Tuesday, March 30, 2021
New York to be the very latest (and one of the very biggest) states to legalize recreational marijuana
As detailed in this Bloomberg article, headlined "New York Moves to Become Second Largest Pot Market In U.S.," a very big state is about to make marijuana use legal. Here are just some of the highlights:
New York moved toward creating the nation’s second-largest market for legal marijuana when the state Legislature passed Tuesday a bill that would impose special pot taxes and allow the licensing of dispensaries.
The measure (S.854A /A.1248A) would allow cannabis storefronts to open as soon as next year, and would let home growers start cultivating their own pot. It would limit the number of licenses for large corporations, and impose sales and excise taxes that are estimated to eventually bring in about $350 million a year.
The legislation would set in motion automatic expungement of records for people with previous convictions for activities that would no longer be criminalized when marijuana is legalized for use by adults 21 and older.
The Senate voted for the measure 40-23. The Assembly cleared the bill by a vote of 100-49. Both chambers’ votes were largely along party lines.... Governor Andrew Cuomo (D) has said he will sign the bill, which he negotiated with lawmakers in a handshake deal last week.
Once New York’s program is fully rolled out, it’s anticipated to generate tens of thousands of jobs and about $4.2 billion in sales, surpassing Washington state and trailing only California, which had about $4.4 billion in sales last year.
Several lawmakers in both houses, mainly Republicans, brought up concerns with people under the influence of marijuana driving or going to work and using heavy machinery. “This legislation will be a liability,” said state Sen. Mario R. Mattera (R). “Our contractors are against this, the building trades are against this.”
Mattera, who voted “no” on the bill, also expressed concern over the dangers of drug use, particularly for youth. He described experiencing this problem in his own family, and called marijuana a “gateway” drug. “This is a disaster waiting to happen,” he said.
The legislation includes two kinds of new taxes: a 13% sales tax, with the money raised divided between the state (9%) and localities (4%), plus a distributor excise tax of as much as 3 cents per milligram of THC, the active ingredient in cannabis, using a sliding scale based on the type of product and its potency.
Tax revenue would be used to run and oversee the state cannabis program, with the remaining money divided between programs that try to help people rebuild their lives after marijuana possession arrests, as well as their communities. The revenue would also go to education and drug treatment in the state. Cities, towns, and villages would have until the end of this year to opt out from having dispensaries and pot cafes in their communities.
Up to 3 ounces of cannabis and 24 grams of cannabis concentrate would be legally permitted for personal possession outside of the home. Up to 5 pounds of cannabis will be allowed in a private residence, as long as it’s in a secure location out of the reach of those under age 21, according to the bill.
The proposal allows for the personal cultivation of cannabis, with an adult 21 or older permitted to have up to three mature plants and three immature plants. Per household, the limit would be six of each kind of plant. Home cultivation would become legal in six months for medical marijuana patients and legal for others no later than 18 months after the first shops open, dependent upon state regulations....
The bill would allow pot delivery services, with each licensee able to have the equivalent of up to 25 full-time employees. And it would allow for on-site pot consumption, as long as the cannabis cafes aren’t within 500 feet of a school, or 200 feet from a house of worship.
New York lawmakers also baked social and economic equity proposals into the legislation. A single company wouldn’t be allowed to handle all parts of a recreational transaction — cultivation, processing, distributing, and dispensing — with the exception of micro businesses. A cultivator or processor would be barred from having a direct or indirect financial interest in a retail dispensary.
A state Cannabis Control Board and Office of Cannabis Management would be required to take small businesses into consideration and prioritize “social and economic equity” applicants from communities disproportionately impacted when marijuana was illegal. Priority for licenses also would go to those who make less than 80% of their county’s median income, and those convicted in the past of a marijuana-related offense.
The bill sets a goal of allocating half of the adult-use licenses to a minority- or woman-owned business, distressed farmers, service-disabled veterans, or “social and economic equity” applicants. The state would also create business incubator programs for social equity applicants, make low- and zero-interest loans available to them, and would be permitted to waive their licensing fees, according to the bill.
Thursday, March 25, 2021
I have been recently thinking about metrics used to assess marijuana reform, and this recent post at the Just Taxes blog from the Institute on Taxation and Economic Policy flags a new benchmark in a notable metric. The piece by Carl is titled "State and Local Cannabis Tax Revenue Jumps 58%, Surpassing $3 Billion in 2020," and here are excerpts:
Cannabis taxes are a small part of state and local budgets, clocking in at less than 2 percent of tax revenue in the states with legal adult-use sales. But they’re also one of states’ fastest-growing revenue sources.
