Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Tuesday, June 30, 2020

"Marijuana and Its Movement: Issues with Transporting a Legally Ambiguous Substance"

The title of this post is the title of this new paper recently posted to SSRN and authored by Joshua Gmerek, a recent graduate 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:

Regardless of whether you are a commercial truck driver performing a job, a patient driving to get her medicine, or a citizen who just recreationally enjoys marijuana, the rules surrounding the transportation of marijuana are important.  California became the first state to legalize the medical use of marijuana in 1996, and the prevalence of medical and recreational marijuana legalization has only expanded since then.  At this point, some product or chemical compound from the cannabis plant is virtually everywhere in the United States, yet the transportation of these products has not been comprehensively debated by the public, let alone legislated. 

This article is focused on exploring the unique legal landscape surrounding the transportation of marijuana, hemp, and cannabidiol (CBD) from both a business and individual perspective.  By showcasing examples of how businesses and individuals have been impacted by the unclarity in this area, the goal is to convey that nothing about transporting these products is risk-free and that there is unnecessary conflict between state and federal law.

June 30, 2020 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Monday, June 29, 2020

"California cities begin embracing cannabis in desperate search for cash"

The title of this post is the title of this recent notable Politico article. Here are excerpts:

California local governments scrambling to find tax revenues during the coronavirus pandemic are turning toward an industry they had considered taboo until now: cannabis.

It has been almost four years since voters legalized recreational marijuana in California, and nearly 70 percent of cities and counties have yet to embrace pot businesses because they see regulatory problems or have concerns about public safety and negative publicity.

But some, facing insurmountable budget gaps as unemployment rises to its worst level since the Great Depression, would now rather open their doors to cannabis than lay off more workers or cut services.  So far, a handful of cities have begun developing cannabis tax measures for the November ballot since voter approval is required to add local taxes.  It's a trend many in the industry expect to continue over the next month absent approval of a federal bailout for state and local governments....

San Bruno, a Bay Area city that two years ago banned marijuana businesses, is among the governments with a change of heart.  Last week, city council members voted unanimously to fund a tax measure and public education campaign, while voicing support for the idea of exploring an ordinance that would allow a dispensary or delivery service to open sometime next year.

According to projections from city officials, an operational cannabis shop could reduce San Bruno’s projected $8.2 million deficit in the upcoming fiscal year by around $300,000. “It's not gonna solve our problems, but it's going to keep $300,000 that we desperately need to hire whomever it is to make our city better,” Councilmember Marty Medina said at the meeting.

The city of Montclair in San Bernardino County is facing a similar budget crunch as sales tax revenue has cratered following the temporary closure of its mall. There, city officials are considering proposals to repeal a marijuana ban and create regulations for commercial activity.  The plan could raise up to $2 million annually, according to City Manager Edward Starr.

While both San Bruno and Montclair are left-leaning cities where a majority of residents voted to approve the Prop. 64 legalization initiative in 2016, Republican-led jurisdictions where voters rejected the statewide measure are also starting to consider cannabis — to the surprise of industry observers.  Last month, councilmembers in Yucaipa asked city staff to begin looking into alternative revenue streams, including marijuana businesses, amid a 15 percent decline in sales tax revenue and increasing public safety costs. Republicans hold a 20-point registration advantage over Democrats in the San Bernardino County jurisdiction, where a majority voted against Prop. 64....

Calls for jurisdictions to dive into the legal market have even come from some of the highest levels of state leadership, with Treasurer Fiona Ma calling the tax revenues a potential “game changer” during a virtual round table last month....

Among the other jurisdictions that have already begun developing cannabis tax measures or have shown interest in doing so are Sonoma, Signal Hill, Wildomar, Lemon Grove and Yountville.  As in Yucaipa, one of the prevailing themes in council meetings elsewhere has been that their residents are sending tax dollars to neighboring jurisdictions by purchasing marijuana products from other cities with licensed stores or from the state’s robust illicit market.

Industry research firms BDS Analytics and Arcview Market Research estimate that unlicensed operations brought in $8.7 billion in untaxed revenue in 2019, compared to the legal market's $3.1 billion.

According to Jackie McGowan, founder of Green Street Consulting, local leaders are also looking at nearby jurisdictions that have developed their cannabis markets and don’t want to be left behind.  Among those that have already allowed marijuana businesses, Monterey County is counting on $10.2 million in projected cannabis tax revenues to cover general fund shortfalls and avoid layoffs in the upcoming fiscal year and Santa Barbara County leaders believe $10.6 million in marijuana revenue will help offset coronavirus losses.

