Cannabis Law Prof Blog

Denver's Sam Kamin is First Distinguished Professor of Marijuana Law

Congratulations to Sam Kamin of Denver's Sturm College of Law, who's just been named the school's first Vicente Sederberg Professor of Marijuana Law and Policy.

Professor Kamin's pioneering course, Representing the Marijuana Client, was probably the first law school class in the country on that topic, and he's done terrific work in the area for many years.  Given Sturm Law's setting in the Cannabis Capital of America, it's a great move for the school as well.

Brian Vicente, Christian Sederberg, and their firm, Vicente Sederberg LLC, have been building an enviable reputation in the cannabis law field, and it's great to see them looking to develop future lawyers for the field.

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Limited MMJ Bill Sails Through Texas Legislature

It may be the reddest state in the Union, but the Texas Legislature has just given final approval to a limited CBD oil bill that will for the first time allow marijuana to be grown and distributed in the Lone Star State.  Governor Greg Abbott has not indicated whether he will sign the Texas Compassionate-Use Act, but it was sponsored by GOP legislators and had strong bipartisan support.

The bill has drawn praise as a good first step, and criticism as being essentially unworkable.  It's true, that as I noted in a Dallas Morning News op-ed on Sunday, virtually no patients will actually be able to get marijuana under the bill, because it requires (unlike in most other states) physician prescriptions and those are prohibited by the DEA under 21 C.F.R. parts 1300-1321.   But it's still got people here excited because MMJ proponents now have the beginnings of a future infrastructure that will be in place when the bill is later fixed.

The Texas Cannabis Industry Association, which lobbied hard for the bill, even with its flaws, is excited.  The Texas Compassionate-Use Act allows for  creation of state-licensed, nonprofit "dispensing organizations" to "cultivate, process, and dispense low-THC cannabis."  While they won't be able to "dispense" much, the experience in the first two categories gained over the new two years should be helpful in the long-run.

 

Kansas House Passes MMJ Bill

I wouldn't exactly call it a "broad" bill as this story does, but it's something:  Kansas House approves broad marijuana bill. 

    The Kansas House has approved a measure that would decrease penalties for marijuana possession, allow the limited use of medical marijuana and study the use of industrial hemp.

    House members voted 81-36 Thursday to send the bill to the Senate for consideration.

 

    First- and second-time marijuana offenders without serious prior convictions would avoid jail time under the bill. That would decrease the population in the state's overcrowded prisons and save more than $1.7 million over the next two fiscal years, according to state estimates.

    Two amendments to the bill also would legalize the sale and production of hemp oil for seizure treatments and initiate a state study into industrial hemp.

    Opponents say they're worried that the bill would open the door to wider marijuana legalization.

Read more here: http://www.kansascity.com/news/article20462670.html#storylink=cpy

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"'Sea change' in attitude toward marijuana in Texas"

. . . is the title of a good piece by Houston's KHOU-TV, reporting on the upsurge in Republican support for marijuana legalization here in the Lone Star State:

    Inside an old restaurant a short walk from Allen’s Landing, the birthplace of Houston, the Pachyderm Club holds its luncheons.

    The group is staunchly Republican, mostly older and Anglo, but with a few younger Asians and Hispanics in the mix. It could easily be mistaken for a small Rotary Club except for the prevalence of elephant lapel pins.

    But the most surprising thing about the crowd is another kind of pin, worn by a few of the Pachyderm Club members. "RAMP" is the message, an acronym for Republicans Against Marijuana Prohibition.

    "You’ve not seen one person overdose on marijuana," said Jane Bock, a lifelong Republican who’s president of Memorial West Republican Women. "Alcohol has done a lot worse damage."

    When people in a group like this change their minds about marijuana, you know Texas is changing. And if you think it’s just a cause for the younger generation in this club, think again. The pro-marijuana faction is dominated by the gray hairs in the group.

    "I think people are more open-minded," Bock said.

    Texas is one of the most conservative states in the nation. But in a part of the country where people joke about Willie Nelson’s passion for pot, public attitudes toward legalizing marijuana are dramatically changing. Nowhere was that more evident than in a legislative meeting room in the state capitol, where a House committee this week approved a bill that would legalize marijuana in Texas.

    "The community has changed their attitude about it," said Rachel Hooper, a former Harris County prosecutor. "And they want to see violent criminals in jail. And they see marijuana possession as a nonviolent offense."