Powered by an expanding legal market and a pandemic-driven boost in cannabis use, excise and sales taxes on cannabis jumped by more than $1 billion in 2020, or 58 percent, compared to a year earlier. In total, these taxes raised more than $3 billion last year, including $1 billion in California alone. These are the findings of an ITEP analysis of newly released tax revenue data from the 10 states where legal sales of adult–use cannabis took place last year.
About a third (36 percent) of the nation’s cannabis tax revenue growth occurred in California as the state’s relatively new adult-use market continued to gain its footing after a somewhat sluggish start. The next most significant source of new revenue was Illinois, which started legal retail cannabis sales on Jan. 1, 2020.
States with more established markets such as Washington, Colorado, Oregon, and Alaska also saw significant growth in revenue, likely driven in part by an increase in cannabis use during a time of stay-at-home orders and self-quarantining. The slowest year-over-year growth, by contrast, occurred in Nevada as would-be tourists wary of COVID steered clear of Las Vegas. Nevada’s economy and state budget have been among the hardest hit in the nation during the pandemic. Even so, Nevada’s cannabis tax revenues rose 14 percent compared to a year earlier.
While the pandemic has taken a significant toll on state and local budgets overall, its impact on cannabis taxes (and alcohol taxes, for that matter) appears to have mostly been a positive one. Total excise and sales tax revenue from cannabis during the first six months of the pandemic (March through August 2020) shot up by 44 percent compared to the previous six-month period. That’s compared to 17 percent growth in the six months prior. The spike in revenue is clearly visible in the figure below. Notably, it occurred not just in the states with new markets like Illinois and Michigan where rapid growth would have been expected even under normal circumstances, but also across the five states with more established legal markets that launched between 2014 and 2017.
March 25, 2021 in History of Marijuana Laws in the United States, Medical Marijuana Data and Research, Recreational Marijuana Data and Research, Taxation information and issues | Permalink | Comments (0)
Monday, March 22, 2021
I have been privileged to have the opportunity to teach a seminar on marijuana reform nearly every year at The Ohio State University Moritz College of Law since way back in Fall 2013. This opportunity in part helped lead to (a) the creation of this blog in 2013, (b) the establishment of The Ohio State University's Drug Enforcement and Policy Center (DEPC) in 2017, and (c) the publication of the text Marijuana Law and Policy by Carolina Academic Press in 2020.
More broadly, teaching a seminar on marijuana reform multiple times over the last decade has been so interesting (and a lot of fun). Recent years have brought historic policy changes expressed in formal laws and market practices, in Ohio and nationwide, and law students have brought great energy and insights into the classroom as we work together to figure out the realities of the past, present and future of reform. (Some of the great work by students in my more recent marijuana reform seminars now appear in the DEPC's student paper series).
When I started teaching my marijuana reform class in 2013, I was not surprised to learn that there were few other courses like it and I knew I would need to assemble my own materials for classroom use. But now there are three law school texts dedicated to this topic (and another focused on illegal drugs), and yet it still seems as though there are relatively few classes in the typical law school curriculum focus on either the "war on drugs" generally or the changing legal landscapes of marijuana policy in particular.
The Drug Enforcement and Policy Center has been engaged since its founding on how law schools currently approach these issues and to identify how drug policy and law could be better incorporated into law school curricula. In a April 2019 workshop, DEPC assembled 20+ legal scholars who work in this space to begin identifying law school courses currently taught and the primary obstacles to teaching this subject matter. Most recently, DEPC conducted a third survey of all accredited law schools in the U.S. on this topic. The results show that the vast majority of law schools do not teach courses touching on drugs or the evolving legal structures around cannabis, and this is true even for law schools located in states with legalized cannabis markets. (I am pleased that the Moritz College of Law is an exception, and I sincerely believe both law faculty and law students would benefit greatly from more attention to these issues in the law school curricula.)
In an effort to support more law schools offering law course dealing with drug-related issues and marijuana reform topics, DEPC has created this ever-developing website to host teaching resources, reports, course information and other content. As we continue to build out these resources, we’d like to get feedback as well as build a community of instructors teaching in this area.