June 29, 2020 in Business laws and regulatory issues, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms, Taxation information and issues , Who decides | Permalink | Comments (1)

Tuesday, June 23, 2020

Notable new research and commentary on marijuana reforms and traffic fatalities

Download (2)The JAMA Internal Medicine journal has this week published online notable new original research and commentary on roadway fatalities in some states that have legalized marijuana use by all adults (called RCL in the works).  Here is the main piece and its main results and conclusions from its abstract:

"Association of Recreational Cannabis Laws in Colorado and Washington State With Changes in Traffic Fatalities, 2005-2017":

Results

Implementation of RCLs was associated with increases in traffic fatalities in Colorado but not in Washington State.  The difference between Colorado and its synthetic control in the post-RCL period was 1.46 deaths per 1 billion vehicle miles traveled (VMT) per year (an estimated equivalent of 75 excess fatalities per year; probability = 0.047).  The difference between Washington State and its synthetic control was 0.08 deaths per 1 billion VMT per year (probability = 0.674).  Results were robust in most sensitivity analyses.  The difference between Colorado and synthetic Colorado was 1.84 fatalities per 1 billion VMT per year (94 excess deaths per year; probability = 0.055) after excluding neighboring states and 2.16 fatalities per 1 billion VMT per year (111 excess deaths per year; probability = 0.063) after excluding states without MCLs.  The effect was smaller when using the enactment date (24 excess deaths per year; probability = 0.116).

Conclusions and Relevance

This study found evidence of an increase in traffic fatalities after the implementation of RCLs in Colorado but not in Washington State.  Differences in how RCLs were implemented (eg, density of recreational cannabis stores), out-of-state cannabis tourism, and local factors may explain the different results.  These findings highlight the importance of RCLs as a factor that may increase traffic fatalities and call for the identification of policies and enforcement strategies that can help prevent unintended consequences of cannabis legalization.

And here are two follow-up pieces published with this main piece:

Invited Commentary: "Reducing Impaired Driving Fatalities: Data Need to Drive Testing, Enforcement, and Policy"

Research Letter: "Change in Traffic Fatality Rates in the First 4 States to Legalize Recreational Marijuana"

June 23, 2020 in Criminal justice developments and reforms, Medical community perspectives, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research | Permalink | Comments (1)

Tuesday, June 16, 2020

"Struggling Through the Pandemic: Cannabis Social Equity During Covid-19"

Thumbnail_COVID-19_Social Equity During COVID-19_for-socialThe title of this post is the title of this new report that the team at Ohio State's Drug Enforcement & Policy Center has just gotten online via SSRN.  I was pleased to be play a part in this work, and here is the report's abstract:

In March 2020, in response to the COVID-19 national emergency, states across the United States began issuing shelter-in-place orders curtailing operations of individual businesses based on “essential” and “non-essential” classification.  Virtually all states with legalized medical cannabis, and the majority of adult-use states, allowed cannabis establishments to remain open albeit often with significant restrictions on their operations.  Yet, the cannabis industry, and small, minority-owned or social equity designated businesses in particular, are not insulated from the broader economic shockwaves spreading through the country. 

In April 2020, the Drug Enforcement and Policy Center conducted a survey asking patients/consumers and cannabis industry professionals about the challenges they were experiencing and government responses.  Hoping to fill a gap in early discussions of the impact of the COVID-19 crisis, we were especially interested in the impact on cannabis industry participants designated as social equity businesses.  The results indicate that the COVID-19 pandemic has both introduced tremendous new challenges for the cannabis industry and exacerbated long-standing difficulties for businesses in this arena.  If small, minority-owned and social equity businesses are to survive, they need to be treated by the system like any other regular small business venture.  While regulations and safeguards are necessary, these businesses need to be able to operate as a true business, rather than a semi-legal venture with no access to loans, banking, insurance, tax relief, and flexible deliverable modes.

June 16, 2020 in Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Tuesday, June 9, 2020

"A Road Map to Recreational Marijuana Taxation"

TF_FF713_fig_7The title of this post is the title of this great new 39-page report from the Tax Foundation authored by Ulrik Boesen.  Here are the "Key Points" that are set forth at the start of the document:

• Legal recreational marijuana sales are ongoing in nine states, covering 27 percent of the U.S. population.  In 2018, 10.5 percent of adult Americans had used marijuana products in the last 30 days.

• States have designed different excise tax systems for recreational marijuana.  While most tax based on price, states also tax marijuana based on weight or THC content.

• An excise tax on recreational marijuana should target the externality and raise sufficient revenue to fund marijuana-related spending while simultaneously outcompeting illicit operators.  Excise taxes should not be implemented in an effort to raise general fund revenue.

• Changes to federal law would have implications for the tax revenue in states with legalized marijuana.  If businesses had better access to banking, federal tax deductions, or interstate trading, prices would most likely fall.

• High taxes may limit adoption by minors and non-users but could hurt the competitiveness of the legal market.  Low taxes may allow easy conversion from the illicit market but could increase consumption among non-users and minors.  Taxing by price may not be stable, taxing by weight could encourage use of high potency products, and taxing by potency could complicate tax collection and add significant costs to both tax collectors and industry.

