Friday, January 14, 2022
Natalie Fertig has this great new (and lengthy) article in Politico Magazine about the persistent challenges posed by illegal marijuana market in a country that for now has only half-legalized the cannabis plant. The full title of this piece highlights its themes: "‘Talk About Clusterf---’: Why Legal Weed Didn’t Kill Oregon’s Black Market. Legalization was supposed to take care of the black market. It hasn’t worked out that way." I recommend the piece in full, and here are excerpts:
People have grown marijuana illegally in southern Oregon for at least half a century. It was easy to conceal illicit activity in private woods and national forests when the nearest human could easily be a few miles away. But there’s nothing hidden about what’s going on now.
The Red Mountain Golf Course, a 24-acre plot of land just outside Grants Pass, the county seat, sold for just over half a million dollars in June 2021. Three months later, Josephine County Sheriffs and Oregon State Troopers raided the former golf course and seized more than 4,000 marijuana plants and arrested two people on charges of felony marijuana manufacture. It wasn’t an isolated incident. Around the same time, law enforcement seized 380 pounds of processed marijuana stuffed in a car abandoned at the scene of a crash. Cops also seized 7,600 marijuana and hemp plants, 5,000 pounds of processed marijuana and $210,000 in cash from two grow operations just outside Cave Junction. Two men were arrested and held for unlawful manufacture of a marijuana item and other charges.
While these eye-popping figures draw headlines, the raids are just a cost of doing business for the cartels, according to law enforcement officials. Many buy or lease six or seven properties, knowing that some might get shut down by the police. Like any smart entrepreneurs, the cartels budget for those losses....
The proliferation of unlicensed cannabis farms is scaring local residents and scarring the landscape. Personal wells have run dry and rivers have been illegally diverted. Piles of trash litter abandoned grow sites. Locals report having knives pulled on them, and growers showing up on their porches with guns to make demands about local water use. Multiple women say they’ve been followed long distances by strange vehicles. Locals regularly end conversations with an ominous warning: “Be careful.”...
Earlier in the year, the legislature passed a bill, sponsored by Republican state Rep. Lily Morgan, that increased penalties for growing cannabis illegally and gave state regulators the authority to investigate hemp growers.
Jackson County Sheriff Nate Sickler says the tougher rules for hemp cultivation and the money lawmakers funneled to local enforcement efforts are an excellent start. “If we’re able to get our positions funded, I really think we can make a significant impact [on] illegal marijuana,” said Sickler. “Are they going to go away? It’s probably never going to happen.”...
There are as many suggested solutions to southern Oregon’s weed problem as there are factors creating it. Some say tweaks to federal and state hemp regulations — and more money for law enforcement — will get the illicit grows under control. Others argue that only federal decriminalization will solve the problem, because it would reduce the market for illicit weed. Anti-legalization advocates, meanwhile, point to Oregon’s woes as proof that legalization doesn’t live up to its promise of eliminating the illicit market.
Wednesday, January 12, 2022
The title of this post is the title of this exciting event taking place online two weeks from today put on by the Drug Enforcement and Policy Center and The Center for New Revenue. As detailed at this registration page, the event will take place on Wednesday, Jan. 26, 2022 from Noon - 1:30pm. Here are the basics with the list of confirmed speakers:
States that legalize adult-use cannabis face many decisions as they set up a regulatory structure for the new industry. As all states impose excise taxes on recreational cannabis, the questions of how much to tax and how to tax come into focus.
Join the Drug Enforcement and Policy Center and the Center for New Revenue for a panel that will explore the evolving theory and practice of cannabis tax policy. Panelists will delve into a range of issues including the choice of an effective tax base (weight of flower and trim, THC amount, percentage of price) and the appropriate tax burden.
Ulrik Boesen, senior policy analyst, Tax Foundation
Hilary Bricken, attorney, Harris & Bricken
Benjamin Leff, professor, American University Law School
Pat Oglesby, founder, The Center for New Revenue
Shaleen Title, distinguished cannabis policy practitioner in residence, Drug Enforcement and Policy Center
Tuesday, January 11, 2022
Take a break, Delta 8, Delta 8, take a break ... we can check the laws, but we're still a ways away from legal clarity
I am gearing up to teach my marijuana seminar for the first time in two years, and that necessarily means having to prepare for new discussions about new issues in an arena where legal and marketplace reforms are always fast-moving. One brand new issue, for example, is the emergence of a wide array of Delta-8 THC products and all the legal uncertainty that they engender. (As my post title reveals, at least for hard-core REM fans, I cannot help but hum the great REM song Driver 8 whenever I think about Delta 8 issues.)