Do you teach (or would like to teach) a law course touching on drugs or the legal structures around cannabis? Tell us about yourself and share your interest in future programing. Take the short survey at go.osu.edu/teaching-drugs-survey.
Friday, March 19, 2021
Marijuana use still proving hurdle to working in White House despite Prez Biden's advocacy for reform
As reported in this Daily Beast piece,"dozens of young White House staffers have been suspended, asked to resign, or placed in a remote work program due to past marijuana use, frustrating staffers who were pleased by initial indications from the Biden administration that recreational use of cannabis would not be immediately disqualifying for would-be personnel, according to three people familiar with the situation." Here is more:
The policy has even affected staffers whose marijuana use was exclusive to one of the 14 states — and the District of Columbia — where cannabis is legal. Sources familiar with the matter also said a number of young staffers were either put on probation or canned because they revealed past marijuana use in an official document they filled out as part of the lengthy background check for a position in the Biden White House.
In some cases, staffers were informally told by transition higher-ups ahead of formally joining the administration that they would likely overlook some past marijuana use, only to be asked later to resign. “There were one-on-one calls with individual affected staffers — rather, ex-staffers,” one former White House staffer affected by the policy told The Daily Beast. “I was asked to resign.”...
In response to this news story, White House press secretary Jen Psaki tweeted out on Friday an NBC News report from February stating that the Biden administration wouldn’t automatically disqualify applicants if they admitted to past marijuana use. Psaki said of the hundreds of people hired in the administration, only five who had started working at the White House are “no longer employed as a result of this policy.”
Psaki didn’t note how many had been disqualified for a White House job before actually starting, nor did she note how many were suspended or relegated to remote work, but she did send an additional statement to The Daily Beast on Friday. “In an effort to ensure that more people have an opportunity to serve the public, we worked in coordination with the security service to ensure that more people have the opportunity to serve than would not have in the past with the same level of recent drug use. While we will not get into individual cases, there were additional factors at play in many instances for the small number of individuals who were terminated,” Psaki said.
The White House said in February it intended — for some candidates — to waive the requirement that all potential appointees in the Executive Office of the President be able to obtain a “top secret” clearance. The rules about past marijuana use and eligibility for the clearance vary, depending on the agency: For the FBI, an applicant can’t have used marijuana in the past three years; at the NSA, it’s only one. The White House, however, largely calls its own shots, and officials at the time told NBC News that as long as past use was “limited” and the candidate wasn’t pursuing a position that required a security clearance, past use may be excused.
Asked about the policy and its effect on the administration’s staffing Thursday night, a White House spokesperson disputed the number of affected staff, but said the Biden administration is “committed to bringing the best people into government — especially the young people whose commitment to public service can deepen in these positions,” and noted that the White House’s approach to past marijuana use is much more flexible than previous administrations....
Some of these dismissals, probations and remote work appointments could have potentially been a result of inconsistencies that came up during the background-check process, where a staffer could have, for example, misstated the last time they used marijuana. The effect of the policy, however, would be the same: The Biden White House would be punishing various staffers for violating thresholds of past cannabis use that would-be staffers didn’t know about....
The Biden administration has attempted to modernize the White House’s personnel policy as it relates to past marijuana use, which has disproportionately affected younger appointees and those from states where marijuana has been decriminalized or legalized. (Marijuana, of course, remains illegal in the eyes of the federal government.) The number of allowable instances of past marijuana use was increased from the Trump and Obama administrations — a reflection of the drug’s widespread use — and the White House approved limited exemptions for candidates whose positions don’t require security clearances. Those employees, like all those at the White House, must commit to not using marijuana while serving in the federal government and must submit to random drug testing.
The president, however, remains the final authority on who can receive a clearance, and the chief executive can overrule agency judgments on eligibility, as President Donald Trump did when he granted his son-in-law Jared Kushner a top-secret clearance over the objections of the intelligence community and his own counsel.
