Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Friday, February 28, 2014

"Everything is Tax" ... seems a fitting mantra for marijuana reform and policy

The title of this post is drawn from the title of this recent published scholarly article that, on the surface and even in substance, seems be about a lot of topics other than marijuana law, policy and reform.  But the title caught my eye, and I think all would-be marijuana reform advocates ought to check out the article, because I strongly believe the marijuana tax stories and regulations that that emerge in state and federal law and policies in the months and years ahead will be the most important predictor of whether pot prohibition eventually gets fully repealed or lives on and on in the United States.  

The article is authored by Susannah Camic Tahk, it is published at 50 Harvard Journal of Legislation 67 (2013), and it is available here via SSRN.  Here is its abstract:

In contrast to major legislative reform packages in the 20th century, the Affordable Care Act of 2010 took the form of a tax bill. Although this legislation is the first massive social and regulatory overhaul completed through the tax code, in the past twenty-five years the U.S. Congress and Presidential administrations have substantially increased their use of tax law for non-revenue-raising purposes. Growing reliance on the tax code represents a structural transformation of how Congress and Presidential administrations have come to approach lawmaking goals. This transformation defies the near-consensus of previous tax scholarship, which, following Stanley Surrey, disapproves of embedding programs in the tax code. However, that dominant view rests on assumptions that have become outdated. This Article analyzes the ongoing structural transformation by observing and explaining the advantages that accrue from pursuing social and regulatory objectives through the tax code. In particular, this Article identifies a number of legislative and normative advantages that tax-embedded policies offer.

February 28, 2014 in Federal Marijuana Laws, Policies and Practices, Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)

Students for Sensible Drug Policy's conference in SF this Saturday

I'll be giving the welcome remarks at Students for Sensible Drug Policy's 2014 western regional conference tomorrow, being held at Hastings in San Francisco.  There's a great lineup (other than myself, of course), including panels on current research into the medical value of marijuana and the status of marijuana legalization efforts in California.

Any readers in the area should consider checking it out.  Registration and conference information is here.  And here's the conference schedule: 

February 28, 2014 | Permalink | Comments (2)

Thursday, February 27, 2014

Seeking a (much?) broader perspective on the modern marijuana reform movement

Today's New York Times has this notable new front-page article headlined "Pivotal Point Is Seen as More States Consider Legalizing Marijuana."  Here are some excerpts:

A little over a year after Colorado and Washington legalized marijuana, more than half the states, including some in the conservative South, are considering decriminalizing the drug or legalizing it for medical or recreational use. That has set up a watershed year in the battle over whether marijuana should be as available as alcohol.

Demonstrating how marijuana is no longer a strictly partisan issue, the two states considered likeliest this year to follow Colorado and Washington in outright legalization of the drug are Oregon, dominated by liberal Democrats, and Alaska, where libertarian Republicans hold sway.

Advocates of more lenient marijuana laws say they intend to maintain the momentum from their successes, heartened by national and statewide polls showing greater public acceptance of legalizing marijuana, President Obama’s recent musings on the discriminatory effect of marijuana prosecutions and the release of guidelines by his Treasury Department intended to make it easier for banks to do business with legal marijuana businesses.

Their opponents, though, who also see this as a crucial year, are just as keen to slow the legalization drives. They are aided by a wait-and-see attitude among many governors and legislators, who seem wary of pushing ahead too quickly without seeing how the rollout of legal marijuana works in Colorado and Washington. “We feel that if Oregon or Alaska could be stopped, it would disrupt the whole narrative these groups have that legalization is inevitable,” said Kevin A. Sabet, executive director of Smart Approaches to Marijuana, which is spearheading much of the effort to stop these initiatives. “We could stop that momentum.”...

At least 14 states — including Florida, where an initiative has already qualified for the ballot — are considering new medical marijuana laws this year, according to the Marijuana Policy Project, which supports legalization, and 12 states and the District of Columbia are contemplating decriminalization, in which the drug remains illegal, but the penalties are softened or reduced to fines. Medical marijuana use is already legal in 20 states and the District of Columbia.

An even larger number of states, at least 17, have seen bills introduced or initiatives begun to legalize the drug for adult use along the lines of alcohol, the same approach used in Colorado and Washington, but most of those efforts are considered unlikely of success this year.

The allure of tax revenues is also becoming a powerful selling point in some states, particularly after Gov. John W. Hickenlooper of Colorado said last week that taxes from legal marijuana sales would be $134 million in the coming fiscal year, much higher than had been predicted when the measure was passed in 2012....

Opponents of legalization, meanwhile, are mobilizing across the country to slow the momentum, keeping a sharp eye on Colorado for any problems in the rollout of the new law there. “Legalization almost had to happen in order for people to wake up and realize they don’t want it,” Mr. Sabet said. “In a strange way, we feel legalization in a few states could be a blessing.”...

While much of the recent attention has focused on these legalization efforts, medical marijuana may also cross what its backers consider an important threshold this year — most notably in the South where Alabama, Georgia and South Carolina are among the states considering such laws....

Election data, compiled by Just Say Now, a pro-marijuana group, showed that the percentage of the vote that came from people under 30 increased significantly from 2008 to 2012 in states that had marijuana initiatives. This youth vote, predominantly Democratic, rose to 20 percent from 14 percent in Colorado, and to 22 percent from 10 percent in Washington, both far above the 1 percent rise in the national youth vote....

A narrow majority of Americans — 51 percent — believe marijuana should be legal, according to a New York Times/CBS News poll conducted last week, matching the result in a CBS News poll the previous month. In 1979, when The Times and CBS first asked the question, only 27 percent wanted cannabis legalized. There were stark differences in the new poll, though. While 72 percent of people under 30 favored legalization, only 29 percent of those over 65 agreed.  And while about a third of Republicans now favored legalization, this was far below the 60 percent of Democrats and 54 percent of independents who did so....

Mason Tvert, director of communications for the Marijuana Policy Project, a leading advocate for legalizing marijuana, said campaigns were already underway to stage aggressive legalization drives in several states over the next couple of years, including Arizona, California, Maine, Massachusetts, Nevada, and possibly Montana. “It is certainly important to maintain the momentum,” Mr. Tvert said,  “But I don’t think we can look at any one election cycle and see what the future holds. This is going to be a multiyear effort.”

I do not disagree with the general view that 2014 is a "watershed year" concerning discussion and debate over marijuana reform (and this was one big reason I developed a taught a seminar on the topic at my law school last Fall). But, as the title of this post highlights, I have come to believe that a much broader set of social and political forces help account for modern marijuana reform movement. The forces include, inter alia, a growing distrust of all government among both left-leaning and right-leaning opinion leaders over the last 15 years, growing evidence that the many aspects of the drug war may do more harm than some drugs, the failure of Big Pharma to provide effective pain relief (without too many side effects) to many who suffer from a range of serious medial problems, and changing labor and economic realities that change to cost/benefit realities of pot prohibition versus pot regulation.

