Cannabis Law Prof Blog

ANALYSIS: Marijuana Revenue & Regulation Act ( S.776)

On March 30, 2017, Senator Ron Wyden (D-Ore) introduced S.776, the Marijuana Revenue and Regulation Act.

The bill’s official title is “A bill to amend the Internal Revenue Code of 1986 to provide for the taxation and regulation of marijuana products, and for other purposes.”  The legislation aims to remove marijuana from the list of controlled substances and set out requirements for the taxation and regulation of marijuana products.

Specifically, the federal tax code would be amended to impose: (1) an excise tax on any marijuana product produced in or imported into the U.S.; and (2) an occupational tax on marijuana production facilities and export warehouses. The definition of “marijuana product” wouldn’t include industrial hemp or any item containing marijuana that’s been approved by the FDA for sale for therapeutic purposes and is marketed and sold solely for that purpose.

Consequently, the Department of Justice would be required to remove marijuana from all schedules of controlled substances under the Controlled Substances Act (CSA).

Pros

The bill appears to have contemplated criticism of legalizing marijuana on a federal level. The legislation would require producers, importers, and exporters of marijuana products to comply with rigorous licensing, recordkeeping, packaging, labeling, and advertising requirements. This would mean there will be greater control over the production and use of marijuana. The bill would establish penalties for violations of marijuana laws, including the prohibition of the sale of more than one ounce of marijuana in any single retail transaction.

Further, S.776 amends the CSA to require penalties for shipping or transporting marijuana into any state or jurisdiction where it’s illegal. Thus, states where cannabis is not legal will be protected from the substance crossing their borders. Currently, 39 states and the District of Columbia have laws legalizing marijuana (either medicinal or recreational), and the trend is towards greater acceptance of the substance.

Roughly six-in-ten Americans (62%) believe the use of marijuana should be legalized—a steady increase over the past decade, according to a new Pew Research Center survey. This is twice the number that were in favor of legalization in 2000 (31%). And the majorities of younger Americans say the use of marijuana should be legal, including Millennials (74%), Gen Xers (63%), and Baby Boomers (54%). Given these numbers, in addition to the clinical data showing that it can help improve patient quality of life and its potential for revenue and jobs, the proposed legislation has backing among most working adults in the country.

Cons

While there are numerous compelling arguments for legalization and the passing of S.776, opponents say there’s also research demonstrating the dangers of marijuana use. A study by Northwestern Medicine and Massachusetts General Hospital/Harvard Medical School found that young adults who used marijuana only recreationally showed significant abnormalities in two key brain regions that are important in emotion and motivation.

In addition, law enforcement claims that parameters don't exist for determining when someone is under the influence of marijuana. There’s no blood-alcohol content (BAC) test, which makes enforcement worrisome. Critics also point to the fact that THC, the psychoactive component of cannabis, can stay in the bloodstream for days or weeks. As such, getting an accurate reading of impairment, and determining when marijuana was used, would entail some guesswork.

Potential Implications for the Cannabis Industry

As mentioned above, passage of S.776 would have a positive economic impact for the cannabis industry. For example, researchers in Colorado found that their taxed and regulated cannabis industry contributed more than $58 million to the local economy. Opponents are quick to point out that there was about $23 million in added costs to legalization, such as law enforcement and social services. However, the researchers at Colorado State University-Pueblo found that the county still wound up with a net positive impact of more than $35 million. The university’s report examined trends in revenue, construction, marijuana use, homelessness, crime, environmental impact, and other topics and found little conclusive evidence to support claims that marijuana legalization has caused widespread social change in the county.

Also, a national study in January found that legalizing marijuana across the country would create at least $132 billion in tax revenue and more than a million new jobs across the United States in the next decade. New Frontier Data, a data analytics firm that sponsored the study, said that the marijuana industry could create an “entirely new tax revenue stream for the government,” with millions of dollars in sales tax and payroll deductions.

Takeaway

The momentum certainly appears to be moving towards widespread legalization of marijuana at the federal level.

Another bill, the Marijuana Data Collection Act, with bipartisan support. would direct the Department of Health and Human Services to partner with other federal and state government agencies to study "the effects of State legalized marijuana programs on the economy, public health, criminal justice and employment." If enacted, the National Academy of Sciences would conduct the research and publish its findings within 18-months.

However, none of the several bills recently introduced in Congress, including S.776, are given more than a 3% chance of passage into law by Govtrack. Whether the push towards adoption of bills such as these once Congress reconvenes after the mid-term elections remains to be seen.

--Jason Carr

ANALYSIS: Marijuana Justice Act (S. 1689, H.R. 4815)

Spearheaded by Senator Cory Booker (D-NJ) and California Rep. Barbara Lee, the Marijuana Justice Act is attempting to set the foundation, on a congressional level, for what equitable and progressive marijuana legalization should look like. 

The Senate Bill, S. 1689, was introduced by New Jersey Senator Cory Booker on August 1, 2017, during the 1st Session of the 115th United States Congress. In January of this year, an identical bill was presented to the House of Representatives during the 2d Session, titled H.R. 4815, by California Representative Barbara Lee. Although the proposals have not yet garnered traction within Congress, the bills mark a progressive attitude towards legalization.

