Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Thursday, April 25, 2019

"Cannabis, Marijuana, Weed, Pot? Just Call It a Job Machine"

The title of this post is the headline of this notable and lengthy new New York Times article.  Here are excerpts:

Although cannabis remains illegal on the federal level, 33 states now allow its sale at least for medical purposes.  Ten of them, including California, have legalized recreational use.  And as new markets open and capital continues to flood in, the cannabis industry has become, by some measures, one of the country’s fastest-growing job sectors.

The jobs range from hourly work at farms and stores to executive positions.  They also span the country. Columbia Care, a medical cannabis company that is based in New York and has 500 employees, has indoor farms and manufacturing plants in Massachusetts, Delaware, Florida, Illinois, Arizona and the District of Columbia.

It’s hard to know exactly how many jobs there are in the legal cannabis business.  The United States Labor Department collects data from cannabis farms and retailers, but does not provide figures for the industry. Still, listings for cannabis-related positions have rocketed to the top echelon of the fastest-growing-job categories on sites like Indeed and ZipRecruiter.

Julia Pollak, a labor economist at ZipRecruiter, said the company’s data put the number of cannabis jobs nationwide at 200,000 to 300,000.  Most of those jobs are on the lower end of the pay scale, consisting of rote agricultural work like plant trimming ($10 to $15 an hour) and “budtenders” (about $25,000 a year), who help customers decide what kind of cannabis they want and then weigh and bag it.

But as the industry expands, there has also been a strong demand for better-paid positions like chemists, software engineers, and nurses who consult with patients about using cannabis for anxiety and other medical conditions.  “The early signs are that this will grow rapidly,” Ms. Pollak said....

The pioneers who brought the industry out of the shadows are being joined by professional managers and executives — “talent,” in corporate speak — who have had careers in other industries.  For upper-level managers and executives, companies say they prefer candidates with a background in highly regulated industries like alcohol or pharmaceuticals....

After a decade in pharmaceutical marketing at companies including Gilead Sciences, Julie Raque recently became the vice president for marketing at Cannabistry Labs, a cannabis research and testing company in Chicago.  She was intrigued by the industry and eager to join a start-up, but had to take a pay cut in exchange for company stock — and to accept that her decision might be a one-way door.  “I highly doubt companies would want to hire me back,” she said.  “I knew I was about to do something big, and since then I’ve not looked back, because I’m having so much fun.”

A few prior related posts:

April 25, 2019 in Business laws and regulatory issues, Employment and labor law issues, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Saturday, April 20, 2019

Real research to support the unreal attention the food industry now gives to 4/20

As I mentioned in a prior post,  I am not all that keen on all the marijuana buzz devoted to 4/20.   But I am certainly keen on getting a bargain, and this USA Today article highlights how many food retailers are eager to make much of the holiday.  The article is headlined "4/20 specials: 'High' priority list of munchie deals at Pizza Hut, Carl's Jr., Lyft, more," and here is how it sets up the list of offersns:

Saturday is a high-ranking made-up holiday. It's 4/20, aka Weed Day or Pot Day, and that means specials for cannabis fans across the country, regardless of whether they can legally buy pot in their state or not.

This year, more major restaurant chains are getting in the holiday mood including Pizza Hut, which has a sweet brownie deal, and Boston Market with its buy-one-get-one free Pot Pie deal. Plus, Carl’s Jr. says it is the first chain to test a CBD-burger at one Denver location only on Saturday.....

Unlike marijuana, another cannabis species, hemp has almost none of the psychoactive compounds that cause a user to get high. Now that it's no longer labeled a controlled substance, more businesses have the opportunity to create hemp-based products, from tinctures to lotions.

Here are some of munchie deals, not drug deals, though you might find a discounted buzz Saturday....

Whether you think this is misguided or masterful marketing, there is a bit of science behind these tie-ins. Specifically, consider this recent article on SSRN authored by Michele Baggio and Alberto Chong titled "Recreational Marijuana Laws and Junk Food Consumption: Evidence Using Border Analysis and Retail Sales Data."  Here is its abstract:

We use retail scanner data on purchases of high calorie food to study the link between recreational marijuana laws (RMLs) and consumption of high calorie food.  To do this we exploit differences in the timing of introduction of marijuana laws among states and find that they are complements.  Specifically, in counties located in RML states monthly sales of high calorie food increased by 3.1 percent for ice cream, 4.1 for cookies, and 5.3 percent for chips.

April 20, 2019 in Business laws and regulatory issues, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Thursday, April 18, 2019

"Canada Has Made Pot Super Boring"

Download (19)The title of this post is the headline of this interesting New Yorker commentary authored by Stephen Marche. Here are excerpts:

This 4/20 will be different, at least in Canada.  It will be the first celebration of marijuana since the country made pot legal in October, 2018.  The time passed since the end of prohibition hasn’t been long enough to establish any direct consequences from legalization so far, but one thing has already become painfully clear from Canada’s experiment. When you make pot legal, you make it super, super boring....

Other than new signs at the airport warning the more dull-witted Canadian citizens to dispense of their marijuana in the appropriate receptacles before leaving the country, it was hard to notice any real change after the passage of the marijuana laws.  The pot dispensaries, semi-underground before the end of prohibition, were supposed to disappear, but went on just as before.  They’ve just becoming increasingly polished.  The place where I buy my weed looks like a Pottery Barn, and it was so busy the other day that they gave me one of those buzzers they hand out at Shake Shack to tell you when your order is ready.  I had to wait twenty minutes.

It’s also money that’s making pot boring.  Recently, I went to a champagne-and-hot-wings party — a superb concept, by the way — in a wealthy neighborhood in Toronto, and it felt like half the people attending were in the cannabis industry in one way or another; many of them had transitioned from hedge funds.  Marijuana stocks have overtaken real estate as the standard conversational go-to of Toronto dinner parties.  And you have not understood how banal marijuana can be until you overhear two parents watching their kids at a swimming lesson discuss how I.S.O. 9000 certification affects the marketing efforts for stocks of C.B.D.-extract companies....

