Cannabis Law Prof Blog

Marijuana legalization likely to create market for low-THC products aimed at new users

Most people view marijuana legalization as a floodgates moment where long-time black-market marijuana users can finally go to the corner
store to buy ultra-potent strains of the drug in large quantities, and spend their free time testing the hypothesis that it is impossible to overdose on marijuana.

This may be true, but according to a recent report by Deloitte, widespread marijuana legalization may also create a large market of first-time users trying legal marijuana products out of curiosity. According to the report, these consumers are expected to seek out a less potent, more socially acceptable method of ingesting the substance. Forbes.com has the story:

It seems the American CBD craze has invaded Canada. Now, more of those customers, presumably the ones with less experience with hard-hitting pot like GG#4, or these things called dabs are requesting products heavy in the non-intoxicating compound of the cannabis plant. These people are the focus of the latest market report that suggests new, legal users (typically older folks) are more intrigued these days by the stress relieving powers of the plant than they are in getting wrecked.

 

"CBD is becoming kind of an 'it' word in cannabis. We see a real trend there," Andrew Pollock, vice-president of marketing for The Green Organic Dutchman, told CBC News.

 

Due to the forecasted demand for low-THC pot products, dispensaries may want to consider advising customers on the advantages of micro-dosing. Some are already making this part of the plan. After all, this low-key method for consuming cannabis, which is geared toward the person wanting to maintain a functional high without drooling all over themselves and dreaming of tacos all day, is already catching on in parts of the United States.

 

"(They say) two milligrams or three milligrams just has a mild relaxing effect and doesn't interfere with you going about your day," said Tom Adams, managing director of BDS Analytics in Colorado.

 

It's not totally surprising that this new consumer segment seems to be emerging. After all, the purpose of legalization is to make marijuana safer through regulation, and more accessible to the public. The Deloitte report describes current black-market marijuana users as young "risk takers" indicating that their use of marijuana is driven by a desire to "live life to the fullest", and that its illegal status does not curb that desire–if anything it amplifies it.

However, the report goes on to project that the marijuana consumer of the future will be more interested in a less frequent, more relaxing or therapeutic marijuana experience. In other words, once the drug is legalized it will no longer be a ritualistic and taboo exercise in hedonism, but instead will become more akin to the occasional glass of wine or scotch. Further, the report projects that marijuana users in the future will be willing to pay a premium for their products, and will place a high value on knowledgeable staff and diverse product selection. These insights further the parallel between marijuana and alcohol, as recent years have seen a growing demand for high-quality craft beers and locally distilled liquors sold by knowledgeable bartenders and similar connoisseurs.

Government regulators are sure to be happy to hear this information, as there have historically been some concerns that marijuana legalization would result in increased habitual drug use, leading to a host of other societal problems. At least for now, it sounds like cannabis consumers of the future will approach the drug with caution and treat it as an occasional indulgence, rather than instantly succumbing to the "Reefer Madness" that many used to fear.

 –John Robinson

OPINION: State-legalized marijuana businesses probably need not fear federal prosecution, but that "probably" should be more clear

States with legal marijuana cannot have complete confidence in the legitimacy of their businesses because marijuana remains federally illegal. Cannabis in the U.S. is a Schedule 1 drug, which has a very specific meaning according to the DEA website. 

Schedule I drugs, substances, or chemicals are defined as drugs with no currently accepted medical use and a high potential for abuse. Some examples of Schedule I drugs are:

heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), 3,4-methylenedioxymethamphetamine (ecstasy), methaqualone, and peyote

Cannabis is explicitly illegal on the federal level to this day, despite state efforts to legalize marijuana locally. Adding further confusion to the mix, Attorney General Jeff Sessions has not made it clear whether legal marijuana business owners will be prosecuted. 

Dispensaries can take small solace in the apparent lack of Congressional or presidential support for Sessions. In a Wall Street Journal article, authors Sadie Gurman and Natalie Andrews noted that Sessions did not seem to have the backing of the president or Congress behind his desires to crack down on states with legal marijuana: 

Attorney General Jeff Sessions vowed to use federal law to get tough on marijuana, announcing in January he was ending Obama-era protections for the nascent pot industry in states where it is legal. Six months into his mission, he is largely going it alone.

