Marijuana Law, Policy & Reform

Some notable news and notes about medical marijuana programs

As students in my marijuana reform seminar know, I think medical marijuana programs do not get nearly as much attention and study as they should.  Consequently, I was pleased to see a lengthy new Politico piece on persistent medical marijuana challenges.  That got me to thinking it was a good time to do a round-up on the medical marijuana news front:

From Politico, "Dodgy science, poor access and high prices: The parallel medical world of medicinal marijuana in America"

From Marijuana Moment, "Florida’s Medical Marijuana Patient Count Grew 71 Percent In The Past Two Years"

From MJBizDaily, "Utah medical marijuana sales up nearly 60% to $118.7M in 2022"

From Missouri Independent, "Missouri appeals court orders state to issue medical marijuana growing license"

From WLKY in Kentucky, "Republican candidate for Kentucky governor announces support for medical marijuana"

From WLOX in Mississippi, "Five medical marijuana dispensaries given green light to open in Gulfport"

From WRAL in North Carolina, "Medical marijuana legalization bill passes NC Senate in bipartisan vote"

From WTEN in New York, "Medical marijuana being denied to some probationers"

From Dakota News Now in South Dakota, "House committee passes bill clarifying medical marijuana ailments"

Notable marshalling of data to make the case for marijuana legalization in Ohio

One of various assignments I have given to students in my marijuana reform seminar this semester has been to identify and discuss some particular data issue(s) they consider especially interesting and/or important to modern marijuana reform debates.  With short papers on this topic coming due soon, I was quite intrigued to see this notable new local commentary piece that covered lots of data points to make the case for marijuana reform.  The lengthy piece authored by Dave Lange is headlined "Legalizing marijuana in Ohio is a no-brainer -= and overdue," and here are excerpts:

It does seem strange that Ohio voters are being urged to legalize pot by the Coalition to Regulate Marijuana Like Alcohol.  Barring some new political hurdle imposed by the anti-freedom caucus in Columbus, a constitutional amendment to that effect will appear on the November 2023 ballot.

As we know, or at least should know, alcohol-impaired driving is responsible for thousands of traffic deaths nationally each year.  According to the U.S. Centers for Disease Control and Prevention (CDC), that number was 11,654 in 2020, accounting for 30% of all traffic-related deaths.

There is some evidence from the Journal of Studies on Alcohol and Drugs that fatal traffic accidents increased by about 4% in states where recreational marijuana has been legalized.  However, across states, studies have indicated a variance between a 4% increase and a 10% decrease in fatal accidents following legalization....

More strikingly, though, the CDC reports approximately 140,000 deaths per year resulting from excessive alcohol use in the United States.  The CDC also reports an average of six alcohol-poisoning deaths per day.  The number of such deaths attributed to marijuana use is close to zero.  Even the Drug Enforcement Agency acknowledges that zero deaths from marijuana overdoses have been reported.

By any reasonable viewpoint, it’s marijuana that should be legal and alcohol that should be illegal.  That actually occurred in this country between 1920, when the 18th Amendment to the Constitution outlawed alcohol, and 1933, when the 21st Amendment repealed Prohibition.  Most people are familiar with that history lesson....

The racial implications remain evident today in the number of marijuana busts.  Although use is roughly the same among races, Blacks are 3.73 times more likely than whites to be arrested for marijuana, according to the American Civil Liberties Union.

The Marihuana Tax Act was replaced by the Controlled Substances Act in 1970.  Fifty-three years later, the federal government still classifies marijuana as a Schedule 1 drug -- just like heroin, which, according to the CDC, resulted in over 13,000 overdose deaths in 2020.

Fortunately, marijuana arrests have been declining significantly in Ohio, from 18,335 in 2018 to 6,450 in 2021, but they still accounted for 37% of all 2021 drug busts in the state, according to the pro-marijuana legalization group, NORML.

