Marijuana Law, Policy & Reform

"The Economic Impact of Marijuana Legalization in Colorado"

The title of this post is the title of this recent report produced by the Marijuana Policy Group, which describes itself as a "non-affiliated entity dedicated to new market policy and analysis [seeking] to apply research methods rooted in economic theory and statistical applications to inform regulatory policy decisions in the rapidly growing legal medical and recreational marijuana markets." Here is part of the report's synopsis:

The Marijuana Policy Group (MPG) has constructed a new model that accurately integrates the legal marijuana industry into Colorado’s overall economy. It is called the “Marijuana Impact Model.”  

Using this model, the MPG finds that legal marijuana activities generated $2.39 billion in state output, and created 18,005 new FullTime-Equivalent (FTE) positions in 2015.  Because the industry is wholly confined within Colorado, spending on marijuana creates more output and employment per dollar spent than 90 percent of Colorado industries....

Legal marijuana demand is projected to grow by 11.3 percent per year through 2020.  This growth is driven by a demand shift away from the black market and by cannabis-specific visitor demand. By 2020, the regulated market in Colorado will become saturated.  Total sales value will peak near $1.52 billion dollars, and state demand will be 215.7 metric tons of flower equivalents by 2020. Market values are diminished somewhat by declining prices and “low-cost, high-THC” products.

In 2015, marijuana was the second largest excise revenue source, with $121 million in combined sales and excise tax revenues.  Marijuana tax revenues were three times larger than alcohol, and 14 percent larger than casino revenues. The MPG projects marijuana tax revenues will eclipse cigarette revenues by 2020, as cigarette sales continue to decline.  Marijuana tax revenues will likely continue increasing as more consumer demand shifts into the taxed adult-use market.

As a first-mover in legal marijuana, the Front Range has witnessed significant business formation and industry agglomeration in marijuana technology (cultivation, sales, manufacturing, and testing).  This has inspired a moniker for Colorado’s Front Range as the “Silicon Valley of Cannabis.”  Secondary marijuana industry activities quantified for the first time in this report include: warehousing, cash-management, security, testing, legal services, and climate engineering for indoor cultivations.

Does marijuana legalization at least partially account for the remarkable recent popularity of Colorado Law?

The question in the title of this post is prompted by this notable Colorado University news item headlined "Colorado Law receives record number of applications." Here are the details leading to my marijuana-inflused speculation, with my added emphasis throughout the piece:

Applications to the University of Colorado Law School are up 38 percent, setting a record for the most applications ever received in an admissions cycle and the highest median GPA of an incoming class.   With 170 individuals, the University of Colorado Law School’s incoming class of 2019 is the most selective and academically competitive in the school’s history.   The 2016-17 admissions cycle set the school’s record for number of applications and highest median GPA of an incoming class.

This year, Colorado Law received 3,299 applications for the class of 2019 — a 38 percent increase from last year and the most applications ever received in an admissions cycle.  The larger applicant pool allowed for more selectivity, which boosted the median GPA to the highest in the school’s history (3.69). The median LSAT score (162) for the class of 2019 is also higher than that of previous classes.  “I am thrilled that more people have discovered that the experience at Colorado Law is very special,” said S. James Anaya, dean of the law school.  “Our supportive community, dedicated faculty, cutting-edge scholarship, and innovative programs — not to mention our success on the employment front — all make Colorado Law a terrific place to be.”

This year marks the continuation of an upward trend in Colorado Law’s admissions numbers.  In 2015-16, Colorado Law welcomed its largest class ever, at 205 individuals — a 22 percent increase from the previous year.  Applications to Colorado Law increased 10 percent that year, at the same time that law school applications nationwide were down for the fifth year in a row. 

I am disinclined to assert that hundreds (and perhaps even thousands) of prospective law students are now applying to the University of Colorado Law School just so they can legally relax with cannabis as well as with Coors after a tough week of classes.  But  marijuana reform has surely contributed to the recent success of the Colorado economy and this success surely produces unique benefits and opportunities for law students and junior lawyers.  Especially at a time when prospective law students are focused on employment prospects during and soon after law school, I think it fair to suggest marijuana legalization at least partially accounts for why Colorado Law is  so uniquely attractive to law school applicants during an era when most law school continue to struggle with a significant decline in applications.

