Marijuana Law, Policy & Reform

Notable accounting of "legal" Delta-8 THC products

This interesting new Forbes article, "Delta-8 THC Generated $2 Billion In Revenue In Two Years, Report Finds," provides a summary of interesting economic data regarding the interesting "legal" THC products. Here are excerpts:

Delta-8 THC products have seen a surge in popularity in the past two years, resulting in over $2 billion in sales as an alternative to traditional marijuana.  According to a recent report by cannabis analytics firm Brightfield Group, the increasing popularity of delta-8 THC products is causing other cannabis industries to take notice and take action.

Delta-8 THC is a psychoactive cannabinoid derived from hemp that has been reported to produce similar but milder effects than traditional delta-9 THC contained in marijuana.  Delta-8 THC is found naturally in small amounts, but the products currently on the market are created by chemically converting CBD into the Delta-8 molecule.

Delta-8 THC products popped up following the 2018 Farm Bill, which legalized hemp cultivation with a THC level below 0.3% at the federal level.  However, the legalization brought companies to produce a wide array of products containing minor non-psychoactive cannabinoids, such as CBD and CBG, but also other cannabinoids that have milder psychoactive effects than THC, which are not categorized as illegal because they are derived from hemp.

However, there have been safety concerns raised about Delta-8 THC and similar products, as the conversion of CBD molecules into THC molecules requires a skilled chemist to ensure safety, and improper or imprecise techniques can lead to high levels of impurities in the final product.  In addition, the health effects of consuming these impurities are currently unknown.

Nevertheless, the report notes a considerable overlap among the users of CBD, cannabis, Delta-8, and other newly developed cannabinoid products.  The report indicates that 35% of CBD users have purchased psychoactive hemp-derived products within the last half-year.  Furthermore, in states where marijuana is legal, nearly a quarter of marijuana users express interest in purchasing delta-8 products in the future.  As consumers are inclined to experiment with new products, there may be a shift towards delta-8 over time, particularly if the cost difference remains favorable.

In states where marijuana is still illegal, delta-8 has emerged as a cost-effective and accessible way to experience psychoactive cannabis.  It can be obtained legally or through mail-order, providing consumers with a less risky (legally) alternative to getting marijuana illegally.  That was also confirmed by a study published last year, which showed that the public interest in delta-8-THC increased rapidly in 2020 and 2021 and was exceptionally high in those U.S. states that haven't decriminalized or legalized recreational cannabis.

However, the report notes that delta-8's increasing popularity in places where marijuana is still illegal could negatively impact support for legalization.  "If Delta-8 continues to gain popularity and build a foothold in areas where Delta-9 is restricted, legalization measures could see less popular support and grassroots fundraising, slowing progress toward full U.S. legalization," the report reads.

In addition, it seems that there is already a significant amount of confusion between delta-8 and delta-9, the main compound of marijuana, even in places where that is legal. The report observes that retailers selling delta-8 products present themselves as dispensaries and do not clarify that the compound is derived from hemp.

Taking a particular look at the middle of US marijuana reform map as the calendar turns to 2023

Stateline has this notable new article, headlined "Motley Marijuana Laws Drive Consumers — and Revenue — Across State Lines," that gives particular (but still incomplete) attention to the fact that marijuana reform storys have become somewhat consistent on the coasts while being quite varied in the middle of the USA.   I recommend the article in full, and here is a flavor of its coverage:

Less than half a mile south of the Wisconsin border in Illinois, the Sunnyside Cannabis Dispensary bustles with activity. Cars with license plates from Wisconsin, Minnesota and other pot-banning states slide in and out of the shop’s expansive parking lot.

The bright and airy retail store is an easy hop off Interstate 90, which spans the nation’s entire northern tier. For many westbound customers, Sunnyside is the last chance to legally buy recreational, or “adult-use,” marijuana products until Montana, more than 900 miles away. And heading south from this truck-stop town to the small Illinois city of Metropolis, dispensaries likewise hug the Prairie State’s boundaries with Indiana, Iowa and Kentucky, where pot sales are outlawed.

State lines delineate the vastly varying marijuana regulations across the Midwest. Illinois, Michigan and, since December, Missouri allow recreational marijuana, while neighboring states have some of the strictest laws in the nation.  The contrasting statutes create some law enforcement concerns in states where marijuana is outlawed — when residents legally use marijuana just across the border or bring it back home. 