Mr. Sessions’ own prosecutors have yet to bring federal charges against pot businesses that are abiding by state law. And fellow Republicans in Congress, with support from President Donald Trump, are promoting several bills that would protect or even expand the legal pot trade.

The article went on to explain that Sessions told members of Congress that the Justice Department is now emphasizing the pursuit of more dangerous drugs.

And well they should -- by many measures, cannabis is a far less dangerous drug than even legal alternatives like alcohol and tobacco. Smoking tobacco has been linked to lung cancer, and drinking too much alcohol can cause alcohol poisoning and even death.

Yet it is functionally impossible to overdose on the psychoactive ingredient in marijuana, THC, and medicines with CBD oil have been successfully used to treat patients suffering from seizures. Perhaps due to the fact that alcohol and tobacco have been accepted and abundant for so long, they remain legal and well regulated, as opposed to cannabis. 

Although unlikely, at any point, federal agents could bring suit against a state's legal marijuana businesses and arrest the people running it. This should not be the case because it leaves marijuana businesses in an uncertain place. If federal agents are not going to enforce federal marijuana law, perhaps the law should at least be altered, or abolished. 

Keeping marijuana illegal does not benefit society overall. It results in unnecessary prison sentences for nonviolent offenders charged merely with small scale possession. It inhibits research into medical applications.

Some argue that legal marijuana might lead to lower productivity and differences in brain development for young children, but such detriments are far outweighed by other factors at play. Those factors include huge potential for tax revenue generation; potential medical treatments for nausea, loss of appetite, seizures, and pain medication; and focusing of resources toward other larger problems like the opioid epidemic.

Marijuana legalization is an incredibly complex process, in which countless factors are at play and there is no simple solution for everyone. Things would be much simpler, though, if the federal government stepped up in favor of legalization, whether for medical or recreational marijuana. Even if the government actually did start cracking down on legal marijuana businesses, that might be preferable to this Sword of Damocles hanging over the head of every pot business owner, held up by just a single thread. 

 -- Alex Bennett

OPINION: Medical Benefits vs. Economic Gain for Legalizing Cannabis.

There are typically two camps that exist when people argue for legalization. You have those who would want to set up a store and begin selling cannabis like the cash crop that it is, and those who couldn't care less what the strain is called as long as it stops their seizures, anxiety, opioid addiction, or whatever illness they have that is being treated by medical marijuana.

Does it matter what camp you're in? Is one more persuasive than the other? Medical marijuana seems to be the stronger camp when it comes to the act of actual legislation and implementation. That doesn't mean legislators aren't thinking about the profits, but it is easier to argue economics once you have a template thanks to medical marijuana. 

Medical marijuana began its path to legalization in the 1990's when five states, Washington, Oregon, California, Alaska, and Maine put into place their own versions of laws that legalized the use of marijuana for medical purposes. Since then, medical marijuana has appeared to be the baby step before recreational legalization. It wasn't until 2012 that recreational marijuana became legal, and even then it was only Colorado and Washington. 

Now, in 2018, we have 9 states and the District of Columbia with fully legal recreational marijuana and we seem to be on the path of increasing that number, but how? 

One obvious argument for recreational legalization is the economic boom that comes with it. Colorado boasts a $506 million dollar profit from sales since recreational stores opened in 2014, according to CNN. In this current economic climate, that number should surely convince the public that marijuana is an incredibly profitable market and states should be running to legalize it. But why aren't they? 

Fear. Marijuana is still a drug and drugs can be scary. Drugs lead to addiction, addiction leads to a downward spiral, and nobody wants their family or friends to go down that path. This argument comes in the form of driving while high. a recent Gallup pole shows that about 47% of the participants believe that driving will be less safe if there is legal marijuana. There hasn't been a scientifically proven way to determine if the driver themselves is high. We can test if there is THC present in the body but how long has it been there, is it enough to intoxicate this specific driver, and many more questions come in to play when assessing impaired driving.