(I must note for the record that I had the honor and pleasure to teach a special one-week course on Marijuana Law & Policy as a visiting professor at University of Colorado Law School in January 2016.  For that reason (and especially because of the terrific students I meet at Colorado Law), I certainly have a fond spot in my heart for this institution.  But if I really wanted to make this post entirely marijuana-focused and self serving, I would be inclined to add (with tongue firmly planted in cheek) that there is notable connection in 2016 between extra teaching of marijuana law at Colorado Law and a huge increase in applications there.)

UPDATE: I now realize I need to give credit to Paul Caron for first breaking this story with detailed data in this post yesterday under the (punny?) headline "Colorado Law School Enjoys All-Time High"

Notable Forbes discussion of "The Five Best Marijuana Jobs"

Regular readers know I strongly believe that the economic development aspects/consequences  of marijuana reform are very significant and yet too often overlooked.  Consequently, I was intrigued and happy to see this notable new Forbes article about the best marijuana jobs.  Here are excerpts:

The marijuana industry is growing quickly and just as quickly gaining wider societal acceptance.  As such, more people are looking at the cannabis industry as a career choice. Some of the jobs are little out of the ordinary, but that’s probably what draws many workers interested in cannabis jobs. Whether they worked with marijuana in the black market or just want an alternative to the standard cubicle job, thousands are trying to get in.

There are websites with cannabis job listings like Cannajobs and 420careers.  Medical marijuana delivery company GreenRush held a job fair in California in April; 2,700 people attended and 200 jobs were filled. Another event is planned for November 10.

Cannabis company Terra Tech Corp. recently held a job fair in Las Vegas. They ran a quarter page ad and expected about 200 people to show up. They got 2,000 instead. “Most people just want to get into the space,” said CEO Derek Peterson. “They believe in the product.” Peterson said a lot of people came without any experience and since the jobs are unique, they tried to pair existing skills with new job requirements.

He also noted that a lot of people in the 40-50 age group have been aged out of the traditional workforce. “Almost everyone had a bachelor’s degree that we saw,” he said. While some positions like store managers overlap more traditional jobs, others like bud trimmers are truly unique to the space. Here are the top five jobs in the marijuana industry.

Grow Master

The grow master is the person responsible for cultivating various strains of marijuana plants. Peterson likens it to being a master chef. Grow masters are in high demand and it’s a seller’s market. At minimum they can command a salary of $100,000 a year and a percentage of the profit....

Store Managers

Like any retail operation, a medical dispensary or recreational outlet needs a manager. These employees can do very well, especially in profitable stores. At minimum, they can earn $75,000 a year and many get a bonus on top of that based on the store’s sales. When you consider that some stores in California have sales of $3 million to $6 million a year, while some San Francsico Bay area stores do $7 million to $10 million a year, that bonus can be pretty good....

Extraction Technician

Most people only think of marijuana in the plant form, however marijuana extracts are a growing side of the business. These “extract artists” have a unique set of skills. Peterson said many of the people he hires for this job have PhD’s. They can earn between $75,000 and $125,000 a year. Some states don’t like the idea of people smoking pot for medical purposes and like the state of New York have only legalized medical marijuana in the extract form....

Bud Trimmers This is the entry level job working with the plant. It tends to be the lowest paid job in the industry — a bud trimmer in California may make $12-$13 an hour. In Vegas where service jobs are in high demand, $13 an hour is the general wage. Some get paid by the pound and that can run to $100-$200 a pound. In a medical dispensary, a trimmer takes the plant and with little scissors cuts the flower from the stem....

The Owner

While owning a marijuana business sounds like the ultimate counterculture move, it brings a mountain of headaches. Many owners say they don’t make the millions that many people think they do. There are legal and banking headaches, and the regulatory landscape is constantly shifting. The owners don’t get to claim the same business deductions that other business owners get, so the expenses are sky high. Many owners front millions of dollars for years before they ever get to see any profits.

