Saturday, May 15, 2021
In a post last month, titled "Senate majority leader shrewdly emphasizing "freedom" in his push for federal marijuana reform," I explained why I viewed Senator Chuck Schumer's focus on "freedom" in his marijuana reform pitch to be appealing and shrewd given that it lines up with a lot of the smaller-government rhetoric often coming from GOP politicians and activists. Consequently, I was not surprised to see this past week that part of the pitch for a notable new GOP-sponsored bill to end federal marijuana prohibition includes an emphasis on greater liberty for individuals and states concerning marijuana practices.
This new 14-page marijuana reform bill is available at this link, and it is formally titled the "Common Sense Cannabis Reform for Veterans, Small Businesses, and Medical Professionals Act." This press release from Congressman Dave Joyce (OH-14), one of the sponsors, provides these details:
Through his work with the Cannabis Caucus and his position on the House Appropriations Committee, Joyce has helped lead the effort to reform the federal government’s outdated approach to cannabis and protect the rights of states across the country, like Ohio, that have voted to implement responsible cannabis policies. Specifically, the Common Sense Cannabis Reform for Veterans, Small Businesses and Medical Professionals Act, which has been applauded by several organizations, would:
- Remove cannabis from the Federal Controlled Substances Act.
- Direct the U.S. Food and Drug Administration and the Alcohol and Tobacco Tax and Trade Bureau to issue rules to regulate cannabis modeled after the alcohol industry within one year of enactment.
- Create a federal preemption to protect financial institutions and other businesses in non-cannabis legal states so that they can service cannabis companies.
- Allow the Department of Veterans’ Affairs to prescribe medical cannabis to veterans.
- Direct the National Institutes of Health to conduct two studies on cannabis as it pertains to pain management and cannabis impairment and report to Congress within two years of enactment.
And here is some of the media coverage that provides a review of this bill:
- From Marijuana Moment, "Congressional Bill To Federally Legalize Marijuana Filed By Republican Lawmakers"
- From MJBizDaily, "Two US House Republicans pitch federal marijuana legalization bill"
- From Newsweek, "Republicans Push for Federal Legalization of Marijuana to Ensure 'Individual Liberty'"
May 15, 2021 in Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)
Wednesday, May 12, 2021
The title of this post is the title of this new paper recently posted to SSRN and authored by Alexa Askari, 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:
This paper compares the foundations of the Christiania commune in Copenhagen, Denmark, with the origins of the United States war on drugs, both phenomena of the anti-hippie sentiment of the 1970s. While the Danish took a relatively lax approach to the commune’s cannabis-related activities, in the U.S. crackdowns were widespread and disproportionately impacted people of color. Today, Christiania remains the focal point of the Danish cannabis trade, while the United States has become a patchwork of varying state-level permissive regimes fundamentally in conflict with federal prohibition. How both countries’ relationships with cannabis will continue to develop ultimately depends on the political will of those in power.
May 12, 2021 in History of Marijuana Laws in the United States, International Marijuana Laws and Policies, Political perspective on reforms, Recreational Marijuana Commentary and Debate | 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)
Thursday, May 6, 2021
Equity getting lots of attention, but still much work to do, as social justice becomes centered in marijuana reform efforts
I flagged in this post the great Drug Enforcement and Policy Center (DEPC) event that took place last week titled "Social Equity 2.0: Lessons From Recent State Developments." Though I may be a bit biased, I think this 90-minute event was a spectacular review by spectacular speakers of the importance and the challenges of centering social justice and equity issues in modern marijuana reform. But do not take my word for it, and everyone can now watch the full event via the video link on this page. In addition, Jimi Devine at The Village Voice did this thorough review of the panel discussion under the headline "The Time Has Come for Cannabis Equity." Here is how the review gets started:
As cannabis legalization enters its newest phase with social equity dominating the conversation, Ohio State University’s Moritz College of Law hosted an advocate and regulator-packed panel to map out a path to Social Equity 2.0.
The Tri-State was well represented on the panel. Incoming New Jersey Cannabis Regulatory Commission chair Dianna Houenou spoke to how the issue had been embedded from the start in her new state agency. Minority Cannabis Business Association President Jason Ortiz spoke about the current effort in Connecticut to put equity front and center in the conversation.
The pair were joined by Illinois governor J. B. Pritzker’s senior advisor for cannabis control, Toi Hutchinson, and former Massachusetts Cannabis Commission member Shaleen Title. Both have championed the issue in their respective states over the years. Politico’s Natalie Fertig led the conversation.
Meanwhile, I have see a lot more significant coverage of equity issues in all sorts of distinct media in recent weeks. Here is a sampling:
From the AP, "Marijuana social equity: Seeds planted but will they grow?"