Thursday, March 18, 2021
The title of this post is the title of this new paper recently posted to SSRN and authored by Nicholas Sgroi, a 2L at The Ohio State University Moritz College of Law. (This paper is yet another in the on-going series of student papers supported by the Drug Enforcement and Policy Center.) Here is this latest paper's abstract:
America is currently experiencing an economic recession plagued with high unemployment and low economic output. The Alliance for Sensible Markets and other proponents of cannabis legalization think that the cannabis industry can be extremely helpful in recovery through an interstate cannabis commerce plan. This plan could potentially pump in immediate waves of investment and create thousands of jobs. The plan lays out two steps: (1) have at least two states enter into an interstate compact for cannabis and (2) obtain congressional approval for the interstate compact. This article will look at the trends of a few states; speak about the benefits of the plan; touch on the consequences; and talk about the chances of this plan working, especially with the 2020 election approaching. Additionally, the article will tackle questions that face the plan if those two steps are met, such as questions on banking laws, tax laws, and whether psychoactive cannabis will be regulated as a commodity crop or if states will maintain their own existing regulatory framework.
Wednesday, March 17, 2021
"Inequitable Marijuana Criminalization, COVID-19, and Socioeconomic Disparities: The Case for Community Reinvestment in New York"
The title of this post is the title of this notable new report released today by the Drug Policy Alliance and the Public Science Project at the Graduate Center, CUNY. Here are parts of the 30-page report's executive summary:
The prevalence of substantial racial disparities in marijuana arrests is well established. In 2018, New York City Comptroller Stringer released a report documenting how disparities in marijuana policing fall along both racial and socioeconomic lines. This research expands upon that work in two important ways:
1. We explore whether the same disparities occurred in other areas of New York State, including Syracuse, New Rochelle, and Buffalo.
2. We additionally analyzed social vulnerability and COVID-19 rates to assess whether the communities who have been most impacted by marijuana policing are also disproportionally impacted by COVID-19.
New York City, New Rochelle, Syracuse, and Buffalo were selected to present a holistic picture of marijuana prohibition, racial inequities in arrests, and health disparities across the state. The four case studies are all in the top seven largest cities in New York State and were chosen to represent different regions within the state, as well as economic, educational, and racial diversity.
In each city we identified the zip codes with the highest and lowest rates of marijuana-related arrests and compared averages between the two groups on a number of indicators. For ease of reading, we use the terms “high marijuana arrest zip codes” and “low marijuana arrest zip codes” to refer to these groupings. However, there were two exceptions to this procedure. First, due to New Rochelle’s small size, there were not enough zip codes to generate averages, so the data presented reflects the single zip codes with the highest and lowest arrest rate. Second, as the NYPD data on marijuana arrests is organized by precinct rather than zip code, we analyzed the data for New York City by precinct.
Arrests and Race
The analysis suggests that similar disparities in marijuana policing are occurring in New York City, Syracuse, New Rochelle, and Buffalo. In all four cities, marijuana arrests are disproportionately concentrated in communities of color. In Syracuse, which reports the home zip code of those arrested, rather than where the arrest occurred, marijuana arrests disproportionately affect those who live in communities of color. People of color are consistently over-represented in marijuana arrests, and areas with the highest marijuana arrest rates also tend to have proportionally larger populations of color.
Social Vulnerability Index
The Social Vulnerability Index (SVI) is a measure created by the Centers for Disease Control that uses 15 social factors (e.g. poverty, lack of vehicle access, crowded housing) in order to assess the ability of a community to prevent suffering and loss in the wake of disaster and disease. As it is difficult to assess the numerous impacts of COVID-19 on a community, we compared SVI scores for the high and low marijuana arrest zip codes in each city. High marijuana arrest areas consistently ranked higher on SVI scores than low marijuana arrest zip codes, indicating increased vulnerability during public health emergencies.
Median Household Income, Poverty, and SNAP
Across all four cities, the high marijuana arrest zip codes demonstrate more socioeconomic deprivation compared to the low marijuana arrest zip codes. In each city, the average poverty rate was notably higher among the high marijuana arrest zip codes. High marijuana arrest zip codes consistently have nearly half the median household income of the low marijuana arrest zip codes (except for New Rochelle, where the disparity is even greater). Across all four cities, the average percentage of families receiving SNAP (Supplemental Nutrition Assistance Program) in high marijuana arrest zip codes was at least 3 times greater than in low marijuana arrest zip codes.
Homeownership, and Median Home Value
Socioeconomic disparities were also evident in housing. In every city, we observed that high marijuana arrest zip codes had both lower rates of home ownerships and lower median home values than low marijuana arrest zip codes.