Rural Illinois excited by economic development potential of medical marijuana reform

This AP article, headlined "Legal Marijuana Stirs Hope in Illinois Town," highlights the on-the-ground reality that I believe will sustain marijuana reform: local economic development. Here are excerpts:

A skunky aroma fills the room in which hundreds of lush marijuana plants grow, some nearly ready for harvest. Grower Ashley Thompson, a former high school agriculture teacher in this rural part of southeastern Illinois, takes the scent of weed home with her.

She doesn't mind. It's the fragrance of money and jobs. "My family says I smell," said Thompson, who quit the classroom to work for Ataraxia, one of a handful of cultivation centers in Illinois, which is one of 23 states with medical marijuana. "I can't tell though."

The Associated Press recently gained an exclusive look at Illinois' first legal marijuana crop, and the new farmland ritual beginning amid surrounding cornfields in the historic town of Albion: the harvest of medical marijuana that will soon be sold in dispensaries around the state.

Ataraxia is the first center to make it to the finish line after running a gantlet of state requirements. For the company to find a home in Albion — where grain trucks rumble past the sleepy central square, cicadas drone in the trees shading a century-old courthouse and a breeze touches an empty bandstand — is paradoxical. Stores can't sell package liquor, but marijuana has been welcomed as a badly needed source of employment.

A comical T-shirt for sale says the town is "High and Dry." Cheryl Taylor, who sells the shirts at her shop on the square, said the marijuana facility has everyone curious: "It's brought our little town to life."

Down a country road, tucked behind the New Holland tractor dealer and the Pioneer seed plant, the history-making cannabis crop is being cut and dried behind the locked doors of a giant warehouse. By mid-October, strains with names like Blue Dream, OG Kush, Death Star and White Poison will be turned into medicine in many forms: oils, creams, buds for smoking, edible chocolates and gummies.

It's been a twisting path to harvest, marked by delays and a secretive, highly restrictive program meant to avoid the creation of easy-access pot shops seen in other states. Until Illinois gave approval in late September for the AP's tour, only company workers and government inspectors had been inside the warehouse. Thousands of cannabis plants — some in full bud, coated with cannabinoid-rich fibers — filled two large rooms at the facility on the day of the AP's tour. Mother plants and young plants started from cuttings had their own, smaller rooms.

The 1,900-person community of Albion, which is closer to Louisville, Kentucky, than Chicago, has embraced all this, sight unseen. "It's a good thing for the local economy," said Doug Raber, who sells insurance. "This is a pretty conservative area. Any kind of revenue we can have here is good."

Local developers sold a cornfield to Ataraxia for $5,000 an acre, which real estate agent Randy Hallam said is a 50 percent discount. The city also paid to build a road and extend water and sewer lines. The company hired locals to build and outfit the warehouse.

But only seven people, aside from managers, have been hired permanently. With only 3,000 approved medical marijuana patients, the company can't expand yet. CEO George Archos said he wants to hire 50 to 60, and meeting that goal will go a long way to keeping the community's support. "Albion needs to diversify its employment," said Duane Crays, editor of The Navigator, Albion's newspaper. Chief employers regionally are agriculture, oil and gas production, and an auto filter plant....

Residents' excitement over the health benefits of marijuana — from stimulating appetite in cancer patients to easing stiffness for people with multiple sclerosis — may also have historic roots. The bandstand marks the spot where a mineral spring once drew patients suffering from a host of ailments; it was said the water could cure. "My wife has MS," Hallam said. She doesn't have her patient card yet, he said, "but she has a doctor's appointment coming up."

Could marijuana reform in part explain application and enrollment boost at University of Colorado Law School?

The question in the title of this post was the thought that kept coming to mind as I read this interesting article headlined "CU-Boulder law school sees enrollment boom as numbers fall nationally."  As those in and following closely the law school industry know all too well, both applications and enrollment has been way down at most law schools nationwide over the last few years.  But, as the article explains, the flagship school in a flagship state for marijuana reform now has a different story to tell:

At a time when interest in attending law school appears to be waning across the country, the University of Colorado Law School this fall has seen a 22 percent increase in first-year students. CU's newest crop of law students totals 205, up from 168 students in the first-year class of 2014.

Though they're still trying to determine the exact cause of the enrollment boost, Colorado Law administrators contend that the school is in a desirable location and has a reputation for putting students in jobs after graduation. "We've been really working hard at communicating our value proposition and why Colorado Law is a special place to be," Dean Philip Weiser said. "We are getting that story out there. That story picks up on the fact that we are really helping our students on the job front."

