

    A recent study might change this policy. Comparing states with and without legalized medical marijuana, it found a substantial decrease in opioid (heroin and prescription pill) overdose death rates in states that had enacted medical marijuana laws. In their conclusions, the researchers suggested that medical marijuana should be part of policy aimed to prevent opioid overdose.

    Outside marijuana’s harms and benefits, missing in this discussion is the social environment of drug use. Drug use is social in nature. Where and with whom drugs are used influences why and how they are used. Socially acceptable or moderate use of drugs can be learned through social rituals in socially controlled settings.

    Studies in the Netherlands found that using marijuana in Amsterdam coffeehouses encouraged a “stepping-off” hard drug use. These studies also found that when young people used marijuana in a controlled coffeehouse setting instead of a polydrug-using environment, they learned to use marijuana moderately without combining with other drugs. Along with providing access to marijuana, it’s important to instruct users on safe and effective medical marijuana consumption.

    Since Massachusetts has not yet opened its medical marijuana dispensaries, it is too early to see if medical marijuana legislation will help reduce opiate addiction in the Commonwealth. Using recent research findings, Massachusetts policymakers have a unique opportunity to implement medical marijuana policies that address its contemporary opiate overdose. Medical marijuana could be part of drug treatment for heroin and opiates.

    For homeless people, however, getting a marijuana card is expensive and buying medical marijuana from a dispensary is beyond their economic means. Street drugs are more prevalent in their social setting, easier to obtain, and can be much cheaper. From a policy perspective, addressing the alarming rates of overdose deaths among the homeless in Boston could mean distributing medical marijuana cards to homeless addicts for free and providing reduced cost medical marijuana.

L.A. Times: Move Marijuana Off of Schedule 1

Okay, I don't know how many people still actually read newspapers.  Especially their editorials.  But for what it's worth, the fourth biggest newspaper in the U.S. has a new editorial calling for Congress and the Administration to start moving marijuana off of the list of the world's most dangerous drugs:

    A federal judge has done what Congress and the Obama administration have failed to do — open a discussion on whether marijuana should continue to be listed as a Schedule 1 drug, a classification that is supposed to be used only for the most dangerous, addictive drugs, such as heroin and LSD.  It shouldn't take a judge to point out that lumping marijuana in with heroin and deeming it to have no medicinal value at all is unreasonable and unnecessary.-  

    As part of a criminal trial involving alleged marijuana growers in Northern California, U.S. District Judge Kimberly J. Mueller held a five-day hearing late last year to evaluate the current scientific research on marijuana use and to determine whether the Schedule 1 designation is unconstitutional, as the defendants contend. Final arguments are scheduled for next month.

    This discussion is a welcome one. Whether the Drug Enforcement Administration's classification is constitutional or not, it shouldn't take a judge to point out that lumping marijuana in with heroin and deeming it to have no medicinal value at all is unreasonable and unnecessary.

    Frankly, government policy on marijuana is a mess. Federal law says marijuana has no accepted medicinal value, yet 23 states have legalized it for medical use. It has been put on the list of drugs that carry the most severe penalties for drug crimes, but Congress and the Obama administration have also passed legislation that blocks funding for the enforcement of federal marijuana laws in states that allow medical marijuana. That law, passed in December, in effect ended the prohibition of medical marijuana in nearly half the states. Meanwhile, Colorado and Washington have been unofficially allowed by the federal government to legalize recreational pot.

    Even as lawmakers relax enforcement, federal authorities, including the prosecutors in Mueller's courtroom, defend the Schedule 1 designation, saying there are not enough long-term studies of the medicinal value and health risks of marijuana use to justify reclassifying it. But the DEA has for decades made it nearly impossible for researchers to obtain the drug for study. The lack of research hasn't stopped many states from allowing the use of the drug for pain relief and other therapeutic purposes, but it has denied doctors and patients important information about the risks or benefits. The agency began increasing government production of marijuana for research only last year.

    Legalization advocates hope Mueller will rule that federal marijuana policy is unconstitutional. Although her decision would apply only to the defendants in this case and could be appealed, a ruling against the existing policy could prompt other defendants to file similar motions. But the country's drug laws should not be decided in the courts. It's long past time for Washington to revisit the war on drugs, and officials can begin by reclassifying medical marijuana so it can be regulated more as a prescription drug.

As I've noted before, I wouldn't expect too much from Judge Mueller's opinion.  The constitutional standard is very low.  Congress and the Administration are going to have to do something eventually.

Legalization Side Effect: Houses Blowing Up in Colorado

From the Department of Unintended Consequences . . . .

Doug Berman at Marijuana Law, Policy & Reform notes an interesting New York Times story, in a post titled "Colorado trying to cope with unexpected cannabis combustion problems."

On the bright side, learning to extract cannabis oil may be one way to get students interested in chemistry.