COVID-19 Rates and Health Insurance
Across all cities, we found higher average COVID-19 positivity rates among the high marijuana arrest zip codes compared to the low marijuana arrest zip codes. However, it should be noted that we were unable to find data for three zip codes in Syracuse due to the lack of standardized reporting of COVID-19 data across New York State. Even so, the connection between racial and social inequities and COVID-19 has been thoroughly documented elsewhere. We also found that, on average, a slightly larger percentage of people under 65 are uninsured among the high marijuana arrest areas than the low marijuana arrest zip codes.
Despite regional differences, New York City, New Rochelle, Syracuse, and Buffalo demonstrate similar trends. People of color are over-represented in marijuana arrests, and high marijuana arrest zip codes are characterized by larger communities of color and greater socioeconomic deprivation. There is also evidence to suggest that high marijuana arrest zip codes are more severely impacted by COVID-19.
Saturday, March 13, 2021
The title of this post is the title of this paper recently posted to SSRN authored by W. Michael Schuster and Robert C. Bird. Here is its abstract:
Overcoming its checkered past and stringent regulation, cannabis is quickly becoming a highly lucrative consumer product. Accompanying this rapid decriminalization is crippling legal uncertainty, as vague statutory language, sporadic backsliding, presidential indecision, and inconsistent enforcement have introduced substantial and unnecessary legal and compliance risks. This combination of a novel industry and its ambiguous legal environment is not only ripe for reform, but also illuminates how firms can respond strategically to high levels of legal uncertainty.
After a review of the controversial history of cannabis and the legal uncertainty that pervades the industry, the manuscript shows how uncertainty drives firms to pursue risky legal strategies. This manuscript shows that firms under the stress of uncertainty respond by either aggressively leveraging their legal knowledge to capture value or attempting to circumvent the legal environment altogether. Both pathways of legal strategy impose unnecessary volatility on cannabis firms.
The manuscript then highlights how legal uncertainty drives legal strategy in a discrete legal environment – the federal government’s refusal to register marks for goods that are illegal under federal law—including most cannabis goods. We uncover five distinct legal strategies used by cannabis firms, with each strategy responding to a different combination of legal uncertainties. Finally, eschewing an unrealistic proposal for immediate uniformity, we propose pragmatic and achievable reforms that would significantly reduce legal uncertainty for firms while not upsetting further the already chaotic legal environment of cannabis regulation.
Wednesday, March 10, 2021
This New York Times article, headlined "Mexico Set to Legalize Marijuana, Becoming World’s Largest Market," reports on the latest reform developments from south of the border. Here is how the piece gets started:
Lawmakers in Mexico approved a bill Wednesday night to legalize recreational marijuana, a milestone for the country, which is in the throes of a drug war and could become the world’s largest cannabis market, leaving the United States between two pot-selling neighbors.
The 316-to-129 vote in Mexico’s lower house, the Chamber of Deputies, came more than two years after the Mexican Supreme Court ruled that the country’s ban on recreational marijuana was unconstitutional and more than three years after the country legalized medicinal cannabis.
The chamber approved the bill in general terms Wednesday evening before moving on to a lengthy discussion of possible revisions introduced by individual lawmakers. In its final form, though, the measure is widely expected to sail through the Senate before being sent to President Andrés Manuel López Obrador, who has signaled support for legalization.
The measure, as of Wednesday night, would allow adults to smoke marijuana and, with a permit, grow a small number of cannabis plants at home. It would also grant licenses for producers — from small farmers to commercial growers — to cultivate and sell the crop.
“Today we are in a historic moment,” said Simey Olvera, a lawmaker with the governing Morena party. “With this, the false belief that cannabis is part of Mexico’s serious public health problems is left behind.”
If enacted, Mexico would join Canada and Uruguay in a small but growing list of countries that have legalized marijuana in the Americas, adding further momentum to the legalization movement in the region. In the United States, Democrats in the Senate have also promised to scrap federal prohibition of the drug this year.
For “Mexico, given its size and its worldwide reputation for being damaged by the drug war, to take this step is enormously significant,” said John Walsh, director of drug policy for the Washington Office on Latin America, a U.S. advocacy group. “North America is heading toward legalization.”
Monday, March 8, 2021
The title of this post is the title of a recent Heritage event that can now be heard in podcast form here. Here is how the event is described:
People driving under the influence of drugs has been a major problem in America for decades, with alcohol being the most common drug used. The recent opioid-abuse epidemic, along with the decision by a large number of states to legalize cannabis for medical or recreational use, has made the problem of driving under the influence of drugs even more urgent. To save lives, the issue must be understood and addressed.