• A potency- and weight-based tax defined by THC levels may be the best short-term solution for lawmakers assuming that THC is an appropriate proxy for the externalities associated with consuming marijuana

June 9, 2020 in Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms, Taxation information and issues | Permalink | Comments (0)

Wednesday, May 20, 2020

Lots of notable public health analyses of marijuana reforms in June 2020 issue of World Psychiatry

A number of notable new papers are now available online from the June 2020 issue of World Psychiatry. Here are titles and links to all the pieces (most of which are just a few pages and all of which seem worth checking out):

Assessing the public health impacts of legalizing recreational cannabis use: the US experience by Wayne Hall and Michael Lynskey

Considering the health and social welfare impacts of non‐medical cannabis legalization by Benedikt Fischer, Chris Bullen, Hinemoa Elder and Thiago M. Fidalgo

To legalize or not to legalize cannabis, that is the question! by Marta Di Forti

Mapping and mitigating the health risks of legalizing recreational cannabis use: a call for synergy between research and policy by Eva Hoch and Valentina Lorenzetti

Recreational cannabis legalization presents an opportunity to reduce the harms of the US medical cannabis industry by Keith Humphreys and Chelsea L. Shover

Cannabis and public health: a global experiment without control by Jürgen Rehm and Jakob Manthey

Being thoughtful about cannabis legalization and social equity by Beau Kilmer and Erin Kilmer Neel

The effects of recreational cannabis legalization might depend upon the policy model by Rosario Queirolo

Legalizing recreational cannabis use: a promising journey into the unknown by Jan C. van Ours

Assessing the public health effects of cannabis use: can legalization improve the evidence base? by Matthew Hickman, Lindsey A. Hines and Suzie H. Gage

May 20, 2020 in Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Monday, May 18, 2020

"Too young for Cannabis? Choice of minimum legal age for legalized non-medical Cannabis in Canada"

The title of this post is the title of this interesting new research by multiple authors now appearing in the journal BMC Public Health.  Here is its abstract:

Background

Choice of minimum legal age (MLA) for cannabis use is a critical and contentious issue in legalization of non-medical cannabis.  In Canada where non-medical cannabis was recently legalized in October 2018, the federal government recommended age 18, the medical community argued for 21 or even 25, while public consultations led most Canadian provinces to adopt age 19.  However, no research has compared later life outcomes of first using cannabis at these different ages to assess their merits as MLAs.

Methods

We used doubly robust regression techniques and data from nationally representative Canadian surveys to compare educational attainment, cigarette smoking, self-reported general and mental health associated with different ages of first cannabis use.

Results

We found different MLAs for different outcomes: 21 for educational attainment, 19 for cigarette smoking and mental health and 18 for general health.  Assuming equal weight for these individual outcomes, the ‘overall’ MLA for cannabis use was estimated to be 19 years.  Our results were robust to various robustness checks.

Conclusion

Our study indicated that there is merit in setting 19 years as MLA for non-medical cannabis.

May 18, 2020 in International Marijuana Laws and Policies, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research | Permalink | Comments (0)

Sunday, May 17, 2020

"The 'Free Market' for Marijuana: A Sober, Clear-Eyed Analysis of Marijuana Policy"

The title of this post is the title of this new paper recently posted to SSRN and authored by H. Justin Pace.  Here is its abstract:

Marijuana is prohibited at the federal level.  At the same time, states are not only decriminalizing marijuana but attempting to provide a regulatory apparatus for its sale. This has created a unique business environment.  In some ways there is a true “free market” for marijuana in states where it has been legalized — free, that is, of the legal and financial infrastructure available to fully licit businesses in America.

Contracts may not be enforceable because they lack a legal purpose.  Relief in bankruptcy court may not be available, either as a debtor or as a creditor.  Use of a legal entity to limit liability and take advantage of entity personhood may be impracticable.  Federal money laundering and other laws effectively restrict access to the banking system, forcing marijuana businesses to operate as purely cash businesses.  The USPTO refuses to register federal marks related to marijuana.  Marijuana businesses face challenges in obtaining competent legal counsel to guide them through a market free on one hand regulated on the other.

The odd legal posture has implications for considering marijuana policy through an economic lens.  Any analysis of marijuana externalities should consider any additional externalities created by that odd legal posture.  An analysis of policy options for mitigating negative externalities should also factor in the additional costs for marijuana businesses due to this “free market.”  The uncertainty, from a policy perspective, counsels in favor of applying heuristics when considering policy options: this paper offers three and applies each.

This is the first paper to use this situation to examine the value offered by our legal and financial infrastructure.  An inability to use it hurts marijuana businesses in very real ways.  But, at the same time, marijuana businesses are able to operate — to thrive even — nonetheless.  That infrastructure is both more and less valuable than is appreciated, and in surprising ways.  Ultimately, this paper advocates federal action that facilitates a continued incremental, state-by-state approach to marijuana reform.

May 17, 2020 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Thursday, May 14, 2020

"States with recreational marijuana laws view the legislation as a success"

Recreational-marijuana-success-failure-01-01-01-01The title of this post is the title of this new article from YouGov discussing its survey that provides an interesting window into the positive impression that marijuana reform has made in states that have legalized adult-use. Here are the details:

States that have legalized recreational marijuana don’t seem likely to regret it.

YouGov asked more than 32,000 Americans whether they believe recreational marijuana legislation has been more of a success or failure in the states that have legalized it. In many states where recreational cannabis is legal, a plurality of citizens believes these laws have been more of a success than a failure overall.

That is a particularly strong belief in Colorado, where citizens were among the first-in-the-nation to vote in favor of recreational weed in 2012. Today, about a quarter (26%) of Coloradans say the state-level recreational cannabis laws have been a “success only” and another 45 percent say they have been “more of a success than a failure.” Fewer than one in five (17%) believe the laws have been “more of a failure.”...