Even a few months after legalization, I find myself wondering how much of the pleasure of marijuana came from its illicitness.  When you used to pass around a joint, you were sharing a little naughtiness, a tiny collective experience of rebellion.  Now, at a party, when you a pass around a joint, you’re basically saying let’s go stare at things for a while.  When I see cops on the street today, there is nothing I do that might upset them.  We are on the same side, utterly.  It’s pathetic.

There may still be dangers to marijuana, of course.  The public-health effects of legalization are, as yet, unknown.  Nobody knows whether legalization will lead to higher rates of teen-age mental illness, or to traffic accidents.  But, already, it is unimaginable that marijuana would be made illegal again.  Even with the brief distance of a few months since the end of prohibition, the sheer stupidity of the drug war appears absolute. Marijuana isn’t worth the attention of the police.  It’s not even that good a drug. It wouldn’t be in my top five, anyway.

One of the most important consequences of marijuana’s legalization is that the drug can now be studied. We might learn how it works and what it does to people. Clinical trials will replace the loose collection of vague anxieties and promotional pseudoscience that have dominated discussions of marijuana up to this point in history.  It will finally be possible to think sensibly about marijuana. And what could be more boring?....

It has to be said, in boredom’s defense, that it’s the cure for a great number of evils.  The cliché holds that America is losing the war on drugs, but it’s not quite accurate. Cocaine and heroin have never been cheaper.  Overdose deaths recently topped car accidents as a more likely cause of death for adults in the United States.  But America is very much winning the war on drugs that are legal: tobacco use has declined sixty-seven per cent since 1965, and drunk-driving fatalities by forty-eight per cent since 1991.  Of course, the way America reduced the use of these drugs wasn’t by killing bad guys and arresting users en masse, but by treating them like social problems with collective solutions.  Yawn.  No one’s going to make a season of “Narcos” out of that.

Canada is proving, once again, the deep political power of boredom: if you want to suck the power and glamour out of drugs, let the government run them.

April 18, 2019 in Business laws and regulatory issues, History of Marijuana Laws in the United States, International Marijuana Laws and Policies, Recreational Marijuana Commentary and Debate | Permalink | Comments (1)

Friday, April 12, 2019

"The Canna(business) of Higher Education"

The title of this post is the title of this paper just posted to SSRN and authored by Shelby Slaven, who is a student at The Ohio State University Moritz College of Law. Here is the paper's abstract:

While the idea of legalizing cannabis for adult use is gaining on acceptance among the public, the past and current policies on both, the state and federal level, have resulted in dearth of research on the efficacy of cannabis for therapeutic purposes as well as possible societal and health consequences of recreational use.  Institutes of higher education are best positioned not only to reform research on the substance, but to train a generation of cultivators, distributors, and healthcare professionals, and while doing so address some of the historical harms perpetrated by the policies of the War on Drugs.  Students are seeking out ways to capitalize on a growing market and remedying past discrimination should be a top priority.  This paper first provides an overview of cannabis legalization as it stands today, the political efforts that got it here, and those that will move it forward.  It then discusses institutes of higher education and the efforts to bring cannabis into the classroom.  Lastly, this paper argues that Historically Black Colleges and Universities can provide education, training, and a foot in the door for Black individuals who have suffered harsher criminal penalties in the name of the war on crime.

April 12, 2019 in Business laws and regulatory issues, Employment and labor law issues, History of Marijuana Laws in the United States, Medical Marijuana Commentary and Debate, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Tuesday, April 9, 2019

"The Good, the Bad, and the Ugly: Why IRC § 280E is not the Industry Killer it is Portrayed to be"

The title of this post is the title of a presentation to be made by one of my students in my Marijuana Law, Policy & Reform seminar this coming week.  Here is part of his explanation of his topic and links to some background reading:

State legalization of marijuana, and the rising prevalence of marijuana businesses, has continually thrust Internal Revenue Code (IRC) § 280E into the spotlight.  Many scholars have argued for the provision’s abolishment, but the IRS’s staunch stance remains unyielding.  The literature seems to suggest a tacit assumption that IRC § 280E will remain a hurdle if/until marijuana is removed from Schedule I.  Although IRC § 280E is a hurdle, other mechanisms are shifting to allow marijuana businesses to be successful despite this tax provision. 

For example, in many cases, the Tax Cuts and Jobs Act of 2017 did more for marijuana businesses than a repeal of IRC § 280E would have.  Yes, marijuana businesses are still worse off than other businesses from a tax perspective, but marijuana’s competition is not necessarily other sectors, it is the black market.  There is something to be said for the fact that the marijuana industry continues to grow, despite claims of IRC § 280E making growth “impossible.”  However, the primary focus of this paper is not to explain why IRC § 280E predictions were incorrect, it is to look forward at why and how the industry can continue to succeed regardless of IRC § 280E.

Background Reading

April 2015 white paper by the National Cannabis Industry Association, "Internal Revenue Code 280E: Creating An Impossible Situation For Legitimate Businesses": Download 2015-280E-White-Paper

Fortune article, "The Marijuana Industry’s Battle Against the IRS"

2015 IRS Memo on IRC § 280E

Cannabis Business Times article, "Tax Court Reinforces IRS Code 280E in Harborside Ruling"

Memo from Rosenberg Martin Greenberg law firm, "Are Owners of Cannabusinesses Eligible for the Qualified Business Income Deduction Under Section 199A?"

April 9, 2019 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Taxation information and issues | Permalink | Comments (1)

Monday, April 1, 2019

"Challenges in Securing Intellectual Property (IP) Rights in the Cannabis Industry"

The title of this post is the title of a presentation to be made by one of my students in my Marijuana Law, Policy & Reform seminar this coming week. Here is part of his explanation of his topic and links to some background reading:

The cannabis industry has been growing rapidly and has become more mainstream.  In 2018, New Frontier Data forecasted that the legal U.S. cannabis market ― worth an estimated $8.3 billion in 2017 ― would grow to almost $25 billion by 2025.  While many innovators of the cannabis industry are heavily focused on the business activities to get the company off the ground by dealing with cannabis-specific challenges such as marketing, financing, and differentiations.  However, it is also critical to evaluate the significance of intellectual property (IP) and the benefits it can provide.