I am happy to see the front-page of the NY Times discuss the various 2014 short-term realities that may impact marijuana reform over the next few years. But I would be especially eager to hear from readers concerning what they think are broader social and political forces that will shape these stories over the next few decades.

Cross-posted at Marijuana Law, Policy and Reform

February 27, 2014 in Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Wednesday, February 26, 2014

Pat Oglesby on changing marijuana tax estimates

The past few days have seen changes in marijuana tax estimates in Washington and Colorado.  Pat Oglesby has some insightful thoughts on these developments, and the difficulty of estimating marijuana tax revenue generally, in this post for the Huffington Post today:

While marijuana revenue could be a promising new source of income for states, a wide range of expectations underscores how little we know so far about what mature markets will look like one day. Last week, early projections for marijuana revenue in the first two legalizing states gave way to new ones. In Colorado, expectations rose; in Washington, they collapsed. As projections zig-zag, other states considering legalization don't know what to expect.

 

In Colorado, the number jumped by 60 percent, from $67 million to $107 million. That's for the first fiscal full year of marijuana excise taxes. The old, lower number came from the Legislature last August; the new, higher one came from the Governor on February 18.

 

In Washington, the number collapsed from $1.6 billion to $129 million -- a drop of over 90 percent. Oops. Those numbers are for marijuana excises by the end of Fiscal 2017. The old, higher number came from a criticized 2012 legislative estimate; the new, lower, more plausible one came from the state's official Forecast Council on February 19.

 

That's confusing. But even comparing the official forecasts is confusing. The numbers above are just for excise taxes.

February 26, 2014 in Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)

Tuesday, February 25, 2014

Which poses the bigger threat: Big Marijuana or Little Marijuana?

Policymakers want to ensure that the marijuana industry doesn’t engage in socially irresponsible behaviors, such as selling marijuana to minors. And many policymakers agree that the structure of the marijuana industry plays a key role in shaping its behavior. Interestingly, however, policymakers seem to disagree about whether society would be better off if the marijuana industry were concentrated (i.e., controlled by a few Big firms) or fragmented (i.e., controlled by many Small firms).  

On one side, anti-legalization groups like Smart Approaches to Marijuana has raised the specter of Big Marijuana. The group doesn’t really explain why Big is necessarily bad; instead, it just conjures images of Big Tobacco to make its case. But there are reasons to be concerned about concentrated industries. All industries, of course, are driven by a profit motive and seek to expand their markets as much as possible. For this reason, industries generally oppose regulations that reduce the size of those markets, such as laws banning sales to minors, regardless of whether those laws make good sense for society as a whole. To be sure, this anti-regulation impulse can be found in both concentrated industries and fragmented ones. But all else being equal, concentrated industries are generally more successful at blocking passage of sensible regulations. In large part, this is because of the transaction costs and free-rider problems besetting fragmented industries. It is just a lot easier to coordinate the lobbying efforts of a few Big firms than it is to coordinate the lobbying efforts of many Small ones. Hence, if the marijuana industry were ever to be dominated by a few, very Big players, it might prevent governments from passing sensible restrictions on its activities, much the way Big Tobacco fought off government regulations for decades.

On the other side, government officials have raised the specter of Little Marijuana. Little Marijuana depicts the current structure of the industry. It is populated with hundreds – and in states that allow home cultivation, thousands -- of relatively small growers and distributors. While a fragmented industry wields less political clout, it is also far, far more difficult to police. It is a lot easier for government agents to monitor an industry comprised of a few Big firms than it is for them to monitor an industry comprised of many Small ones. Hence, as long as the marijuana industry remains highly fragmented, governments will likely have a difficult time enforcing sensible restrictions on its activities. Colorado’s Marijuana Enforcement Division, for example, has struggled to monitor the hundreds of medical marijuana dispensaries in the state, and state officials have complained that home cultivation exacerbates the problem.

For all of its vices, Big Tobacco helps demonstrate the upside of a highly concentrated industry structure. For example, as I discuss in more detail in this paper, there is relatively little evasion of cigarette taxes in this country, even though the taxes imposed on cigarettes can be quite high (e.g., 45% in federal and state excise taxes alone in California). For example, several studies estimated that only about 7-12% of cigarette taxes go unpaid on average. (Not surprisingly, the number is higher in high-tax jurisdictions.) In large part, the successful enforcement of cigarette taxes can be traced to the highly concentrated structure of the tobacco industry: three firms now manufacture roughly 85% of all cigarettes consumed in this country (and they do so at just 15 factories). I think it safe to say that monitoring this industry to ensure that taxes are paid (and other regulations followed) is far easier than it would be if thousands of firms were now manufacturing cigarettes.

Ultimately, perhaps the lesson is that Big Marijuana and Small Marijuana both pose challenges for policymakers, albeit challenges of a different nature. In the short term, Small Marijuana is clearly a bigger concern. But in the long term, policymakers long for the day when the industry wielded little political clout.  

February 25, 2014 in Current Affairs | Permalink | Comments (0)

2016 Republican National Convention in Denver?

Following on Doug's post about the recent Ohio poll, Denver is one of the finalists for the 2016 Republican National Convention.  One of the politicians leading the bid thinks  Colorado's legalization law may help attract the gathering, since leaders from other states may want to learn more about how the policy is playing out.  

"There's an easy political case to be made," former Rep. Bob Beauprez, a Republican and the chair of the bid committee, said.

 

Beauprez argued that even the state's recent legalization of recreational marijuana could be a plus because it shows how Colorado is on the political cutting edge. "Other governors and mayors will want to come here and see how it's working out," he said, noting that ballot measures to legalize the drug are anticipated in several other states.

Whether or not the RNC comes to Denver in 2016, Colorado's swing state status will make the presidential politics of marijuana legalization especially interesting to watch.  If Denver does manage to get the convention, it will only add to the dyamic. 

February 25, 2014 in Current Affairs, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Monday, February 24, 2014

Attention 2016 Prez candidates: new poll says 87% in Ohio support use of medical marijuana

One of many reasons I thought Colorado's 2012 vote to legalize marijuana was such a big deal is because the Mile High state is something of a swing state in the national race for President and thus all 2016 candidate for Prez will need to have a somewhat more refined message on marijuana come the next national election than other recent candidates.  Additional reasons why would-be candidates for the Oval Office need to start working on their pot platform has emerged today via this new about a new poll from the ultimate swing state:

Ohio voters overwhelmingly approve of medicinal marijuana and narrowly support same-sex marriage, according to a poll released Monday.