Usefully for me (and perhaps for others), I just saw this recent piece providing an overview of state laws and other matters related to Delta 8 THC products. Though industry-delta-friendly, this article still provides a helpful review of various basics under this full headline: "Delta-8 is Available in 28 States While Others Try to Ban It: Several U.S. states preemptively restrict or outright ban delta-8 THC as federal regulators swoop in to clarify its legality." Here are some excerpts from the lengthy piece:
Delta-8 THC has been a sensation in the country. Its popularity soared throughout 2020 and many believed its reign of euphoric bliss would continue into 2021 and beyond. However, the federal government and the DEA are swooping in to ruin all the fun.
In April, alone, several U.S. states either restricted or banned delta-8 THC, sparking outcry from users, companies, manufacturers, and vendors within the cannabis industry. So, why are U.S. states banning delta-8 THC? Which ones have already banned it? What have the federal government and the DEA got to do with this?....
Delta-8 is one of 113 cannabinoids found in varieties of cannabis (hemp or marijuana) and a variant of delta-9-tetrahydrocannabinol (THC). It’s psychoactive and intoxicating, causing a “high” when consumed. However, when compared to delta-9 THC, the effects are far milder and better suited to beginners looking to enjoy the euphoric effects without the side effects commonly associated with delta-9. Delta-8 THC can now be found in several product types such as distillates, vape cartridges, oils, and flower....
In 2018, the federal government under the Trump administration, signed the Agriculture Improvement Act (2018 Farm Bill), legalizing hemp and all hemp-derived cannabinoids.... However, in 2020, the DEA issued a controversial interim final rule that sought to bring the Farm Bill further in line with the Controlled Substances Act (CSA), spelling trouble for not only delta-8 but also for delta-10 THC.
Within this final rule, the DEA stated all “synthetically-derived tetrahydrocannabinols remain schedule I controlled substances”. Why is this significant and how is it related to delta-8? Well, in order for companies to have enough delta-8 THC in their products, it must be converted from cannabidiol (CBD) via a structural isomerization process conducted under laboratory conditions. This isomerization process takes CBD, alters its molecular structure, and turns it into delta-8. Since it’s produced by chemical or biochemical synthesis and not sourced straight from the hemp plant itself, the DEA believes delta-8 is a synthetic substance.....
Is delta-8’s safety in question? Yes. Delta-8’s safety is in question. Why? Because it’s a psychoactive and intoxicating delta-9 THC variant that’s recently exploded into an unregulated market with very little research verifying its effects.
Friday, January 7, 2022
Pleased to see The National Jurist include "cannabis law" on list of "20 hottest law jobs for the next decade"
Thanks to Paul Caron's posting, I just saw that the latest issue of The National Jurist has an extended feature headlined "20 hottest law jobs for the next decade" which makes mention of cannabis lawyering. Here is a bit of the piece's preamble along with its short discussion of "Cannabis Law":
Crystal balls are hazy, but we’re following the trends to predict which practice specialties will be most in demand.... What’s next on the horizon? That’s a tough question, but it’s not impossible to predict.
We turned to top experts, the three authors of “Law Jobs: The Complete Guide,” to get their opinions on which fields show the most promise. They know their stuff. In their book, they identify hundreds of specialties and sub-specialties.
The most pertinent advice from the authors: “While it makes sense to take a close look at hot specialties, the most important thing is to find a job that fits one’s personality, passions and values. Our book gives readers the information about the pros and cons of each major career type in order for people to find their fit.”
The authors are: Andrew McClurg, professor emeritus of The University of Memphis-Cecil C. Humphreys School of Law; Christine Nero Coughlin, a professor at Wake Forest University School of Law; and Nancy Levit, a professor at University of Missouri-Kansas City School of Law. They offer personal and professional advice on the 20 hottest practice areas.
Cannabis Law by ANDREW McCLURG
Legal job experts are high on the emerging area of cannabis law. Yes, pun intended. Seriously, nearly all lists of hot legal specialty areas include cannabis law. Makes sense. A majority of Americans now live in states where marijuana is allowed for recreational and/or medical use.