But many elected officials in those states say the larger problem is the loss of potential revenue from an industry that could bring visitors, jobs and tax dollars.  Public support for the liberalization of marijuana laws in this region is growing, following national trends.  Much of the debate is economic, as restrictive states see their residents paying marijuana sales and excise taxes to neighboring states.

In Illinois, which legalized adult-use marijuana in 2019, out-of-state residents account for 30% of recreational marijuana sales, according to state filings. Sales in the state have risen from just more than $400 million in fiscal 2020 to more than $1.5 billion in fiscal 2022.  Tax disbursements to local Illinois governments in fiscal 2022 reached $146.2 million, a 77% increase over 2021.

Illinois law mandates that a fourth of marijuana tax revenue be used to support communities that are “economically distressed, experience high rates of violence, and have been disproportionately impacted by drug criminalization.”  The significant revenue is a big pull for states that outlaw marijuana to consider changing their policies. But some opponents to legalized cannabis worry about what other effects marijuana sales could have on their communities....

Indiana, which has some of the nation’s toughest marijuana laws, borders two states (Illinois and Michigan) with recreational sales. “I try to enforce the laws as best I can based on what Indiana wants us to do,” said Ken Cotter, prosecutor for St. Joseph County, Indiana, along the Michigan border. The region is known as Michiana.

“I was worried that if Michigan legalizes marijuana, folks from Indiana might want to go to Michigan, get the marijuana and drive back — that's one thing. But if they then went to Michigan, legally smoked it there and then drove [under the influence], that's a whole different ball game,” Cotter said. Cotter, a Democrat, said there has not been an increase in marijuana possession cases in his jurisdiction since Michigan legalized recreational sales in 2018, but that marijuana-based DUI charges have “increased dramatically.”

But Cotter was cautious not to draw broader conclusions from his jurisdiction of 270,000 residents, stressing that more data and reporting is a pressing public safety need. That’s in line with an expansive 2021 report from the Cato Institute, a libertarian-leaning think tank based in Washington, D.C., suggesting it’s too soon to know all the effects of the changing laws.  The report noted that early studies, including those on public safety, have varied conclusions, and that data comparisons at this point can be problematic.

A recent survey by a national law firm finds some Midwestern states among those least favorable to the cannabis industry. Indiana’s laws rank 49th among states and the District of Columbia in receptiveness to cannabis, according to Thompson Coburn, a national law firm that has a cannabis practice. Wisconsin stands 47th, Kentucky 41st and Iowa 38th. In Wisconsin, for example, the first conviction for a small amount of marijuana possession is a misdemeanor, but any subsequent possession charge is a felony....

In Minnesota, where Democrats now control the governorship and both chambers of the legislature, lawmakers introduced an adult-use bill on Jan. 5. Democratic Gov. Tim Walz quickly tweeted his support: “It's time to legalize adult-use cannabis and expunge cannabis convictions in Minnesota. I’m ready to sign it into law.”

And in Wisconsin, Democratic Gov. Tony Evers told Wisconsin Public Radio in December that recreational marijuana will “be in the budget,” but that a hostile GOP-led legislature stands in the way. "Even though the people of Wisconsin by huge numbers in polling support recreational marijuana in the state of Wisconsin, I just don't know if the Republicans are there yet," Evers told WPR. "All I know is that there is talk on the Republican side, from what I've heard, around medicinal."...

Iowa appears unlikely to move toward liberalization of its marijuana laws, despite a Des Moines Register poll from 2021 showing 54% of Iowans supporting the legalization of adult-use products.

Notable new report explores "The Pros and Cons of Cannabis Taxes"

The Urban-Brookings Tax Policy Center this past week released this notable extended report titled "The Pros and Cons of Cannabis Taxes" authored by Richard Auxier and Nikhita Airi.  Here is the report's abstract:

While 19 states have enacted a tax on recreational marijuana, there is no standard cannabis tax in the US the way there is an alcohol tax, cigarette tax, and gas tax.  Instead, governments use three different types of cannabis taxes: a percentage-of-price tax, a weight-based tax, and a potency-based tax.  Different states use different taxes and some states levy multiple taxes.  Additionally, some state and local governments levy their general sales tax on the purchase of marijuana.  This report is a guide for policymakers, journalists, and engaged community members hoping to better understand cannabis tax debates.  It details each state’s cannabis tax system, provides data on cannabis tax revenue, explains the pros and cons of different cannabis taxes, and discusses the various goals of those taxes.