A Quinnipiac University poll of Ohio voters found 87 percent support the use of medical marijuana while only 11 percent oppose. Ohio voters also narrowly approve of allowing adults to possess small amounts of the drug for personal use -- 51 percent in favor, 44 percent opposed. Two medical marijuana proposals are in the works, but it's unclear whether either will collect the more-than 385,000 signatures of valid Ohio voters required to put the issue before voters in November.

Twenty states and Washington, D.C. allow for medical marijuana programs and Colorado and Washington voters gave the green light for legal recreational use in 2012. Ohio voters say Colorado's legalization is bad for the state's image, with 37 percent of those polled saying it helps the state.

Peter A. Brown, assistant director of the Quinnipiac University Polling Institute, said Ohioans' views of marijuana are complicated. "Twice as many voters think alcohol is more dangerous than marijuana, and about half the state's voters think the two are equally harmful," Brown said in a statement.

Support is strongest among voters age 18 to 29, who approve of personal marijuana use 72 percent to 25 percent, but boomers and Gen-Xers say they've tried marijuana at a higher rate than younger voters.  More than half of Ohio voters -- 55 percent -- say they've never tried marijuana.

The poll surveyed 1,370 registered Ohio voters from Feb. 12-17 on land lines and cell phones, and the poll had a margin of error of plus or minus 2.7 percentage points.

For a bunch of reasons, I think all polling numbers concerning views on marijuana are subject to lots of "noise" based on how the poll questions are posed. And, of course, at least until the 2014 mid-term elections take place, it is way too early to make too many predictions about 2016 candidates and issues. Nevertheless, these latest poll numbers from Ohio reinforce my view that the 2016 Prez campaign is sure to have a lot more serious and sophisticated discussion of federal marijuana laws, policies and practices than any other election cycle in memory.

February 24, 2014 | Permalink | Comments (0)

Saturday, February 22, 2014

"Glengarry Glen Girl Scout?"

ImagesThe title of this post is the amusing subheadline of this amusing marijuana human interest story that has been making the rounds the last few days.  The main headline of this Time report is "Smart Cookie: Girl Scout Sets Up Shop Outside Marijuana Dispensary," and here are the details:

You don’t need a MBA to know that the key to sales is to know your demographic. That’s why Girl Scout Danielle Lei should earn a merit badge in business for setting up shop outside of a medical marijuana dispensary in San Francisco.

Lei sold 117 boxes of Dulce de Leches and Tagalong Girl Scout cookies during a two-hour stint outside The Green Cross pharmacy over Presidents Day weekend. According to her mother, Lei sold 37 more boxes catering to the munchies crowd than what she sold during the same two-hour period outside a Safeway store the next day, proving once again that when it comes to business it’s all about location, location, location.

“It’s no secret that cannabis is a powerful appetite stimulant, so we knew this would be a very beneficial endeavor for the girls,” Holli Bert, a staff member at The Green Cross, told Mashable. “It’s all about location, and what better place to sell Girl Scout cookies than outside a medical cannabis collective?”

No MBA or Glengarry Glen Ross style motivational speech necessary for this smart cookie.

Perhaps not surprisingly, a number of other media outlets were also giving this story attention, and this AP story from Phoenix suggests that other Girl Scouts are taking notice:

Customers of some medical marijuana dispensaries are finding they don't have to go far if they have a case of the munchies. Girl Scouts seem to be foregoing the usual supermarket stops for selling their beloved cookies.

A few days after a teenager sold dozens of cookie boxes outside a San Francisco pot dispensary, 8-year-old Lexi Menees will return to Trumed Dispensary in Phoenix on Saturday for the same purpose. The girl's mother, Heidi Carney, got the idea after hearing about what happened in San Francisco. The family says Lexi sold more than 50 boxes on Friday.

Susan de Queljoe, a spokeswoman for the Girl Scouts—Arizona Cactus-Pine Council, says this is not something the organization would encourage but that it's up to the parents.

February 22, 2014 in Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (1)

Friday, February 21, 2014

Banks suggest recent federal banking guidance changes nothing (and they’re probably right)

The Colorado Bankers Association, an organization counting many prominent national and local banks as members, is very skeptical (to put it mildly) of the banking guidance issued by the DOJ and Treasury Valentine’s Day. My earlier posts on the guidance can be found here and here.

In a nutshell, the CBA suggests the guidance does nothing to ease bank fears over dealing with the state’s marijuana industry and that only a change to federal laws could really accomplish that. A statement issued from the CBA’s President, Don Childears, can be found here. Here’s a snippet:

“The guidance issued today by the Department of Justice and the U.S. Treasury only reinforces and    reiterates that banks can be prosecuted for providing accounts to marijuana related businesses.

“In fact, it is even stronger than original guidance issued by the Department of Justice and the Treasury . . . After a series of red lights, we expected this guidance to be a yellow one. This isn’t close to that. At best, this amounts to ‘serve these customers at your own risk’ and it emphasizes all of the risks. This light is red.”

“Bankers had expected the guidance to relieve them of the threat of prosecution should the open accounts for marijuana businesses, but the guidance does not do that. Instead, it reiterates reasons for prosecution and is simply a modified reporting system for banks to use. It imposes a heavy burden on them to know and control their customers’ activities, and those of their customers. No bank can comply.”

“An act of Congress is the only way to solve this problem. . . ”

I agree. Earlier DOJ guidance suggesting it wouldn’t crack down on marijuana distribution was probably sufficient to get people to distribute the drug in Colorado (in reality, it probably wasn’t even necessary to achieve that). But guidance suggesting the DOJ might not crack down on money laundering offenses falls well short of what highly regulated banks are going to need before they start dealing with this industry.

February 21, 2014 in Current Affairs, Federal Marijuana Laws, Policies and Practices | Permalink | Comments (0)

Marijuana reform: ballot measures or the legislature?

Last week, Rob posed an interesting question: should states reform marijuana laws through ballot measure or legislation.  As his post notes, recent state medical marijuana laws have come mostly in the form of legislation.  Earlier reforms were mostly by ballot measure.  

Of course, the ballot measure model has been a matter of political necessity to a large degree.  It took a string of ballot measure victories to begin to convince politicians that supporting medical marijuana might actually be a smart political move.  

If marijuana legalization is going to follow a different path, with greater reliance on legislative reform, politicians will need to be quicker to embrace the issue than they were with medical marijuana.  

This brings me to a notable development, noted by Toke of the Town today.  It appears that all of the Democratic candidates for governor have come out (in some form or another) for marijuana law reform.  Most interesting to me, the most recent candidate to do so cited his belief that legalization may now be inevitable in explaining his position: 

Maryland Attorney General Doug Gansler this week told the Baltimore Sun that he feels the legalization of cannabis is going to happen, and that as governor he would ensure laws are implemented "the right way" if such a change were to happen while he is in office.