While decriminalized marijuana and approvals for medical marijuana became popular in the 1970s and 1990s, recreational marijuana was not legalized anywhere in the United States until 2012. Now, recreational marijuana is legal in 11 states—Washington, Oregon, Nevada, California, Colorado, Michigan, Illinois, Massachusetts, Maine, Alaska, and Vermont—with more states considering the legislation this year.

About two-thirds of those in Oregon (69%) and Massachusetts (67%) believe that the laws have been more of a success. That remains the majority opinion among those who live in Washington (65%), Nevada (64%), California (59%), Illinois (59%), and Michigan (56%).

Michigan and Illinois are the only Midwestern states with legal recreational marijuana, and they are the most recent additions to the list. Michigan became the 10th state to legalize recreational marijuana after residents approved it during the 2018 Midterm elections. Illinois became the 11th after its state government approved recreational cannabis for adults over 21 during the 2019 legislative session. The state began selling recreational marijuana in January.

Maine is the only state surveyed where fewer than half (47%) view the laws as more of a success. About one in nine Mainers say the laws have been a “success only.” About one-third (37%) consider the laws more of a success than a failure. One in five (20%) believe the laws have generally been more of a failure, and one-third (33%) are uncertain.

The folks at YouGov did another interesting poll about marijuana back in April 2020, which is reported here under the headline "Is marijuana essential? Most Americans say yes"

May 14, 2020 in Polling data and results, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)

Tuesday, May 5, 2020

"Reconsidering Federal Marijuana Regulation"

The title of this post is the title of this new article authored by Paul J. Larkin, Jr. available via SSRN.  Here is its abstract:

The Controlled Substances Act (CSA) prohibits the cultivation and distribution of marijuana by placing it in a category (Schedule I) reserved for drugs that are unhelpful and dangerous.  In so doing, the CSA approached this problem from the wrong direction.  People use drugs for medical or recreational purposes, and each one requires a separate legal scheme.

Medical Marijuana Use: For more than 50 years, Congress has entrusted to the Commissioner of Food and Drugs the decision whether a particular drug is “safe” and “effective” and therefore can be sold throughout the nation.  The reason is that those decisions require the scientific expertise of professionals in the fields of medicine, biochemistry, and the like, not the legal knowledge of Justice Department lawyers or the moral sensibilities of the electorate.  Congress should leave to the judgment of the FDA Commissioner the decision how federal law should regulate medical-use marijuana.

Recreational Marijuana Use: American society permits alcohol and tobacco to be sold under regulation.  For alcohol, the Twenty-First Amendment empowers states to decide whether and how to sell liquor without much room for supplementary federal regulation.  For tobacco, the Family Smoking Prevention and Tobacco Control Act of 2009 authorizes the FDA Commissioner to regulate the distribution of tobacco products.  Congress should consider whether to follow the same approach here.  There are various factors relevant to that decision.  For example, long-term marijuana use can lead some users to become dependent on, or addicted to, the drug, or to suffer serious mental disorders, such as psychosis.  Legalizing recreational marijuana use also will increase the number of roadway accidents attributable to cannabis intoxication. Whether the benefits of recreational marijuana use outweigh those harms is the question that Congress should answer.

May 5, 2020 in Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (1)

Thursday, April 30, 2020

"How weed became 'whatever': Leagues are ditching old policies"

MlbAs a time with no actual sports, it is nice to have a good excuse to check out ESPN's website where one now finds this very lengthy article sharing the title of this post. The lengthy piece is worth reading in full, and here are excerpts (with my emphasis added):

The marijuana stigma that plagued [Ricky] Williams' NFL career is eroding, if not gone entirely from an enforcement standpoint.  In January, Illinois became the 11th state to legalize recreational marijuana.  Now, of the 123 teams across MLB, the NBA, NHL and NFL, 50 play in states or provinces where recreational marijuana is legal (40.6%). Another 51 teams play in jurisdictions where medical marijuana is legal (41.5%).  That's 82% of teams (101 of 123) that are playing in cities where a player can walk down the street, go into a dispensary, and legally purchase either recreational or medicinal marijuana -- just like they were buying a six pack of beer.

The only states in which any of the four major pro league teams play where there are no broad laws legalizing marijuana are Indiana, Georgia, North Carolina, Tennessee, Texas and Wisconsin.

Sports leagues have adapted.  Last year, we wrote about the NHL's marijuana approach -- predicated on treatment, not punishment -- which at the time was the most progressive in professional sports.  Today?  It's actually the norm.

The NFL ratified a new CBA in March with a drug policy quite similar to the NHL model.  The NFL significantly raised the threshold for positive tests (from 35 nanograms to 150) and eliminated its previous window of testing, which spanned from April to August to the first two weeks of training camp. In other words, if players want to smoke weed in the offseason, they are free to do so.  But most importantly: Players are no longer suspended solely for marijuana.  If a player were to test positive, his case is reviewed by a panel of medical experts who determine if the player needs medical treatment.  "Certainly, we see that society is changing its views, but views only change because key facts become more and more obvious to the people who make policy," NFLPA executive director DeMaurice Smith said.