From Brookings, "State cannabis reform is putting social justice front and center"
From MJBizDaily, "New York’s marijuana social equity program eyed as possible game changer"
Tuesday, May 4, 2021
The title of this post is the title of this notable new article now available via SSRN and authored by Ryan Stoa. Here is its abstract:
Cannabis legalization is celebrated by many as a long-overdue rectification of a drug policy that has oppressed and incarcerated vulnerable people and communities for decades. But as the legalization era continues and the legal cannabis industry starts to take shape, legalization advocates and industry stakeholders must reckon with a sobering reality: the benefits of legalization are not being equitably shared, and vulnerable communities that were hit the hardest during the war on drugs are not well represented in legal cannabis markets.
This reality is as true for stakeholders of cannabis agriculture as it is for other sectors of the cannabis industry. As the first step in the supply chain, the cultivation of cannabis sets the tone for the industry as a whole. A well-regulated, equitable, and sustainable cannabis agriculture industry has significant catalytic potential for downstream market participants. Unfortunately, however, the cannabis agriculture industry suffers from many equity shortfalls.
This Essay will explore three of these shortfalls: (1) access to agricultural lands and start-up capital, (2) cultivation licenses and state distribution of benefits, and (3) labor standards and farmworker protections. While there are many more equity issues facing cannabis agriculture, this Essay shines a light on these three while identifying areas of concern for future research. It is clear that stakeholders of cannabis agriculture, including regulators and business owners, can and should prioritize equity and participation in the development of their industry.
Wednesday, April 28, 2021
I believe I have previously noted some of the marijuana reform essays in the terrific collection published last year by Brookings under the title "Marijuana Federalism: Uncle Sam and Mary Jane." (Information about the book can be found here and here.) I am now pleased to see that Paul Larkin, Jr. has this notable new article titled "Reflexive Federalism" which engages with many of the ideas and essays in Marijuana Federalism. Here is its abstract:
Over the last twenty-plus years, a majority of states have concluded that marijuana has legitimate therapeutic and recreational value, and those states allow private parties to cultivate, sell, possess, and use it under a state regulatory régime. Consequently, we have witnessed the development of state cannabis regulatory programs that are inconsistent legally, practically, and theoretically with the approach that our national government has taken for fifty years. How do we resolve that conflict between state and federal law? The Supreme Court has refused to take this issue away from the political branches of the federal government by ruling that it is a matter within the states’ bailiwick. The Executive Branch has failed to take a coherent position regarding whether, when, and how it will enforce the existing federal law. And Congress has abdicated its responsibility to clarify what should be federal policy in a field where only Congress can decide. The result is that we have one law for Athens and one for Rome. Not surprisingly, that strategy is not working for anyone other than those members of Congress who wish to avoid casting a vote on the issue.
Some of Marijuana Federalism’s contributors encourage Congress to “cowboy up” politically and eliminate the disarray in the law by leaving it to each state to decide, while others try to persuade the Supreme Court to take another whack at the issue and rule that Congress cannot generally regulate the intrastate sale of cannabis. The threads that tie the essays together are the potential benefits we might see from permitting multiple states to devise different regulatory approaches and the affinity for decentralized decision-making built into our Constitution’s DNA. What Marijuana Federalism is missing, however, is a treatment of the argument that Congress should leave decisions regarding the recreational use of marijuana to the states, but not whether it has legitimate medical uses. For 80 years the nation has entrusted the Food and Drug Administration with the responsibility to decide what is a “drug” and what drugs are “safe” and “effective.” There is no good reason to treat cannabis differently.
April 28, 2021 in Campaigns, elections and public officials concerning reforms, Federal Marijuana Laws, Policies and Practices, Recreational Marijuana Commentary and Debate, Who decides | Permalink | Comments (0)
Tuesday, April 27, 2021
I am pleased to spotlight a great Drug Enforcement and Policy Center (DEPC) event taking place tomorrow afternoon titled "Social Equity 2.0: Lessons From Recent State Developments." This is how this event is described on this page (where you can register):
In recent years, social equity has become a routine part of conversations surrounding cannabis legalization. Yet, despite the stated goals of political leaders and various efforts of multiple states, challenges with implementing robust social equity programs persist.
Join the Drug Enforcement and Policy Center for a virtual panel event that brings together experts from states whose recent cannabis legalizations include social equity provisions. Panelists will discuss their state’s experience, lessons learned, and focus areas for federal legislators and regulators as they begin considering cannabis legalization nationwide.
Dianna Houenou, senior policy advisor and associate counsel, Office of the Governor, State of New Jersey, and incoming chair, New Jersey Cannabis Regulatory Commission
Toi Hutchinson, senior advisor for cannabis control, Office of the Governor, State of Illinois
Jason Ortiz, president, Minority Cannabis Business Association, and board member, Students for Sensible Drug Policy
Shaleen Title, distinguished cannabis policy practitioner in residence, Drug Enforcement and Policy Center, and vice-chair, Cannabis Regulators of Color Coalition
Natalie Fertig, federal cannabis policy reporter, POLITICO
Tuesday, April 20, 2021
As detailed in this new Drug Policy Alliance press release, today "the Federal Cannabis Regulations Working Group released its Principles for Federal Cannabis Regulations & Reform," outlining what a federal regulatory framework — grounded in justice and social equity—should look like." Here is more from the DPA release:
The working group was convened by the Drug Policy Alliance at the beginning of this year.