If this idea takes hold in the political world--that marijuana legalization is inevitable--I think we may start to see marijuana legalization by legislation happen much more quickly than we did for medical marijuana.  

Of course, whether that is a good thing or not--Rob's question--is a different story.  All things being equal in terms of substance, I think reform by legislation is better than by ballot measure for many of the reasons Rob points out.  

The catch is that reforms by the legislature may tend to be much more cautious than by ballot measure.  In the case of Maryland, the AG says he wants to make sure it is implemented "the right way."  If I had to guess, I would imagine the Maryland AG's thinking about "the right way" would involve a much more restrictive law than what we see in Colorado and Washington.

Chris Christie said much the same thing about medical marijuana in New Jersey, for example.  The result is a medical marijuana law that, at least some advocates say, doesn't seem to be really serving its purpose:

Patients in need of medical marijuana in more than half the state have a tough time getting the drug because the program is too bureaucratic, too expensive and few doctors are willing to participate, patient advocates and a dispensary owner told a state legislative committee today.

To be sure, it could be that some legislatures would enact reforms that are as good or better (in terms of substance) than what we would get from a ballot measure.  And the flexibility that reform via the legislature provides is a big plus, as Rob discusses.  

But, there is the possibility that (at least in some states) the question facing advocates going forward may be whether it is better to have very modest reform by legislation or more robust reform by ballot measure.  

February 21, 2014 in Medical Marijuana State Laws and Reforms, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Wednesday, February 19, 2014

Can medical and recreational marijuana legalization co-exist in Washington state?

For some time, we have put mind-altering substances into one of three boxes: (1) acceptable for recreation (e.g., alcohol and tobacco), (2) acceptable for use as a medicine but for no other use (e.g., substances in Schedules II through V of the CSA) or (3) not acceptable for any use (e.g., all Schedule I substances.)  Kimani Paul-Emile wrote an interesting article (PDF) discussing this, and advancing an alternative framework for thinking about drug control, a few years back.

There isn't a lot of modern precedent for a substance regulated under the law for both medicine and recreation.  (Of course, there was medicinal alcohol during prohibition.  But after repeal, interest in alcohol as a medicine faded pretty fast.)  

With evidence of marijuana's value as a medicine only mounting as time goes on, it doesn't seem likely that interest in the medical use of marijuana will vanish anytime soon.  And so, as marijuana legalization takes hold, regulating the medicinal and recreational uses of marijuana may pose difficult legal and policy challenges.  

In Colorado, legalization left medical marijuana largely untouched (at least in terms of legal regulation).  Recreational pot stores have one "menu" and set of prices for registered medical patients and a different "menu" for recreational buyers (with medical marijuana subject to less tax and, as a result, cheaper).  Colorado already had a robust set of medical marijuana regulations, which may have helped the state implement this system.  So far, Colorado medical marijuana patients seem to be OK with how things are going.

Washington is a different story.  There, the State's pre-legalization medical marijuana law was much more open-ended.  And, as a result, regulators and lawmakers have been struggling over what to do about medical marijuana now that they are implementing legalization.

Earlier this week, Washington state legislators passed a measure that would bring medical users into the recreational system.  And so far, medical marijuana patients do not seem happy about the development.

Jacob Sullum has the story at Forbes:  

Last night the Washington House of Representatives approved a bill that would abolish medical marijuana dispensaries, a.k.a. “collective gardens,” and impose new restrictions on patients who use cannabis for symptom relief. H.B. 2149, which passed by a vote of 67 to 29, would thereby eliminate some of the unregulated competition for the state-licensed pot stores that are expected to start opening this summer under I-502, the legalization initiative that Washington voters approved in November 2012. Supporters of the bill, which was introduced by Rep. Eileen Cody (D-West Seattle), hope that banning dispensaries will help maximize tax revenue and mollify the feds.

 

The bill requires patients to buy their cannabis from the same stores that serve recreational customers, which would be the only legal sellers of medical marijuana as of May 1, 2015, when the provision allowing collective gardens would be repealed. Patients could continue to grow marijuana for their own use, but the maximum number of plants would be reduced from 15 to six (three of them flowering). The ceiling on possession by patients would be cut from 24 ounces to three. The bill instructs the state Department of Health, together with the Washington State Liquor Control Board (which is charged with regulating marijuana growers, processors, and retailers), to produce a report by November 15, 2019, on the question of whether it is appropriate to continue allowing home cultivation.

February 19, 2014 in Medical Marijuana State Laws and Reforms, Recreational Marijuana State Laws and Reforms | Permalink | Comments (2)

Tuesday, February 18, 2014

Using Banks to Police the Marjiuana Industry

As I noted Friday, the Treasury Department just issued new guidance designed to make it easier for banks to serve state-authorized marijuana businesses. In a less-noticed move, the DOJ also issued new guidance urging federal prosecutors not to pursue financial crimes charges against marijuana businesses outside of the circumstances outlined in its August 2013 memo regarding drug crimes. The Treasury guidance and new DOJ memo can be found here.

Banks have long refused to serve the marijuana industry, citing, among other reasons, federal statutes that criminalize financial transactions involving proceeds of illegal activity, including marijuana sales. Sam Kamin and Joel Warner discuss the banking issue here.

Now, I doubt this new guidance will convince many banks to serve the marijuana industry. Among other things, and as I explained in a paper critical of the DOJ’s first marijuana enforcement guidelines (the 2009 Ogden memorandum), such guidance does not shield banks from all of the relevant federal sanctions that serving marijuana businesses might trigger.

But if banks DO end up serving marijuana businesses, it might give a boost to state and federal efforts to police the marijuana industry. In particular, banks could help government officials determine whether the marijuana industry is violating state law and / or engaging in behavior that would justify federal legal action under those 2013 DOJ enforcement guidelines (e.g., selling to minors).

Here’s how. Federal law requires banks to monitor and report on the financial transactions of their clients. Under federal law, for example, banks are required to file “Suspicious Activity Reports” anytime they know, suspect, or have reason to suspect a client is engaging in a financial transaction involving proceeds of illegal activity. The government then uses these SARs to investigate and prosecute federal crimes committed by the clients.

Importantly, the bulk of the new Treasury guidance is actually devoted to reaffirming and clarifying the duty of banks to file SARs on clients engaged in the marijuana industry. It makes abundantly clear that a “financial institution that decides to provide financial services to a marijuana-related business would be required to file suspicious activity reports (“SARs”) . . .  if, consistent with FinCEN regulations, the financial institution knows, suspects, or has reason to suspect that a transaction conducted or attempted by, at, or through the financial institution . . . involves funds derived from illegal activity.” (emphasis added)

To be sure, the reporting requirement could simply overwhelm government agents, since every transaction involving a marijuana business might trigger a new report. Indeed, federal agents are already deluged with SARs; in 2009, for example, banks submitted more than 700,000 SARs (banks in Colorado and Washington submitted more than 17,000 SARs), far too many for the government to investigate them all.

