Marijuana Law, Policy & Reform

House Judiciary Committee, by vote of 26-15, approves MORE Act to deschedule marijuana and thereby end federal prohibition

After what reportedly was quite an intriguing discussion, this afternoon the House Judiciary Committee approved  the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act, H.R. 3617, with 26 votes in favor (24 Democrats, 2 Republicans) and 15 votes (all Republicans) against. The MORE Act, as noted in this post from DEC 2020, received a full favorable vote from the House. But at that time, everyone knew there would be no time and likely little interest in Senate action before the Congress term ended. Now there is ample time for the Senate to pass MORE or another like bill, though I think there is considerable uncertainty about there being enough votes for reform.

In case you forgot, in addition to removing marijuana from the prohibitions created by the Controlled Substances Act, the MORE Act would expunge non-violent federal marijuana convictions and support state efforts to do the same, while also providing provide resources and support for minority owned marijuana businesses and creating other reinvestment programs for communities that have been adversely impacted by marijuana prohibitions.  Here is a bit more from this Marijuana Moment piece:

Although most Republicans who spoke argued against the bill, Rep. Matt Gaetz (R-FL), who is a cosponsor of it, made the case for reform.

“I am a proud co-sponsor of the MORE Act because the federal government has screwed up marijuana policy in this country for a generation,” he said. “We lied to people about the effects of marijuana. And then we used marijuana as a cudgel to incarcerate just wide swaths of communities, and particularly in African-American communities.”

“We cannot honestly say that the war on drugs impacted suburban white communities in the same way it affected urban black communities. We can’t say that marijuana enforcement was happening the same way on the corner than it was happening in the fraternity house,” he said. “We have an opportunity to fix that problem. The war on drugs, much like many of our forever wars, has been a failure. If there’s been a war on drugs, drugs have won that war.”

However, he expressed certain concerns about provisions of the legislation such as the proposed federal excise tax on cannabis sales. While Gaetz also said that while he supports the MORE Act, he doesn’t feel it stands a chance in the Senate and recommended advancing more modest reform.

While the legislation has largely stayed intact compared to the prior version that passed the chamber last year in a historic vote, there were some modest revisions that were incorporated upon its reintroduction in May.

The panel on Thursday considered additional changes before moving the measure forward, although much of the time was spent debating unrelated issues such as COVID-19 vaccines, abortion policy and protests against police violence.

Rep. Thomas Massie (R-KY) sought to remove the bill’s tax provisions as well as grant funds it would create to help repair the harms of the war on drugs.

"Ohio Medical Marijuana Control Program at Three Years: Evaluating Satisfaction and Perception"

The title of this post is the title of this terrific new report authored by Jana Hrdinova of the Drug Enforcement and Policy Center (DEPC) at The Ohio State University Moritz College of Law.  This DEPC webpage provides this overview:

Summary

H.B 523, enacted by the Ohio General Assembly, became effective in September 2016 and made Ohio the 25th state to adopt a comprehensive medical marijuana program.  A new report from the Drug Enforcement and Policy Center (DEPC) traces the development of the Ohio Medical Marijuana Control Program (OMMCP) since the start of legal sales in January 2019 and documents continued dissatisfaction among patients and prospective patients.

By gathering key program data and reporting on a new patient survey, this research fills gaps in our understanding of the OMMCP five years after becoming law.  With multiple new marijuana reforms under discussion in Ohio, the perceived effectiveness and success of the current system among patients and potential patients may shape the long-term prospects and future of the program.

Selected Findings

• 55% of respondents reported some level of dissatisfaction with OMMCP, with 25.4% reporting being “extremely dissatisfied” and nearly 30% being “somewhat dissatisfied.”  However, when compared to previous years the overall dissatisfaction levels are declining (67% in 2019 reported being dissatisfied, compared to 62% in 2020 and 55% this year).  Additionally, the intensity of dissatisfaction has lessened.

• 72% of survey respondents with a qualifying medical condition reported that Ohio dispensaries were their primary source of medical marijuana.  For people who indicated that they purchased marijuana from other sources, the primary reason for doing so was the cost of product in Ohio dispensaries and the cost and difficulty associated with becoming a registered patient.

• High price of marijuana in Ohio dispensaries was the top reason cited by participants for their continued dissatisfaction, for not using licensed dispensaries, and for opting out of using medical marijuana.  Price of marijuana in Ohio continues to be considerably higher than in Michigan and significantly lower than in Pennsylvania.  The second and third top-cited reasons were lack of home grow and lack of employment protections, respectively.