Join us for a discussion with four former White House “Drug Czars” on the importance of this problem, potential new challenges as more states legalize cannabis and more individuals engage in polydrug use, and how the federal government and states should respond.
Saturday, March 6, 2021
This new and extended Law360 piece authored by Julie Werner-Simon provides an interesting accounting of the landscape of marijuana legalization. The piece is titled "3 Degrees Of Legalization Show True Prevalence Of Cannabis," and merits a full review (in part because it has a number of original graphics of interest). Here are excerpts (along with one of the graphics):
Across the political spectrum and the wide swath of the U.S. — including far-flung territories — just shy of 7 million of America's almost 335 million inhabitants live in a place where marijuana usage is completely illegal.
Although marijuana has been federally illegal for 50 years since the administration of President Richard Nixon and the implementation of the Controlled Substances Act, that has not stopped U.S. states and territories from taking things into their own hands.
Marijuana legality across America is more endemic, with graduated levels of permissiveness than the binary state-legal adult recreational and medical marijuana delineations first reveal....
First-degree states and territories are those which have legalized adult recreational use. In first-degree regimes, adults of the state or territory can legally purchase marijuana without the need to show any medical preconditions.
Second-degree states and territories are places that have legalized, implemented or established implementation dates for medical marijuana programs, which provide broad patient access to marijuana for the treatment of multiple medical conditions. Second-degree programs vary enormously but, generally, second-degree states and territories permit patients at a minimum, to possess and smoke medical marijuana.
In America, second-degree regions ultimately evolve into places having coexisting adult use first-degree programs....
Rounding off the trifecta are the third-degree states that comprise an even smaller number of places with severely limited access, or SLA, to medical marijuana products. This third category, which includes only states and no territories, typically permits restricted marijuana use to a limited number of universities or research institutions or for limited medical purposes by a patient population comprised primarily of those with incurable diseases, seizure disorders or epilepsy.
Some, but not all, SLA states cap the quantity of THC in any medical use of the marijuana product in that state, or restrict the amount a patient can receive in a set period, and some make it illegal to smoke medically authorized marijuana product.
SLA status, the third-degree designation, is often a precursor to becoming a second-degree medical use state. SLA communities can become accustomed to having restricted programs, with some even referring to their SLAs as medical marijuana programs....
There is no dispute about the distinctions between first-degree and second-degree states, but the muddled lines between what constitutes second-degree and third-degree regimes cause the variations in the answer to the question: Where is marijuana illegal?
From a visitor's perspective, the bulk of SLA states would reasonably appear to be fully illegal when, in fact, there are narrow legal grounds for some to use or study marijuana in those states.
Applying the three-degree analysis, there are only three states and one U.S. territory where marijuana is entirely illegal, that is, verboten for use in any form. These are Idaho, Nebraska, Kansas and American Samoa. That's fewer than 7 million people in all of America living in places without some degree of marijuana legalization....
With all this activity on the state and territory level, the marijuana investment bonanza, as well as the advent of a new administration and an ever-so-slight Democratic majority in the U.S. Senate, surely a thawing of the federal prohibition of marijuana is not far behind?
Not so fast and not tomorrow. There will be no early groundhog spring for marijuana in 2021. The life and death consequences of COVID-19 have made it America's top priority; marijuana legalization has taken a backseat. Yet there will likely be incremental actions occurring after COVID-19 fiscal relief and increased vaccination levels and before the 2022 midterms....
Mandeep Trivedi, a well-regarded corporate valuator of marijuana businesses has said, where marijuana is concerned "[t]he almighty dollar is an almighty force." It is the dollar that has caused inroads into the once impregnable view that supporting marijuana legalization is political suicide.
All economic indices show that marijuana legalization generates oodles of much-needed cash for governments. The experiences of the legalized states, from the first- through the third-degree, prove this maxim. Federal government coffers depleted by COVID-19 costs, the payment of stimulus relief funds and the 2018 federal tax cuts are in need of replenishment. Marijuana can make this happen.