As with any other new ventures, enforcing an IP protection strategy early on can maximize the profits of a new invention and minimize the risk of potential infringement.  However, there are some challenges because cannabis (or at least THC) is still illegal under federal law.  My paper will focus on elucidating the IP issues and challenges in a budding cannabis industry.  Further, I will discuss some factors and complexities to secure IP rights on cannabis-related inventions.

Background readings:

* "Cannabis: IP Issues in a Budding U.S. Industry"

* "Building Cannabis IP Includes Both Your Brand and Your Technology"

* "The Complicated Relationship Between IP Law & Cannabis"

* "Protecting Your IP Is (No Surprise) Even Harder in the Cannabis Business"

* "Securing U.S. Patents in the Cannabis Industry"

April 1, 2019 in Assembled readings on specific topics, Business laws and regulatory issues | Permalink | Comments (0)

Wednesday, March 27, 2019

Minority Cannabis Business Association engages OSU College of Law 3L Chris Nani to evaluate social equity efforts in Los Angeles

Download (3)I am always so very excited when students here at The Ohio State University Moritz College of Law get so very excited about marijuana law and policy.  One such student whose work I have spotlighted here is Christopher Nani, who took my marijuana seminar back in Fall 2017 and has been doing amazing work in this space ever since.  In addition to getting articles published at the Cannabis Law Report discussing federal tax treatment of cannabis businesses (see prior posts here and here) and co-hosting a podcast focused on business development in the cannabis industry (called Cannabiz with Canna-Chris), Chris has produced this notable article detailing a "Model Social Equity Equation for the Cannabis Industry."  

I describe Chris' article as notable in part because the Minority Cannabis Business Association took note of the work, and MCBA has now engaged Chris to use his equation to "score"  Los Angeles.  This press release, titled "MCBA Engages in Case Study to Rate Efficacy of Los Angeles’ Social Equity Program," explains:

The Minority Cannabis Business Association (MCBA) announced plans to take a score of social equity policies implemented by the city of Los Angeles intended to increase diversity in the burgeoning cannabis industry.  Partnering with the MCBA on this effort is Chris Nani, an Ohio State Law student who recently released a similar study that focused on these equity policies in three other California cities.

The results of Nani’s preliminary study had outcomes for Sacramento, San Francisco and even the much-lauded Oakland program that didn’t fully meet the intent of those policies, and underlines the necessity of reassessment once these programs have been implemented.  As one of the largest markets in California, Los Angeles is an important influencer in the industry and will serve as an example for future efforts on this topic.

“We are excited to see municipalities across the country starting to implement social equity programs as a way to reinvest in communities that for decades have been disproportionately harmed by the War on Drugs,” says Kayvan Khalatbari, MCBA’s Board Chair. “Now we need to ensure their intended outcomes are being met.  If they’re not, we need to reexamine those policies and work on them until we get it right. We must develop an effective and repeatable model.”

The case study will utilize an “Equity Equation”, which provides a scored assessment to rate the effectiveness of municipal social equity programs based on 10 separate factors, all of which have been determined to play a major role in the ultimate success or failure of these policies.  One factor commonly cited as a barrier to entry for people of color to find a place in the cannabis industry, regardless of policies in place, is a lack of available capital.

“Social equity programs are an important progression for the cannabis industry,” says Chris Nani. “As new markets come online and use Los Angeles as a model in their own programming, it’s critical that we understand what is working and what is not.  The equation I developed is meant to grade the efficacy of these programs and offer suggestions for improvement.  I look forward to working with lawmakers, social equity applicants and MCBA to work towards improving these policies across the country.”

March 27, 2019 in Business laws and regulatory issues, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Rounding up just some (of so many) stories about CBD

There is so much talk and so many stories about CBD, I know I can barely scratch the surface on this topic.  But it seems this past week I have seen an especially notable number of notable stories on this front.  Below I provide a partial round-up, and suggested particular attention to the first linked piece for its science and thoughtfulness:

March 27, 2019 in Assembled readings on specific topics, Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Monday, March 25, 2019

New Jersey shows, yet again, the challenges of marijuana legalization done via the traditional legislative process

NJ-legalize-marijuana-1-800x533Full adult-use marijuana legalization has a strong winning record when the issue has been taken directly to voters via ballot initiative.  This reform has proven much more difficult through the traditional legislative process, with only Vermont able to pass a limited (non-commercialized) version of reform this way.  Today, after lots of debate in the state, New Jersey proved yet again how challenging this can be as detailed in this local story headlined "Legal weed won’t happen right now in N.J. Lawmakers call off big vote."  Here are the basics:

Leaders of the state Legislature have canceled a planned vote Monday on a bill that would legalize recreational marijuana for adults 21 and older in New Jersey, state Senate President Stephen Sweeney is set to announce.

“While we are all disappointed that we did not secure enough votes to ensure legislative approval of the adult use cannabis bill today, we made substantial progress on a plan that would make significant changes in social policy,” Sweeney, New Jersey’s top state lawmaker, said in a statement provided to NJ Advance Media. Sweeney. D-Gloucester, added that the “fight is not over.”

It’s expected that lawmakers will schedule another vote this year, but it’s unclear when that will happen. “We need to learn from this experience and continue to move forward,” Sweeney said." While this legislation is not advancing today, I remain committed to its passage.”

The vote fell apart after Gov. Phil Murphy and fellow Democratic state leaders spent more than a week feverishly trying to wrangle enough votes in the Democratic-controlled Legislature to pass the Democratic-sponsored measure. But top lawmakers said they wouldn’t hold the vote if they weren’t guaranteed to have both the 21 votes they need in the state Senate and the 41 they need in the state Assembly. As of Monday afternoon, multiple sources said, there were only 17 or 18 members of the Senate who would vote yes. But that still left leaders a few votes short....