    A poll conducted early last year by the University of Texas and Texas Tribune indicated 49 percent of Texans believe marijuana should be legalized, not just for medical use but for all purposes. Only 23 percent of the surveyed registered voters believed the drug should be outlawed for all uses.

    The shift in public opinion is so dramatic, politicians running for office are touting decriminalization as an election issue. One former prosecutor who recently ran for district attorney even spoke before a group of pro-marijuana demonstrators who marched around Houston City Hall over the weekend. Kim Ogg, who ran for Harris County district attorney, has sent out news releases touting her position on decriminalizing marijuana.

    "I think Houston’s ready for a reasonable policy on marijuana," said Ogg. "They’re tired of their tax dollars being wasted putting kids in jail with real criminals. And it’s not making any of us safer."

    That argument strikes an emotional chord with Ann Lee, who’s become one of the leaders of the Republican movement to legalize marijuana.

    "Why are our jails now called the new plantations?" Lee said. "That is awful! In this great, wonderful, beautiful country of mine, we have ruined a whole generation of young minorities, both blacks and Latinos, by saddling them with a felony conviction."

    Lee and her late husband started RAMP after her paraplegic son discovered marijuana helped relieve his severe nerve pain. An 85-year-old woman with white hair and an effervescent personality, she’s convinced many of her fellow Republicans to change their long-standing opposition to legalization.

    Even supporters of the [total] legalization bill approved by the committee in Austin concede it has little chance of becoming law, at least this year. But the very fact that it passed through a committee of the conservative Texas House of Representatives offers testament to the state’s dramatic change in attitude over the legalization of marijuana.

    "The sea change has been people realizing that we do not have to support bad law," Lee said. "And to be a conservative, you do not support prohibition. Prohibition trumps everything that I believe as a Republican."

 

Second Ohio Legalization Group Clears First Ballot Hurdle

The well-oiled crony-capitalist marijuana ballot initiative in Ohio may find itself with some competition come election time.  The Buckeye State'sattorney general has initially certified the "Legalize Marijuana and Hemp in Ohio" ballot initiative, sponsored by a group called  "Better for Ohio." which means it can now start collecting some 300,000 signatures by July 1 to qualify as a ballot initiative.

But there's not a lot of difference between the proposal already being pushed by "ResponsibleOhio," a group of rich and politically connected people who are trying to get a state-granted monopoly on weed built into the state constitution.  The LMHO initiative basically sticks to that monopoly -- even using the same 10 properties ResponsibleOhio plans to use for growing and processing weed -- but it does add the options for individuals to own a few plants of their own withpout state registration, which may make it more attractive to some voters.

There's also a strange provision that seems to allocated licenses based on serial numbers of several mysterious $100 bills now locked in a safe, but whose serial numbers would under the bill become part of the Constitution of Ohio.   Owners of those specific bills would apparently get the license.  I'm a lawyer and I find that part of the amendment baffling at first (and second) read -- and the backers don't seem to have offered an explanation about how at works. 

Okay, This Isn't Sending the Right Message to Concerned Florida Parents

HEADLINES WE'D RATHER NOT SEE:  High School Principal Caught in Pot Smoke-Filled Car, Shirt Undone — And With Student!

    Krista E. Morton, the principal of Mavericks High of Palm Springs, was arrested and charged with marijuana possession after she was caught in a car reeking of marijuana — with her shirt unbuttoned — and with one of her students!

    According to the police report, Morton, 45, of Wellington, initially told officers, who were responding to a call Wednesday about possible sexual activity in North Palm Beach’s Lakeside Park parking lot, that she and the 19-year-old student were “just friends.”

    Then she said that the kid was a stranger she’d just picked up because she was lonely.

    The 19-year-old eventually admitted to police that he was a student at Morton’s school.

 

Texas Senate Approves CBD Bill

Texas could be on board with legalized cannabidiol before the end of this session, as the Texas Senate voted 26-5 to approve SB 339, a limited CBD bill introduced by Sen. Kevin Eltife (R-Tyler).  A companion house bill, HB 892, introduced by Rep. Stephanie Klick (R-Fort Worth), was passed out of committee and is now before the House.

The bill is very limited, but it's impressive that the Republican-dominated legislature (the GOP has a nearly 2/3 majority in each house) has taken any steps   It.s a tribute, in my view, to the fact that several Texas legalization groups understood that working with sympathetic Republicans to get something moving was an important first step.  A baby step, certainly, but a step.  Here's the Texas Tribune's take on the story:

    Epilepsy patients in Texas would have access to medicinal oils containing a therapeutic component found in marijuana under legislation the state Senate passed Thursday. 