Law enforcement in states with legalization have been trying to find a system that works together to maintain safety without assuming guilt. Certain states, like Colorado have implemented a legal limit of THC allowed to be present in the driver's system. Their officers have received special training, according to the state's website, that allow them to detect if a person is impaired due to drug use. This limit applies to MMJ and recreational users. The Washington Post compared two studies on the increase of auto accidents in states with legalization. The first was by the Insurance Institute for Highway Safety, the second by The American Journal of Public Health. The American Journal found no increase in fatal car crashed but the Highway Safety found a 3% increase in auto accidents. 

This is the part where people against legalization say that public safety and wellbeing is more important than money and the argument gets shut down. There is one thing that the states with recreational marijuana all have in common; they all had medical marijuana legalized before legalizing recreational use. This is how the state can test the waters for marijuana, the public reaction, the drawbacks, what the overhead costs really are, different methods that could be used in terms of patients picking up the marijuana. And when the fear of impaired driving comes out then advocates bring out a study done by the American Journal of Public Health that claimed there was a decrease in traffic fatality rates. 

Another issue that comes up when advocating to jump right into recreational use is defining the terms. Legislation is not easy to write or pass, it can be less difficult when the governing body can at least agree on definitions and terms of use, sale, and consumption. When advocates try to begin with recreational, the first issue will probably be, how can we keep this out of the hands of children. This is a very important issue, one that alcohol businesses are well aware of. The trick is that their product, while dangerous, is not on the Controlled Substances Act.  Legislators go down a never ending path when trying to legalize recreational marijuana because their audience for the bill is too large. When there is a medical marijuana bill, the same terms need to be defined, but the size of affected users is not nearly as large. This allows for the creation of what could be the template for recreational marijuana. 

With what seems to be a movement towards legalization of marijuana across the United States, the best options for states that have not created medical marijuana laws, to do so before attempting to legalize recreational marijuana. It can placate certain fears of the general public, give the legislators a template, and it opens doors to those who really need it sooner rather than later. 

--Loren D. Elkins

North Dakota next to legalize adult use marijuana?

Maybe, according to lawyers Jinouth Vasquez Santos (Los Angeles) and Stanley Jutkowitz (D.C.) of Seyfarth Shaw LLP.  The pair have a recent client advisory that notes what's going on up in Baja Manitoba:

Just two years ago, North Dakota voters passed medical marijuana legalization with 64 percent support. Now, North Dakota could join a number of sanctuary states legalizing recreational marijuana.

Through an effort called Legalize ND, proponents of recreational marijuana submitted more than the required 13,452 valid petition signatures to get a measure on the November 2018 general election ballot.

If passed, the measure would legalize the cultivation, possession, use, and distribution of marijuana and authorize the state, counties, and other municipalities to tax the sale of marijuana at no more than 20 percent. The measure would also remove penalties related to marijuana use from state law.

However, voters should expect an uphill battle. Opponents argue that legalization will create a lot of problems with regard to regulations and will increase crime. But if passed, one thing's for sure, if you can smoke it there, you may well be able to smoke it anywhere.

So how will this affect employers? It's a bit hazy. The measure does not have any specific provisions impacting an employer's right to drug test or to make employment decisions based on a positive drug test.

However, based on North Dakota's medical marijuana provisions which provide that the statute does not prohibit an employer from disciplining an employee for possessing or consuming usable marijuana in the workplace or for working while under the influence of marijuana, one can assume the same may apply if North Dakota legalizes recreational marijuana.

Stay tuned.

--Frank Snyder

 

Vasquez Santos and Jutkowitz 

Oklahoma Begins Accepting Medical Marijuana Patient Licenses

Medical marijuana is coming to Oklahoma, and the state began accepting and approving patient applications on the 25th. In June, Oklahoma voters approved the legalization of medical marijuana via a statewide ballot measure, and it is clear that decision will have major economic ramifications on the state. ABCnews.com has the story:

More than 1,600 people and businesses applied for Oklahoma medical marijuana licenses on the first day that applications were made available.

 

 The online application system went live at 10 a.m. Saturday at www.OMMA.ok.gov for all potential medical marijuana patients, growers, dispensaries, processors and caregivers. Oklahoma State Department of Health spokesman Tony Sellars said that by Saturday evening, the agency had received 1,054 patient, 634 business and three caregiver applications.

 

 Officials awarded 23 licenses to patients Saturday to test the approval process and will resume approving applications Monday, Sellars said.