Sweeney said earlier this year said he wouldn’t schedule another vote until after the November elections at the earliest. If they can’t get enough votes by then, it’s possible leaders could opt for asking New Jersey voters to decide in a ballot referendum next year whether to legalize weed.

The crumbling of Monday’s vote is a tough pill for Murphy, who made legalizing marijuana a key plank in his platform when he won election in 2017. He and top Democratic lawmakers have been hoping for more than a year to have New Jersey join 10 other states and Washington, D.C., that have legalized pot. But they prefer to become only the second state to do it legislatively, rather than through a ballot referendum.

Monday’s development also postpones two other measures tied to the bill: one that would expand the state’s oft-criticized medial marijuana program and another that would expunge thousands of pot convictions in the state. Murphy has said his administration will now move to dramatically increase the number of licenses for cultivators of medical marijuana as a backup plan.

Murphy and proponents of legal pot say the goal of legalization is to increase tax revenue for the state, create a brand new industry, and improve social justice because black people are three times more likely to be arrested on pot charges than whites. Recent polls have found a majority of New Jerseyans support legal pot. But many lawmakers — Democratic and Republican — have been leery, saying it could erode public safety, lead people to try more dangerous drugs, and damage communities of color.

March 25, 2019 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Sunday, March 24, 2019

"Marijuana Legalization: Dealing with the Black Market"

The title of this post is the title of a presentation to be made by one of my students in my Marijuana Law, Policy & Reform seminar this coming week.  Here is part of his explanation of his topic and links to some background reading:

Summary:

I will be looking at the prevalence (and in some cases, the dominance) of the black market for marijuana in jurisdictions that have legalized marijuana. I will specifically be looking at states that have legalized recreational use. However, I may still look at states that have only legalized medical marijuana because the black market still dominates in many of those states as well.

A major argument for marijuana legalization is potential revenue, but the black market can steal a significant amount of revenue from states.  Additionally, the existence of a black market is detrimental to public health and safety for a variety of reasons, including the distribution of potentially laced products. 

At first, I was surprised by just how dominant the black market remains in states that have legalized. For example, in California the black market is estimated to be worth 4 times the legal market. But consider major reasons why consumers choose to purchase cannabis products from the black market:

  • The black market offers much cheaper weed with no sin taxes;
  • The black market is able to sell higher potencies of marijuana;
  • The black market is able to sell larger amounts of marijuana;
  • The black market is oftentimes much more convenient.

Another reason people choose the black market is because they are familiar with it. Someone who has had a dealer for years is not all of a sudden going to switch to buying from a legal source.  Additionally, the black market (generally) has no age restrictions, so the black market still exists for minors who wish to use marijuana products.

I also plan on talking about the regulations on legal cannabis providers and how those contribute to the struggle to subdue the black market (ex: marketing, banking, barriers to entry, supply problems, lax enforcement of black market).  Finally, although I recognize that wholly eliminating the black market is infeasible, I will analyze potential solutions to the problem, such as deregulating (decreasing barriers to entry, lowering the age restriction, increasing enforcement, increasing strength of legal products, etc.) and working with the black market dealers.

Background Resources:

"Can a marijuana dispensary’s budget pot put illegal dealers out of business?" (discussing Nevada’s lower cost product dubbed the Black Market Killer) 

"Marijuana Black Market ‘Business Has Never Been Better’ In Canada Despite Legalization, Cannabis CEO Warns" (discussing Canada’s struggle with the black market)

"'I deliver to your house': pot dealers on why legalization won't kill the black market" (interview with two black market dealers in Canada)

"How marijuana entrepreneurs can outsmart black-market competitors" (discussing ways to possibly beat the black market)

"California’s black market for pot is stifling legal sales. Now the governor wants to step up enforcement" (discussing California’s black market)

"Marijuana Advertising Rules Challenge California Businesses" (discussing marketing regulations (including <30% of Minors Rule)

March 24, 2019 in Business laws and regulatory issues, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Friday, March 22, 2019

Exploring how employers should reform drug policies in an era of marijuana reform

As mentioned in prior posts, my Marijuana Law, Policy & Reform seminar is now deep into the student presentation unit, and we will have four presentations each week in coming weeks and thus lots of great student-assembled content here on the blog  The first presentation for next week will focus on updating employment  policies, and here is how my student has summarized his topic, along with the background readings he has provided for classmates (and the rest of us):

As more states legalize marijuana for medical and recreational uses, the business community must acknowledge that larger portions of the American public will consume marijuana. Consequently, the labor market now includes more marijuana users than ever before. The zero-tolerance drug policies that employers use to discourage marijuana consumption are driving labor shortages throughout corporate America. To remain competitive and recruit the next generation of talented employees, Fortune 500 companies should revise their drug policies to permit off-duty marijuana use. Efforts to reform workplace drug policies should consider the labyrinth of federal and state laws that require certain employers to test for marijuana. Provided that corporate employers include exceptions for these rules, workplace drug policies will remain legally compliant.

 

Lisa Nagele-Piazza, How Do Recreational Marijuana Laws Affect the Workplace?, Society for Human Resource Management (Jan. 17, 2018).

 

Roy Maurer, Employers in This State Can’t Reject Job Applicants ‘Solely’ for Smoking Pot, Society For Human Resource Management (February 16, 2018) .

 

Judy Stone, The Sham Of Drug Testing For Benefits: Walker, Scott And Political Pandering, Forbes (Feb. 17, 2015).

 

Nelson D. Schwartz, Economy Needs Workers, but Drug Tests Take a Toll, N.Y. Times (July 2017).

 

Federal Laws and Regulations, Substance Abuse and Mental Health Services Administration (Nov. 2, 2015).