Senate Bill 1689 and House Bill 4815, both named the "Marijuana Justice Act", are a pair of identical Congressional bills that center marijuana legalization around criminal justice reform, accountability, and community reinvestment, and they represent the first time that companion legislation has been introduced in both chambers of Congress to remove marijuana from the Controlled Substances Act (CSA).

Objectives

The Marijuana Justice Act, if enacted, would:

• Remove marijuana from the US Controlled Substances Act, thereby ending the federal criminalization of cannabis;
• Incentivize states to mitigate existing and ongoing racial disparities in state-level marijuana arrests by:

1.  Cutting federal funding for state law enforcement and prison construction if a state disproportionately arrests and/or incarcerates low-income individuals and/or people of color for marijuana offenses and;
2. Allowing entities to sue states that disproportionately arrest and/or incarcerate low-income individuals and/or people of color for marijuana offenses;

• Provide a process for expungement of federal convictions specific to marijuana possession;
• Allow individuals currently serving time in federal prison for marijuana-related violations the right to petition the court for resentencing;
• Create a community reinvestment fund to invest in communities most impacted by the failed War on Drugs.

The Text

A Bill to amend the Controlled Substances Act to provide for a new rule regarding the application of the Act to marihuana, and for other purposes.

The stated purpose of the Act is to de-schedule marijuana, apportion funds, and create a “Community Reinvestment Fund”.

Section 1. Short Title

Both bills began with their titles, with the Senate bill stating: This Act may be cited as the “Marijuana Justice Act of 2017”. The House bill has identical language, with the only amendment being the change of the date from 2017 to 2018 when the House bill was introduced.  

Section 2. De-Scheduling Marihuana

This section serves as the cornerstone for the legalization aspect of the Act.

For context, the Controlled Substances Act is the federal drug policy that places all regulated substances into one of five schedules based on the potential for abuse, current accepted medical use, and degree of physical or psychological dependence resulting from abuse of the drug. 

As quoted in the CSA, the finding for Schedule I drugs include that:

(A) The drug or other substance has a high potential for abuse.

(B) The drug or other substance has no currently accepted medical use in treatment in the United States.

(C) There is a lack of accepted safety for use of the drug or other substance under medical supervision.

Section 2 (a) of the Marijuana Justice Act is titled "Marijuana Removed from Schedule of Controlled Substances." The purpose of this section is to de-schedule marijuana from the Controlled Substances Act (CSA) by striking the terms "marihuana" and "tetrahydrocannabinols", and re-designating subparagraphs within §202(c) of the Controlled Substances Act (21 U.S.C. 812). 21 U.S.C. 812 (c) (10) and 21 U.S.C. 812 (c) (17) force cannabis-related substances "marihuana" and "tetrahydrocannabinols," respectively, into schedule 1 regulated substances; therefore, by striking the terms as mentioned above, they would no longer be listed as schedule 1 substances under federal law.

Section 2 (b) of the Act, captioned “Removal of Prohibition on Import and Export”—§1010 (b) of the Controlled Substances Import and Export Act (21 U.S.C 960) strikes the language that penalizes:

Any person who -

• (1) …  knowingly or intentionally imports or exports a controlled substance,
• (2) …  knowingly or intentionally brings or possesses on board a vessel, aircraft, or vehicle a controlled substance, or
• (3) …  manufactures, possesses with intent to distribute, or distributes … a mixture or substance containing a detectable amount of marihuana. 

Additionally, the Act would conform the following amendments to the Controlled Substances Act by striking variations of the term "marihuana" and restructuring the designations of paragraphs and subparagraphs within:

21 U.S.C. 802 (44) – Definitions

21 U.S.C. 841 (b) – Prohibited Acts, penalties

21 U.S.C. 842 (c) (2) (B) – Prohibited Acts, penalties with prior convictions

21 U.S.C. 843 (d) (1) – Prohibited Acts, penalties and terms of imprisonment

21 U.S.C. 859 (a) – Distribution to persons under age twenty-one, first offense

21 U.S.C. 860 (a) – Distribution or manufacturing in or near schools and colleges, penalties

21 U.S.C. 863 (d) – “Drug Paraphernalia” defined

21 U.S.C. 886 (d) – Payments and advances, Drug Pollution Fund

The last measure of de-scheduling marijuana would amend the National Forest System Drug Control Act of 1986 by striking the terms "marijuana and other" and "marihuana" from the act.

Section 3. Ineligibility for Certain Funds

Although this section is titled, “Ineligibility for Certain Funds” the section also provides guidelines for expungement and sentencing review.

Section 3 (a) provides definitions for terms such as “covered state,” “disproportionate arrest rate,” “low-income individual,” and several other terms cited throughout the section.

Section 3 (b) details the considerations for distributing Federal funding to states. Under the Act, if a state is determined to have a disproportionate arrest or incarceration rate for marijuana offenses, they will be deemed ineligible to receive federal funds to staff or construct a prison or jail. However, covered states will not be subject to more than a 10% reduction of funds that would otherwise go to law enforcement assistance programs, block grants, and justice assistance grant programs. Additionally, any funds not awarded to covered states will be deposited into the Community Reinvestment Fund.