• 81% of respondents reported having trust in the safety of products sold in Ohio dispensaries. Only 8% reported not trusting the safety of dispensary products.

• COVID-19 inspired changes, including telemedicine, online ordering and curbside pick-up have had a positive impact on patients’ satisfaction levels.

• Despite growth in sales and in the number of patients and caregivers, the number of physicians with a Certificate to Recommend has actually decreased over the last 12 months.  Ohio is now second to last in the number of physicians per 100,000 residents able to recommend medical marijuana.

Is the marijuana industry where everyone is going back to work?

The question in the title of this post is prompted by this notable lengthy new Washington Post article, fully headlined "Greener pastures: Marijuana jobs are becoming a refuge for retail and restaurant workers: An estimated 321,000 Americans now work in the legal cannabis industry, outnumbering the country’s dentists, paramedics and electrical engineers." Here are excerpts:

After a year on the front lines, Jason Zvokel traded in his 15-year career as a Walgreens pharmacist for a different kind of drugstore: a marijuana dispensary.

Now instead of administering vaccines and filling prescriptions, he’s helping customers make sense of concentrates, tablets and lozenges. His pay is 5 percent lower, he says, but the hours are more manageable. “I am so much happier,” said Zvokel, 46, who’s worked in retail since he was 18. “For the first time in years, I’m not miserable when I come home from work.”

The cannabis industry is riding a pandemic high: Marijuana dispensaries and cultivation facilities — deemed “essential” by many states at the beginning of the coronavirus crisis — became an early refuge for retail and restaurant workers who had been furloughed or laid off. The industry has continued to grow, adding nearly 80,000 jobs in 2020, more than double what it did the year before, according to data from the Leafly Jobs Report, produced in partnership with Whitney Economics.

An estimated 321,000 Americans now work in the industry, a 32 percent increase from last year, the report found, making legal marijuana one of the nation’s fastest-growing sectors. In other words: The United States now has more legal cannabis workers than dentists, paramedics or electrical engineers....

That surge in cannabis hiring has put pressure on traditional employers — particularly in the 18 states and the District where recreational marijuana use is legal — to ease drug testing requirements. Amazon, the nation’s second-largest private employer, said in June that it would stop screening employees for cannabis use and would support federal legislation to legalize marijuana. A number of other employers, including retailers, restaurants and city governments have also dropped such requirements in an effort to attract workers in a labor market where job openings outpace the number of unemployed Americans 10.9 million to 8.4 million.

Workers’ rights groups are pressing for broader unionization in the cannabis industry, calling it a critical time to establish well-paying jobs with proper protections. With the right policies, they say, the industry could become a pipeline to middle-class jobs, much like the manufacturing industry used to be....

Brianna Price recently left a job as a grocery stocker to become a “budtender” — an industry term for a sales associate — at a dispensary. She’s been promoted three times in the year she’s worked there, and now oversees all purchasing and a staff of nine.

“It’s the best job I’ve ever had,” said Price, 31, of Midland, Mich., who worked as a paralegal for eight years before she was laid off early in the pandemic. She took a part-time job at the supermarket chain Aldi, but says it paid so little that she had to move back in with her parents. There were other downsides, too: Her shifts often started at 5 a.m. and sometimes consisted of standing outside, wiping down shopping carts for hours on end....

At the Hempire Collective in Loomis, Mich., where she works, sales have more than doubled in the last year, to roughly $500,000 a month, according to co-owner Mario Porter. He’s expanded his dispensary staff from seven to 12, and expects to hire more this year. Many of his new employees, he said, come from retail jobs that they left during the pandemic.

"The Cannabis Conundrum: Constitutional & Policy Concerns in Taxation of the Marijuana Industry"

The title of this post is the title of this notable paper that I just saw via SSRN which is authored by Beckett Cantley and Geoffrey Dietrich.  Here is its abstract:

The cannabis industry has greatly expanded over the last few years, with a majority of states legalizing cannabis in some form.  However, despite the growing popularity of the cannabis industry and more companies entering the market, the Internal Revenue Service (“IRS”) has remained steadfast in denying business deductions for cannabis companies.  Under Internal Revenue Code (“IRC”) § 280E, the IRS can disallow all ordinary and necessary business expenses by companies trafficking in illegal drugs.  The disallowance of ordinary and necessary business expenses greatly hinders cannabis companies, especially for companies legally operating under state law. Several cannabis companies have also attacked the harsh effects of IRC § 280E on constitutional and public policy grounds.  Despite a general shift in medical, legal, and public opinion supporting the full legalization of marijuana, legislation still lags far behind. There is currently pending legislation to address the deductions allowed for marijuana companies and reflects a shift in public policy.