March 22, 2019 in Assembled readings on specific topics, Business laws and regulatory issues, Employment and labor law issues | Permalink | Comments (0)

Tuesday, March 12, 2019

Minority Cannabis Business Association produces new "Model Municipal Social Equity Ordinance"

There is much discussion in marijuana reform circles about how states and localities can best ensure the new growing marijuana industry develops in a diverse, socially equitable way. The latest effort to advance this agenda comes from the Minority Cannabis Business Association (MCBA), which has now released this interesting new "Model Municipal Social Equity Ordinance." Here is part of the preface of this model ordinance:

This Model Municipal Social Equity Ordinance (“Model Ordinance”) is intended to be used by municipalities that have adopted ordinances to regulate, zone and license local cannabis businesses, or are currently considering draft ordinances to do so.  As such, this Model Ordinance does not include recommended provisions for general license types (other than to add license types that lower barriers to entry or mitigate on-going criminalization of cannabis consumption), nor does it include detailed zoning and land use provisions.  The drafters of this model ordinance assume those provisions are already incorporated within the adopting municipality’s general licensing ordinance, and that the general licensing ordinance already reflects the particular circumstances of its local community.

We also assumed that the types of licenses which may be available, and the general regulatory framework surrounding cannabis businesses will be largely predetermined by the state in which the adopting local jurisdiction sits.  As such, the Model Ordinance contains only those provisions necessary to create a baseline framework for adopting and advancing social equity in the cannabis industry as official public policy -- a “minimum viable product” designed to be broadly adopted and tailored as necessary by each adopting jurisdiction.  Prevailing political realities in each jurisdiction will vary, and the Model Ordinance includes bolded and bracketed substantive terms that may be revised as necessary....

The Drafting Committee finalized this version of the Model Ordinance after incorporating input received on two previous working drafts.  The First Discussion Draft was previously circulated in October 2018 and presented to the attendees of the MCBA Policy Summit, as well as the members of the MCBA Policy Committee and the MCBA Board of Directors.  Their input was incorporated by the Drafting Committee into the Second Discussion Draft. The Second Discussion Draft was circulated for input to the MCBA Board of Directors, the NCIA Policy Council staff, Drug Policy Alliance staff as well as other select stakeholders for additional input before being finalized. Finally, please note that this Model Ordinance is intended to be a living documents, and one that can be continually improved upon. The Drafting Committee invites any and all input on the Model Ordinance, and expects to publish updated versions of the Model Ordinance periodically.

Interestingly, though the heart of the Model Ordinance is a social equity program, these heading from the model proposal show that more is covered than just business issues:

Section 1: Short Title

Section 2: Cannabis Social Equity Program

Section 3: Good Faith Effort for Equity in Employment

Section 4: Community Benefits Agreement

Section 5: Community Reinvestment Fund

Section 6: Record Change Provisions

Section 7: No Additional Restrictions Allowed on Entry Into the Cannabis Industry

Section 8: Data Collection

Section 9: Lowest Law Enforcement Priority

Section 10: Permitting Social Consumption Lounges

Section 11: Eliminating Suspicionless Drug Testing

March 12, 2019 in Business laws and regulatory issues, Criminal justice developments and reforms, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Saturday, March 9, 2019

Leafy report finds"more than 211,000 cannabis jobs across the United States"

DownloadThis story at Leafy, headlined "As of 2019, Legal Cannabis Has Created 211,000 Full-Time Jobs in America," reports on Leafy's effort to account for job creation in the legal marijuana industry.  Here is how the article starts:

How many jobs are there in the legal cannabis industry?  It’s a common question — and one the government refuses to answer. Because cannabis remains federally illegal, employment data agencies such as the Bureau of Labor Statistics ignore all jobs related to the industry.

Over the past three months Leafly’s data team, working in partnership with Whitney Economics, has gone state-by-state to tally the total number of direct, full-time jobs in the state-legal cannabis industry.

There are now more than 211,000 cannabis jobs across the United States.

The Leafy accounting is set forth in this relatively short document titled "Special Report: Cannabis Jobs Count."  Here is an excerpt:

In early 2017, roughly 120,000 Americans worked in the legal cannabis industry.  At that time, 29 states allowed medical marijuana.  Four states and the District of Columbia had legalized the adult use of cannabis.  National sales in legal markets topped $6.7 billion.

Today, two years later, 34 states have legalized medical marijuana.  Ten states and the District of Columbia have legalized cannabis for adult use.  Annual sales nationwide are nearing the $11 billion mark.  And the number of Americans directly employed in this booming industry has soared to more than 211,000.

When indirect and ancillary jobs — think of all the lawyers, accountants, security consultants, media companies, and marketing firms that service the cannabis industry — are added, along with induced jobs (local community jobs supported by the spending of cannabis industry paychecks), the total number of full-time American jobs that depend on legal cannabis rises to a whopping 296,000.

By comparison, there are currently about 52,000 coal mining jobs in the United States.  American beer makers employ 69,000 brewery workers.  And 112,000 people work in textile manufacturing.

March 9, 2019 in Business laws and regulatory issues, Medical Marijuana Data and Research, Recreational Marijuana Data and Research | Permalink | Comments (0)

Saturday, March 2, 2019

"Achieving Equity in the Marijuana Industry: Should State's Implement Social Equity Provisions into their Regimes?"

As mentioned in a recent post, this time of year students in my Marijuana Law, Policy & Reform seminar are advancing research projects/papers around topics of their choosing, and they are starting to gear up for in-class presentations.  The presentation includes the requirement that they provide for posting here materials/links with background reading and information for the discussion they will lead.  This coming week a student will be discussing the topic that serves as the title of this post, and here is his description of his plans:

I will examine how minorities have been disproportionately affected by the war on drugs and the consequences we still face today as a result of this enforcement.  I will focus on the regimes that various states have put in place to address social equity, proposals states/localities are currently facing, the challenges of implementing these types of regimes, and what I consider the best solution to the social equity issue.  Below are sources for the presentation: the first two examine why social equity regimes are necessary; the next three discuss regimes in place and the issues they have faced.