Legal marijuana is a heavily regulated area, and laws vary considerably from state to state. Because everything is new, regulators are struggling to interpret the rules as they go. Throw in the fact that marijuana remains illegal under federal law and you have plenty of potential pitfalls that require lawyers. A mistake can result in criminal prosecution for your client, and maybe for yourself.
Cannabis law is a blend of areas, including administrative law, banking law, entity formation, intellectual property, tax law and venture capital. Because it requires knowledge of so many areas, most cannabis lawyers work in small specialty firms or in specialty groups within large firms. It’s a competitive niche field, not something to dabble in. Even though the area is expanding, jobs aren’t ever going to be as widely available as in traditional fields.
I think this description is generally sound, as is the full list of job areas on the list of 20 including sound and obvious choices like health law and environmental law and immigration law and M&A. But I did find it notable that just about every other "hot" jobs area of law was one that just about every law school has at least one and often multiple courses in the subject. But, as my Center has highlighted in recent reports (see here and here to download), only a handful of law schools regularly teach classes on cannabis law.
Wednesday, December 29, 2021
The title of this post is the title of this paper recently posted to SSRN and authored by Philip Ewing, a student at The Ohio State University Moritz College of Law. (This paper is yet another in the on-going series of student papers supported by the Drug Enforcement and Policy Center.) Here is this latest paper's abstract:
As marijuana is quickly gaining legal status in an increasing number of states throughout the United States, states are faced with choices to make about how they will regulate the industry. One aspect of the regulatory scheme that states must implement is how they will allow businesses to be structured, specifically with regards to vertical integration. Vertical integration is a business structure where a company controls more than one aspect of a business, such as maintaining control over their suppliers, distributors, and retail locations. This allows companies to reduce overhead and reduce costs. Some states mandate that marijuana businesses must be completely integrated, controlling the business from “seed to sale,” others allow vertical integration but do not require it, and some states prohibit vertical integration. This paper will explore vertical integration and how it currently exists in the cannabis industry, detail current trends in state regulations regarding vertical integration, and evaluate policy considerations for the various regulatory approaches.
Tuesday, December 7, 2021
The title of this post is the title of this notable new paper available via SSRN and authored by Shaleen Title. (Shaleen Title served as one of five inaugural commissioners of the Massachusetts Cannabis Control Commission from 2017 to 2020, and this year has been serving as the Distinguished Cannabis Policy Practitioner in Residence at the Drug Enforcement and Policy Center.) Here is the abstract for this paper:
As states and local jurisdictions implement new laws legalizing marijuana, many have charged regulators with the worthy goal of remedying the injustices of the drug war, a concept known as social equity. Broadly, social equity falls into a few core policy categories: criminal justice reforms, including automatic expungement of past cannabis offenses; reinvesting a percentage of marijuana tax revenue into the most impacted communities; and — the focus of this paper — creating a cohesive cannabis industry licensing framework with special considerations for people affected by the war on drugs.
So far, no program has successfully achieved its social equity goals as originally envisioned. But as each new state studies and incorporates the experiences of those that previously tried, we are seeing remarkable progress with respect to the involvement, inclusion, and support of people who have experienced disproportionate harm from prohibition. This paper is designed to equip readers with practical advice about how to implement social equity. There are three large policy areas regulators have to address as they begin to design a comprehensive social equity policy for their state’s cannabis industry: policies around what makes an individual or an entity a social equity applicant, policies around what benefits a social equity applicant should have access to, and licensing policies that will support your community’s social equity goals.
December 7, 2021 in Business laws and regulatory issues, History of Marijuana Laws in the United States, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms, Who decides | Permalink | Comments (0)
Friday, November 12, 2021
"Maximizing Social Equity as a Pillar of Public Administration: An Examination of Dispensary Licensing in Pennsylvania"
The title of this post is the title of this notable new preprint authored by Lee Hannah, Daniel Mallinson and Lauren Azevedo. (Note: This research received supported from the Drug Enforcement and Policy Center, which I help direct.) Here is the paper's abstract:
Public administration upholds four key pillars for administrative practice: economy, efficiency, effectiveness, and social equity. The question arises, however, how do administrators balance these often-competing priorities when implementing policy? Can the values which contributed to administrative decisions be measured?