MLB and its union negotiated a new drug policy in December 2019 following Tyler Skaggs' death.  While the new policy added testing for opioids, fentanyl and cocaine, plus synthetic weed -- with positive tests being referred to a treatment board -- cannabinoids were taken off the league's drugs of abuse list.  That wasn't a huge deal for MLB players, who were only previously tested for marijuana if there was "reasonable cause."  It was, however, monumental for minor leaguers, who were regularly tested and faced steep fines and suspensions -- including a 50-game ban for a first-time offense, 100 games for a second and a lifetime ban for the third strike.  "The way the league had the rules set up, it was ridiculous," said longtime MLBPA agent Joshua Kusnick.  "I can't even imagine how many guys' careers were ruined over marijuana. I personally had clients whose careers were derailed because of it.  If you were a fringy prospect and you were popped for marijuana, you were released because teams didn't want to deal with it.  And if you were released, you couldn't serve your suspension.  So who is going to sign you if you had 50 games to wait?"

The NBA's policy has remained the same -- and is now actually the harshest in North American professional sports.  A first positive test means a player must enter the marijuana program.  The second positive test calls for a $25,000 fine.  The third infraction is a five-game suspension, and five more games are added to each ensuing violation (10 games for a fourth positive test, 15 games for a fifth, etc.).  However, the NBA does not test players during the offseason, and the union and league agreed to not test players during the league's coronavirus hiatus.

April 30, 2020 in History of Marijuana Laws in the United States, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate, Sports, Who decides | Permalink | Comments (0)

Wednesday, April 22, 2020

Student presentation on "Marijuana Reform and Gun Ownership"

This will be another exciting week as students in my Marijuana Law, Policy & Reform seminar are finishing up their presentations on research topics of their choice. The fourth presentation slated for this week will focus on how marijuana reforms intersect with gun ownership. Here is the student's description of his topic and some background readings he has provided:

My presentation will focus on the interaction between legal marijuana and gun ownership.  I will begin by analyzing federal firearms laws and their practical implementation by the Bureau of Alcohol, Tobacco, and Firearms (ATF). I then look through examples of the conflicts these laws present in states which have legalized marijuana, and how federal laws currently prohibit any individual from exercising both their right to consume marijuana in legal states and their right to own a firearm under the Second Amendment. For some background reading, here are some helpful links:

Paul Barach, Why Can’t Medical Cannabis Patients Own Guns?, PotGuide (Jan. 17, 2020). 

Open Letter to All Federal Firearms Licensees, Bureau of Alcohol, Tobacco, Firearms and Explosives (Sept. 21, 2011).

Aimee Green, Medical Marijuana Cardholders Can’t Be Denied Concealed Gun License Solely Because they Use Pot, Oregon Supreme Court Rules, OregonLive (May 19, 2011).

Mike Lowe, Mixed Legality of Marijuana on State, Federal Levels Leaves Gun Owners in Limbo, WGN9 (Jan. 9, 2020).

April 22, 2020 in Assembled readings on specific topics, Criminal justice developments and reforms, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Student presentation on "How Farm Bill's legalization of hemp-derived CBD products could impact federal marijuana reform"

As mentioned before, the semester is winding down and students in my Marijuana Law, Policy & Reform seminar, soldiering on via Zoom, are making presentations on research topics of their choice. The third presentation slated for this week will focus on the the Farm Bill and federal reforms. Here is part of the student's description of the issue and some background readings she has flagged:

My presentation and my paper focus on how the legalization of hemp-derived CBD products, through the Farm Bill, could have an impact on the federal legalization of marijuana.  A few sources I used to help with this research are:

Jeff Smith, What marijuana companies can learn from federal legalization of hemp, Marijuana Business Daily (Feb. 27, 2020).

Jeremy Burke & Skye Gould, States where marijuana is legal, Business Insider (Jan. 1, 2020).

Kimberly Holland, CBD v. THC: What's the Difference?, Healthline (May 20, 2019).

U.S. Department of Agriculture, Farm Bill

John Hudak, The Farm Bill, hemp legalization and the status of CBD: An explainer, Brookings Institute (Dec. 14, 2018).

April 22, 2020 in Assembled readings on specific topics, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Student presentation on "Producing a Better Marijuana Tax Scheme"

Students in my Marijuana Law, Policy & Reform seminar are continuing to complete their presentations on research topics of their choice, and the second presentation slated for this week will focus on marijuana tax issues. Here is the student's description of his topic and some some "light" reading selected to help set the stage for his presentation.

In my paper, I set out to find a tax scheme that gives greater weight to the public health concerns of legalization while balancing the desire for revenue and fairness.  In doing so, I analyze the three primary tax bases that may be chosen by a legislature: (1) Price, (2) Weight, and (3) Potency, pausing a moment to describe just how complex the concept of marijuana "potency" really is.  In doing so, I lay out the benefits and disadvantages of each tax base and use Illinois' tax scheme to illustrate these pros and cons.  I also consider whether medical marijuana should be taxed on a separate scheme, exempted from tax, or treated the same as product intended for adult use.  Finally, I make a case for a hybrid tax base: tax flower and bud by weight, and edibles and concentrates by potency (as measured by THC). 