Throughout a series of meetings and in-depth conversations, the group — made up of cannabis state regulators, public health professionals, criminal justice reform advocates, civil rights attorneys, people working with directly impacted communities in the cannabis industry, re-entry advocates, academics and an expert involved in Canada’s cannabis regulation — has identified key principles that should guide the development of federal cannabis regulation policies. The principles document encourages and provides guidance on issues related to racial justice, equity, preventing underage use, elimination of lifelong consequences, medical use, taxation, research and more. This release precedes the group’s continued effort to develop and roll out a more comprehensive set of recommendations for Congress on crucial issues such as — but not limited to — which federal agency should regulate cannabis (and to what extent), what kind of product should cannabis be regulated as, expungement, workforce development, medical use, non-commercial activity, and enforcement.
It will be very interesting to see if how forthcoming federal marijuana reform bills meet up with this two-page statement of principles.
The title of this post is the title of this new article authored by Lauren Newell recently posted to SSRN. Here is its a abstract:
Like the alcohol industry during Prohibition, the marijuana industry is a profitable one. And, like bootlegging was then, selling marijuana in the United States now is illegal. Despite the number of states that have legalized or decriminalized the sale of marijuana for medical or recreational use under state law, marijuana sales remain illegal as a matter of federal law under the federal Controlled Substances Act of 1970 (CSA). Individuals and entities that violate the CSA face substantial potential criminal and civil liability, including prison time and fines, alongside a host of additional negative consequences arising in business law, tax, bankruptcy, banking, and other sources. The negative consequences marijuana businesses face have been discussed in detail elsewhere. This Article asks a different question: not, what are the negative consequences, but rather, when do those negative consequence attach? In other words, when does a company become a “Marijuana Business”?
For purposes of this discussion, a Marijuana Business is an entity that participates, contributes, or assists, directly or indirectly, in the retail and/or medical marijuana industry to an extent that exposes it, its owners, and its agents to potential criminal and civil liability and other negative business consequences. In short, these are the companies that should be worried about the fact that they are engaging in an industry that is illegal under federal law. To identify the circumstances that result in a company’s being a Marijuana Business, this Article analyzes seven hypothetical companies that directly participate in the marijuana industry or support others that do. For each, it asks whether the facts are sufficient to establish criminal liability either directly under the CSA or indirectly under criminal conspiracy or aiding and abetting liability theories. Part I briefly introduces criminal liability under the CSA, along with the two complicity theories. Part II analyzes the hypothetical companies’ actions and determines whether they are Marijuana Businesses. Part III concludes with factors that courts and companies can look toward to determine whether those companies are indeed Marijuana Businesses.
April 20, 2021 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 (0)
Monday, April 19, 2021
After strong bipartisan approval in US House again, will US Senate finally take up SAFE Banking Act?
A big week for discussion of marijuana reform got off to a big start thanks to a vote in the US House of Representatives. This effective Marijuana Moment piece, headlined "U.S. House Approves Marijuana Banking Bill For Fourth Time, Setting Up Senate Consideration," provides these details:
The U.S. House of Representatives on Monday approved a bill to protect banks that service state-legal marijuana businesses from being penalized by federal regulators. After receiving an initial voice vote earlier in the afternoon, members passed the legislation by a final recorded vote of 321-101.
The legislation, which was reintroduced by Rep. Ed Perlmutter (D-CO) and a long bipartisan list of cosponsors last month, was taken up under a process known as suspension of the rules, which does not allow for amendments and requires a 2/3rd supermajority to pass....
Because marijuana businesses are largely precluded from accessing traditional financial institutions and have to operate on a mostly cash-only basis, that makes them targets of crime — a point that advocates, regulators and banking representatives have emphasized. “Even if you are opposed to the legalization of cannabis, you should support this bill,” Perlmutter added. “American voters have spoken and continue to speak — and the fact is, you can’t put the genie back in the bottle. Prohibition is over.”...
Rep. Patrick McHenry (R-NC) spoke in opposition to the legislation, stating that “regardless of your position on this bill, I do think the fact remains that cannabis is a prohibited substance under Schedule I of the Controlled Substances Act — and let me further state, by enacting this legislation, we’re effectively kneecapping law enforcement enforcement and legalizing money laundering.”
But in a sign of the bipartisan nature of this reform, Rep. David Joyce (R-OH) took to the floor to defend the legislation. He said “I’m proud to help lead this common sense and overdue effort.”
“At a time when small businesses are just beginning to recover from the economic destruction caused by COVID-19, the federal government should be supporting them, not standing in their way,” he said.
McHenry was the only lawmaker to rise against the bill on the floor, yielding all additional opposition time to other Republican members who actually spoke in support of it.