This study leverages the expansion of medical cannabis programs in the states to interrogate these questions. Focusing on the awarding of dispensary licenses in Pennsylvania affords the ability to determine the effect of social equity scoring on license award decision, relative to criteria that represent the other pillars of public administration. The results show that safety and business acumen were the most important determining factors in the awarding of licenses, both effectiveness and efficiency concerns. Social equity does not emerge as a significant determinant.
Monday, November 8, 2021
Regular readers are familiar with my regular posts highlighting papers from the on-going series of student papers supported by the Drug Enforcement and Policy Center. I am excited to now be able to highlight another version of one of these papers resulting from DEPC's partnership with the Reason Foundation to turn student work into extended policy briefs. Nathaniel Wilson, a student at The Ohio State University Moritz College of Law, has this new full policy brief completed under the full title "New Market Entrants and Uncertain Drug Policy in the United States: Kratom and Delta-8 THC Illustrate Tradeoffs." Here is part of the brief's introduction:
This brief focuses on two substances that ... are each regularly sold to consumers across the country and are gaining in popularity, especially among younger demographics. Delta-8 THC is a relatively new phenomenon that has been introduced into consumer markets across the country, though it has been a known derivative of the cannabis plant for decades. The brief will discuss the legality of delta-8 THC, including the significant role of the 2018 Farm Bill, in this analysis. Additionally, it examines whether or not delta-8 THC is truly legal at the federal level today and provides a forward-looking analysis as to any potential changes that are likely to come in the future. This brief then explores concerns that a business has to contend with if it wants to manufacture and sell delta-8 products, as well as the policy considerations for regulators who want to focus their sights on these particular products. After discussing delta-8, this brief turns to kratom, a substance similarly besieged by incoherent government policy as it gets regularly sold to consumers across the country. Kratom, which is marketed as an herbal supplement, is another substance that has been around for a long time but has seen a recent rise in interest for its potential recreational and therapeutic applications. As with delta-8, this brief discusses the legal environment surrounding kratom, as well as the policy considerations that must factor into an effective regulatory scheme for this particular substance. The concluding discussion forges the overall approach that should be taken when dealing with new market entrants in these “underground” markets.
Monday, October 11, 2021
The title of this post is the title of an exciting event sponsored by the Drug Enforcement and Policy Center at The Ohio State University Moritz College of Law. Here is a description of the event from this registration page:
Long seen by the tobacco industry as a consumer segment of consumers ripe for exploitation, urban communities of color have endured vicious decades of deceit and disregard for their health as the targets of menthol cigarette advertising. Menthols comprise some 30 percent of a shrinking tobacco market in the United States.
As the industry and its supporters in public office move to protect their profits from a federal ban, Dr. Wailoo offers a detailed account of how advertising firms explicitly capitalized on poverty, alienation, and drug use to carve a menthol market out of urban space. This effort, which started in the 1950s and lasted decades, followed the tobacco industry’s false framing of menthol cigarettes as a safer, even healthful alternative for smokers beginning in the 1920s.
Join the Drug Enforcement and Policy Center for a moderated discussion with Professor Keith Wailoo, author of Pushing Cool: Big Tobacco, Racial Marketing, and the Untold Story of the Menthol Cigarette, Dr. Amy Fairchild, dean of The Ohio State University College of Public Health, and DEPC Visiting Assistant Professor Sarah Brady Siff.
Again, registration for this event is available at this link.
Monday, October 4, 2021
The title of this post is the title of this new paper recently posted to SSRN and authored by Elle Gerwig, a recent graduate of The Ohio State University Moritz College of Law. (This paper is yet another in the on-going series of student papers supported by the Drug Enforcement and Policy Center.) Here is this latest paper's abstract:
In today’s world, individuals are surrounded by marketing and advertisements. The alcohol and tobacco industries have long faced advertising restrictions, and now cannabis businesses are beginning to see similar restrictions. Unlike other industries, cannabis is still illegal under federal law which creates confusing restrictions for companies who are located in states where medical or adult-use cannabis is legal. This split in ideology between the federal and state governments, along with the confusing state regulations written more for policymakers than industry workers, has set a crash course for cannabis. This paper will examine several marketing areas where the cannabis industry is currently facing strict regulations, such as billboards, social media, and text messaging, as well as the public policy aspects that have influenced the rules on cannabis advertisements. The paper also focuses on the Telephone Consumer Protection Act (TCPA) and the current rise of class actions associated with text-message marketing in the cannabis industry. The primary goal of this article is to discuss the current regulations for cannabis advertising and why these regulations are hurting the growing cannabis industry.