But the new Treasury guidance instructs banks to distinguish between good and bad marijuana businesses. Namely, if a bank believes a marijuana business is abiding state law and avoiding activities the federal government considers objectionable (e.g., selling across state lines), the bank may file an abbreviated SAR, simply by writing “MARIJUANA LIMITED” in the notations section of the report. But if the bank believes the business is flouting state law or engaging in one of those objectionable activities, it is supposed to file more detailed SAR, writing “MARIJUANA PRIORITY” in the notations section and explaining why the bank believes the business deserves closer scrutiny.

The information provided on these SARs could greatly enhance the efforts of federal and state enforcement agencies to police the marijuana industry. Banks won’t necessarily have perfect information about their clients, but they will often possess information that government agencies cannot realistically gather on their own. Indeed, as I’ve discussed at length elsewhere, governments commonly use private parties to gather information they need to enforce their regulations; e.g., without the W-2s filed by employers, the IRS would struggle (mightily) to collect individual income taxes. And requiring banks to further distinguish between law-abiding and law-shirking marijuana business greatly enhances the utility of this information for government agencies.

Knowing that banks will share information with the federal government could have a powerful deterrent effect on marijuana businesses. These businesses need bank services – try operating any business without a checking account, for example. But if they misbehave, banks will shun them, or worse yet, report their misbehavior to the feds. To be sure, some misbehaving businesses will simply avoid the banks altogether. But those businesses will be put at a serious competitive disadvantage vis a vis their more law abiding rivals.

In sum, if the guidance works (a big if), marijuana businesses will get access to banking services; banks will expand their market; and government agencies will get a new watchdog to help police the marijuana industry.  Looks like a win win win.

February 18, 2014 in Criminal justice developments and reforms, Current Affairs, Federal Marijuana Laws, Policies and Practices, Medical Marijuana State Laws and Reforms, Recreational Marijuana State Laws and Reforms | Permalink | Comments (1)

Could marijuana reforms end up making our roadways much safer?

The question in the title of this post might be a bit of foolish wishful thinking on my part, but these passages from this notable new New York Times article provides the foundation for my (undue?) optimism:

[S]cience’s answers to crucial questions about driving while stoned — how dangerous it is, how to test for impairment, and how the risks compare to driving drunk — have been slow to reach the general public.  “Our goal is to put out the science and have it used for evidence-based drug policy,” said Marilyn A. Huestis, a senior investigator at the National Institute on Drug Abuse.  “But I think it’s a mishmash.”

A 2007 study found that 12 percent of the drivers randomly stopped on American highways on Friday and Saturday nights had been drinking.  (In return for taking part in the study, intoxicated drivers were told they would not be arrested, just taken home.)  Six percent of the drivers tested positive for marijuana — a number that is likely to go up with increased availability.  Some experts and officials are concerned that the campaign against drunken driving has not gotten through to marijuana smokers.

“We’ve done phone surveys, and we’re hearing that a lot of people think D.U.I. laws don’t apply to marijuana,” said Glenn Davis, highway safety manager at the Department of Transportation in Colorado, where recreational marijuana use became legal on Jan. 1. “And there’s always somebody who says, ‘I drive better while high.’ ”

Evidence suggests that is not the case. But it also suggests that we may not have as much to fear from stoned driving as from drunken driving.  Some researchers say that limited resources are better applied to continuing to reduce drunken driving.  Stoned driving, they say, is simply less dangerous.

Still, it is clear that marijuana use causes deficits that affect driving ability, Dr. Huestis said.  She noted that several researchers, working independently of one another, have come up with the same estimate: a twofold increase in the risk of an accident if there is any measurable amount of THC in the bloodstream....

The estimate is low, however, compared with the dangers of drunken driving. A recent study of federal crash data found that 20-year-old drivers with a blood-alcohol content of 0.08 percent — the legal limit for driving — had an almost 20-fold increase in the risk of a fatal accident compared with sober drivers. For older adults, up to age 34, the increase was ninefold.

The study’s lead author, Eduardo Romano, a senior research scientist at the Pacific Institute for Research and Evaluation, said that once he adjusted for demographics and the presence of alcohol, marijuana did not statistically increase the risk of a crash. “Despite our results, I still think that marijuana contributes to crash risk,” he said, “only that its contribution is not as important as it was expected.”

The difference in risk between marijuana and alcohol can probably be explained by two things, Dr. Huestis and Dr. Romano both say. First, stoned drivers drive differently from drunken ones, and they have different deficits. Drunken drivers tend to drive faster than normal and to overestimate their skills, studies have shown; the opposite is true for stoned drivers. “The joke with that is Cheech and Chong being arrested for doing 20 on the freeway,” said Mark A. R. Kleiman, a professor of public policy at the U.C.L.A. School of Public Affairs....

Another factor is location. A lot of drinking is done in bars and clubs, away from home, with patrons driving to get there and then leaving by car. By contrast, marijuana smokers tend to get high at home....

All of these facts lead experts like Dr. Romano and Dr. Kleiman to believe that public resources are better spent combating drunken driving. Stoned driving, they say, is best dealt with by discouraging people from mixing marijuana and alcohol — a combination that is even riskier than alcohol alone — and by policies that minimize marijuana’s risk on the road.

For instance, states that legalize recreational marijuana, Dr. Kleiman said, should ban establishments like pot bars that encourage people to smoke away from home. And Dr. Romano said that lowering the legal blood-alcohol concentration, or B.A.C., to 0.05 or even 0.02 percent would reduce risk far more effectively than any effort to curb stoned driving. “I’m not saying marijuana is safe,” he said. “But to me it’s clear that lowering the B.A.C. should be our top priority. That policy would save more lives.”

My supposition based on this article that marijuana reforms could end up making our roadways much safer is a result of two potential impacts of ending pot prohibition: (1) if marijuana reform leads a number of people who would generally go get drunk at a bar to instead now just get stoned at home, the net effect will be safer roads, and (2) if enduring concerns about the impact of marijuana reform leads more policy-makers to focus on highway harms, we might see a greater effort to get much tougher on the enduring public safety disaster that is drinking and driving.