In 1975, then-Gov. James Rhodes signed a bill that made Ohio the sixth state to decriminalize marijuana, reducing possession of less than 100 grams to a “minor misdemeanor.”  It became the 25th state to legalize medical marijuana for certain afflictions in 2016.

The question now is whether Ohio will become the 22nd state to legalize recreational, or adult-use, marijuana, or will Ohioans continue contributing to the burgeoning market in neighboring Michigan, which legalized it in 2019?  With nearly $2.3 billion in sales last year, Michigan is now the second-largest market in the country, trailing only California.  Michigan’s 10% marijuana excise tax, on top of its sales tax, is a handsome bonus to state and local governments.

"Tax Issues Affecting Marijuana Businesses"

The title of this post is the title of this new article recently posted to SSRN authored by Erik M. Jensen. Here is its abstract:

This article considers several issues affecting Internal Revenue Code section 280E, which denies income-tax deductions and credits to businesses trafficking in controlled substances.  Even though marijuana is legal in an increasing number of states, it remains a controlled substance under federal law and section 280E therefore applies to marijuana businesses.  As a result, investing in a marijuana business is much less attractive than it would otherwise be.  The article discusses issues of statutory interpretation but, more important, considers whether an almost complete denial of deductions and credits converts what is in form an income tax into something else.  If the “income” tax as applied to a marijuana business is not on income, within the meaning of the Sixteenth Amendment, it may have to be apportioned among the states on the basis of population to be constitutional (the so-called direct tax apportionment rule).  The article also argues, however, based on a 1911 Supreme Court decision, that the Sixteenth Amendment issues might go away if the business is conducted using a taxable corporation.  Finally, the article includes a brief discussion about marijuana businesses conducted either directly by American Indian nations or through tribally created corporations.  Those entities are not subject to the federal income tax; the limitations of section 280E therefore are irrelevant; and tribal businesses have a competitive advantage in the marijuana market.  Because of section 280E’s application to businesses that are legal under state law but illegal under federal law — an untenable situation — federalism issues underlie all of the discussion.

Interesting (social media) advertising news for the marijuana industry

As reported in this new Politico piece, headlined "Twitter becomes first major social platform to allow weed ads," a notable new owner is ushering in a notable new advertising policy.  Here are the details and some context:

Elon Musk is backing up all his 420 tweets. The owner of Twitter, who sparked a media firestorm after he puffed on a spliff during an appearance on Joe Rogan’s podcast, is making good on speculation that his acquisition of the platform might make it more cannabis-friendly. The company changed its policy to allow U.S. cannabis companies to advertise on its platform Tuesday — although with numerous restrictions.

“It is a groundbreaking thing for many cannabis advertisers to be able to reach their markets and their audiences without doing any type of workarounds,” said Amy Deneson, co-founder of the Cannabis Media Council, a trade association focused on cannabis education.

To advertise on Twitter, cannabis companies must be pre-authorized by Twitter and meet many requirements. Perhaps the most significant restriction is that cannabis companies can’t promote or offer for sale cannabis products. Among the other requirements cannabis companies must adhere to:

• Be licensed by the “appropriate authorities”
• Only target ads to areas where they are licensed to promote products or services online
• Not target those under 21
• Assume all legal responsibility for complying with applicable laws and regulations

Cannabis advertisements also can’t appeal to minors, make any health claims or show any depictions of cannabis use.

Even with this change in Twitter policy, some cannabis companies won’t be able to take advantage of the platform for advertising due to state laws restricting online cannabis advertising....

Beyond simply allowing cannabis advertising, Twitter is actively wooing the industry. Many advertising platforms require minimum buys of $5,000 to $10,000 to get started. But Twitter is not setting any minimum for cannabis companies, explained Deneson.

Twitter is also offering a one-to-one match of every advertising dollar from cannabis companies until the end of March. So if a cannabis company runs a $50 campaign on the platform, it effectively amounts to a $100 campaign....