One recent attack on IRC § 280E is that the provision violates the Sixteenth Amendment. Under this theory, cannabis companies argue the definition of income under the Sixteenth Amendment requires gain, and thus the disallowance of ordinary and necessary business expenses imposes a tax on more than a company’s income. For example, the Sixteenth Amendment permits a taxpayer to reduce gross receipts by cost of goods sold before a tax may be imposed.  The correct method in calculating cost of goods sold also provides another point of contention between the IRS and cannabis companies. Courts continue to classify cannabis companies as “resellers” instead of “producers,” which reduces the amount that cannabis companies can deduct as cost of goods sold.

Despite the growing popularity of cannabis companies and a growing number of states legalizing marijuana, courts are unlikely to invalidate IRC § 280E as unconstitutional until a sufficient groundswell of support for the policy benefits such a change would permit arises.  This article will discuss: (I) a brief evolution of the public support, policies, and rationales behind marijuana legalization and the conflicts arising under the Sixteenth Amendment; (II) competing state and federal laws concerning cannabis regulation; (III) and the constitutionality of IRC § 280E under both the Sixteenth Amendment and the Eighth Amendment; and conclude with (IV) a public policy argument for legislation removing marijuana from the purview of IRC § 280E.

"Cannabis, Consumers, and the Trademark Laundering Trap"

The title of this post is the title of this notable new paper now available via SSRN and authored by Viva Moffat, Sam Kamin and Timothy Maffett.  Here is its abstract:

At the moment, cannabis companies cannot get trademark protection for their marijuana and marijuana-related products because the “lawful use” doctrine limits federal trademark protection to goods lawfully sold in commerce.  Given that the drug remains illegal under federal law, this may not sound like much of a problem, but it has serious consequences for consumers of marijuana.  Without trademark rights, a cannabis company in one state can simply use the brand name of a prominent company in another state and consumers will assume that they are getting the products they have come to rely on, with potentially dangerous results.  As the cannabis industry has grown, this issue has only become more acute; the current approach of the United States Patent & Trademark Office (PTO) and the federal courts undermines trademark law’s consumer protection and fair competition goals.

Several years ago, we proposed a solution to the unavailability of trademark protection during federal prohibition, one we suggested would help cannabis companies and cannabis consumers bridge the gap from the current period of legal ambiguity through full marijuana legalization.   We coined the phrase “trademark laundering” to describe the practice of applying for federal trademark protection for a mark placed on legal products and then using that mark on both legal and illegal goods – on both t-shirts and marijuana, for example.  As we anticipated, the practice has indeed taken off, but it has been a success only on the surface.

This article examines how the PTO and the courts have mishandled marijuana marks and identifies how they have interpreted and deployed the lawful use doctrine in ways that undermine and conflict with trademark’s stated goals.  Given that the PTO is unlikely to abandon the lawful use doctrine any time soon, we propose changes to the way the PTO applies that doctrine in the trademark registration process, as well as changes to the courts’ consideration of trademark disputes involving cannabis companies.  These changes will ensure that both consumers and marijuana businesses are protected as the United States transitions from marijuana prohibition to a post-prohibition federal regulatory regime.

"Targeted Marijuana Law Enforcement in Los Angeles, 1914-1950"

The title of this post is the title of this notable new paper authored by Sarah Brady Siff now available via SSRN. Here is its abstract:

Marijuana was illegal to possess or sell in California for 103 years.  The state first banned it in 1913, grouping it with opiates and cocaine on a list of prohibited vice drugs adopted six years earlier, meaning that it was subject to the same penalties as these other, far more dangerous, drugs until 1961.  Initially framed as a “Mexican” drug, marijuana prohibition enforcement began on the periphery of Los Angeles in older Latino neighborhoods as well as in agricultural outposts where immigrants lived, worked, and gardened.  Later this policing turned toward the city center, targeting the segregated section of Central Avenue with its jazz musicians and its multiracial nightlife, as well as actors and musicians in nearby Hollywood.  By 1950, Los Angeles-area police were arresting more people for the possession or sale of marijuana than for heroin, other opiates, and cocaine combined.  Mexican, Mexican American, and Black citizens were the targets of this enforcement in sharp disproportion to their presence there.