Just before the debate started on Monday, the governors of 20 states and one U.S. territory — as well as bankers associations representing every state in the country and a coalition of state treasurers — sent letters to House leadership, expressing support for the reform legislation.
The vote marks the fourth time the House has approved the Secure and Fair Enforcement (SAFE) Banking Act. Lawmakers passed it as a standalone bill in 2019 and then twice more as part of coronavirus relief legislation. At no point did the measure move forward in the Senate under Republican control last session, however.
But this time around, advocates and industry stakeholders are feeling confident that the bill’s path will not end in the House. With Democrats now in control of both chambers and the White House, there are high expectations that the proposal will make its way through the Senate and onto the president’s desk.
I am hopeful, but not at all optimistic, that this bill will move forward in the Senate with Democrats now in control of the chamber. Senate leader Chuch Schumer is expected to release a comprehensive marijuana reform bill "soon" and that bill will likely be a priority for Senators and advocates most eager to see federal marijuana reforms. Senators and others backing broader reforms could potentially view the SAFE Banking Act as an insufficient reform that could undercut momentum for bigger reforms.
April 19, 2021 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 (0)
Monday, April 12, 2021
The title of this post is the title of this notable new paper authored by Daniel Orenstein now available via SSRN. Here is its abstract:
States continue to legalize recreational cannabis, but most have heavily restricted where consumption of newly licit cannabis is permitted. Every legalizing state has thus far prohibited open, outdoor public use, either limiting lawful use to private property or allowing a small number of licensed indoor venues for consumption outside of public view, an approach borrowed from alcohol control. In contrast, some non-U.S. jurisdictions have adopted a tobacco control approach, allowing limited outdoor public use while prohibiting indoor public use. Each approach presents individual and population health risks that reflect the complex intersection of health, social inequities, and community norms.
Cannabis consumers face uncertain but potentially significant health risks from use, and the relative availability of use locations also implicates existing inequities in policing practices and housing. Those who do not use cannabis but are exposed to others’ use face possible harms from secondhand smoke and from intoxicated behavior, with such risks likely to be inequitably distributed due to existing employment and housing patterns. Communities as a whole also face risks, including that changing cannabis norms may increase use prevalence or intensity and that concentration of cannabis outlets in under-resourced communities may prove as detrimental as the concentration of other disfavored businesses has been.
Each public use approach carries attendant risks, but a regulatory framework based on the tobacco control model best balances the protection of public health and the promotion of equity and social justice. This model recognizes the parallels between cannabis and tobacco (in addition to those between cannabis and alcohol). This approach also provides a pathway to mitigating the public health risks of cannabis legalization by leveraging an approach that has proven effective at reducing secondhand exposures and denormalizing smoking behavior in the tobacco context.
April 12, 2021 in Business laws and regulatory issues, Medical community perspectives, Recreational Marijuana Commentary and Debate, Recreational Marijuana Data and Research, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)
As reported in this new Hill piece, "New Mexico Gov. Michelle Lujan Grisham (D) on Monday signed legislation to legalize the use and sale of recreational marijuana in the state, as well as to expunge the records of people with prior, low-level cannabis convictions." Here is more:
"The legalization of adult-use cannabis paves the way for the creation of a new economic driver in our state with the promise of creating thousands of good paying jobs for years to come,” Lujan Grisham said in a statement. “We are going to increase consumer safety by creating a bona fide industry. We’re going to start righting past wrongs of this country’s failed war on drugs. And we’re going to break new ground in an industry that may well transform New Mexico’s economic future for the better,” Lujan Grisham said.
The governor noted that the sentencing component of the law could impact up to tens of thousands of New Mexicans, and make possible the potential early release of low-level convicted cannabis offenders who are currently incarcerated.
The governor’s signature launches an administrative process that will culminate in the launch of commercial sales for adults no later than April 1, 2022. Issuing licenses to conduct commercial cannabis activity will begin no later than Jan. 1, 2022.
Under the legislation, recreational marijuana sales would initially be taxed at 12 percent, eventually rising to 18 percent. Medical marijuana would be exempt. Adults over the age of 21 will be allowed to purchase and possess up to two ounces of cannabis, 16 grams of cannabis concentrates and 800 milligrams of infused edibles. Home growers will be allowed six plants per person, with a cap of 12 plants per household....
The governor said legalization will generate needed tax revenue to help the state recover from the coronavirus pandemic. "As we look to rebound from the economic downturn caused by the pandemic, entrepreneurs will benefit from this great opportunity to create lucrative new enterprises, the state and local governments will benefit from the added revenue and, importantly, workers will benefit from the chance to land new types of jobs and build careers,” Lujan Grisham said.
The legislation makes New Mexico the third state in recent weeks to pass legislation legalizing recreational marijuana. New York Gov. Andrew Cuomo (D) signed a bill at the end of March, and Virginia Gov. Ralph Northam (D) last week convinced lawmakers to move up the effective date of legalization by three years.