Section 3 (c) requires that each Federal court issue an expunction for marijuana use or possession offenses that resulted in a conviction. Subsection (d) provides for sentencing review and states that individuals who have been sentenced and imprisoned have the right to motion the court to conduct a sentencing hearing. Lastly, subsection (e) allows individuals who have been aggrieved by the disproportionate arrest or incarcerations rate the right to bring a civil action in appropriate district courts.

Section 4. Community Reinvestment Fund

The final section of the Marijuana Justice Act establishes a "Community Reinvestment Fund" within the United States Treasury. According to the bill, deposits to the Fund will consist of funds not awarded to covered states, states that have not enacted a statute legalizing marijuana, because they have disproportionate arrest and/or incarceration rates for marijuana offenses in addition to amounts otherwise appropriated to the Fund.

Section 4 (c) outlines the uses for the funds; making them available to the Secretary of Housing and Urban Development to reinvest in communities most affected by the war on drugs by funding job training, re-entry services, community centers, and other programs and opportunities. The Act concludes by authorizing $500,000,000 to be appropriated to the Fund for each fiscal year from 2018 – 2040.

Implications

The Marijuana Justice Act is rooted in social justice and community development. While the objectives of the Act are noble and progressive, perhaps the Act is attempting to tackle too many issues at once. There has been vocalized support for federal legalization, making Section 2 of the Act the most accessible.

Additionally, expunction efforts for marijuana-related crimes have been a topic of discussion on both the West and East coasts. However, there is a likelihood that courts will get overloaded by individuals who desire to bring civil suits. In regards to the Community Reinvestment Fund, the introduction of the fund would be groundbreaking; however, it is important to realistically consider the logistics and operations of the fund, as there would need to be continuous data-collections and attention to the appropriations on a federal level. If the Act were to be passed in its entirety, it would be a victory for communities impacted by the war on drugs and individuals who have been negatively affected by the implicitly discriminatory enforcement of current marijuana laws. 

--Gianna Redeemer

OPINION: Marijuana Found in Murder Victim's Apartment is Irrelevant

The tragic murder of Botham Jean in Dallas, Texas attracted media attention from all over the nation. However, according to theroot.com, Texas’s own Fox4 news station focused its coverage of the murder on the marijuana that was found in the victim’s apartment after the fact. The article reports that Fox4 tweeted the "clickbait" above when the station shared its article on Twitter:

Fox4’s coverage reflects a misguided and inappropriate selection of newsworthy material.  It reflects a common technique used by the media to portray black victims of tragic incidents as being flawed, or as somehow deserving the tragedy that occurred. Here, marijuana is used as an attempt to smear the image of the victim.

As an opinion piece in the Observer points out, this is not uncommon: “In the aftermath of many shootings involving black men, reactions have fallen along partisan lines. When Trayvon Martin and Philando Castile were killed, conservative media painted them as criminal and ‘thugs.’” In the light of the tragic events that occurred, it is disappointing that the station found that a small amount of marijuana in a murder victim’s apartment want “breaking news.”

What we know about what  happened on the tragic evening of September 6th can be summarized from a report from Vox:

Botham Shem Jean, a black man, was in his own apartment in Dallas [on September 6] when Amber Guyger, his downstairs neighbor and an off-duty police officer, shot him inside his own apartment.

. . .

Jean was not accused or suspected of any crime. Guyger, a four-year veteran of the Dallas Police Department, says the shooting was an accident — the tragic culmination of a series of missed warning signs that revolve around a mistaken belief that she was in her own apartment.

According to Guyger's account, when she arrived home to the South Side Flats apartments on September 6, she didn’t realize she had gotten out on the wrong floor of her building and that the apartment she was in was not, in fact, hers. Seeing a “large silhouette” in the dark apartment, she said she thought she was being burglarized. So she shot, hitting Jean in the chest. When she turned on the lights in the apartment, she realized her mistake.

However, there are varying accounts of the stories, as “Witness accounts, however, contradict that narrative: Neighbors say they heard Guyger knocking on Jean’s door and demanding to be let in before the shooting.” 

Amid the swirl of questions, I find it extremely problematic that Fox4 news chose to focus its attention on the small amount of marijuana in Jean’s apartment. Instead of using its investigatory resources on the flurry of issues in this case, the news station chose to post an article that focused primarily on the discovery of illicit drugs. As if that is relevant at all to the tragedy that occurred in the apartment, as if marijuana makes Jean a “criminal,” and as if his “criminality” lends credence to Guyger’s account of events. It doesn’t.

As The Observer noted, many outraged Tweeters voiced their disappointment, so much so that the station changed its headline “to reflect that Jean’s family attorneys were outraged the marijuana search warrant became public. The offending tweet is still up, however.” 