Mainstream advertising platforms have been reluctant to serve a federally illegal industry, in part due to concerns about existing advertisers not wanting to be positioned next to cannabis ads. But they’re also concerned about how to validate whether a potential advertiser is a licensed business. The change in Twitter’s policy is so new that it’s unclear how long it will take for a cannabis brand to get through the validation process.

Some background on the recent history of marijuana reform efforts in Ohio

Students in my marijuana reform seminar are quite fortunate to have a special guest speaker coming to class next week.  Tom Haren, who has been called "the Face of Marijuana Legalization in Ohio," serves as a leader with the Coalition to Legalize Marijuana Like Alcohol in Ohio.  This group collected over 200,000 signatures in 2021 in order to get this statutory initiative petition seeking to fully legalize marijuana for full use in front of the Ohio General Assembly.  A dispute over filing deadlines resulted in a delay in when the initiative could move forward to a ballot vote, as this local article explains, so Ohio voters will now see this issue on their ballots in 2023 if the General Assembly does not address the measure and the campaign collects a second round of signatures after the legislative period.

Though I expect Tom Haren to speak to my class about his work on this initiative and its prospects, I still recall the last major ballot campaign over full legalization in Ohio back in 2015.  Helpfully, the rich and often ugly stories surrounding Ohio marijuana reform efforts in that off-off-year election are chronicled in a 2018 law review article: "Responsible Ohio: Successes, Failures, and the Future of Adult Marijuana Use in Ohio."  That article, though already quite dated, provides an important reminder that "Had Responsible Ohio not brought legalization to the political fore in 2015, it is unlikely that Ohio would have [had] a viable medical program" enacted the following summer.

Of course, the Drug Enforcement and Policy Center is the place to go for a lot more information about Ohio's existing medical marijuana program and reform proposals (including the timelines for the ballot initiative).

Americans for Safe Access releases "2022 State of the States Report: An Analysis of Medical Cannabis Access in the United States"

My wonderful marijuana seminar is about to turn to a close examination of the laws, policies and practices around medical marijuana reforms, and I am incredible grateful that the folks at Americans for Safe Access (ASA) unveiled their latest comprehensive annual report on medical marijuana reform just in time for our collective review. This new 150+ page report, titled "2022 State of the States Report: An Analysis of Medical Cannabis Access in the United States," provides both a national and state-by-state perspective on medical marijuana reforms.  This ASA press release about the report provides a bit of an overview:

The report evaluates the effectiveness of each state cannabis program from a patient perspective and assigns a grade using a rubric that reflects the key issues affecting patient access, broken down into more than 100 categories, including: barriers to access, civil protections, affordability, health and social equity, and product safety. The report also assigns penalties for harmful policies. ASA distributes the report to state legislators and regulators in every state, as well as hundreds of health and patient organization across the country.

Despite an increase in registered patient numbers and states with medical cannabis programs, the report highlights the fact that states are still falling short in creating programs that fulfill the needs of all patients-- the average grade among states was only 46.16% with Maryland earning the highest score of 75.71%. The report also highlights new issues facing patients including a decline in legislative improvements to state medical cannabis programs and the negative impacts recreational adult-use laws are having on medical cannabis access.

The report also offers solutions to improve state programs including legislative and regulatory language. Since the first edition in 2014, advocates and state legislators have utilized ASA’ report to pass new legislation and regulations to improve medical cannabis access. This year’s report offers policymakers a Medical Cannabis Equity Checklist with legislative improvements for states with recreational adult-use programs or those considering adopting such programs, to ensure patient access is not harmed.... ASA recognizes that state policymakers and regulators have been tasked with creating the infrastructure for a supply chain that remains illegal at the federal level and are now addressing a new health concern of the seemingly federally legal, unregulated cannabinoid market. In 2022 alone, 99 pieces of legislation were introduced regarding the unregulated cannabinoid market. The State of the States report calls on state legislatures to join patient advocates in calling on Congress to pass comprehensive federal legislation, and offers steps to do so in the “State's Government's Role in Ending Federal Prohibition” section.