In making my case, I recognize that there is no perfect marijuana tax scheme.  The science is too young, marijuana is too complex a substance (both scientifically and by dint of being both "fun" and medicine), and these factors serve to amplify the push-pull between social goals, revenue, simplicity, and fairness inherent in any tax.  I have thus included in my proposal a five-year sunset provision that will force legislators to return to the table and incorporate new science (along with the previous five years of data what worked and did not work in the original law) and hopefully produce a better tax scheme.

BOTEC Analysis LLC, Cannabis Potency Tax Feasibility Study (Oct 2019)

NPR, Highly Potent Weed Has Swept The Market, Raising Concerns About Health Risks (May 2019)

BOTEC Analysis Corp., Testing for Psychoactive Agents (Aug 2013)

Tax Foundation, How High Are Recreational Marijuana Taxes in Your State? (Apr 2019)

Pat Oglesby, Laws to Tax Marijuana (How To Tax It) (June 2012)

April 22, 2020 in Assembled readings on specific topics, Business laws and regulatory issues, Recreational Marijuana Commentary and Debate, Taxation information and issues | Permalink | Comments (0)

Tuesday, April 21, 2020

Student presentation on "Key arguments against legalization of recreational marijuana"

Students in my Marijuana Law, Policy & Reform seminar are finishing up their presentations on research topics of their choice. The first presentation slated for this week will focus on certain arguments made against recreational marijuana reform. Here is the student's description of his topic and some background readings he has provided:

For my project, I examined some of the arguments that opponents of the legalization of recreational marijuana often stress.  My research gave particular attention to the external "costs" of the legalization of recreational marijuana.  The three arguments that I will be focusing on for class discussion are (1) the cost of car accidents both fatal and non-fatal, (2) the cost of employee productivity, and (3) the cost of high school dropout rate.  I will examine these arguments, discuss some of their strengths and weaknesses, and finally talk about how they can be used in inform better policy in the marijuana space.

Here are some useful articles that I used when researching:

"Does Marijuana Increase the Risk of Vehicle Crashes?"

"Prevalence of Marijuana Involvement in Fatal Crashes: Washington, 2010-2014"

"Impact of smoking status on workplace absenteeism and productivity"

"The Causes and Costs of Absenteeism"

"Marijuana use and high school dropout: the influence of unobservables"

"Cause and Effect: The High Cost of High School Dropouts"

April 21, 2020 in Assembled readings on specific topics, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Thursday, April 16, 2020

Student presentation on "Transportation of Hemp and Marijuana"

With the semester winding down, numerous students in my Marijuana Law, Policy & Reform seminar are scheduled for presentations on research topics of their choice this week.   The fourth presentation slated for this week will focus on the transportation of cannabis.  Here is part of the student's description of the issue and some background readings he has flagged:

For all the discussion that has been had about the legalization of marijuana, we have not sufficiently discussed how these products should be moved around. The goal of my presentation is to explore this issue by looking at cases that have unfolded and the policies of institutional players. For some background, please see:

Hemp Suppliers at Odds With Hazy Regulations” 

The Great American Cannabis Experiment” 

Inability To Ship Across State Lines Hurts Cannabis Businesses, Especially Small Operators” 

Travelers caught with weed in Chicago airports won’t be busted, police say” 

April 16, 2020 in Assembled readings on specific topics, Business laws and regulatory issues, Medical Marijuana Commentary and Debate, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Wednesday, April 15, 2020

Student presentation on "Marijuana Stocks"

As students "take over" my Marijuana Law, Policy & Reform seminar through presentations on research topics of their choice, I continue to enjoy hearing about (and posting here about) their selected topics. The third presentation slated for this week will focus on marijuana stocks. Here is part of the student's description of the issue and some background readings he has flagged:

While the market for investors is nearly impossible to predict, as the Covid-19 pandemic is currently demonstrating, certain industries seem to be “recession proof” and are viewed as “safer” investments. One such industry is the “sin” industry.  Stocks that fall under this category include tobacco, alcohol, weapons, gambling, sex, and most importantly, marijuana.  While many of these industries have been publicly traded on major US stock exchanges for decades, the first marijuana stock was not traded until February 27, 2018.  Thus, the industry is still in its infancy with many questions left unanswered.  I will focus on three areas of law impacting marijuana stocks: 1) the Controlled Substance Act, 2) taxes, and 3) fraud. Further, the history of marijuana stocks in the US, the potential outlook for marijuana stocks in the future, and my opinion on which marijuana stock will be the most successful will be discussed.

Fabian Gorsler, A Marijuana Company is Listed on the U.S. Stock Exchange for the First Time, Highsnobiety (Feb. 27, 2018).

Casey W. Baker, Marijuana’s Continuing Illegality and Investors’ Securities Fraud Problem: The Doctrines of Unclean Hands and IN PARI Delicto, 12 J. Bus. Entrepreneurship & L. 93 (2019).

Erin Fuchs, The Legal Risk of Investing in Weed is ‘Remote’ and ‘Theoretical’, Yahoo Finance (Nov. 3, 2018).