To be fair, it could be said that the news station was just sharing publicly available information regarding a development in an ongoing murder investigation. That’s the job of a news station, right? While news stations have the duty to share information with the public, Fox4’s clickbait line goes too far. This was not simply sharing information with the public, it was sharing the information in a way that attempted to change the public perception of the victim. Taglines such as the one used by Fox4 distract us from the uncomfortable, but sad truth: an unarmed, black man was murdered in his own apartment by a police officer who perceived him as a threat. Did subsequently finding marijuana make him suddenly more threatening?

--Ashleigh Morgan Williams 

The Latest US Territory to Legalize Marijuana Use Makes History

On Friday, a small US territory made a big splash in the country’s marijuana legalization history. According to Forbes.com, the Governor of the Commonwealth of the Northern Mariana Islands signed a bill into law that provides

adults over 21 years of age will be able to legally possess up to one ounce of marijuana, as well as infused products and extracts. Regulators will issue licenses for cannabis producers, testing facilities, processors, retailers, wholesalers and lounges. Home cultivation of a small number of plants will be allowed.

The article further points out that this is the first US jurisdiction “to go from having cannabis totally illegal to allowing recreational use without first having a medical marijuana program.” It was “unclear if the governor was going to sign or veto the legislation, as he had previously expressed concerns about the public safety implications of legalizing marijuana.”

Though the governor signed the recreational scheme into law, he also used his “line-item veto powers to cancel some provisions of the proposal, including one to allow a government entity to be licensed to grow cannabis, as well as a provision requiring recreational marijuana consumers to obtain $5 permits.”

Legalization advocates are hopeful about the effect this may have on other US Jurisdictions.

"This is the first legislatively enacted law in the U.S. that taxes and regulates marijuana for adults’ use, but it will be far from the last," Karen O'Keefe, state policies director for the Marijuana Policy Project, said in an interview. "New Jersey could follow suit within weeks, and as many as five more state legislatures could do so within the next year. Public support for legalizing marijuana is strong and growing, and elected officials are increasingly getting the message."

Other advocates are hopeful that the “building momentum will add pressure on the federal government to modernize its approach to cannabis.”

 --Ashleigh Morgan Williams

Nevada cannabis industry shatters revenue projections; state expects more growth to come

Nevada is the latest state to feel the economic boom of legalized cannabis, and so far it is smooth sailing for state regulators. The state fully legalized the drug beginning in January 2017 and total industry sales soared over $500 million, $425 million of which came from recreational sales alone. These numbers drastically outperformed both state projections, and first year sales of other states. The Las Vegas Review-Journal has the story: 

Including recreational and medical marijuana as well as marijuana-related goods and accessories, Nevada stores
eclipsed a half-billion dollars in sales, just under $530 million, according to figures released Tuesday by the Nevada Department of Taxation.

 

Bill Anderson, executive director of the Tax Department, said that the industry “has not only exceeded revenue expectations, but proven to be a largely successful one from a regulatory standpoint.”

 

“We have not experienced any major hiccups or compliance issues,” he added. “As we move into fiscal year 2019, we expect to see continued growth in the industry by way of additional businesses opening up, and we expect revenues to continue to be strong.”

This stunning performance translated into $70 million in tax revenue for the state. To give some context to these metrics, state regulators projected $265 million in sales and $50 million in tax revenue, according to the Review-Journal. Furthermore, the states of Colorado, Washington, and Oregon–largely considered to be trailblazing states in the cannabis industry, and all with larger populations than Nevada by at least 1 million citizens–recorded first-year cannabis sales of $303 million, $259 million, and $241 million, respectively, putting them far behind Nevada's first year numbers. Perhaps most surprisingly, despite being home to Las Vegas, Nevada only collected $49 million in intoxicating beverage taxes from 2016-2017, signaling that marijuana may be a greater source of revenue for the state than alcohol moving forward.

Nevada's "sinful" tourist economy can likely be thanked for such astounding numbers, although the state's casinos have come out against marijuana use in their facilities, out of fear of losing their gaming licenses. Additionally, the state's marijuana law prohibits consumption anywhere but in private residences. State Senator Tick Segerblom told the Las Vegas Sun: “The numbers are kind of leveling off, and we need to reach the tourist market a little more. We need a venue where people can come and enjoy marijuana properly."

These results suggest a few things: first, that tourism economies can drive marijuana sales even in states with lower populations and where marijuana use is not widely supported by dominant businesses. Second, that as more states legalize cannabis they may take cues from states that have previously approved legalization in order to more efficiently bring the drug to market. Finally, that there is still much progress to be made with respect to laws surrounding marijuana consumption in states where it has been made legal. Perhaps as more states begin venturing into legalization, they will use Nevada as a model of how best to regulate, tax, and sell cannabis.

--John Robinson

Will Canada's New Cannabis Laws Create a New Border Problem?

With Canada legalizing adult-use marijuana, effective October 17, 2018, it is expected that Canadian citizens will partake in this new industry, either through consumption or investment means. While the substance may be legal in Canada, and a few U.S. states that border Canada, crossing the border could become difficult. 