And here is part of the report's conclusion:

After nearly a decade of legal and taxable sales, it is clear that cannabis taxes can generate hundreds of millions of dollars in annual revenue for state and local governments.  However, recent revenue declines in five states, each with a distinct cannabis tax system, underscore that revenue growth is not limitless and that various factors can affect what governments collect from year to year.

We know that overly complex and burdensome tax systems, like the pre-reform taxes in California, can depress the evolution of legal marijuana markets.  However, we also know that some states, like Washington, can create highly effective markets even with relatively high tax rates.

We know that taxes based on weight and potency could possibly help policymakers achieve important goals like producing more consistent tax revenue and discouraging the use of possibly dangerously potent products. However, we also know that these taxes can drive up costs and create significant burdens for legal sellers....

Ultimately, as new states enact taxes on marijuana and states with existing tax systems consider reforms, policymakers should use existing evidence to make informed choices that align their goals with their taxes.  But state and local cannabis tax policy remains anything but simple and predictable.  Policymakers across the country should also prepare to monitor, study, and reform these taxes as events develop and we learn more.

Legalization ballot initiative sidelined by state Supreme Court in Oklahoma, while initiative cleared to go forward in neighboring Missouri

As students in my marijuana seminar know (too) well, I find the modern history of marijuana reform throughout the United States to be a fascinating legal and political story.  And sometimes I view some of the regional variations in these stories to be especially remarkable, and one such recent example comes from the center of our great nation.  Specifically, I am referencing here the notably different outcomes of legal challenges to state ballot legalization initiatives in neighboring Oklahoma and Missouri.  Though these states share a (small) border, they are not sharing the same outcomes in lawsuits challenging efforts to put marijuana legalization before votes, as reported in this Marijuana Moment articles:

"Missouri Marijuana Legalization Initiative Will Appear On November Ballot After State Supreme Court Rejects Prohibitionists’ Challenge"

An initiative to legalize marijuana in Missouri is officially cleared for ballot placement following a month-long legal back-and-forth between the campaign and prohibitionists.  A lawsuit filed last month sought to keep the Legal Missouri 2022 reform proposal off the ballot after it was certified by the secretary of state.  But after two lower courts dismissed the challenge, the state Supreme Court on Tuesday delivered the final word that the legal battle is over.

"Oklahoma Supreme Court Says Marijuana Legalization Won’t Be On November Ballot, But Will Be Voted On In Future Election"

Oklahoma voters will not get the chance to vote on a marijuana legalization initiative in November, with the state Supreme Court on Wednesday rejecting the campaign’s lawsuit that sought to secure ballot placement this year.  However, justices also dismissed two separate legal challenges to the ballot title, clearing the initiative’s path for a vote during the state’s next general or special election.

Legal battles over initiatives are never unusual, and a range of legal tripwires can often attend efforts to bring ballot measures directly to voters on any topic.  But I surmise that these kinds of challenges to marijuana reform measure have found growing success, perhaps unsurprisingly, as initiative move from bluer to redder states. Judges and other legal actors in bluer states can often seem more welcoming of ballot initiatives in this arena (and we have seen politicians in Maryland and New Jersey place marijuana reform initiatives on the ballot), whereas these actors in redder states sometime seem far more keen to keep voters from having a chance to directly weigh in on these issues.