As the end of this article notes, 2021 has already been a banner year for marijuana legalization. I am inclined to include New Jersey in the list of 2021 legalizing states (though perhaps the state formally came aboard the legalization train in 2020 when voters approved a ballot initiative that the state legislature operationalized in 2021).
With three+ states already legalizing marijuana through traditional legislation, 2021 will go down as a historic year even without any other states (or the federal government) acting in this arena. But this new Marijuana Moment article, headlined "Four More States Could Still Legalize Marijuana This Year After New Mexico, New York And Virginia," reviews the prospects for additional state action in the coming months in Connecticut, Delaware, Minnesota and Rhode Island.
Sunday, April 11, 2021
The title of this post is the title of this new paper recently posted to SSRN and authored by Nathaniel Wilson, 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:
This article covers two substances that are becoming particularly prevalent in consumer markets across the country, Delta-8 THC and kratom. It introduces each substance and provides an analysis of the legal landscape that each substance currently faces in the United States, including an overview of relevant statutory law and regulatory efforts at both the federal and state level. Finally, the article provides policy concerns that legislatures and regulatory agencies should take into consideration when approaching the regulation of these substances, as well as, other novel substances that share similar qualities.
Wednesday, April 7, 2021
"American Edibles: How Cannabis Regulatory Policy Rehashes Prohibitionist Fears and What to do About It"
The title of this post is the title of this notable new paper now available via SSRN authored by Jay Wexler and Connor Burns. Here is its abstract:
Why can’t we buy a cannabis muffin with our morning coffee? For much of the past century, the answer was simple: cannabis was illegal. Now, however, with more and more states legalizing cannabis for adult use, the answer is far less clear. Even in those states that have legalized cannabis, the simple action of buying and eating edibles at the same location has somehow remained a pipe dream despite consumer demand. Digging a little deeper, we can see how contemporary alarmism, by rehashing the same prohibitionist rhetoric demonizing cannabis for over eighty years, has once again arisen with a new target: cannabis-infused edibles. From journalists to policymakers to legal scholars, the rekindling of prohibitionist arguments against edibles has had real world impacts on the regulation of cannabis edibles, to the harm of all involved.
This Article explores contemporary cannabis edibles regulation using historical, scientific, and legal frameworks to explain why current edibles regulation is so problematic, and what to do about it. By delving into the history of cannabis prohibition, this Article shows how the very same arguments propping up prohibitionist edibles policies are rooted in bad-faith arguments made decades ago that themselves were merely thin veils for racism. Applying this historical perspective and a rational understanding of contemporary cannabis edibles, this Article explores how states have used prohibition-inspired regulations to address two main concerns — overconsumption and inadvertent consumption — and how such regulations need to be revisited and revised. This Article then argues that social consumption sits at the crux of edibles regulation, and that states must implement social consumption imminently to address the harms that current regulations do not address, or even worse, perpetuate.
April 7, 2021 in Business laws and regulatory issues, History of Marijuana Laws in the United States, Recreational Marijuana Commentary and Debate, Recreational Marijuana State Laws and Reforms | Permalink | Comments (0)
Thursday, April 1, 2021
Though we sometimes have to wait until 4/20 for a lot of marijuana discussions, this week is proving historic as the New Mexico legislature last night passed two big marijuana reform bills just hours after New York's Governor officially signed that state's historic marijuana legalization bill (NY basics here). This AP piece, headlined "New Mexico primed to join US recreational pot wave," reports on the basic details of the new laws just passed in the Land of Enchantment (yes, that is the official NM nickname):
New Mexico is joining a wave of states that are legalizing recreational marijuana as its Democrat-dominated Legislature sent a package of cannabis bills Wednesday to a supportive governor. Lawmakers used a marathon two-day legislative session to push through marijuana legalization for adults over 21 and a companion bill that automatically erases many past marijuana convictions, overriding skeptical Republicans.
By signing the bills, Gov. Michelle Lujan Grisham would extend legal recreational pot sales in the American Southwest by April 2022, when the New Mexico legislation kicks in, and join 16 states that have legalized marijuana, mostly through direct ballot initiatives. California and Colorado were among the first in the U.S. to legalize marijuana, with Arizona becoming one of the latest in the region to follow suit earlier this year. New York Gov. Andrew Cuomo signed a legalization bill Wednesday, and a proposal in Virginia is awaiting the governor’s signature.
The New Mexico initiative would reconsider criminal drug sentences for about 100 prisoners, and give the governor a strong hand in licensing the industry and monitoring supplies.
New Mexico flirted with cannabis legalization in the 1990s, when then-Gov. Gary Johnson challenged taboos against decriminalization in defiance of Republican allies. The state’s medical marijuana program founded in 2007 has attracted more than 100,000 patients. The Legislature was reticent to legalize until now. Several hardline opponents of legalization in the state Senate were voted out of office by Democrats in 2020 primary elections, in a shift that paved the way for Wednesday’s historic vote.