I am not expecting that we will get strong evidence that marijuana reforms end up making our roadways much safer anytime soon, but I am hopeful that researchers like Dr. Romano and Dr. Kleiman continue to stress that our modern alcohol policies and practices now impact highway safety much more than any marijuana reforms are likely to do. And, as these related recent articles also highlight, the media so far is doing a pretty good job defusing the risk of misguided reefer madness when it comes to driving under the influence:

February 18, 2014 in Criminal justice developments and reforms, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (1)

"Inside the Anti-Pot Mindset" of one notable addiction doctor concerned with teenage marijuana use

A helpful colleague alerted me to this interesting article discussing why one Colorado doctor has become a vocal opponent of modern marijuana reforms: 

A Libertarian pot advocate turned opponent, Dr. Christian Thurstone, is at ground zero in the marijuana legalization battle.  The medical director of a large Colorado youth drug treatment clinic; an associate professor of psychiatry at the University of Colorado, Denver; and one of a small number of doctors board certified in general, child and adolescent and addictions psychiatry, he has unique insight into the marijuana momentum sweeping the nation.

Thurstone believes that marijuana legalization is a disaster in the making. He is not shy about saying so. His experience with Colorado toe-in-the-water legalization of marijuana for medical purposes was his epiphany.

He noticed back in 2009, when Colorado began providing "medical" marijuana for its residents, that his clinic's clientele tripled: 95% of his patients came for marijuana addiction.  He learned from his teenage clients that "medical" marijuana was easy to score on the streets. But the potency was increasing from medical grade. Soon his young clients would tell him how marijuana was their preferred medicine for relieving stress and anxiety.

Eventually, these young addicts came in with "medical" marijuana licenses. It was at this point Thurstone felt he needed to act. He wrote a piece for the Denver Post criticizing medical marijuana laws in January 2010 titled "Smoke and Mirrors: Colorado Teenagers and Marijuana." Thurstone made some fighting points. "What Colorado has created is a backdoor way to legalize marijuana, and it has done so in a manner that makes a mockery of responsible medicine," he wrote....

Five years later Thurstone continues his crusade. During an interview on Denver's KUSA television station in January, Thurstone was quoted as saying, "We're seeing a lot more patients, a lot more youth coming to treatment for marijuana addiction....If somebody tries marijuana before the age of 18, one in six develops an addiction to the drug. If someone waits until after 18, the number is more like one in nine."

"We have good reason to believe from both animal and human studies that exposure to marijuana during this important time of brain development can permanently change the way the brain develops," he added. "We have good evidence showing that marijuana exposure in adolescents confers up to an eight-point drop in IQ from age 13 to 38. We know that youth who use marijuana are two times more likely to develop psychosis as young adults."

Predictably, the pro-pot people have skewered him. They have questioned his knowledge, his competence and just about everything else. But Thurstone's critics do make some salient points when they refer to studies by the CDC in 2012 and another by economists at the University of Colorado, Denver and Montana State University in 2011 that indicate marijuana use among teens declined in Colorado after the passage of the comprehensive medical marijuana laws.

Thurstone criticized the studies. Still they are strong evidence in opposition to him. The debate will continue to rage on, and Thurstone will continue his campaign. He is, after all, a convert who went from being in favor of legalizing pot to opposing it.

I find this article and Dr. Thurstone's perspective quite interesting for a number of reasons, especially because it highlights how one's distinct type of involvement with marijuana use and abuse can (unduly?) influence one's views on the benefits and costs of legal reform. I do not doubt Dr. Thurstone's representation that he has a lot more teenage clients seeking help for marijuana addiction, but I do wonder if that reality is evidence of greater teen use of marijuana or just greater willingness of teens (and their parents) to seek treatment for marijuana problems now that involvement with marijuana is not longer treated as a serious criminal justice concern by the state.

Relatedly, though I am not surprised to hear a doctor express concern about hearing teens say that marijuana has become a "preferred medicine for relieving stress and anxiety," I still wonder if there is obviously a better "medicine" for this purpose. Most adults use alcohol to relieve stress and anxiety, but I doubt society wants most kids to instead try that form of self-medication. In addition, big Pharma makes big money marketing to doctors and patients a bunch of prescription drugs to deal with stress and anxiety, but I am not aware of any strong evidence that the solutions to stress and anxiety peddled by big Pharma are ideal for teens, either.

I make these points not to assert that Dr. Thurstone is misguided to be concerns about teenage marijuana use, but rather just to encourage broader reflection on whether the problems and concerns he identifies have been made worse by marijuana reform or rather have just become more visible to him.

February 18, 2014 in Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms | Permalink | Comments (3)

Looks like California will not be voting on marijuana legalization again until 2016

The Los Angeles Times reports this morning that the most prominent of the proposed California legalization ballot measures--backed by the Drug Policy Alliance--will not be going forward this year.  As a result, it looks like Californians will have to wait until 2016 to vote again on marijuana legalization.  Given the cost of running a ballot measure in California and the difficulty in getting younger voters out in mid-term elections, this decision is not surprising.  

From the LA Times:

A coalition of investors and strategists, which played a key role in passing most of the legislation to reform drug laws nationwide since 1996, has decided not to put a pot initiative on the ballot in California this year but will wait to push for legalization until 2016.

Signature-gathering efforts for at least two additional pot measures are circulating, but they do not appear to have the high-profile financial backing needed. So the coalition's decision makes it less likely that marijuana will be legalized in California in the near future.

The group was instrumental in legalizing recreational pot in Washington and Colorado and medical marijuana in Massachusetts in 2012, and it is supporting efforts in November to pass a recreational pot measure in Oregon and a medical cannabis measure in Florida.

The coalition includes the Drug Policy Alliance, which has been involved in drug reform for nearly two decades and is supported by billionaire financier George Soros. It also is allied with the late philanthropist Peter Lewis, who spent $65 million over the last 15 years to change pot laws. Lewis died in November.

The decision not to go forward in 2014 was "very close" and "one that came down to the wire," said Graham Boyd, counsel to Lewis and a leader in working to legalize marijuana in California. "We see this as a trial run or a dress rehearsal for 2016."

February 18, 2014 in Current Affairs, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Monday, February 17, 2014

Is 13 years for possession of a small amount of marijuana constitutionally excessive?

As Doug has blogged about before, reforms and changing attitudes about marijuana laws raise the question of whether long sentences for small-time marijuana offenders may violate the Eighth Amendment.  

Last Friday, a Lousiana appeals court considered this question, upholding a 13 1/3 year sentence for (.pdf) "possession of a small amount of marijuana."  

The defendant's conviction was his fourth for marijuana possession, apparently warranting a mandatory minimum 13 1/3 year sentence under Louisiana's Habitual Offender Law.  At first, the trial court departed from the mandatory minimum and imposed a (still very lengthy) five-year sentence.  The intermediate appeals court upheld the sentence but the Lousiana Supreme Court reversed and vacated the five-year sentence.  On remand, the trial court reluctantly sentenced the defendant to 13 1/3 years.