Since 2005, CU's first-year law classes have hovered between 160 and 180 students each year. The American Bar Association reported that fall 2014 first-year enrollment levels in the United States, the most recent data available, were the lowest since 1973. The 2014 new student enrollment figure represented a 4.4 percent decrease from 2013 and a 27.7 percent decrease from 2010, when first-year law school enrollment peaked. Nearly two-thirds of association-approved law schools experienced first-year enrollment declines last year....

It seems that trend is continuing into 2015, though official enrollment numbers aren't yet available. The Law School Admission Council reported in August that applications were down 4 percent from 2014. Despite that, applications to Colorado Law increased in 2015 to 2,383, up from 2,180 applications in 2014.

CU admitted a few more students this year and saw an increased yield rate, or the number of students who enrolled after being admitted. This year, the yield rate was about 19 percent, compared to 15 percent in 2014.

At the same time, the academic qualifications of the 2015 entering class stayed roughly the same as those of the 2014 class, Weiser said. The median LSAT score stayed the same and the median cumulative grade point average declined from 3.62 in 2014 to 3.6 in 2015.

Roughly 70 percent of the entering class of 2015 came from outside of Colorado, up from 59 percent in 2014. Weiser believes the law school's setting and collaborative environment drew students to Boulder this year. "Part of the story is Colorado," Weiser said. "One is that our community in Colorado is a special community that really wants to help each other and collaborate and that cultural appeal resonates."

He said the law school has always been less reliant on large, corporate law firms than other schools. Instead, Colorado Law graduates tend to be more innovative in their career choices. "We have a very entrepreneurial student population, alumni population, who have done all sorts of interesting things," Weiser said. "There are lots of opportunities for smart people who are creative, who know how to communicative, know how to analyze. "I remain excited about what our students are going to be able to do and the careers they're going to be able to have."

Not surprisingly, marijuana reform is not mentioned in this article as a reason for the uptick in both applications and entering students, but the fact that a much larger percentage of students in the entering class came from outside the state is notable and certainly reinforces my speculations. In addition, I am certain that marijuana reform has helped the overall Colorado economy and the business needs for legal help in a highly-regulated industry.

Why heartland could warm to weed: "Rural Maryland sees jobs, not vice, in medical marijuana"

The title of this post is partially the headline of this local article and partially my spin on why I think the potential economic developments of a lawful marijuana marketplace could be of greatest long-term political and social importance.  Here is how the interesting article gets started:

Washington County is a proudly conservative place. Voters here haven’t backed a Democrat for president since 1964, and same-sex marriage lost by a landslide in a referendum three years ago.

But when Chicago-based Green Thumb Industries pitched a proposal to put a medical-marijuana production plant here, the county’s five county commissioners — Republicans all — passed a resolution unanimously supporting the plan.

Residents of Hagerstown, the county seat, seem to be taking the news in stride. The consensus: yes to marijuana for relieving pain, no to recreational use. “I think it’s all right as long as it’s only for medical. I don’t want a lot of potheads,” said Leo ­Myers, 61, a security worker at the Mack Truck plant.

It isn’t just compassion for suffering patients that is driving the acceptance of medical marijuana in Washington County, although that is one factor. Here and in other rural counties from Western Maryland to the Eastern Shore, officials are looking at cannabis grower-processors as sources of jobs rather than purveyors of vice.

Unemployment in this county has eased since it soared into double digits during the recession. But at 6.1 percent, the rate remains higher than the statewide average of 5.6 percent. And many residents have to commute 90 minutes or more to jobs in or near the District. Decent-paying jobs closer to home are much in demand.

“Out in Western Maryland, we’ve been deprived and depressed a lot,” said Commissioner John Barr. That history has helped shape reaction to the possibilities created by Maryland’s legalization of marijuana for medical purposes. “We view it as an economic-development opportunity,” Barr said.

Green Thumb representatives who briefed the commissioners before last month’s vote said the facility would employ 30 to 50 employees in its first year and predicted that it would expand to 200 workers in a new 175,000-square-foot plant in two to four years. They predicted the venture would give a $4 million-to- $7 million boost to the local economy.