Friday, September 24, 2021
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.
September 24, 2021 in Business laws and regulatory issues, Employment and labor law issues, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)
Thursday, September 23, 2021
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.
Tuesday, September 14, 2021
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.
Friday, August 27, 2021
The title of this post is the title of this new piece authored by Benjamin Seymour now on SSRN. Here is its abstract:
This Comment offers a fair lending solution to promote racial equity in federal cannabis banking reform: amend the Equal Credit Opportunity Act to ensure individuals previously arrested, charged, or convicted for selling, cultivating, or possessing marijuana will not therefore be precluded from loans to start legal cannabis businesses. Given disparities in the criminal enforcement of marijuana laws, this amendment would provide racial justice benefits, while also encouraging entrepreneurship. As a market-based social justice effort, this amendment offers a bipartisan approach to one of the most vexing and contentious issues in marijuana banking reform.
This Comment briefly surveys the federal statutes that have led to an under-banked cannabis industry and discusses the costs of cash for marijuana businesses. It then examines prior reforms proposed by academics, executive-branch officials, and legislators. Finally, this Comment explores the racial equity concerns that these proposals fail to address and develops a fair lending approach for justice in marijuana banking reform.
Wednesday, July 14, 2021
Great early coverage of US Senate Leader Chuck Schumer's "discussion draft" of new Cannabis Administration and Opportunity Act
Since nearly the start of this year, Senate Majority Leader Chuck Schumer, along with Senators Ron Wyden and Cory Booker , has been talking up the introduction in the US Senate of a new comprehensive federal marijuana reform bill. That talk has suggested that reform efforts from these Democratic Senators would be similar to, but still quite distinct from, the Marijuana Opportunity Reinvestment and Expungement (MORE) Act, that has moved forward in the House of Representatives in recent years.
Today, in mid July 2021, these Senators have scheduled a press conference to unveil what is being described as a "discussion draft" of a lengthy federal bill titled the Cannabis Administration and Opportunity Act (CAOA). The full text of this CAOA "discussion draft" is available here and it runs 163 pages(!). In other words, CAOA give marijuana reform advocates (and opponents) a whole lot to discuss. Helpfully, the cannabis press core is already doing great job covering the basic:
From Marijuana Moment, "Here Are The Full Details Of The New Federal Marijuana Legalization Bill From Chuck Schumer And Senate Colleagues." Excerpt:
Perhaps the most immediately consequential provision would be a requirement that the attorney general to remove marijuana from the Controlled Substances Act within 60 days of the bill’s enactment. But it’s important to keep in mind that this legislation—like other federal legalization bills moving through Congress—would not make it so marijuana is legal in every state. The proposal specifically preserves the right of states to maintain prohibition if they way. It stipulates, for example, that shipping marijuana into a state where the plant is prohibited would still be federally illegal.
However, the measure would make it clear that states can’t stop businesses from transporting cannabis products across their borders to other states where the plant is permitted. FDA would be “recognized as the primary federal regulatory authority with respect to the manufacture and marketing of cannabis products, including requirements related to minimum national good manufacturing practice, product standards, registration and listing, and labeling information related to ingredients and directions for use,” according to the summary.
From Politico, "Schumer launches long-shot bid for legal weed." Excerpt:
The discussion draft of the Cannabis Administration and Opportunity Act includes provisions that cater to both “states rights” Republicans and progressive Democrats. While the proposal seeks to remove all federal penalties on weed, it would allow states to prohibit even the possession of cannabis — along with production and distribution — a nod to states’ rights. It would also establish funding for a wide range of federal research into everything from drugged driving to the impact cannabis has on the human brain. The measure aims to collect data about traffic deaths, violent crime and other public health concerns often voiced by Republican lawmakers.
On the flip side, the proposal also includes provisions that are crucial to progressives. That includes three grant programs designed to help socially or economically disadvantaged individuals, as well as those hurt by the war on drugs and expungements of federal non-violent cannabis offenses. States and cities also have to create an automatic expungement program for prior cannabis offenses to be eligible for any grant funding created by the bill.