 

 Sellars added that the state collected $1.5 million in application fees on Saturday.

For those who have followed the saga of legalization in Colorado this is not a huge surprise. In 2017, total marijuana sales in the state reached $1.5 billion, with roughly $416 million of that total coming from medical-use sales. The state collected $247 million in taxes on marijuana that year. Based on these early numbers from Oklahoma, it seems as though the state can look forward to a similar boom in revenues resulting from the introduction of medical marijuana into their economy.

A pro-marijuana group in Oklahoma called Green The Vote has begun collecting signatures to qualify recreational marijuana legalization for a similar statewide ballot initiative, but as of this writing they did not have enough signatures to do so. Perhaps as the effects of medical marijuana legalization ripple throughout the state, Oklahoma voters will embrace the concept of full legalization. 

 -John Robinson

Arizona Legalization Ballot Proposal Nears Signature Requirement

This is good news for Arizona weed advocates.  According to the Arizona Republic, "A marijuana legalization campaign is nearing its goal of gathering 150,000 valid signatures to get on the November ballot."  Details:

The  initiative would ask Arizona voters to legalize marijuana for recreational use and establish a network of licensed cannabis shops where sales of the drug would be taxed.

The Campaign to Regulate Marijuana Like Alcohol is a few thousand signatures short of gathering the 150,642 signatures needed to qualify for the ballot, spokesman Barrett Marson said Wednesday. However, some of those signatures are likely invalid — gathered from people who cannot vote — and the group aims to collect 225,000 signatures, he said.

"Arizonans are clearly excited about this initiative," Marson added.

Many others are not, including one group that has been educating the public about harms of the drug on children and society. The Arizonans for Responsible Drug Policy has pointed to news articles and statistics and a new U.S. Department of Health and Human Services survey that shows Colorado leads the nation in past-month marijuana use following its legalization of the drug in 2012.

Under the proposed Regulation and Taxation of Marijuana Act, adults 21 and older could possess up to 1 ounce of marijuana and grow up to six plants in their homes without obtaining licenses, as long as the plants are in a secure area.

It would also create a distribution system similar to Colorado's, where licensed businesses produce and sell marijuana.

The initiative also would create a Department of Marijuana Licenses and Control to regulate the "cultivation, manufacturing, testing, transportation, and sale of marijuana" and would give local governments the authority to regulate and ban marijuana stores. It also would establish  a 15 percent tax on retail sales, with proceeds going to fund  education, including full-day kindergarten and public health.

Under the 2016 Arizona initiative language, driving while impaired by marijuana would remain illegal, as would consuming marijuana in public and selling or giving the drug to anyone under 21.

Taxation of the program would pay for the state's cost of implementing and enforcing the initiative. Forty percent of the taxes on marijuana would be directed to the Department of Education for construction, maintenance and operation costs, including salaries of K-12 teachers. Another 40 percent would be set aside for full-day kindergarten programs. And 20 percent would go to the state Department of Health Services for unspecified uses.

Revenue from the taxes could not flow into the state's general fund, which would allow it to be spent for other purposes.

Ohio Legislature Readies its Own Marijuana Ballot Issue

The marijuana legalization ballot measure sponsored by "Responsible Ohio" -- the proposal that would grant a monopoly on marijuana sales to the wealthy backers of the measure and lock it in the state constitution -- is facing blowback from the state legislature.  Ohio legislators yesterday put forth their own ballot measure that would block  the prospective monopoly.

    A campaign to legalize marijuana in Ohio took a step closer to making November’s ballot Tuesday, after its promoters turned in more than twice the required number of signatures.

    But the measure will face competition at the polls. Ohio legislators also approved their own ballot measure on Tuesday to undermine the pot plan, which lawmakers worried would amount to a “marijuana monopoly” because of its provision that only 10 growers would control the wholesale pot market. The lawmakers’ measure would block other measures that benefit select economic interest groups.

    The marijuana ballot measure campaign, dubbed Responsible Ohio, is just one of many ballot measures in recent history that are designed to benefit their backers. The companies funding the Responsible Ohio campaign would control — and likely profit from — the marijuana growth sites should the measure pass.