Under the advancing legalization package, New Mexico would levy an initial excise tax on recreational marijuana sales of 12% that eventually rises to 18%. That’s on top of current gross receipts on sales that range from roughly 5% to 9%. Possession of up to 2 ounces (57 grams) of marijuana would cease to be a crime, and people would be allowed six plants at home — or up to 12 per household. The reforms would eliminate taxes on the sales of medical marijuana and seek to ensure adequate medicinal supplies.
“The United States of America is in the midst of a sea change when it comes to this,” said Democratic state Rep. Javier Martinez of Albuquerque, lead sponsor of the legalization bill. “This bill begins to repair the harms of prohibition.”
State oversight would largely fall to the governor-appointed superintendent of the Regulation and Licensing Department that would issue licenses for a fee to marijuana-related businesses. The agency initially would have the authority to limit marijuana production levels by major producers — a lever over market supplies and pricing.... The legalization bill creates a cannabis control division to oversee 10 types of industry licenses. Those include micro-licenses with low annual fees for small producers to grow up to 200 marijuana plants and also package and sell their products.
Bill sponsor Martinez says that provides an important measure of equity, within a bill designed to support communities that suffered from criminalization of marijuana and tough policing. Past drug convictions don’t automatically disqualify applicants for marijuana business licenses. The odor of marijuana or suspicion of possession are no longer legal grounds to stop, detain or search people.
Legalization bill co-sponsor Rep. Deborah Armstrong says New Mexico will respond to early pitfalls of legalization in other states as it mandates child-proof packaging for marijuana products. Public health advocates condemned provisions that allow public consumption lounges for recreational cannabis, citing the dangers of second-hand smoke and vapor to workers and patrons.
Lawmakers discarded a Republican-sponsored bill from Sen. Cliff Pirtle of Roswell that emphasized low taxes in an effort to stamp out illicit weed and would have provided low-cost licenses to small pot farmers by linking fees to the number of plants in cultivation. Local governments cannot prohibit pot businesses but can regulate locations and hours of operation, under the proposal. Bill sponsors say that sheriffs and police want consistency from town-to-town on rules and enforcement.
Republican state Sen. Gay Kernan of Hobbs voted against legalization and said she was amazed that legislative colleagues would support the freedom to buy mind-altering drugs amid New Mexico’s struggles with poverty and opioid overdoses. “I just think it’s terribly unfair to impose this kind of significant change in our way of life and areas of the state that clearly do not welcome this,” Kernan said.
Tuesday, March 30, 2021
New York to be the very latest (and one of the very biggest) states to legalize recreational marijuana
As detailed in this Bloomberg article, headlined "New York Moves to Become Second Largest Pot Market In U.S.," a very big state is about to make marijuana use legal. Here are just some of the highlights:
New York moved toward creating the nation’s second-largest market for legal marijuana when the state Legislature passed Tuesday a bill that would impose special pot taxes and allow the licensing of dispensaries.
The measure (S.854A /A.1248A) would allow cannabis storefronts to open as soon as next year, and would let home growers start cultivating their own pot. It would limit the number of licenses for large corporations, and impose sales and excise taxes that are estimated to eventually bring in about $350 million a year.
The legislation would set in motion automatic expungement of records for people with previous convictions for activities that would no longer be criminalized when marijuana is legalized for use by adults 21 and older.
The Senate voted for the measure 40-23. The Assembly cleared the bill by a vote of 100-49. Both chambers’ votes were largely along party lines.... Governor Andrew Cuomo (D) has said he will sign the bill, which he negotiated with lawmakers in a handshake deal last week.
Once New York’s program is fully rolled out, it’s anticipated to generate tens of thousands of jobs and about $4.2 billion in sales, surpassing Washington state and trailing only California, which had about $4.4 billion in sales last year.
Several lawmakers in both houses, mainly Republicans, brought up concerns with people under the influence of marijuana driving or going to work and using heavy machinery. “This legislation will be a liability,” said state Sen. Mario R. Mattera (R). “Our contractors are against this, the building trades are against this.”
Mattera, who voted “no” on the bill, also expressed concern over the dangers of drug use, particularly for youth. He described experiencing this problem in his own family, and called marijuana a “gateway” drug. “This is a disaster waiting to happen,” he said.
The legislation includes two kinds of new taxes: a 13% sales tax, with the money raised divided between the state (9%) and localities (4%), plus a distributor excise tax of as much as 3 cents per milligram of THC, the active ingredient in cannabis, using a sliding scale based on the type of product and its potency.
Tax revenue would be used to run and oversee the state cannabis program, with the remaining money divided between programs that try to help people rebuild their lives after marijuana possession arrests, as well as their communities. The revenue would also go to education and drug treatment in the state. Cities, towns, and villages would have until the end of this year to opt out from having dispensaries and pot cafes in their communities.
Up to 3 ounces of cannabis and 24 grams of cannabis concentrate would be legally permitted for personal possession outside of the home. Up to 5 pounds of cannabis will be allowed in a private residence, as long as it’s in a secure location out of the reach of those under age 21, according to the bill.