In an interview with The Star Vancouver, Len Sanders, a Washington based immigration attorney, explained how the federally controlled U.S.-Canada border has begun to classify those in the marijuana industry as "drug traffickers." He went on to say that this enforcement applies to people involved with the actual plant, such as growers, users, and dispensary owners, to people who have either directly invested or their investment will be used in the cannabis industry. He mentions how the CEO and two employees of Keirton Inc. (a large agriculture equipment manufacturer)  were stopped at the border and moved to a secondary location only to be told that they were banned for life from entering the United States. Keirton Inc. was not the only group to face this punishment. In an interview with the Financial Post, Sam Zneimar was banned for life simply for investing in U.S. based marijuana companies. 

 In this current administration, U.S. citizens have seen a big push for more enforcement at our Southern border and a new wave of keeping America "safe". But will the same hold true on the other side of the country? In both interviews the offending party expressed sympathy for the poor border patrol agent that was made to enforce this law. These articles both mention a civil interaction between a "drug trafficker" and a border patrol agent and an unfortunate outcome. The U.S. has yet to tweet about the "drug traffickers" that are attempting to get into the U.S. through Northern points of Entry. 

 --Loren D. Elkins

 

With the legalization efforts coming out of Mexico, it should be interesting to see how those investors will be greeted at the border.                         

Utah may soon legalize medical marijuana

A public event supporting legal medical marijuana organized by the Utah Patient Coalition has attracted hundreds of supporters. The bill being considered, Proposition 2, would allow patients with doctor recommendations to legally obtain medical marijuana from privately owned dispensaries. 

According to an article by Kathy Stephenson of the Salt Lake Tribune, the event included music, food trucks, bounce houses, T-shirts and lawn signs. 

Not all Utahns are in favor of the bill in its current form, though. The article explains that despite empathy for suffering children, some groups don't support Proposition 2 due to a perceived lack of sufficient procedural safeguards. 

A Dan Jones and Associates poll, conducted for UtahPolicy.com, found 64 percent of likely voters to be “somewhat” or “strongly” in support of the measure.

However, several groups, including the The Church of Jesus Christ of Latter-day Saints and the Drug Safe Utah Coalition — made up of medical experts, clergy, law enforcement, educators and business leaders — are opposed and say the initiative as written lacks procedural safeguards.

“We are aware of many in our neighborhoods who seek relief from pain and suffering and are moved with empathy by stories of children who endure debilitating seizures and other medical conditions," said Marty Stephens, the church’s director of community and government relations. “The church supports medicinal use of marijuana, so long as proper controls and safeguards are in place.

“In the spirit of compromise,” he added, "we urge a timely, safe and compassionate approach to providing medical marijuana for those in need without the harmful effects that will come if Proposition 2 becomes law.”

The upcoming elections in November will show whether events like this are enough to sway the voters of Utah to become the 32^nd state to legalize medical marijuana. 

--Alex Bennett

U.S. House Committee Approves the Medical Cannabis Research Act

A U.S. House committee approved a bill last week that would require the Department of Justice to issue licenses to marijuana growers for research purposes. Cannabis Business Times reports that while the bill has not yet been scheduled for a vote before the full House, the committee action is nonetheless a significant step in the legislative process.

The Medical Cannabis Research Act of 2018 would open the door to a more robust federal licensing process that would allow medical-grade cannabis to be grown for state-funded research. Since 1968 and up to the present day, only the University of Mississippi has held such a license.

If the bill were to pass, U.S. Attorney General Jeff Sessions would be required to license two research facilities for cannabis cultivation within one year. For each year after that, he (or the successive attorneys general) would be required to license an additional three research facilities. 

While there have been a slew of cannabis-related bills written on Capitol Hill, Thursday's approval of the Medical Cannabis Research Act by the House Judiciary Committee places the bill ahead of most others.  Here's a video of the hearing:

 

-- Jason Carr

Commercial Sale of Marijuana is Officially on the Vermont Democratic Party Agenda

Late last month the Vermont Democratic Party officially declared support for the statewide commercial sale, regulation, and taxation of marijuana.  At an August 26 meeting, party leadership unanimously voted to change the platform’s language to include the party’s belief that marijuana “should be legal, taxed and regulated in the interests of consumer and public safety, as well as economic opportunity.”

Vermont is the most recent state to legalize the recreational use of marijuana among adults who are 21 years of age and older, and as a Washington Post article reports, the first to do so by legislative enactment (all other initiatives were by ballots). However, the commercial sale is still illegal within the state.  As Professor Robert Mikos notes in his casebook, Marijuana Law, Policy, and Authority, of the 9 states in the US that have legalized recreational marijuana, Vermont is the only state in which any form of commercial sale is still criminalized.

Despite the failure of a taxation and regulation bill last year, members of the Democratic Party in Vermont are still hopeful that “momentum from recreational legalization will translate into swift passage of tax and regulate policy in the upcoming legislative session.”  

 

--Ashleigh Williams (Morgan)

One border, two approaches

The traditional picture of the US-Mexico marijuana trade involves drug cartels bringing Mexican weed into the US.  But according to a piece from San Diego's KPBS, Mexico’s Demand For Potent California Marijuana Creates Southbound Smuggling, the flow increasingly is going the other way.