  1. Trevor Hughes, New Marijuana Laws in 2019 Could Help Black and Drug Dealers go Legal, USA Today (Feb. 21, 2019)

  2. Janell Ross, Legal Marijuana Made Big Promises on Racial Equity – and Fell Short, NBC News (Dec. 31, 2018) .

  3. State Medical Marijuana Social Equity Plan Comparison

  4. Laura Hancock, Judge Tosses Ohio Medical Marijuana License Requirements for Minority GroupsCleveland.com (Nov. 16, 2018) 

  5. Celene Adams, Challenges – and Controversy – Swirl Around Marijuana Social Equity Programs in California, Marijuana Business Daily (Nov. 29, 2018)

March 2, 2019 in Business laws and regulatory issues, History of Marijuana Laws in the United States, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Tuesday, February 26, 2019

Two interesting new articles about the early operation of Ohio's medical marijuana program

OHIO-HERBAL-CLINIC-DOCTORS-OFFICE-OHIO-MEDICAL-MARIJUANA-CARD--300x300Two Ohio papers had two interesting new article about early developments in the operation of Ohio's still-new medical marijuana program.  Here are headlines, links and excerpts:

From the Akron Beacon Journal, "Ohio medical marijuana recommendations coming from clinics, not family doctors"

If you know someone who has received a recommendation to use medical marijuana, odds are the recommendation didn’t come from a family doctor or primary-care physician. The vast majority of recommendations in Ohio come from clinics that employ doctors solely to evaluate patients for medical marijuana, say people familiar with the industry....

“Marijuana-specific clinics fill a huge need,” said Dr. Joel Simmons, who runs the Ohio Herbal Clinic, a Near East Side cannabis clinic. While the clinics, many of which have out-of-state owners, have some critics, patient advocates say primary-care doctors are the ideal source for marijuana recommendations.

Those doctors better understand a patient’s needs and medical history, said Mary Jane Borden, co-founder of the Ohio Rights Group, which advocates for users of medicinal cannabis. When Ohio lawmakers wrote the state’s medical-marijuana law, they hoped that family physicians would be writing most recommendations, Borden said....

Clinics charge between $125 and $200 for an evaluation, which insurance won’t cover.  Because the clinics don’t negotiate with insurance companies, they clinics can charge whatever they want, said Emilie Ramach, founder and CEO of Compassionate Alternatives, a Columbus-based nonprofit agency that helps patients pay for medicinal cannabis.  Several clinic doctors, including Simmons, said they do their best to keep their prices reasonable.

From the Columbus Dispatch, "High prices keep many Ohioans out of legal cannabis market"

As Ohio’s medical marijuana industry finally takes off, some patients and advocates are griping about costs that put it out of reach for many people.  A steep price tag stems partly from the lack of competition, as Ohio only has seven dispensaries spread throughout the state, mostly in rural areas, experts said.  Costs are expected to drop as more dispensaries open and the industry finds its footing.

In the meantime, patients openly acknowledge buying the drug on the black market while they wait for prices to come down.  And without insurance to cover the expense, some worry that low-income people might never be able to afford medical cannabis....

Several local patients said using marijuana has improved their quality of life, but they must stretch their budgets to pay for it or buy it on the street.  “I’m not using as much as I probably need to be using,” said Mary Alleger, 31, of Reynoldsburg, who said she uses cannabis to treat post-traumatic stress disorder (PTSD) and ongoing pain from a botched medical procedure.

Katherin Cottrill, 33, of Newark, has worked with the patient advocacy organization Ohio Rights Group to acquire a medical marijuana card, but said current costs keep her from even getting started.  “I would have to pay $200 to $250 (just to get a recommendation),” Cottrill said.  “And then I have to drive to a dispensary and pay $50. It’s unreasonable for me to even try.”...

Just under 3 grams of medical marijuana costs about $50. Cannabis clinics charge between $125 and $200, and the state charges $50 in fees.  Marijuana is cheaper on the street, patients said.

“On the black market you can buy an ounce for $200,” said Robert Doyle, 61, of Newark, who has a medical marijuana card but still buys the drug on the street due to the cost.  There are about 28 grams in an ounce.  Doyle said he’s visited dispensaries in Michigan with prices comparable to the black market, making him confident that Ohio’s costs will eventually fall....

But even if prices drop, clinic costs and fees will remain a barrier for some, Cottrill said.  “What about low-income people who are desperately seeking medication?” she said. “They can’t even afford to pay $50 to get their card registered.”

February 26, 2019 in Business laws and regulatory issues, Medical community perspectives, Medical Marijuana Commentary and Debate, Medical Marijuana Data and Research, Medical Marijuana State Laws and Reforms, Who decides | Permalink | Comments (1)

Thursday, February 14, 2019

Federal judge finds Walmart unlawfully discriminated under state law against Arizona medical marijuana patient

As reported in this local article, headlined "Judge Rebukes Arizona Walmart for Firing Employee With Medical-Marijuana Card," a federal court last week issued a notable ruling on behalf of a medical marijuana patient in Arizona. Here are the basics:

An Arizona Walmart location terminated an employee in 2016 who held a valid medical-marijuana card after a drug test came back positive. But now a federal judge has ruled that because Walmart could not prove the employee was impaired at work, the company violated the nondiscrimination provision in the Arizona Medical Marijuana Act.

In a significant decision that recognized a private right of action for employment discrimination under the AMMA, Arizona U.S. District Judge James A. Teilborg said last week that Walmart was not justified in firing the worker based on the company's idea that marijuana metabolites in her urine meant she must have been impaired at work.

Whitmire's attorney Joshua Carden, who runs a Scottsdale-based law firm, said Teilborg's decision is "the first of its kind in Arizona."

"No court has officially decided whether a private right-of-action exists under the Arizona Medical Marijuana Act, so that was a big part of the decision," Carden told Phoenix New Times on Tuesday.