The proposal allows for the personal cultivation of cannabis, with an adult 21 or older permitted to have up to three mature plants and three immature plants. Per household, the limit would be six of each kind of plant. Home cultivation would become legal in six months for medical marijuana patients and legal for others no later than 18 months after the first shops open, dependent upon state regulations....
The bill would allow pot delivery services, with each licensee able to have the equivalent of up to 25 full-time employees. And it would allow for on-site pot consumption, as long as the cannabis cafes aren’t within 500 feet of a school, or 200 feet from a house of worship.
New York lawmakers also baked social and economic equity proposals into the legislation. A single company wouldn’t be allowed to handle all parts of a recreational transaction — cultivation, processing, distributing, and dispensing — with the exception of micro businesses. A cultivator or processor would be barred from having a direct or indirect financial interest in a retail dispensary.
A state Cannabis Control Board and Office of Cannabis Management would be required to take small businesses into consideration and prioritize “social and economic equity” applicants from communities disproportionately impacted when marijuana was illegal. Priority for licenses also would go to those who make less than 80% of their county’s median income, and those convicted in the past of a marijuana-related offense.
The bill sets a goal of allocating half of the adult-use licenses to a minority- or woman-owned business, distressed farmers, service-disabled veterans, or “social and economic equity” applicants. The state would also create business incubator programs for social equity applicants, make low- and zero-interest loans available to them, and would be permitted to waive their licensing fees, according to the bill.
Thursday, March 18, 2021
The title of this post is the title of this new paper recently posted to SSRN and authored by Nicholas Sgroi, a 2L 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:
America is currently experiencing an economic recession plagued with high unemployment and low economic output. The Alliance for Sensible Markets and other proponents of cannabis legalization think that the cannabis industry can be extremely helpful in recovery through an interstate cannabis commerce plan. This plan could potentially pump in immediate waves of investment and create thousands of jobs. The plan lays out two steps: (1) have at least two states enter into an interstate compact for cannabis and (2) obtain congressional approval for the interstate compact. This article will look at the trends of a few states; speak about the benefits of the plan; touch on the consequences; and talk about the chances of this plan working, especially with the 2020 election approaching. Additionally, the article will tackle questions that face the plan if those two steps are met, such as questions on banking laws, tax laws, and whether psychoactive cannabis will be regulated as a commodity crop or if states will maintain their own existing regulatory framework.
Saturday, March 13, 2021
The title of this post is the title of this paper recently posted to SSRN authored by W. Michael Schuster and Robert C. Bird. Here is its abstract:
Overcoming its checkered past and stringent regulation, cannabis is quickly becoming a highly lucrative consumer product. Accompanying this rapid decriminalization is crippling legal uncertainty, as vague statutory language, sporadic backsliding, presidential indecision, and inconsistent enforcement have introduced substantial and unnecessary legal and compliance risks. This combination of a novel industry and its ambiguous legal environment is not only ripe for reform, but also illuminates how firms can respond strategically to high levels of legal uncertainty.
After a review of the controversial history of cannabis and the legal uncertainty that pervades the industry, the manuscript shows how uncertainty drives firms to pursue risky legal strategies. This manuscript shows that firms under the stress of uncertainty respond by either aggressively leveraging their legal knowledge to capture value or attempting to circumvent the legal environment altogether. Both pathways of legal strategy impose unnecessary volatility on cannabis firms.
The manuscript then highlights how legal uncertainty drives legal strategy in a discrete legal environment – the federal government’s refusal to register marks for goods that are illegal under federal law—including most cannabis goods. We uncover five distinct legal strategies used by cannabis firms, with each strategy responding to a different combination of legal uncertainties. Finally, eschewing an unrealistic proposal for immediate uniformity, we propose pragmatic and achievable reforms that would significantly reduce legal uncertainty for firms while not upsetting further the already chaotic legal environment of cannabis regulation.
Wednesday, March 10, 2021
This New York Times article, headlined "Mexico Set to Legalize Marijuana, Becoming World’s Largest Market," reports on the latest reform developments from south of the border. Here is how the piece gets started:
Lawmakers in Mexico approved a bill Wednesday night to legalize recreational marijuana, a milestone for the country, which is in the throes of a drug war and could become the world’s largest cannabis market, leaving the United States between two pot-selling neighbors.
The 316-to-129 vote in Mexico’s lower house, the Chamber of Deputies, came more than two years after the Mexican Supreme Court ruled that the country’s ban on recreational marijuana was unconstitutional and more than three years after the country legalized medicinal cannabis.
The chamber approved the bill in general terms Wednesday evening before moving on to a lengthy discussion of possible revisions introduced by individual lawmakers. In its final form, though, the measure is widely expected to sail through the Senate before being sent to President Andrés Manuel López Obrador, who has signaled support for legalization.