On appeal, the defendant argued that a 13 year sentence for marijuana possession was constitutionally excessive.  The appeals court disagreed, seemingly finding itself constrained by the prior state Supreme Court ruling:

Although both trial judges clearly found that the mandatory minimum sentence in this case (thirteen and a half years) is grossly disproportionate to the crime in this case (possession of two marijuana cigarettes), particularly when compared to other jurisdictions,1 at the resentencing hearing the trial judge was unable to articulate additional reasons beyond those already found insufficient by the Louisiana Supreme Court to support a downward departure in this case. 

The decision included a concurrence (.pdf), expressing concern about the long sentence:

The facts in this case are simple. The middle-aged defendant has no history of violence. He has an excellent work history and record of supporting his seven children. The trial judge reluctantly imposed the draconian (as it applies to this defendant and this offense) sentence mandated by the multiple offender statute. I point out (as did the trial judge at the resentencing hearing) that the per curiam issued in this case by the Louisiana Supreme Court implicitly ignored or overruled its own precedent in Dorthey, supra, thus leaving this court and the trial court without guidance as to what, if anything, remains of the discretionary authority of the trial and intermediate appellate courts to determine whether a sentence is constitutionally excessive as to a particular defendant or whether such judicial authority is now totally subsumed by the state’s discretionary authority to multiple bill a defendant.

 

This is not to say that I approve of the use or distribution of marijuana, but, like the majority notes, the crimes of which Mr. Noble has been convicted have been related to harm that he primarily and directly has caused to himself.

 

In my view, this is not the case that our courts should be using as the poster child for harsh sentencing. 

For more on Lousiana's harsh approach to marijuana sentencing, see here and here.

February 17, 2014 in Court Rulings, Criminal justice developments and reforms | Permalink | Comments (0)

Friday, February 14, 2014

Federal government issues new guidance to financial industry on how it should deal with the marijuana industry

The marijuana industry got a Valentine’s Day present from the federal government today. The Department of the Treasury Financial Crimes Enforcement Network (FinCEN) just issued guidance on how banks and other financial institutions should deal with the growing marijuana industry. This is a potentially important development, because on its face, federal law would seem to preclude marijuana growers / dealers from opening bank accounts, depositing cash, issuing checks, accepting credit card payments, etc.. The guidance, which can be found here, is obviously premised on the notion that marijuana growers can obtain financial services, notwithstanding federal regulations to the contrary.

I’m sure we’ll have more to say about this issue in the coming days, but here’s a taste of the guidance to whet your appetite:

In assessing the risk of providing services to a marijuana-related business, a financial institution  should conduct customer due diligence that includes: (i) verifying with the appropriate state authorities whether the business is duly licensed and registered; (ii) reviewing the license application (and related documentation) submitted by the business for obtaining a state license to operate its marijuana-related business; (iii) requesting from state licensing and enforcement authorities available information about the business and related parties; (iv) developing an understanding of the normal and expected activity for the business, including the types ofproducts to be sold and the type of customers to be served (e.g., medical versus recreational customers); (v) ongoing monitoring of publicly available sources for adverse information about the business and related parties; (vi) ongoing monitoring for suspicious activity, including for any of the red flags described in this guidance; and (vii) refreshing information obtained as part of customer due diligence on a periodic basis and commensurate with the risk. With respect to information regarding state licensure obtained in connection with such customer due diligence, a financial institution may reasonably rely on the accuracy of information provided by state licensing authorities, where states make such information available.

 As part of its customer due diligence, a financial institution should consider whether a marijuana-related business implicates one of the Cole Memo priorities or violates state law. This is a particularly important factor for a financial institution to consider when assessing the risk of providing financial services to a marijuana-related business. Considering this factor also enables the financial institution to provide information in BSA reports pertinent to law enforcement’s priorities. A financial institution that decides to provide financial services to a marijuana-related business would be required to file suspicious activity reports (“SARs”) as described below.”

February 14, 2014 | Permalink | Comments (0)

Thursday, February 13, 2014

Two physicians highlight why medical science makes it important to re-schedule marijuana

Orrin Devinsky and Daniel Friedman, two physicians at the NYU Comprehensive Epilepsy Center, provide an informative and sober discussion of medical marijuana issues and research problems in this New York Times op-ed headlined "We Need Proof on Marijuana." Here are excerpts:

Many people have heard the story of Charlotte Figi, a young girl from Colorado with severe epilepsy. After her parents began giving her a marijuana strain rich in cannabidiol (CBD), the major nonpsychoactive ingredient in marijuana, Charlotte reportedly went from having hundreds of seizures per week to only two or three per month.  Previously, her illness, Dravet Syndrome, was a daily torture despite multiple high doses of powerful anti-seizure drugs.

As news of Charlotte’s story moved from the Internet to a CNN story by Dr. Sanjay Gupta to Facebook pages, some families of children with similar disorders moved to Colorado, which recently legalized marijuana, to reap what they believe are the benefits of the drug.

Dozens of other anecdotes of miraculous responses to marijuana treatments in children with severe epilepsy are rife on Facebook and other social media, and these reports have aroused outsize hopes and urgent demands.  Based on such reports, patients and parents are finding official and backdoor ways to give marijuana to their children.

But scientific studies have yet to bear out the hopes of these desperate families. The truth is we lack evidence not only for the efficacy of marijuana, but also for its safety. This concern is especially relevant in children, for whom there is good evidence that marijuana use can increase the risk of serious psychiatric disorders and long-term cognitive problems.

The recent wave of state legislatures considering and often approvingmedical marijuana raises significant concerns.  By allowing marijuana therapy for patients with diseases such as difficult-to-control epilepsy, are state legislatures endorsing the medical benefits and safety of a broad range of marijuana species and strains before they have been carefully tested and vetted?  Marijuana contains around 80 cannabinoids (THC is the major psychoactive cannabinoid, largely responsible for the high) and more than 400 other compounds.  The chemical composition of two genetically identical plants can vary based on growing conditions, soil content, parasites and many other factors.

While the language of the legislation may be cautious, there is an implied endorsement of medical benefit for marijuana when a legislature passes a bill and a governor signs it into law, and the tremendous gaps in our knowledge are not effectively conveyed to the public....

Before more children are exposed to potential risks, before more desperate families uproot themselves and spend their life savings on unproven miracle marijuana cures, we need objective data from randomized placebo-controlled trials....

Paradoxically, however, as state governments increasingly make “medical” marijuana available to parents to give to their children, the federal government continues to label the nonpsychoactive CBD — as well as THC — as Schedule 1 drugs.  Such drugs are said to have “no currently accepted medical use in the United States, a lack of accepted safety for use under medical supervision, and a high potential for abuse.”  This designation hamstrings doctors from performing controlled studies.  While it is possible to study Schedule 1 drugs in a controlled laboratory setting, it is extremely difficult to study these substances in patients.  For our study, we keep the CBD in a 1,200-pound safe in a locked room, in a building with an alarm system.