California’s cultivation of marijuana has created an unprecedented phenomenon: southbound smuggling of the drug across the U.S.-Mexico border.

 

Mexico’s demand for potent California strains is on the rise as Mexican drug cartels have mostly failed to make a competitive homegrown product.

 

“If you’re in Mexico, and you want the best marijuana out there, there’s only one place to get it,” said Matthew Shapiro, a San Diego-based attorney who specializes in marijuana. “There’s no such thing as high-quality Mexican weed.”

 

California’s initiative to legalize marijuana for recreational use could further boost southbound smuggling, experts on both sides of the border told KPBS. It would make it easier for Tijuana residents with visas or dual citizenship to access California’s more potent strains — and bring it back to Mexico.

 

It’s illegal to move marijuana from the U.S. to Mexico, just as it’s illegal to move the drug from Mexico into the U.S. But it’s easier to smuggle southbound. At the San Ysidro Port of Entry, drivers can cross the border into Tijuana without ever stopping to speak with a Mexican official.

This shift in perception has become a motivating factor in the recent changes to Mexico's own drug laws, including a suggestion by a Mexican government official back in February that Mexico may consider legalization:

"Colorado, California and the other states that have legalized marijuana have in some ways put the U.S. in a really awkward position," said David Shirk, a Mexico security analyst and professor at the University of San Diego. "On one hand, we are telling our friends like Mexico we want you have to have a zero tolerance policy on illicit drugs while at the same time we have let the camel's nose under the tent when it comes to marijuana."

 

The U.S. and Mexico, both signatories of United Nations counternarcotics treaties, have cooperated in drug busts and marijuana eradication efforts for decades.

 

"There is a significant contradiction in current U.S. policy that Mexico and other countries will begin to use as a basis for modifying their own drug policies," Shirk said.

 --Loren D. Elkins

Possible Safe Harbor for U.S. Military Veterans Who Need Medical Cannabis

A bill filed in Congress would allow veterans to get medical marijuana from the U.S. Department of Veterans Affairs.  While a growing number of military veterans use medical marijuana for the treatment of PTSD, chronic pain, and other mental and physical war wounds, however, federal law prohibits VA doctors from prescribing it.  That might change.

Senators Bill Nelson (D-FL) and Brian Schatz (D-HI) recently filed the Medical Marijuana for Veterans Safe Harbor Act that would legalize medical marijuana for veterans and empower physicians in the VA to issue medical marijuana recommendations in accordance with the laws of "the State in which the use, possession, or transport occurs." Despite the fact that state laws that legalize the use of medical marijuana are preempted by federal laws which prohibit such use, this bill effectively harmonizes federal law governing the VA with state law in states where medical marijuana is legal.

According to Tom Angell of Forbes, who reports on the story, Senators Nelson and Schatz are addressing long-term goals such as cannabis research and reduction of opioid use among veterans. The bill allocates $15 million for research on "the effects of medical marijuana on veterans in pain" and "the relationship between treatment programs involving medical marijuana that are approved by States, the access of veterans to such programs, and a reduction in opioid abuse."

Some form of medical marijuana is permitted in 31 states and this legislation would grant veterans the same access to legitimately prescribed medication as other patients in those 31 states would have. Justin Strekal, political director for NORML, says that "Historically, veteran and military communities have long been at the forefront of American social change, catalyzing widespread acceptance of evolving cultural norms and perceptions surrounding racial, gender, and sexual equality. The therapeutic use of cannabis by veterans follows this trend and members of Congress should follow their lead and pass the Veterans Medical Marijuana Safe Harbor Act."

--Kindal Wetuski

Fort Lauderdale to Limit Number of Marijuana Dispensaries in Opposition to State Law

Several medical marijuana dispensaries that have applied to open operations in Fort Lauderdale, FL face denial of their applications as officials have decided to enforce an ordinance that limits the number of medical marijuana dispensaries allowed to open in the city. According to a Sun Sentinel report, the actions by city officials seemingly violate state law:

[S]tate law prohibits cities from limiting the number of dispensaries. A city is allowed to ban them outright, but if a city chooses to allow the marijuana treatment centers, they must be treated like any ordinary pharmacy.

Fort Lauderdale says that's a problem, because its law prohibits more than one dispensary in each of its four districts. City officials plan to reject three of the dispensaries that applied.

City officials have acknowledged that a dispensary wishing to challenge its law can do so in court. And while officials recognize they will likely lose if such a challenge is brought, they are unwilling to forego enforcement of the city ordinance based solely on a potential courtroom battle. 

--Jason Carr

Wells Fargo, politicians, and cannabis banking

Banking giant Wells Fargo caught flak last week for its decision to terminate the account of one Nikki Fried, a hitherto unknown Florida politician who told the bank that she took campaign contributions from medical marijuana businesses.  Critics have claimed that the bank was somehow violating her “constitutional right to freedom of speech, that this was an “abhorrent” “attempt to restrain speech,” and even that it’s some kind of conspiracy between Big Pharma, the Republican Party, and the Florida state legislature to defeat Fried,  who sis running for state agriculture commissioner.