The measure, as of Wednesday night, would allow adults to smoke marijuana and, with a permit, grow a small number of cannabis plants at home. It would also grant licenses for producers — from small farmers to commercial growers — to cultivate and sell the crop.
“Today we are in a historic moment,” said Simey Olvera, a lawmaker with the governing Morena party. “With this, the false belief that cannabis is part of Mexico’s serious public health problems is left behind.”
If enacted, Mexico would join Canada and Uruguay in a small but growing list of countries that have legalized marijuana in the Americas, adding further momentum to the legalization movement in the region. In the United States, Democrats in the Senate have also promised to scrap federal prohibition of the drug this year.
For “Mexico, given its size and its worldwide reputation for being damaged by the drug war, to take this step is enormously significant,” said John Walsh, director of drug policy for the Washington Office on Latin America, a U.S. advocacy group. “North America is heading toward legalization.”
Saturday, March 6, 2021
This new and extended Law360 piece authored by Julie Werner-Simon provides an interesting accounting of the landscape of marijuana legalization. The piece is titled "3 Degrees Of Legalization Show True Prevalence Of Cannabis," and merits a full review (in part because it has a number of original graphics of interest). Here are excerpts (along with one of the graphics):
Across the political spectrum and the wide swath of the U.S. — including far-flung territories — just shy of 7 million of America's almost 335 million inhabitants live in a place where marijuana usage is completely illegal.
Although marijuana has been federally illegal for 50 years since the administration of President Richard Nixon and the implementation of the Controlled Substances Act, that has not stopped U.S. states and territories from taking things into their own hands.
Marijuana legality across America is more endemic, with graduated levels of permissiveness than the binary state-legal adult recreational and medical marijuana delineations first reveal....
First-degree states and territories are those which have legalized adult recreational use. In first-degree regimes, adults of the state or territory can legally purchase marijuana without the need to show any medical preconditions.
Second-degree states and territories are places that have legalized, implemented or established implementation dates for medical marijuana programs, which provide broad patient access to marijuana for the treatment of multiple medical conditions. Second-degree programs vary enormously but, generally, second-degree states and territories permit patients at a minimum, to possess and smoke medical marijuana.
In America, second-degree regions ultimately evolve into places having coexisting adult use first-degree programs....
Rounding off the trifecta are the third-degree states that comprise an even smaller number of places with severely limited access, or SLA, to medical marijuana products. This third category, which includes only states and no territories, typically permits restricted marijuana use to a limited number of universities or research institutions or for limited medical purposes by a patient population comprised primarily of those with incurable diseases, seizure disorders or epilepsy.
Some, but not all, SLA states cap the quantity of THC in any medical use of the marijuana product in that state, or restrict the amount a patient can receive in a set period, and some make it illegal to smoke medically authorized marijuana product.
SLA status, the third-degree designation, is often a precursor to becoming a second-degree medical use state. SLA communities can become accustomed to having restricted programs, with some even referring to their SLAs as medical marijuana programs....
There is no dispute about the distinctions between first-degree and second-degree states, but the muddled lines between what constitutes second-degree and third-degree regimes cause the variations in the answer to the question: Where is marijuana illegal?
From a visitor's perspective, the bulk of SLA states would reasonably appear to be fully illegal when, in fact, there are narrow legal grounds for some to use or study marijuana in those states.
Applying the three-degree analysis, there are only three states and one U.S. territory where marijuana is entirely illegal, that is, verboten for use in any form. These are Idaho, Nebraska, Kansas and American Samoa. That's fewer than 7 million people in all of America living in places without some degree of marijuana legalization....
With all this activity on the state and territory level, the marijuana investment bonanza, as well as the advent of a new administration and an ever-so-slight Democratic majority in the U.S. Senate, surely a thawing of the federal prohibition of marijuana is not far behind?
Not so fast and not tomorrow. There will be no early groundhog spring for marijuana in 2021. The life and death consequences of COVID-19 have made it America's top priority; marijuana legalization has taken a backseat. Yet there will likely be incremental actions occurring after COVID-19 fiscal relief and increased vaccination levels and before the 2022 midterms....
Mandeep Trivedi, a well-regarded corporate valuator of marijuana businesses has said, where marijuana is concerned "[t]he almighty dollar is an almighty force." It is the dollar that has caused inroads into the once impregnable view that supporting marijuana legalization is political suicide.
All economic indices show that marijuana legalization generates oodles of much-needed cash for governments. The experiences of the legalized states, from the first- through the third-degree, prove this maxim. Federal government coffers depleted by COVID-19 costs, the payment of stimulus relief funds and the 2018 federal tax cuts are in need of replenishment. Marijuana can make this happen.
There are 20 months until the 2022 midterms. The soil is tilled for receptivity to a more mature marijuana industry operating under coexisting federal and state regulation and taxation systems. Even for the most conservative of political actors, this groundswell will be hard to resist. Marijuana has gone mainstream; its tie-dye stigma has diminished while action from the federal government has been incentivized. Federal marijuana legalization will ultimately have its day.