That is hardly an economic panacea, but it represents a significant lift for a county still reeling from 650 layoffs at a Citigroup mortgage-servicing center and the closing of Unilever’s Good Humor ice cream plant, with its 450 jobs, in recent years.

The board’s action illustrates how quickly attitudes are changing across Maryland about the medicinal use of cannabis — the industry’s preferred term and one that was written into state law this year. “There’s a lot of interest all over the state,” said Hannah Byron, executive director of Maryland’s Medical Cannabis Commission.

"The Legal Business Of Marijuana Is Growing But The Industry Lacks Diversity"

The title of this post is the headline of this notable new NPR Morning Edition segment.  Here is the piece's textual teaser:

The business of selling marijuana legally — for medical and recreational purposes — is expanding. But so are concerns that African-Americans are being shut out of this new industry.

Colorado Supreme Court affirms statutory interpretation permitting dismissal of medical marijuana user

As reported in this local article, a long awaited Colorado Supreme Court ruling concerning application of the state's employment laws for marijuana user finally was handed today.  Here are the basics:

The Colorado Supreme Court on Monday affirmed lower courts' rulings that businesses can fire employees for the use of medical marijuana — even if it's off-duty. The 6-0 decision comes nine months after the state's highest court heard oral arguments in Brandon Coats' case against Dish Network. Coats, who had a medical marijuana card and consumed pot off-duty to control muscle spasms, was fired in 2010 after failing a random drug test.

Coats challenged Dish's zero-tolerance drug policy, claiming that his use was legal under state law. The firing was upheld in both trial court and the Colorado Court of Appeals. When the case went to the state Supreme Court, legal observers said the case could have significant implications for employers across Colorado. They also noted that the ruling could be precedent-setting as Colorado and other states wrangle with adapting laws to a nascent industry that is illegal under federal law.

As such, the question at hand is whether the use of medical marijuana — which is in compliance with Colorado's Medical Marijuana Amendment — is "lawful" under the state's Lawful Off-Duty Activities Statute. That term, the justices said, refers to activities lawful under both state and federal law.

"Therefore, employees who engage in an activity, such as medical marijuana use, that is permitted by state law but unlawful under federal law are not protected by the statute," Justice Allison H. Eid wrote in the opinion. The justices said the court will not make a new law. Current Colorado law allows employers to set their own policies on drug use.

Coats' attorney Michael Evans, of Centennial-based The Evans Group, called the decision "devastating."

"For people like Brandon Coats, there really isn't a 'choice,' as MMJ is the only substance both he and his (Colorado-licensed) physicians know of to control his seizures due to his quadriplegia," Evans said. "He has to have it. " A silver lining of the decision, Evans said, is that it provides clarity in a "scary, gray area" of state law.

"Today's decision means that until someone in the House or Senate champions the cause, most employees who work in a state with the world's most powerful MMJ laws will have to choose between using MMJ and work," Evans said in a statement....

Sam Kamin, a law professor at the University of Denver, said the justices' decision comes as no surprise. "It's easy to make too much of this decision," he said. "It really comes down to interpreting this one word in this one statute." As a matter of statutory interpretation, the court got it right, he said.

But for Coats and medical marijuana advocates, this is a blow, Kamin said. Coats was a "dream plaintiff" in that marijuana served as medicine, he said. Coats was rendered a quadriplegic by a car accident and used marijuana to control leg spasms.

The cause likely would land in the hands of the state legislature, Kamin said. "I think (Coats') case is very sympathetic, and I think his case would be quite compelling before the legislature," Kamin said.

The full ruling in this notable state Supreme Court can be accessed at this link, and the only thing I find surprising is why it took the Colorado justices a full nine months to resolve this matter.

In addition, though I fully understand the disappointment felt by Coats and his lawyer, I share Sam Kamin's view that this ruling is not that big a deal. This ruling does not mean state employers must dismiss marijuana users, only that they are not required by statute to keep such users who comply with state law employed. Ultimately, this case only would have been a very big deal if it had come out the other way. And, especially as more and more state legalize medical marijuana, I suspect more and more employers will become more eager to make accomodations for medical marijuana patients.