There are 20 months until the 2022 midterms. The soil is tilled for receptivity to a more mature marijuana industry operating under coexisting federal and state regulation and taxation systems. Even for the most conservative of political actors, this groundswell will be hard to resist. Marijuana has gone mainstream; its tie-dye stigma has diminished while action from the federal government has been incentivized. Federal marijuana legalization will ultimately have its day.
Thursday, March 4, 2021
The title of this post is the title of this notable new article authored by Robert Mikos now available via SSRN. Here is its abstract:
A growing number of states have authorized firms to produce and sell cannabis within their borders, but not across state lines. Moreover, many of these legalization states have barred nonresidents from owning local cannabis firms. Thus, while cannabis commerce is booming, it remains almost entirely intrastate. This Essay provides the first analysis of the constitutionality of state restrictions on interstate commerce in cannabis. It challenges the conventional wisdom that the federal ban on marijuana gives legalization states free rein to discriminate against outsiders in their local cannabis markets. It also debunks the justifications states have proffered to defend such discrimination, including the notion that barring interstate commerce is necessary to forestall a federal crackdown on state-licensed cannabis industries.
The Essay concludes that the restrictions legalization states now impose on interstate commerce in cannabis likely violate the Dormant Commerce Clause (DCC). The Essay also examines the ramifications of this legal conclusion for the future of the cannabis market in the United States. It suggests that without the barriers that states have erected to protect local firms, a new breed of large, national cannabis firms concentrated in a handful of cannabis-friendly states is likely to dominate the cannabis market. This development could dampen the incentive for new states to legalize cannabis and further diminish minority participation in the cannabis industry. To address these concerns, congressional legislation may be necessary, because individual states have only limited capacity to shape the national market and the firms that compete therein.
Wednesday, March 3, 2021
US Senate caucus releases notable new report, "Cannabis Policy: Public Health and Safety Issues and Recommendations"
As reported in detail via this Marijuana Moment piece, headlined "Senate Marijuana Report Highlights Legalization’s Popularity And Risks, While Criticizing DEA Research Barriers," this notable new report on marijuana policies was released today by the Senate Caucus on International Narcotics Control. Here is part of the story:
A U.S. Senate drug caucus released a report on Wednesday that recognizes broad voter support for marijuana legalization and expresses criticism of existing policies that inhibit research into cannabis, taking direct aim at the Drug Enforcement Administration’s (DEA) role in impeding studies. But because of what they see as the risks of cannabis use, lawmakers also want the federal government to consider recommending THC caps on state-legal products.
Sens. Dianne Feinstein (D-CA) and John Cornyn (R-TX) co-chair the Senate Caucus on International Narcotics Control, which released the document, and neither are generally viewed as allies of the legalization movement. The report, which was first reported by Politico, largely focuses on the need to boost research into the effects of cannabis, with members voicing concern about issues such as impaired driving, THC potency and marijuana use by vulnerable populations. At the same time, however, it acknowledges the “increasing popularity” of legalization and outlines some of the benefits of enacting the policy change.
“Despite its increasing popularity—91 percent of Americans believe cannabis should be legalized for either medical or recreational purposes—cannabis remains illegal at the federal level,” it says. “Nonetheless, the U.S. cannabis industry is thriving. Cultivation and sales have largely shifted from Mexican cartels to U.S.-based businesses operating in licit, state markets (though a sizeable [sic] black market remains).”
“Experts estimate the licit cannabis market employs more than 200,000 individuals and will produce as much as $24 billion in profits 2025, nearly $9 billion of which will be from medical cannabis sales,” the caucus wrote.
The report discusses at length the need for further research into marijuana and points to a number of barriers — including the Drug Enforcement Administration’s position on international treaties — that have stymied studies into the plant. Members wrote that because “cannabis may hold both promise and peril” it is “imperative to increase the research base associated with cannabis, and that this research should be used to guide future policy so that appropriate regulations can be put in place to mitigate any negative public health consequences.”...
Overall, the report identifies five issues around marijuana policy and offers corresponding recommendations. It is far from universally favorable to cannabis reform—with much discussion on risks associated with impaired driving and youth consumption, for example—but it reflects how the rhetoric around marijuana is continuing to evolve in Congress, even in traditionally conservative panels like the one that produced the new document.
“Despite growing acceptance and accessibility of this drug and its derivatives, there is still much we don’t know about the effects of marijuana usage,” Cornyn said in a press release. “It’s critical for policymakers to understand the public safety implications of increased marijuana use before diving in to the complex and difficult job of changing federal policy, and it is my hope that this report will help inform these important policy decisions in the future.”