All this is nonsense.  Yes, Wells Fargo has probably gone a little overboard--most banks are probably not as paranoid as WF (which has been hit by billions of dollars in fines in the last few years) about violating regulatory restrictions.  And yes,m the fact that cannabis businesses cannot get reasonable access to banking services is a major problem that I’ve noted frequently. 

But what happened to Fried has nothing to do with her political speech.  It has to do with the fact that under federal law Nikki Fried is guilty of the federal crime of laundering drug money.  And any bank that takes that money, knowing that it comes from an illegal source and mingling it with other money, is also guilty.   

This is not not criticism of Fried, hyperbole, or sensationalism.  It's a plain fact.  As people in the industry know, anybody who accepts money derived from marijuana sales and puts it into a bank is by definition guilty and is facing big fines and a substantial prison sentence that can reach 20 years.  Under federal law (and the laws of a whole lot of other nations), taking money from Uncle Bob's Holistic Healthful Medical Cannabis Company is no different than getting it from the Medellin Drug Cartel.  

Fried is different and noteworthy only in that she is the first politician who is facing the consequences everybody else in the business has faced for years.

You may, of course, think it outrageous that simply providing banking services for a state-legal business should result in criminal liability.  I agree entirely.  But that bridge has already been crossed  During the Obama Administration the Justice Department weaponized bank enforcement.  Its notorious Operation Chokepoint tried, with some success, to coerce banks to drop accounts for perfectly legal businesses like firearms dealers, tobacco sellers, payday lenders, dating services, that sold lawful goods and services such as firearms, ammunition, tobacco, payday lenders, dating services, debt-collection services, pawn shops, gold and silver dealers, and others.  And more recently states like New York have tried to put lawful enterprises out of business by pressuring their banks.

And unlike marijuana production and distribution, those businesses are, in fact, perfectly legal.  Despite a lot of wishful thinking, marijuana is still a Schedule I controlled substance and is still completely, totally, unmistakably illegal everywhere in the United  States.

In my opinion, the chance that Wells Fargo and its employees could be penalized for taking money from Nikki Fried are very small.  That's why other banks seem to have stepped up to take her accounts.  But the risk isn't zero, and were I the bank's lawyer I would be compelled to point that out to them and let them decide whether the possible gain is worth the risk.

As I noted before, the bright side of this is that once politicians start having trouble putting political donations into a bank, they are likely to start taking action to resolve the problem.  There is, in fact, no good reason not to allow marijuana deposits in banks.  Allowing businesses to take credit cards, pay vendors by check, and deposit cash should make it much easier to track illegal payments than does the current system involving wheelbarrows full of currency,

--Frank Snyder

Marijuana Legalization Could Be on the Horizon in the Garden State

A vote to legalize marijuana in New Jersey could be approaching in the upcoming month. New Jersey Senate President, Stephen Sweeney recently expressed confidence that there will be enough votes to pass a recreational bill as early as this Fall. However, the vote may face delay as there have been changes in budget proposals, and currently, a pair of new bills regarding recreational legalization and medical expansion are awaiting finalization. 

Governor Phil Murphy has built a reputation as being a champion for legalization in the name of social justice. While Murphy's promise of legalizing recreational marijuana within his first 100 days in office did not come to fruition, he has been able to make strides in expanding the state's medical marijuana program by including more qualifying conditions. 

Although Murphy wants the legalization efforts to materialize, budgetary obstacles are proving challenging to get around. Reports stated that Murphy intended to include $60 million in revenue of a state budget proposal for the upcoming fiscal year, with many legalization supporters hoping the revenue would go toward an expungement program. More detail can be found in an article in Rolling Stone:

Advocates want this expungement to be automatic, where the state takes on the process of expunging records rather than the person charged. However Kate Bell, legislative council for the Marijuana Policy Project, says that the phrase “automatic” is very misleading.

“People have this idea that the government can still press a button and magically expunge all these past convictions, but that’s not necessarily correct,” Bell says.

Record expungement is affecting marijuana policies across the nation, as a California expunction bill has just passed the Senate and is awaiting the Governor's signature. On the opposite coast, Senate Bill S-2702 was introduced in early June by NJ Senator Nicholas Scutari and would legalize marijuana for adults 21 and over, and included a provision about expungement; however, expungements would still require an application.

Although there is no concrete time frame for New Jersey to pass legislation, an increase in cannabis-related arrests and racial disparities in said arrests has yielded a newfound urgency for legislative action. 

-- Gianna Redeemer

Cannabis Law Institute program set for September in DC

The National Cannabis Bar Association's "Cannabis Law Institute" is just two weeks off.  The two-day event features more than 70 speakers from the legal, business ,and political worlds, and looks to have some terrific programming.  Check out the conference web site for schedules, registration, and other information.

I'll be seeing you there!

--Frank Snyder

Massachusetts Lawmakers To Consider Licensing of Marijuana Testing Labs

The Massachusetts Cannabis Control Commission is scheduled to vote August 23rd on a measure that may ultimately result in recreational pot sales within the state.