    Senators voted 26-5 to pass Senate Bill 339, by Sen. Kevin Eltife, R-Tyler, which would legalize oils containing cannabidiol (CBD), a component found in marijuana known to treat epilepsy and other chronic medical conditions.  If the measure passes the House, by 2018, the state would be able to regulate and distribute the oils to patients whose symptoms have not responded to federally approved medication.

    "While the bill is not the full-scale medical marijuana bill that many advocate for, we recognize that change takes time and this is certainly a step in the right direction," Phillip Martin, deputy director of the liberal group Progress Texas, said in a statement. "These bills are an important step and we are eager to see them set promptly on the calendars so they can be considered by the full Texas Legislature."

    Eltife's proposal is the second marijuana-related bill to receive votes of support in as many days. On Wednesday night, a House committee voted 5-2 in favor of a measure that would legalize the possession and delivery of marijuana — a measure that looks unlikely to make it to the full House for a vote.

    Meanwhile, a companion to Eltife's bill – House Bill 892 from Rep. Stephanie Klick, R-Fort Worth – passed out of a House committee earlier this week.

    Some medical marijuana advocates are reluctant to support Eltife's bill, which would not offer access to cancer patients or veterans suffering from post-traumatic stress disorder. Eltife's Senate proposal also limits the presence of THC, or tetrahydrocannabinol — the psychoactive element in marijuana — in the oils to a level critics have said is too low to help many epilepsy patients.

    In a committee hearing on the bill, opponents said they feared it could lead to an increased recreational use of marijuana. Others worried about public safety, believing that the products would be hard to regulate.

    Texas is one of 16 states where marijuana is illegal for medical and recreational use. In recent years, 13 states have legalized CBD oil for certain medical conditions. Twenty-three other states and the District of Columbia have laws allowing broader use of medical marijuana.

    Last year, a University of Texas/Texas Tribune Poll showed that 77 percent of Texans believed that marijuana should be legalized in at least some circumstances.

Here's another positive reaction:

"This is a historic day for Texas," said Sindi Rosales, CEO of the Epilepsy Foundaton Central and South Texas. "The Senate brought us one step closer to helping to save the lives of people with intractable epilepsy."

 

 

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California MMJ Businesses Challenge IRS Deduction Denials

From Bloomberg BNA Daily Tax Report:

    Two California companies that own various shares in medical marijuana dispensaries are petitioning nearly $2 million in IRS-imposed tax deficiencies and penalties for 2010 and 2011.

    Northern California Small Business Assistants Inc. (NCSBA) and the Organic Cannabis Foundation LLC (OCF), both in Santa Rosa, Calif., are contesting deductions the Internal Revenue Service disallowed.

    The IRS said tax code Section 280E forbids the deductions because the companies claiming the deductions were "engaged in the illegal trafficking of marijuana during those years."

    The OCF, which in 2010 and 2011 operated a "legally permitted California business, having commenced operation of a medical marijuana treatment and dispensary center in Santa Rosa," claimed expenses under Section 162 that the IRS disallowed. The IRS sent the OCF a notice of deficiency on January 22, claiming $1,355,131 in tax deficiencies and penalties for 2010 and 2011 (Organic Cannabis Found., LLC v. Commissioner, T.C., No. 10593-15, petition, 4/23/15).

    The NCSBA in 2010 and 2011 held a 99 percent ownership interest in Napa Organics LLC, the Petting Zoo LLC and Oakland Cannabis Institute LLC, all passthrough entities operating, or attempting to operate as, medical marijuana dispensaries.  Each company also claimed expenses under Section 162 that the IRS disallowed in full, sending the NCSBA a notice of deficiency on January 22, claiming $638,048 in tax deficiencies and penalties for 2010 and 2011 (N. Cal. Small Bus. Assistants, Inc. v. Commissioner, T.C., No. 10594-15, petition, 4/23/15).

    The petitions, both filed April 23, claimed the companies "complied with all federal, state and local tax-reporting requirements" and said the businesses "reasonably and in good faith believed that they were lawfully operating their business in accordance" with those laws.

    The companies argued that the Tax Court has held that Section 280E doesn't preclude a taxpayer from deducting expenses attributable to a trade or business other than that of illegal trafficking in controlled substances simply because the taxpayer also is involved in the illegal trafficking of a controlled substance, and that California law authorizes the use, distribution, possession, or cultivation of medical marijuana.

    The petitions also argued that Section 280E is "irrational and arbitrary," "unconstitutionally vague" and "an unconstitutional use of the taxing power."