Feinstein said that she hopes the report will “speed final passage” of a marijuana research bill she introduced alongside Sen. Chuck Grassley (R-IA) in February. She said the legislation, an earlier version of which cleared the Senate toward the end of last year but which was not merged with a separate House-passed bill in time to be enacted, would mark “an important step to ensure that Congress is well-informed about this policy area.”
As reported in this AP article, a "man who was prescribed medical marijuana to help with back pain has won a second victory in his legal battle over whether workers’ compensation insurance can reimburse him for the cost, the New Hampshire Supreme Court determined Tuesday." Here is more:
The court ruled in favor of Andrew Panaggio, saying “we are not persuaded” by the state’s arguments that an insurance carrier, under the federal Controlled Substances Act, could be prosecuted for aiding and abetting a marijuana possession crime if it has to reimburse Panaggio. In 2019, the court had ruled that a state labor appeals board was wrong to determine that workers’ compensation insurance couldn’t reimburse Panaggio. But the federal law question was unresolved.
Panaggio had hurt his back at work and was approved by the state Department of Health and Human Services to participate in a therapeutic cannabis program in 2016. He used the medical marijuana to treat ongoing pain and sought reimbursement through workers’ compensation....
The New Hampshire court noted Tuesday that other courts have considered whether the Controlled Substances Act preempts a state order requiring medical marijuana reimbursement, and that the results are mixed. In a 2018 case in Maine, the state supreme court ruled against a paper mill worker who was disabled after being hurt on the job in 1989. But last year, in New Jersey, an appeals court ruled that a contractor must reimburse a former employee for the cost of medical marijuana that he uses to treat pain from a work-related injury.
At least five states have found medical marijuana treatment is reimbursable under their workers’ compensation laws, and other states have proposed similar laws, according to the National Council on Compensation Insurance. Several states have passed laws excluding medical marijuana treatment from workers’ compensation reimbursement.
The full unanmous ruling from the Supreme Court of New Hampshire is available at this link.
Monday, March 1, 2021
The folks at Marijuana Moment have this new lengthy piece, headlined "Biden AG Pick Restates Pledge To Respect State Marijuana Laws, In Writing," reporting on AG Merrick Garland's written responses to questions from Senators about marijuana enforcement. Here are some highlights:
President Joe Biden’s nominee to serve as U.S. attorney general has reiterated in written testimony to multiple senators that he does not feel the Department of Justice should be using its resources to prosecute people who are acting in compliance with state marijuana laws....
“I do not think it the best use of the Department’s limited resources to pursue prosecutions of those who are complying with the laws in states that have legalized and are effectively regulating marijuana,” he said in response to a question from Ranking Member Chuck Grassley (R-IA) about how he would navigate the federal-state marijuana policy conflict. “I do think we need to be sure, for example, that there are no end runs around the state laws by criminal enterprises, and that access is prohibited to minors.”
That view is consistent with policies put into place under Obama — known as the Cole memorandum — and then rescinded by President Donald Trump’s first attorney general, Jeff Sessions.
Pressed on whether he generally supports efforts to decriminalize or legalize cannabis, the attorney general nominee didn’t give a specific answer but gave an answer focused solely on the harms of current punitive policies.
“Criminalizing the use of marijuana has contributed to mass incarceration and racial disparities in our criminal justice system,” he wrote, “and has made it difficult for millions of Americans to find employment due to criminal records for nonviolent offenses.”...
But while Garland’s responses reflect a friendly attitude toward cannabis policy as far as advocates are concerned, he did say in response to a question from Sen. Ted Cruz (R-TX) about prosecutorial discretion that “the Executive Branch cannot simply decide, based on a policy disagreement, that it will not enforce a law at all.”
Another Grassley question noted Biden’s ongoing opposition to federal legalization and support for decriminalizing cannabis possession and expunging prior marijuana records. He asked whether Garland sees “any contradictions” in that policy stance.
“As I testified at my hearing, it is important to focus our attention on violent crimes and other crimes that greatly endanger our society, and prosecutions for simple marijuana possession are not an effective use of limited resources,” the judge replied. “As I testified, we have seen disparate treatment in these prosecutions that has had a harmful impact on people and communities of color, including stymied employment opportunities and social and economic instability.”