A few of many prior recent related posts:
- Senate majority leader shrewdly emphasizing "freedom" in his push for federal marijuana reform
- Red state marijuana reforms not yet leading to GOP Senator support for federal reform
- Key Democratic Senators pledging to soon "release a unified discussion draft" to advance "comprehensive cannabis reform legislation in the 117th Congress"
- Cannabis Freedom Alliance releases "Recommendations for Federal Regulation of Legal Cannabis"
- Notable new GOP bill for ending federal marijuana prohibition
- Notable working group releases new "Principles for Federal Cannabis Regulations & Reform"
- US Senate caucus releases notable new report, "Cannabis Policy: Public Health and Safety Issues and Recommendations"
July 14, 2021 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Political perspective on reforms, Who decides | Permalink | Comments (0)
Tuesday, July 13, 2021
"Higher Me: Marijuana Regulation in the Workforce and the Need for State Legislated Employee Protections"
The title of this post is the title of this new paper recently posted to SSRN and authored by Lily Boehmer, a recent graduate of The Ohio State University Moritz College of Law. (This paper is yet another in the on-going series of student papers supported by the Drug Enforcement and Policy Center.) Here is this latest paper's abstract:
Although illegal under federal law, states have increasingly pushed the cannabis legality boundary by legalizing the use of recreational and medicinal marijuana at the state level. In the space between diverging federal and state law, such actions have created a dire situation for employees; employees in states that have legalized the use of marijuana can be fired for arguably legal conduct. Legalization of hemp and cannabidiol (CBD) products increase the risk of termination and litigation for employees and employers. State legalization is not what it purports it to mean.
This paper examines the current legal framework of cannabis regulation, discusses the historical, legal precedent of an employer’s right to terminate an employee in contrast to recent case law providing protection and hope to employees, and analyzes why some employers have stopped marijuana drug testing in response to faulty testing and diminished applicant pools. Ultimately, this paper argues that, absent federal legalization of marijuana, states must protect employees’ off-duty marijuana use through express state legislation. Legalization cannot be fully actualized until employees can use marijuana without employment repercussions.
Sunday, June 27, 2021
The title of this post is the title of this notable new report authored by Janessa Bailey with Leafly. I recommend the full report's explanation, accounting and scoring of various aspect of social equity in cannabis reform. Here is how the report gets started:
Over the past decade, cannabis legalization has offered new economic opportunities to hundreds of thousands of people across the United States. But those opportunities have not been extended to all Americans.
In the nine years since Colorado and Washington first legalized marijuana for all adults, we’ve learned that past inequities and current barriers aren’t erased by simply declaring cannabis legal.
The systems of discrimination built into 80 years of prohibition won’t be erased by hope and wishful thinking. Their dismantling requires proactive steps on the part of state and municipal policymakers.
Cannabis is the nation’s fastest-growing industry. As of June 2021, 38 states have some form of legalized cannabis, with 19 states and Washington, DC, allowing legal use for all adults. The $18.3 billion dollar industry now supports 321,000 full-time American jobs, and cannabis entrepreneurship and employment have exploded over the past five years.
But as legalization and the growing cannabis industry have expanded, it has become increasingly clear that opportunities in cannabis are not fairly accessible to all Americans.
Seeds of Change offers eight strategies to create a fair and equitable cannabis industry, assesses each legal adult-use state on its implementation of those strategies, and illuminates the often-hidden barriers that contribute to the current disparities in cannabis.
In other words: Here’s what’s needed, here’s how legal states are doing, and here’s why these strategies are necessary.
Tuesday, June 1, 2021
The Memorial Day weekend serves as the unofficial start to summer and today is the official start of June, and so I figured it was a good time to catch up with a bunch of recent notable stories from major outlets that I have not found time to blog about recently. So here goes:
From Pew Research Center, "Religious Americans are less likely to endorse legal marijuana for recreational use"
From the New York Times, "Why the Pandemic Was a Breakout Moment for the Cannabis Industry"
From the New York Times, "Yes, Pot Is Legal. But It’s Also in Short Supply."