Before she was fired, Carol Whitmire had worked at Walmart stores in Show Low and Taylor for about eight years. On May 21, 2016, while working as a customer service supervisor at the Taylor Walmart, a bag of ice fell on Whitmire's wrist while she was leveling the bags, according to the lawsuit. The injury led to an urgent care visit and a drug test, pursuant to Walmart policy. Whitmire’s urine tested positive for marijuana metabolites.

A medical-marijuana cardholder for approximately the last five years, Whitmire smokes marijuana before bed to treat her shoulder pain and arthritis, and as a sleep aid, according to court records. She says she never brought marijuana to work or reported to the job impaired.

After the wrist injury, Whitmire informed the Walmart human resources department and the urgent care clinic that she holds a medical-marijuana card. She continued working until July 4, when she was suspended as a result of the urine sample. Her manager fired Whitmire on July 22 because of the positive result of the drug test, the complaint says.

In March 2017, Whitmire filed a discrimination charge with the Equal Employment Opportunity Commission and the civil rights division of the Arizona Attorney General’s Office. Three months later, she sued Walmart in federal court in Phoenix, alleging wrongful termination and discrimination in violation of the AMMA, the Arizona Civil Rights Act, and Arizona worker's compensation law.

In his decision last week, first reported by Law360, Teilborg granted partial summary judgment to Whitmire for her claim of discrimination under the AMMA. The judge, however, denied Whitmire’s claims alleging discrimination under the Arizona Civil Rights Act and retaliatory termination under Arizona employment protection and worker’s compensation laws.

The court will make a decision regarding damages or Whitmire's potential reinstatement in May, her attorney said. Under the AMMA, it is illegal for an employer to discriminate in hiring or firing based on a patient's "positive drug test for marijuana components or metabolites, unless the patient used, possessed or was impaired by marijuana on the premises of the place of employment or during the hours of employment."

In court, Walmart denied wrongfully terminating or discriminating against Whitmire, and said the company's drug testing policy is lawful and protected under Arizona's Drug Testing of Employees Act (DTEA). But Teilborg wrote that in the absence of expert testimony establishing that Whitmire's drug test shows she was impaired at work because of marijuana she smoked the night before, Walmart "is unable to prove that Plaintiff’s drug screen gave it a ‘good faith basis’ to believe Plaintiff was impaired at work."

Walmart could not meet the burden of proving that the urine sample after the accident “sufficiently establishes the presence of metabolites or components of marijuana in a scientifically sufficient concentration to cause impairment,” the judge wrote.

The full 50+ page ruling in Whitmire v. Walmart is available at this link. As the press report notes, the key to the ruling is the patient protective language in the the Arizona Medical Marijuana Act. Consequently, this ruling does not provide protection to medical marijuana patients outside the state. But the ruling is still notable and another recent example of lower courts growing more comfortable recognizing and enforcing rights under state law on behalf of some marijuana users in some settings.

February 14, 2019 in Business laws and regulatory issues, Federal court rulings, Medical Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)

Tuesday, February 12, 2019

House Subcommittee to hold hearing on Feb. 13 on "Challenges and Solutions: Access to Banking Services for Cannabis-Related Businesses"

Tomorrow afternoon, as detailed on this official webpage, the Subcommittee on Consumer Protection and Financial Institutions of the US House Committee on Financial Services will have hearing on the topic of banking access for cannabis businesses. One focal point for the hearing is consideration of draft legislation, the "Secure And Fair Enforcement Banking Act of 2019" or the "SAFE Banking Act of 2019," which is designed to allow marijuana-related businesses in states with existing regulatory structures to access the banking system. 

In addition to being the first-ever congressional hearing on banking for marijuana businesses, I sense this is the first of a series of possible effects by the Democratic-controlled House to move forward on various possible federal legislative reforms.  A few days ago, Click the Committee produced this Memorandum providing background, and here is the scheduled "Witness List":

  • The Honorable Fiona Ma, California State Treasurer
  • Maj. Neill Franklin (Ret.), Baltimore City & Maryland State Police Departments, and Executive Director, Law Enforcement Action Partnership (LEAP)
  • Ms. Rachel Pross, Chief Risk Officer, Maps Credit Union, on behalf of Credit Union National Association (CUNA)
  • Mr. Gregory S. Deckard, President, CEO and Chairman, State Bank Northwest, on behalf of Independent Community Bankers of America (ICBA)
  • Mr. Corey Barnette, Owner, District Growers Cultivation Center & Metropolitan Wellness Center

 

UPDATE: Here now are links to all of the written testimony of witnesses at this hearing:

February 12, 2019 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Who decides | Permalink | Comments (0)

Saturday, February 9, 2019

Appreciating the problems when weed is allowed to grow like a weed

Marijuana-fieldThe cheeky title of this post is the thought I had in response to the news out of Oregon this past week, discussed in this Quartz piece headlined "Oregon has more legal cannabis than the state can consume in six years."  Here are the details:

In 2018, Oregon’s legal marijuana producers grew more than twice as much as was legally consumed, leading to an oversupply that has 6.5 years’ worth of cannabis, measured by the psychoactive compound THC, on the shelves at dispensaries and wholesale distributors.

The latest data from Oregon, which adopted its legal regime in 2014, was released this week (pdf) by researchers working for Oregon’s Liquor Control Commission, which closely regulates cannabis from production to distribution....

“For Oregon, producing a lot of marijuana is not new news; producing a lot of marijuana that is tracked in the legal system is,” writes Steve Marks, the commission’s executive director.  He notes that the state has garnered $198 million in tax revenue from the first three years of its legal cannabis regime, and that only 45% of estimated Oregon cannabis use is supplied by the medical marijuana market, legal home grows, or the black market.

But the current situation creates a “concern that [legally grown cannabis] may be diverted to the black market and/or out of state given current market conditions (high supply, falling prices, and a huge pipeline of applications for new entrants into the market),” writes Josh Lehner, an economist who works for the state government.