April 15, 2020 in Assembled readings on specific topics, Business laws and regulatory issues, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate, Taxation information and issues | Permalink | Comments (0)

Friday, March 27, 2020

"Cannabis finds its moment amid coronavirus outbreak"

CoronavirusandcannabisgraphicThe title of this post is the title of this notable new Politico piece.  Here are excerpts:

Cannabis is turning out to be the one thing the coronavirus can’t destroy.

Marijuana sales are booming, with some states seeing 20 percent spikes in sales as anxious Americans prepare to be hunkered down in their homes potentially for months. Weed sellers are staffing up too, hiring laid-off workers from other industries to meet demand. And in the midst of a historic market meltdown, stock prices for cannabis companies have surged, in some cases doubling since the public health crisis began.

“We are hiring because we are having to shift our business a bit,” said Kim Rivers, CEO of Trulieve, which is valued at $1 billion. The company is staffing up its delivery fleet, retail workers, and people to handle increased inventory shipments. “Now is a great time [to apply], particularly if you’re in a business that has seen layoffs.”

Nearly all of the 33 states with legal medical or recreational markets have classified marijuana businesses as an essential service, allowing them to remain open even as vast swaths of the retail economy are shuttered. San Francisco and Denver initially announced plans to shut down dispensaries, but immediately backpedaled after a public furor.

Weed shops are essentially being treated the same as pharmacies, reflecting a dramatic shift in cultural perceptions about the drug over the last decade. “It is a recognition that it has taken on much greater significance around the country,” said Rep. Earl Blumenauer (D-Ore.), a longtime Capitol Hill champion for cannabis. “This is something that makes a huge difference to the lives of hundreds of thousands of people every day. I do think that this might be part of a turning point.“

Concerns about whether smoking pot is the smartest response to a pandemic that’s causing severe lung injuries in tens of thousands of Americans have been largely drowned out. "Public opinion has pushed lawmakers to think about cannabis — and particularly medical cannabis — in different ways than they used to," said John Hudak, a cannabis policy expert at the Brookings Institution, and author of Marijuana: A Short History. "A lot of state policymakers are trying to get this right and they obviously see the risk of shutting down a dispensary to be higher than the rewards of shutting down a dispensary."...

The burgeoning industry does face some stiff financial headwinds: The massive stimulus package moving through Congress this week to help beleaguered businesses shuts out cannabis companies from taking advantage of its benefits, reflecting the continued federal illegality of marijuana. Prior to the recent boom in sales, the industry had been in financial turmoil, with many companies laying off workers and scuttling acquisitions as they ran short on cash. “I'm frustrated Senate Republicans refused to allow us to include them in this legislation, but we aren't giving up," Sen. Patty Murray (D-Wash.) said Wednesday.

In addition, some medical experts question the wisdom of allowing uninhibited access to marijuana during a massive public health crisis. They worry that customers flocking to pot shops could spread the virus, that stoned customers will engage in risky behavior and that smoking pot will worsen the lung damage for people who do become infected. “If you keep the pot stores open, you're just adding fuel to the fire,” said Karen Randall, an emergency room doctor in Colorado. “You're having a whole bunch of people who are trashing their lungs.”...

The federal government said Thursday that a staggering 3.3 million people applied for unemployment benefits last week. While the cannabis industry can’t do much to remedy that bloodletting, some companies are looking to hire people who have recently lost their jobs. Harborside — which operates three shops in the Bay Area — found itself suddenly understaffed as delivery requests increased by 45 percent and phone calls exploded from around 100 to 8,000 per day.... Harborside has hired 10 employees in the last few weeks — some of whom were directly laid off as a result of the coronavirus — and plans to hire at least six more. The largest increase was in their delivery fleet, going from four drivers to 10.

And they’re not alone. “Two and a half weeks ago, our sales just exploded,” said Zachary Pitts, CEO of California cannabis delivery service Ganja Goddess. “People are leaning on delivery more now … even though storefronts are still open in California.” Pitts estimated that he’s increased his workforce by about 15 percent in recent weeks, and is working on hiring more. The company has suspended normal vetting processes and is instead relying on trusted referrals....

As states move to declare marijuana an essential business, the gulf between state and federal policy has never been wider. Congress is poised to enact a $2 trillion stimulus package this week, but the cannabis industry will not see a cent. “In the same way that cocaine dealers in the United States who are suffering under Covid-19 are not going to be eligible for relief under the stimulus bill, cannabis companies won't either,” said Hudak of the Brookings Institution. “Illegal businesses do not access legal funding.”

The cannabis industry generated $15 billion in sales last year and employs 340,000 people. Employers and workers pay federal taxes, and are required to comply with other coronavirus-related measures such as paid sick leave coverage. But for cannabis companies to access assistance made available through the stimulus package, Congress or the administration would need to dictate their inclusion. A spokesperson for Sen. Jeff Merkley (D-Ore.) said he wants to include such a provision in a future coronavirus aid package. Similarly, Murray said she is “exploring what can be done in the upcoming appropriations process to help them through this crisis and beyond."

March 27, 2020 in Business laws and regulatory issues, Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, Medical Marijuana Commentary and Debate, Political perspective on reforms, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)

Thursday, March 26, 2020

In a post-COVID economy, will job creation and tax revenue from marijuana reform become irresistible?