Boston Business Journal reports:

Framingham’s MCR Labs and Salem-based CDXAnalytics will both have their applications reviewed by the full commission, according to an agenda released Tuesday. Though there are four labs in the state that have been testing medical cannabis in Massachusetts for some time, they must receive additional approval from the commission before they can test recreational marijuana.

Both MCR and CDXAnalytics have said they would be ready for the increased workload once the recreational marijuana market launched.

Should the labs pass regulatory muster, approved marijuana dispensaries can begin selling recreational marijuana that have been independently tested by the approved labs.

-- Jason Carr

Politician's bank account closed for accepting contributions from cannabis businesses

Either Wells Fargo is taking nervousness about marijuana to a new extreme, or the banking giant has figured out a great way to force Congress to deal with the cannabis banking problem.  In Wells Fargo Closes Florida Politician's Account Due To Marijuana Donation, Forbes reports that the nation's fourth biggest bank canceled the account of Nikki Fried, who's running for Florida Agriculture Commissioner.  Fried is a professional lobbyist who has lobbied for medical marijuana business in Tallahassee, but Well Fargo cut her loose because her campaign accepted donations from MMJ lobbyists.

"As part of the onboarding of the client it was uncovered some information regarding the customers [sic] political platform and that they are advocating for expanding patient access to medical marijuana," . . . a vice president and senior relationship manager at Wells Fargo, wrote in a July 11 email to the Fried campaign's compliance officer.

After the campaign confirmed in a reply that Fried has indeed received contributions from cannabis industry leaders—and had no intention of stopping—Wells Fargo confirmed the closure of the account in an August 3 letter.

"Periodically, we review our account relationships as part of our responsibility to oversee and manage banking risks," the letter said. "As a result of a recent review of your account relationship, we determined that we need to discontinue our business relationship and close the account above within 30 days from the date of this letter."

If the move represents a new company-wide policy—whether or not it spreads to other banking institutions—it could have implications for dozens members of Congress and other politicians who regularly accept campaign contributions from people involved in the marijuana industry.

Maybe the best way to push Congress to act is to suggest that their campaign contributions depend on it.

--Frank Snyder

UK MMJ Update

Good Morning Britain: Medical marijuana is making a move in the United Kingdom.  Here's the video.

 

 

Canada looking at "Uber for Pot"

If it's too much trouble to go to the dispensary, an Edmonton company wants to bring it to you.  It's open question, though, whether Alberta officials will allow it to launch.  The Canadian Broadcasting Company has the story:

Called Save the Drive, the business is set to launch a mobile application when cannabis becomes legal Oct. 17.

CEO Chanel Graham sees a need for the service among medical users who are ho mebound, can't drive, or among recreational users who are intoxicated and unable to drive.

"This is something that would be needed and in demand in Canada," Graham said. "And it's something that we can offer to keep drivers off the road."

The company would employ three full-time and six part-time employees and then at least 200 drivers who are paid per delivery.

The Alberta Gaming and Liquor Commission will have to decide whether it wants to keep its monopoly or open things up to competition.

--Frank Snyder

 

Congressman: "We're completely on our asses" on marijuana

Rep. Tom Garrett (R-Va) wants Congress to get off its collective derrière and resolve the problem of marijuana legalization by turning it over to the states.  Earlier this year he introduced the Ending Federal Marijuana Prohibition Act of 2017 (H.R. 1227), which would remove cannabis (both marijuana and hemp) from the Controlled Substances Act entirely and turn regulation over to the states.

It's basically the same bill that Sen. Bernie Sanders (I-Vt) introduced a couple of years ago.  In a story on PJ Media, GOP Lawmaker on U.S. Pot Policy: ‘We’re Completely on Our Asses,’ he has some blunt words about why he favors the approach:

On Monday, Garrett doubled down on the legislation, explaining the reasons he supports state discretion over medical marijuana policy. After he outlined his reasoning to his constituents, Garrett said at the Cato Institute, “I didn’t have anyone vehemently opposed.”

 

The Ending Federal Marijuana Prohibition Act of 2017 would remove marijuana from the list of federally controlled substances, bringing it in line with alcohol and tobacco standards. Decriminalization would eliminate a justice system that Garrett believes disproportionately disenfranchises the poor and politically weak, would allow medical professionals rather than the federal government to make key decisions for conditions like epilepsy, and would allow states to realize hundreds of millions of dollars in economic revenue annually.

 

Garrett’s district grows about seven-eighths of all tobacco in Virginia, and his state, Kentucky and Tennessee, he said, could be economic “monsters” in the industry of agricultural hemp due to climate advantages if marijuana were decriminalized.

 

.  .  .

 

“You should be free to do what you so choose to do so long as it’s not an impact on others that’s negative. That’s easy, and that’s who we’re supposed to be as a nation,” he said, adding that the government closest to the people – local government – governs the most efficiently.

 

Garrett, a former prosecutor, described the Republican Party as “AWOL” when it comes to marijuana policy. At the same time, he said that more dangerous drugs like heroin should be treated differently for their rapid and widespread destruction.

 

“I am not pro-marijuana. I’m not anti-marijuana,” he said. “I’m pro-Constitution. I’m pro-liberty. I’m pro-government that enforces its laws.”