From the Wall Street Journal, "Positive Marijuana Tests Are Up Among U.S. Workers"
Also, the always great Marijuana Moment has these two notable recent op-eds:
By Shaleen Title, "Congress Only Has One Chance To Legalize Marijuana The Right Way"
By Matthew Schweich, "The War On Ballot Initiatives Has Marijuana In The Crosshairs"
Friday, May 28, 2021
The title of this post is the title of this notable new report and accounting from folks at the Marijuana Policy Project. Here is how it gets started (with my highlight):
Legalizing marijuana for adults has been a wise investment. Since 2014 when sales began in Colorado and Washington, legalization policies have provided states a new revenue stream to bolster budgets and fund important services and programs. As of May 2021, states reported a combined total of $7.9 billion in tax revenue from legal, adult-use marijuana sales. In addition to revenue generated for statewide budgets, cities and towns have also generated hundreds of thousands of dollars in new revenue from local adult-use cannabis taxes.
Eighteen states have enacted laws legalizing, taxing, and regulating cannabis for adults 21 and older. Eight of the laws passed in 2020 or 2021, and in seven of those states, licensing and tax collections have not yet begun. This document reviews each state’s adult-use cannabis tax structure, population, and revenue from legalization. It does not include medical cannabis tax revenue, application and licensing fees paid by cannabis businesses, additional income taxes generated by workers in the cannabis industry, or corporate taxes paid to the federal government.
The report provides a helpful overview of all the basic tax structures in place for adult-use marijuana as of May 2021, as well as reports on total collections in these states to date. Notably, while Colorado is often thought about as the first legalization state and California is rightly seen as the biggest legalization state, this report details that Washington is as of now the richest state in tax revenues with over $2.5 billion collected. (But California's tax revenue in 2020 was nearly twice that of Washington's according to this report, so by 2022 we should expect the Golden State to have collected the most tax gold from adult-use marijuana legalization.)
May 28, 2021 in Business laws and regulatory issues, History of Marijuana Laws in the United States, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)
Monday, May 10, 2021
I was very pleased to have received the following guest post content from Professor Andrew D. Appleby of Stetson University College of Law:
Although the recreational marijuana movement has gained momentum at the state level, several states may be unable to legalize recreational marijuana because of tax limitations in their state constitutions. A primary motivation for legalization is increased tax revenue, and every state that has legalized recreational marijuana also taxes it. Many states, however, have broad constitutional provisions designed to make tax increases more difficult, most notably provisions that require supermajority approval to create or increase any tax. There appears to be a third wave of these tax supermajority provisions proliferating. Florida voters approved a constitutional provision in 2018 and several other states, including New York in 2021, have considered supermajority approval provisions. These provisions have several unintended consequences, as discussed in my forthcoming article, "Designing the Tax Supermajority Requirement."
These provisions impact recreational marijuana in several ways. Most state tax supermajority provisions apply only to the legislative process, so many states are forced to use the voter approval process for marijuana legalization efforts. Prior to 2021, only two states had legalized recreational marijuana through the legislative process. Neither state has a tax supermajority requirement, and neither state would have satisfied the requirement. Vermont was unable to include a tax provision in its initial legalization bill and needed to enact a separate tax statute two years later. Three states legalized recreational marijuana through the legislative process in 2021. None of the legislation passed with two-thirds supermajority approval.
Recreational marijuana is still divisive in many states for many reasons, particularly as it remains illegal federally, so achieving supermajority approval is difficult. Even in politically liberal states, recreational marijuana legalization voter initiatives have passed by narrow margins. In the 2016 election year, for example, the Massachusetts initiative passed with 53% of the vote and the California initiative garnered only 57% approval. Four states legalized recreational marijuana through ballot initiatives in 2020. Only New Jersey achieved supermajority approval, and just barely, with 67% voting in favor. South Dakota, which has a tax supermajority provision and “one subject” provision in its constitution, had its legalization initiative declared unconstitutional, with the South Dakota Supreme Court currently considering the appeal.
Florida is also grappling with constitutional hurdles in its marijuana legalization efforts, as the Florida Supreme Court struck down a proposed ballot measure because of misleading language. Even if the measure were to appear on the ballot, Florida has an additional tax supermajority provision that requires two-thirds supermajority approval for voters to amend the constitution to create or increase a tax. The experiences in South Dakota and Florida illustrate how tax supermajority provisions have the unintended consequence of impeding recreational marijuana efforts.
May 10, 2021 in Business laws and regulatory issues, Political perspective on reforms, Recreational Marijuana Commentary and Debate, Taxation information and issues , Who decides | Permalink | Comments (1)