As detailed by the Center for Public Integrity, the campaign’s director, Democratic activist Ian James, came up with the idea and is planning to pay his own firm $5.6 million to push the ballot initiative.

    Ohio Rep. Mike Curtin, a Democrat, said he sponsored the anti-monopoly measure because he opposes the way Responsible Ohio is using the citizen-initiated constitutional amendment, not because he opposes pot legalization.

    “Are we going to allow a small group of investors, who have literally no background in drug policy… to carve themselves a special niche in our state’s founding document?” he said. “To me it’s galling. It’s nauseating.”

    But James said voters should have the right to decide the issue.

    “Some statehouse politicians believe the voters are smart enough to elect them, but they aren’t smart enough to decide ballot issues like marijuana legalization,” he said in an earlier statement.

Well, to be fair to the politicians, Mr. James himself doesn't appear to think Ohio voters are smart enough to understand the issues on their own, so his backers have a $20 million war chest to try to convince them through advertising.

California Recreational Weed Measure Clears Ballot Hurdle

From Breitbart News:  CA Marijuana Legalization Clears First Step to Ballot Measure.

    Full marijuana legalization in California inched one small step closer to reality on Monday when advocates were cleared to collect signatures to qualify a measure for the 2016 ballot.

    Supporters of the Responsible Use Act of 2016 have 180 days to collect 365,880 signatures from Californians before the measure can appear on next year’s ballot, reports Reuters.

    The measure, one of at least four being worked on for the 2016 ballot, would impose an excise tax of $8 per ounce of dried marijuana sold in the state, and would allow local governments to tack on an additional sales tax of up to two percent of retail price. The proposal would also set new parameters for marijuana-related criminal offenses and would allow those convicted of marijuana-related crimes the ability to have their sentences reviewed.

    The proposal would not affect medical marijuana’s tax exemption.

Given how easy it is to get an MMJ card in California -- I was repeatedly solicited to apply for one when I took a stroll down Venice Beach at Christmas time -- I'm not sure how many people will want to buy the high-tax version.  But we'll see.

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. 

When Libertarian Ideals and Marijuana Laws Collide

There are fair weather libertarians, and then there are Texas Libertarians. Rep. David Simpson is most certainly the latter. As noted by Prof. Snyder, he has presented a bill in Texas that utterly removes penalties for marijuana. All of them, for everyone. No regulatory system, either.

The press around the bill so far has centered on his reasons for doing so: God made the plant and put it here, why do we need to micro-manage it? (I would add to that argument by mentioning that for those of you who believe in a Creator, God also built our brains with cannabinoid receptors and then placed exactly one plant on Earth that just so happens to make cannabinoids. And our government has banned it.)

But I applaud Rep. Simpson for doing something few “libertarians” are really willing to do – apply his unapologetic ideals to marijuana. For many, libertarianism is really just a way to frame traditional conservative talking points. It’s easy to hate Obamacare and claim it’s because of libertarian views if enough voters in your district hate President Obama.

But step outside the traditional conservative talking points, and those very same ideals can quickly disappear. Take for instance a popular refrain of libertarians - state’s rights. Recently, former Oklahoma Attorney General Scott Pruitt, self-proclaimed champion of state’s rights, lobbed a hand grenade into the legalization debate when he joined with his counterpart in Nebraska to file a lawsuit with SCOTUS intended to block Colorado from proceeding with its adult market. Here is a state’s rights advocate, jumping up and down on the playground demanding that the federal government go make Colorado cut it out. Who cares what the citizens of Colorado voted for. And still support.

And then there is Arizona Rep. Bob Thorpe, another one of these so-called libertarians, who saw a ballot initiative coming in 2016 that would impose a legalization system like Colorado’s. He presented a bill this year that would require that voter initiatives designed to establish state laws that are inconsistent with federal law can only pass with a 75% or greater majority vote. It was so obviously inconsistent with his own platform he was even called out by reporters in the course of announcing the bill.

Good ol’ Cannabis sativa L. It sure does have a powerful effect. For some, it gets them high. For others, it can alleviate pain or help them sleep. For fair weather libertarians, it can make them forget their talking points. Thank you Rep. Simpson for reminding us what it really means to be libertarian.