"Lower-Risk Cannabis Use Guidelines for reducing health harms from non-medical cannabis use: A comprehensive evidence and recommendations update"

The title of this post is the title of this new article by multiple authored appearing in the International Journal of Drug Policy. Here is its abstract:

Background

Cannabis use is common, especially among young people, and is associated with risks for various health harms.  Some jurisdictions have recently moved to legalization/regulation pursuing public health goals.  Evidence-based ‘Lower Risk Cannabis Use Guidelines’ (LRCUG) and recommendations were previously developed to reduce modifiable risk factors of cannabis-related adverse health outcomes; related evidence has evolved substantially since.  We aimed to review new scientific evidence and to develop comprehensively up-to-date LRCUG, including their recommendations, on this evidence basis.

Methods

Targeted searches for literature (since 2016) on main risk factors for cannabis-related adverse health outcomes modifiable by the user-individual were conducted.  Topical areas were informed by previous LRCUG content and expanded upon current evidence. Searches preferentially focused on systematic reviews, supplemented by key individual studies.  The review results were evidence-graded, topically organized and narratively summarized; recommendations were developed through an iterative scientific expert consensus development process.

Results

A substantial body of modifiable risk factors for cannabis use-related health harms were identified with varying evidence quality.  Twelve substantive recommendation clusters and three precautionary statements were developed.  In general, current evidence suggests that individuals can substantially reduce their risk for adverse health outcomes if they delay the onset of cannabis use until after adolescence, avoid the use of high-potency (THC) cannabis products and high-frequency/-intensity of use, and refrain from smoking-routes for administration.  While young people are particularly vulnerable to cannabis-related harms, other sub-groups (e.g., pregnant women, drivers, older adults, those with co-morbidities) are advised to exercise particular caution with use-related risks.  Legal/regulated cannabis products should be used where possible.

Conclusions

Cannabis use can result in adverse health outcomes, mostly among sub-groups with higher-risk use.  Reducing the risk factors identified can help to reduce health harms from use.  The LRCUG offer one targeted intervention component within a comprehensive public health approach for cannabis use.  They require effective audience-tailoring and dissemination, regular updating as new evidence become available, and should be evaluated for their impact.

Rounding up some of the round-ups of the many comments submitted on early draft of federal Cannabis Administration and Opportunity Act

As detailed in this prior post, in mid July 2021, US Senate Majority Leader Chuck Schumer, along with Senators Ron Wyden and Cory Booker, unveil what was described as a "discussion draft" of a lengthy federal marijuana reform bill titled the Cannabis Administration and Opportunity Act (CAOA).  The full text of this CAOA "discussion draft" is available here, and  marijuana reform advocates (and opponents) unsurprisingly has a whole lot that they wanted to discuss about this discussion draft.  September 1 was the deadline for the submission of comments, and I received multiple emails from multiple groups promoting their comments.  Helpfully, I have seen a few press pieces that serve to round up some of the comments:

From Cannabis Wire, "As Comments Close on the Most Comprehensive Cannabis Reform Plan in Congress, Themes Emerge"

From Law360, "Pot Advocates Advise Careful Rollout Of Federal Legalization"

From Marijuana Moment, "Senators Flooded With Input On Federal Marijuana Legalization Bill"

From MJ Biz Daily, "Marijuana trade groups offer comments on Schumer’s federal legalization bill"

The Marijuana Moment piece provides a particularly fulsome review of (and helpful links to) lots of the submitted comments.  Here is how it sets up the review:

While legalization proponents have widely celebrated the introduction of the Cannabis Administration and Opportunity Act (CAOA), they have some suggestions for improvement — principally as it concerns issues of social equity, licensing, tax policy and interstate commerce.

Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) are the lead sponsors of the legislation, and after releasing a draft version of the measure in July, they opened a public comment to receive input on what will be a revised measure the senators plan to formally introduce.

Pro-reform organizations like NORML, Marijuana Policy Project (MPP), National Cannabis Industry Association (NCIA) and Hemp Roundtable made their voices heard — and while they generally applauded the senators’ work to end federal cannabis prohibition, they had some recommendations for revisions.  Prohibitionist groups also weighed in with thoughts about the proposal can be changed to better reflect their concerns with the overall policy of legalization.

A few prior related posts: 

• Great early coverage of US Senate Leader Chuck Schumer's "discussion draft" of new Cannabis Administration and Opportunity Act
• Some federal reform headlines a week after introduction of the Cannabis Administration and Opportunity Act