Goodbye to MMJ Dispensaries in Washington State?

The Evergreen State used to have perhaps the least-regulated medical marijuana industry in the country.  That's changing drastically.  Why Washington state is extinguishing medical marijuana.  Here's the beginning:

    For the past 10 months, three marijuana markets have been operating simultaneously in Washington state: the street market, the medical market and the recreational market.

    In the future, however, there will only be two. And contrary to some people’s expectations about legal recreational pot making drug dealers obsolete, it’s the medical dispensaries that will disappear first.

    Washington State Governor Jay Inslee signed a bill in April that will overhaul medical marijuana and reconcile the two legal markets into one. Medical marijuana dispensaries as they exist now will either close or seek licenses in the regulated industry. In the future, medical customers will have to look to “medically endorsed” recreational marijuana stores for their supply.

    Washington's medical marijuana market has always been "looser than anywhere in the country,” says Rick Garza, head of the state Liquor Control Board, the agency that oversees the marijuana industry.

    "With I-502 (the recreational market), you have a tightly regulated business that has to make a big investment and pay taxes and fees," says Garza. And while medical marijuana is legal, it has become somewhat of a "gray area" because the "vast majority" of users served by the dispensaries are truly recreational users anyway, says Garza.

    "You have this unregulated and untaxed [medical] dispensary that's competing directly with the regulated market."

The story is well worth reading in its entirety.

Decriminalization Bill Passes Louisiana Legislative Committee

Meanwhile, just on the other side of the Sabine River:  Marijuana sentencing reform clears first hurdle in Louisiana Legislature.  Details:

    A New Orleans lawmaker easily moved his bill reducing penalties for simple marijuana possession past its first hurdle in the Louisiana Legislature Wednesday (May 6).

    State Rep. Austin Badon's legislation, House Bill 149, drops the maximum sentence for second-offense marijuana possession from five years in prison to two years. It would also drop the maximum sentence for third-offense possession from 20 years to five. Subsequent convictions could allow for a maximum sentence up to eight years. 

    "This is a well-studied measure to produce reform and reduce recidivism," Badon said. 

    Badon has brought the same or similar legislation to the Legislature for nearly a half decade. It advanced Wednesday from the House's Administration of Criminal Justice by a vote of 10-4 and now heads to the House floor before moving to the Senate side for consideration. 

    Under current law, a first-time offender could be jailed up to six months -- that sentence would stay the same under Badon's proposal. Fines would be also be reduced. Maximum fines for second offenses would be reduced from $2,000 to $500; and for subsequent offenses from $5,000 to $2,000. 

    The bill could save taxpayers approximately $12 million over five years, Badon said. 

   . . .

    ACLU of Louisiana Executive Director Marjorie Esman said while she supports lowering marijuana penalties, she opposed Badon's bill because it "doesn't do enough." 

    "This will do nothing for the woman who testified about her son...whose serving 15 years at Angola," Esman said, noting the legislation is not retroactive would not apply to inmates who are already incarcerated based on the current law. 

    Directors of two influential lobby groups, the Louisiana Sheriffs' Association and the District Attorneys Association, appeared at Badon's side and complimented his collaboration with them to get the legislation is an acceptable posture. The groups took a neutral stance on the bill but removed their opposition. Opposition from those groups on criminal justice is a bill killer in many cases. 

    Badon said his amendment removing the habitual offender application was a compromise he made with the lobbying groups after he learned simple marijuana possession was rarely a factor in the application of three-strikes sentencing. 

    State Rep. Terry Landry, D-New Iberia, said the legislation most affects poor citizens of Louisiana. He commended the associations and Badon for working together and indicated further reform must occur. 

    "It's not working for us -- locking them up and throwing away the key. We have to be progressive, and we have to think outside the box," Landry said, to cheers from spectators at the hearing. 

    . . .

    Another bill on the Senate side, also sponsored by a New Orleans Democrat, seeks to lower penalties for possession of small amounts of marijuana, as well. 

    J.P. Morrell's legislation, Senate Bill 241, carves out a new section of the law that deals strictly with possession of an ounce or less of marijuana or synthetic marijuana -- all the offenses would be considered misdemeanors.

    The maximum penalty for first-offense possession of an ounce or less would be a $100 fine. The maximum penalty for second offense possession would be a $500 fine and 30 days in jail; and the maximum penalty for a third "or subsequent" conviction would be a $1,000 fine and 90 days in jail. The bill has not yet been given an initial hearing. 