To foster research, we need to change compounds derived from marijuana from Schedule 1 to a less restrictive category.  It is troubling that while few barriers exist for parents to give their children marijuana in Colorado, there are significant federal roadblocks preventing doctors from studying it in a rigorous scientific manner.

When patients have not been able to get successful medical treatment, and they live in a state where the law allows medical marijuana for children — we are not suggesting they smoke the drug — compassionate use is reasonable.  But for the long-term health of Charlotte and other patients like her, we urgently need valid data.

February 13, 2014 in Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research | Permalink | Comments (0)

Wednesday, February 12, 2014

Should states reform marijuana laws via ballot initiative or via statute?

The first states to legalize marijuana all did so via ballot initiative: California voters were the first to legalize medical marijuana (Proposition 215 in 1996), and Colorado and Washington voters share that distinction for recreational marijuana (Amendment 64 and I-502, both in 2012). Indeed, 8 out of the first 10 states to legalize medical marijuana did so via ballot initiative.

In these states, the ballot initiative may have been the only option for reformers. That’s because elected state officials have been leery of embracing the reform movement. But the politics of pot have arguably changed in the past decade. Very large majorities now favor legalizing marijuana for medical purposes, and a slim majority now favors legalizing the drug for recreational purposes as well. To be sure, there are still political risks involved in spearheading marijuana reforms, but it’s not a political third rail (assuming it ever was).

Growing popular support for marijuana reforms raises an interesting question about how states should pursue such reforms in the future. In particular, should they do so via ballot initiatives approved by the people, or via statutes approved by their elected representatives?

Here, I want to stake out a tentative case for pursuing reforms via statute rather than initiative. The post is inspired in part by a claim made by Colorado state leaders on Monday: they’re having more difficulty crafting sensible marijuana regulations than they would have had the state’s legislature (rather than its voters) legalized the drug.

There are a number of standard criticisms of the initiative process that should give state constituencies some pause: voters’ lack of information compared to (at least some) professional lawmakers; legal limitations on how initiatives may be drafted (single subject rules, etc.); and so on. But perhaps the most relevant problem—and the one that seemed to animate those Colorado officials—is the comparative difficulty of fixing “broken” initiatives.

This particular difficulty arises in two stages. The first is the lengthy period between certification (i.e., when proponents are allowed to gather signatures) and the election. To get an initiative on the ballot, proponents must first vet the proposal’s title, language, etc. with the state Secretary of State. This vetting process is primarily designed to clarify proposals, not to fix substantive problems with them. And once the language of an initiative has been certified under this process, it generally cannot be changed before the election. In Colorado, for example, it appears the language of Amendment 64 was settled on June 3, 2011 (the date it was submitted to the SOS), fully 17 months before voters actually approved the measure. It seems safe to assume that proponents and opponents alike might have sought changes, perhaps even major ones, had they been allowed to tinker with the proposal over that lengthy span. By contrast, statutes can be reworked up until the very moment legislators actually vote on them. To be sure, some states, including Colorado, give the state legislature the opportunity (two weeks) to comment upon proposals pre-certification; but such comments are advisory only (i.e., proponents can ignore it), and are received still months before the general election is held.

Difficulty also arises in a second, post-adoption stage. Once an initiative is approved by the voters, it is, generally speaking, much harder to change compared to an ordinary statute approved by the legislature, at least when the initiative is couched as a constitutional amendment (like Amendment 64). To change (or repeal) Amendment 64, for example, the Colorado General Assembly would need to pass a new constitutional amendment by a two-thirds majority and still refer the measure to the voters for approval. In the alternative, the state’s voters could pass another initiative, but getting the new initiative certified would take time, and proponents would have to wait at least 2 years to make the changes because initiatives may only be considered at a general election, which is held only every other year. (Other states impose even more onerous hurdles for revising / repealing initiatives post-adoption.)

California’s experience with Proposition 215 illustrates the dangers of reform via initiative. While Prop 215 gave state residents a right to grow, possess, and consume marijuana for medical purposes, it failed to specify how (if at all) such cultivation, possession, and consumption would (or could) be regulated. And since it was passed nearly 20 years ago, the state legislature has struggled mightily to impose meaningful regulations on the drug. Indeed, California now lacks state-wide controls commonly found in other medical marijuana states, including patient registration requirements. To be sure, the state’s failure to impose such controls stems from a number of factors, but the constitutionally privileged status of Proposition 215 is at least partly to blame. In People v. Kelly, for example, a state appellate court invalidated on its face a very modest quantity limitation (8 ounces per patient) imposed by a 2003 state statute, because the limitation burdened the constitutional right created by Proposition 215. While the California Supreme Court later reversed the remedy (facial invalidation), it left open the door for future as-applied challenges to the (already quite generous) legislative limits.

Of course, some of what I’m describing as “pitfalls” of initiatives might be viewed as advantages by certain reform proponents. After all, the stickiness of initiatives makes it tougher for state legislatures to block or undo reforms approved by the people. And there is an always an argument to be made that reforms adopted directly by the people are more democratically legitimate.

But it will be interesting to see if state legislatures try to forestall resort to ballot initiatives by passing statutory reforms first. Indeed, there are signs the tide may be turning. Of the last 11 states to legalize medical marijuana, for example, 7 did so via statute, one by executive order, but only 3 by initiative.

February 12, 2014 | Permalink | Comments (0)

"High Times, Westword sue Colorado over marijuana ad restrictions"

The title of this post is the headline of this interesting new report on the latest notable legal frontier concerning marijuana law and reforms.  Here are the basics:

The publisher of marijuana magazine High Times has sued the state of Colorado in federal court over the state’s rules preventing recreational cannabis businesses from advertising in most publications.  High Times, along with local weekly magazine Westword, filed the lawsuit on Monday.  It marks the first time anyone has challenged the restrictions in court.

The rules allow recreational marijuana businesses to advertise only in publications that are adult-oriented.  According to the state’s rules, recreational marijuana stores can advertise only in a publication that “has reliable evidence that no more than 30 percent of the publication’s readership is reasonably expected to be under the age of 21.”  There is no such restriction on medical marijuana businesses.

The lawsuit argues the rules, which also restrict television, radio and outdoor advertising, are an unconstitutional restriction of free speech.  The magazines are “chilled from soliciting advertisements from prospective clients and prevented from making revenue from clients who wish to engage in advertising concerning marijuana-related products and services,” the lawsuit’s complaint states....

It is also unclear how the suit’s filing in federal court will impact the judge’s assessment of its claim that the ads concern “lawful activity,” since marijuana is illegal federally. But publications have previously had success in federal court in overturning another Colorado marijuana law — one that required marijuana-themed publications to be kept behind the counter at stores.

February 12, 2014 in Current Affairs, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)