Now the question is whether the state government will take any action to push down supply by increasing producer license fees, limiting the maximum amount of marijuana grown in the state, or capping the number of licenses temporarily or permanently.  The researchers do observe that the 6.5 years’ worth of THC on the shelves is a deceiving estimate, since some is likely to become stale or uncompetitive with new products.

Part of the challenge is that many legal producers are getting into Oregon’s market to lay the groundwork ahead of hoped-for changes in federal laws down the line, especially since Oregon removed a residency requirement for owners.  “Businesses in Oregon’s recreational marijuana market are in some ways analogous to technology start-ups… willing to take the risk of losses today for potential large gains tomorrow,” the report notes. “However, this calculus depends on ‘tomorrow’ not being excessively far in the future and the license remaining in good standing.”

For now, the Oregon oversupply is more an “indication of speculative bets and pending market corrections,” but the longer the situation continues, the more pressure there will be on cannabis startups to make money outside the legal system.

In contrast to many other states, Oregon has relatively few limits on who can get a license to grow for the legal market. And marijuana's nickname "weed" is itself a useful reminder that marijuana is not all that hard to grown and it grows relatively quickly. So, absent certain types of regulation, it is not surprising to see an oversupply of product in the Beaver State.

February 9, 2019 in Business laws and regulatory issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Friday, February 8, 2019

Notable new lobbying group, National Cannabis Roundtable, to be chaired by former US House Speaker John Boehner

LogoWhen Acreage Holdings last year announced that former Speaker of the US House of Representatives John Boehner was now on its board of advisors, I was unsure whether Boehner was really interested in being a serious advocate for marijuana reform or was mostly to be a high-profile figurehead in this space. But in November, as noted here, Boehner penned a Wall Street Journal commentary headlined "Washington Needs to Legalize Cannabis." And today comes news that John Boehner is to be the Chair of a new industry lobbying ground calling itself the National Cannabis Roundtable.

This new local press piece and this National Cannabis Roundtable website is all I can find about this new group right now, but the press piece provides a flavor of the group's commitments:

The former lawmaker will also serve as an advisor, not a registered lobbyist, for the roundtable, Boehner said during a phone call with reporters Friday. Boehner said the roundtable will promote changes to federal law that make it easier to research cannabis and for regulated cannabis businesses to operate. Federally, marijuana is an illegal Schedule 1 controlled substance, alongside heroin and LSD, is not a top priority for the group....

But Boehner said removing cannabis from Schedule I of the U.S. Controlled Substances Act is not the group's top priority. "It would clearly be a big goal, but I think there are other steps that need to be taken along the way before we get to that," he said....

Boehner said the roundtable's members represent every aspect of the cannabis supply chain, including growers, processors, retailers, wellness centers, investors, entrepreneurs, and publicly traded companies.

The National Cannabis Roundtable website has the following sentences under the heading "Our Mission"

The legal cannabis boom promises to contribute billions of dollars to the US economy over the next decade - creating jobs, advancing new health science and adding momentum to criminal justice reform.

The National Cannabis Roundtable promotes common sense federal regulation, tax equality and financial services reform and supports changing federal law to acknowledge states’ rights to regulate and manage cannabis policy.

I like the reference to "adding momentum to criminal justice reform" in the first sentence, though the second sentence and other factors leads me to suspect that National Cannabis Roundtable will not have criminal justice reform as a focal point of its work.

Prior related posts:

February 8, 2019 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)

Saturday, January 26, 2019

"In the age of luxury cannabis, it’s time to talk about Drug War reparations"

The title of this post is the headline of this lengthy new commentary piece authored by Jenni Avins appearing in Quartz. I recommend the piece in full, here is its powerful start:

Since California legalized recreational cannabis in January 2018, pot enthusiasts in posh sections of Los Angeles can sleep easily with a few drops of CBD oil under the tongue. They can stroll into dispensaries such as MedMen, the chain touted as the “Apple store of weed,” which recently reported quarterly revenues of $20 million. On Venice Boulevard, shiny sedans toting surfboards drive past posters for Dosist vape pens and billboards for delivery services such as Eaze, a San Francisco-based startup that has raised some $52 million in venture capital.

In places like this, weed is chic. But just a few freeway exits away, in largely black and Latino neighborhoods where cannabis was aggressively policed for decades, people saddled with criminal convictions for possessing or selling the plant still fight to clear criminal records standing in the way of basic necessities: employment, a rental apartment, or a loan. Marijuana legalization and the businesses that profit from it are accelerating faster than efforts to expunge criminal records, and help those affected by them participate in the so-called “Green Boom.” And the legal cannabis industry is in danger of becoming one more chapter in a long American tradition of disenfranchising people of color.

Here is more:

As the US teeters at the tipping point for marijuana going mainstream, it’s increasingly apparent that people and communities who were disproportionately punished for its criminalization were wronged. It’s a cruel footnote to the story of the plant’s legalization that punishment for past involvement with cannabis can remain a bar to entry in the lucrative newly legal industry. Now, policy-makers, entrepreneurs, activists, and everyday consumers are asking what reparations for those wrongs might look like.

Here’s one idea that many agree on: Those disproportionately affected by the War on Drugs—largely, black and Latino communities—should be first in line to benefit from the Green Boom, whether as business owners or beneficiaries of programs funded by earnings from the business.

The US’s legal weed explosion is an incredible story of de-stigmatization, entrepreneurship, and opportunity. It’s also at risk of becoming a staggering tale of hypocrisy, greed, and erasure. But as a deep-pocketed industry with political momentum, American cannabis is uniquely positioned to serve as a model for what racial reparations could look like.

“This is about harnessing the industry to embody the work of repair,” said Adam Vine, the founder of Cage Free Cannabis, an organization that pushes for “drug war reparations” in the form of criminal record expungement, job fairs, voter registration, health care, and social equity programs. “Otherwise,” he said. “Legalization is just theft.”

Go read the rest.

January 26, 2019 in Business laws and regulatory issues, Criminal justice developments and reforms, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)