6b8d8e30-6f74-11ea-a7be-e45c6843ab56Even before we have a real handle on the public health tragedy created by the coronavirus in the US, the economic fallout is already profound as represented by just one headline this morning: "A record 3.3 million Americans filed for unemployment benefits as the coronavirus slams economy."  The Chair of the Federal Reserve is now saying "We may well be in a recession,” and the Treasury Secretary has been talking about a possible 20% unemployment rate.  Though I do not know how extreme will be our economic struggle in the weeks and month ahead, I do know that advocates for marijuana reform are likely to waste no time stressing the potential job creation and tax revenue benefits from marijuana reform.  As this title of this post suggests, I cannot help but wonder if in many states, and maybe even at the federal level, an economic development argument for marijuana reform may start to become nearly irresistible.

I do not have the time right now to do a comprehensive review of pre-COVID press pieces and articles and reports making much of the varied potential economic benefits of marijuana reform.  But this haphazard collection of titles and links provides a flavor for what I expect we will be hearing a lot from marijuana reform advocates in the weeks and months ahead:

"The Economic Benefits of Legalizing Weed"

"Cannabis Is Becoming A Huge Job Creator"

"Using Marijuana Revenue to Create Jobs"

"Legal Marijuana Is A Boon To The Economy, Finds Study"

"Why Legalizing Marijuana Could Give the U.S. Economy a Big Boost"

"The Economic Effects of the Marijuana Industry in Colorado"

"The National Cannabis Economy"

"The marijuana industry looks like the fastest-growing job market in the country"

"The Other Green Jobs: Legal Marijuana and the Promise of Consumption-Driven Economic Development"

UPDATE:  I just saw this new Yahoo Finance article headlined "Coronavirus could accelerate US cannabis legalization."  Here are excerpts:

DataTrek Research’s Jessica Rabe writes in a note, “there’s a simple and effective solution for states and cities to help cover their huge budget shortfalls after the COVID-19 pandemic subsides: legalize recreational sales of marijuana.”...

“We’ve been thinking a lot about how life will change post-virus, and one big difference will be that state and local governments are going to encounter large unexpected tax receipt shortages,” Rabe wrote.  “That’s particularly true when it comes to sales and income taxes amid stressed consumer balance sheets and massive layoffs. And unlike the Federal government, states can’t print unlimited amounts of money.”

Legalization of cannabis for adults, Rabe points out, could be a really easy way to shore up tax basis without driving people out of state, as raising income tax might do. Already it has been successful at raising “hundreds of millions of dollars annually in states like Colorado,” she said. 

March 26, 2020 in Employment and labor law issues, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate, Taxation information and issues , Who decides | Permalink | Comments (0)

Wednesday, March 25, 2020

New Brookings paper envisions a "Cannabis Opportunity Agenda"

2020At Brookings, Makada Henry-Nickie and John Hudak have this interesting new brief as part of  its "Policy 2020" series titled "It is time for a Cannabis Opportunity Agenda." Here is the paper's executive summary:

The 2020 election season will be a transformative time for cannabis policy in the United States, particularly as it relates to racial and social justice.  Candidates for the White House and members of Congress have put forward ideas, policy proposals, and legislation that have changed the conversation around cannabis legalization.  The present-day focus on cannabis reform highlights how the War on Drugs affected targeted communities and how reform could ameliorate some of those wrongs.  The national conversation on cannabis stands at a pivotal inflection point that provides policymakers and legislators with an extraordinary opportunity to establish a policy context wherein inclusive economic opportunities can thrive in tandem with responsible investments to redress longstanding harms.

When Congress works to remedy a discriminatory past or to rectify decades of institutionalized bias, it has an obligation to thoroughly consider implicit and explicit hurdles to equity.  Nowhere is this deliberation more critical than in drug policy reform.  For decades, the criminalization of drugs led to foreclosed opportunities for people of color who were disproportionately victimized by unequal criminal enforcement.  In 2013, police officers were 3.73 times more likely to arrest people of color for cannabis possession than whites.  Arrest disparities were even more egregious in some communities where Blacks were 8.3 times more likely than whites to be arrested for possession.  The racist roots of the War on Drugs inflicted significant collateral damage on minority groups, saddling young men and women of color with drug convictions — often before age 30 — and setting them on a course of institutionalized disadvantage because of the crippling, collateral consequences of criminal records.

Today, amidst a thriving state-legal cannabis industry, the same people hurt most by the drug war face the greatest barriers to participating in the emerging cannabis economy.  As elected officials consider how to reform the nation’s cannabis laws and rectify these serious socioeconomic and racial issues, they must erase any ambiguity about the protections, corrective actions, and inclusive opportunities intended to reverse the generation-long ills of the War on Drugs.  We argue that 2020 is an opportune moment to design a comprehensive pragmatic Cannabis Opportunity Agenda: a set of policies that addresses the social harms of marijuana prohibition and seeks to rehabilitate impacted communities with a focus on equity, opportunity, and inclusion.

March 25, 2020 in Campaigns, elections and public officials concerning reforms, Criminal justice developments and reforms, History of Marijuana Laws in the United States, Race, Gender and Class Issues, Recreational Marijuana Commentary and Debate | Permalink | Comments (0)