As in Texas, the Louisiana legislature is dominated by Republicans.  The fact that the bill got some GOP support at the committee level is a good sign.

BTW, I disagree with the ACLU's opposition to the bill.  It's not a great bill, certainly.  But it would keep at least some people from getting caught up in the disaster that is the nation's drug enforcement policy.  It seems to me the ACLU is willing to make those folks involuntary martyrs in the service of the ACLU's own larger  cause.

Me, I think we've had enough martyrs, and even a few less would be a good thing.

Texas "Tomato" Cannabis Bill Passes House Committee

There are several marijuana bills pending here in the Lone Star State this legislative session, and the one that everyone assumes is least likely to pass just got over a significant hurdle.  The Texas House Criminal Jurisprudence Committee voted to approve a bill (HB 6125) by Rep. David Simpson (R-Longview) to basically remove all marijuana-specific regulations -- to, in effect, regulate it like corn and tomatoes.

    A proposal seeking full legalization of marijuana on religious grounds has cleared an unlikely legislative hurdle.

    Republican state Rep. David Simpson of Longview argues marijuana comes from God and therefore shouldn't be banned by government.

    The team party stalwart has repeatedly championed what he calls the "Christian case" for legalization.

    Simpson's bill (HB 2165) languished for weeks before the House Criminal Jurisprudence Committee.

    Three committee Democrats and two Republicans surprisingly voted to support it Wednesday, though, and it passed 5-2.

    That makes Simpson's bill eligible for consideration to reach the House floor before the legislative session ends June 1, although that's still highly unlikely.

    State law currently makes no exceptions even for medical marijuana, making outright legalization unthinkable.

    Still, advocates hailed the committee vote as "unprecedented progress" for Texas marijuana rights.

    Nearly three out of five Texas voters (58%) support making marijuana legal for adults and regulating it like alcohol, according to a statewide survey conducted by Public Policy Polling in September 2013.

    Four states have adopted laws that regulate and tax marijuana similarly to alcohol. Two of them, Colorado and Washington, have established regulated systems of marijuana cultivation and sales.

    Alaska and Oregon are in the process of implementing similar systems.

For those who don't know the Texas system, the legislature meets only every other year, and given that it's unlikely the bill can be voted on by both houses before the end of the session on June 1, it would be 2016 before the legislature would take it up again.

Still, things are moving more quickly in Texas than most have expected. 

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Nationalized Police? Not to Good For Marijuana Proponents

In his USA Today column, Instapundit's Glenn Reynolds has number of reasons why Al Sharpton's suggestion that we create a single national police force would be a bad idea.

From the marijuana legalization perspective, the idea of every local cop under the command of an attorney general who sends SWAT teams to hit state-legal MMJ operations strikes me as a very bad idea.

 

Black Farmers Shut Out of Florida MMJ Market

The Florida medical marijuana law -- the narrow one that Governor Scott signed last year, not the constitutional amendment that failed -- limits MMJ growing licenses to state-registered "nurserymen" who have a license to cultivate more than 400,000 plans (of any kind) and who have "operated as a registered nursery in this state for at least 30 continuous years."

You have to wonder who exactly who it was who lobbied that the stuff be limited to big, long-established firms with good political connections?

As it turns out, this bit of cronyism is particularly pernicious, given that there seem to be virtually no black-owned farm in the state who have been registered in the "nursery" business for 30 years and who have 400,000 plants.  This also seems to be due in part to deliberate discrimination by the U.S. Department of Agriculture between 1981 and 1996, which has now paid those farmers nearly $1 billion in damages as a result of a 1999 settlement in Pigford v. Glickman.

Using these kinds of arbitrary standards to limit competition is always a bad idea.  We can hope that at least in this case the obvious injustice will lead Florida lawmakers to a more open and competitive approach. 

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Belated Welcome, Instapundit Readers

As it happens, I've been swamped and behind things here, so the Instalanche caught me off guard.  Thanks to Professor Reynolds -- a guy I admire enormously and whose blog I read every day -- and to all of those who visited.  Unfortunately, it's also hard to moderate comments over the weekend on this platform.  So they're now all up.  I appreciate the comments.

Marijuana is now at the stage where the question should it be legalized as turned into how should it be legalized -- and that for me is where the rubber hits the road, as the various factions in the legalization movements (libertarians, stoners, medical patients, crony capitalists, social justice warriors, etc.) start to fight over who wins.  For someone interested in business and politics, it's the most interesting arena out there.