Some federal and state marijuana headlines and stories worth noticing

Some days it seems there is now way too much marijuana news and commentary.  Despite the lack of any federal legislative reforms at all, and relatively little major change at the state level, each day seems to bring dozens of headlines and stories in the cannabis space vying for my attention.  And yet, even during busy times and lots of noise, a few headlines and stories break out to garner my attention.  Today seems to be such a day via these stories and commentaries breaking through (to me, at least):

From The Hill, "Liberals push Biden on marijuana reform ahead of midterm momentum"

From The Hill, "America needs to get real about high-potency marijuana"

From the Los Angeles Times, "The reality of legal weed in California: Huge illegal grows, violence, worker exploitation and deaths"

From Marijuana Moment, "Senate Marijuana Banking Sponsor Gives Details About Forthcoming ‘SAFE Plus’ Reform Package"

From Marijuana Moment, "Illinois Adult-Use Marijuana Sales Top $3 Billion Since Market Launched, With $1 Billion Sold So Far This Year Alone"

From the Minnesota Reformer, "Minnesota’s Black marijuana users far more likely to face arrest than white ones"

From MJBiz, "Marijuana companies lay off hundreds, retrench amid economic woes"

From Politico, "Arrests in New Jersey for small-time cannabis dealing plummet post-legalization"

Reviewing just some of the dynamic marijuana reform stories from the states

The stories of marijuana reform in the United States are still mostly dynamic state stories, and here is just a handful of state stories from big states making headlines in just the last few days:

From California, "The casualties of California legalizing pot: Growers who went legal"

From Florida, "Florida Gov. DeSantis wants pot companies to pay more"

From Michigan, "Marijuana growing moratorium?: Supply and demand could lead to changes in Michigan"

From New York, "New Yorkers with pot convictions will now be the first to get to sell it"

From Virginia, "Inside the ‘wild, wild west’ of Virginia’s marijuana market"

And, of course, there are at least a half-dozen additional states with marijuana reform initiatives on the ballot this fall.  This Hill article provides an overview of these state stories under this full headline: "Voters in these states may soon decide whether to legalize marijuana: Six states could have ballot measures up for vote in the November midterm elections, and should they pass, will join 19 others in legalizing recreational marijuana."

Nevada Supreme Court rejects claim that state's "lawful use" statute protects casino worker from discharge for off-duty marijuana use

Nearly a decade ago, a fascinating employment law case began working its way through the Colorado state court system following the termination of Brandon Coats by the Dish Network. Coats, who used medical marijuana following a car accident that left him a quadriplegic, claimed that Colorado state law protected him from discharge simply for having tested positive for marijuana since he used the drug only off-duty and lawfully under state law. The case involved sympathetic facts early in the modern marijuana reform era, and the case generated lots of amicus briefs and media attention when it reached the state's Supreme Court. In the end, the Colorado Supreme Court ruled in Coats v. Dish Network, 350 P.3d 849 (Colo. 2015) that "an activity such as medical marijuana use that is unlawful under federal law is not a "lawful" activity under" the applicable state employment law.

I was reminded of Coats and all the attention it generated when I tripped across this morning a very similar ruling handed down late last week by the Nevada Supreme Court.  In Ceballos v. NC Palace, No. 82797 (Nev. Aug 11, 2022) (available here), the underlying facts are a bit different: employee's termination comes after state-lawful recreational marijuana use and the language of the applicable state-law statutory employment protections are a bit different.  But the result is the same, as the start and end of the unanimous ruling reveals:

NRS 613.333 creates a private right of action in favor of an employee who is discharged from employment for engaging in "the lawful use in this state of any product outside the premises of the employer during the employee's nonworking hours."  The question presented is whether adult recreational marijuana use qualifies for protection under this statute.  We agree with the district court that it does not.  Although Nevada has decriminalized adult recreational marijuana use, the drug continues to be illegal under federal law.  Because federal law criminalizes the possession of marijuana in Nevada, its use is not "lawful ... in this state" and does not support a private right of action under NRS 613.333.  Further, because NRS 678D.510(1)(a) authorizes employers to prohibit or restrict recreational marijuana use by employees, an employee discharged after testing positive at work based on recreational marijuana use does not have a common-law tortious discharge claim.  We therefore affirm....

The interplay between adult recreational marijuana use and employment law, moreover, is one the Legislature has addressed in NRS 678D.510(1)(a) and, to a lesser extent, in NRS 613.132.  Palace Station terminated Ceballos for failing a workplace drug test after engaging in adult recreational marijuana use before his shift.  NRS 678D.510(1)(a) specifically authorizes employers to adopt and enforce workplace policies prohibiting or restricting such use.  If the Legislature meant to require employers to accommodate employees using recreational marijuana outside the workplace but who thereafter test positive at work, it would have done so.  Cf. NRS 678C.850(3) (requiring employers to accommodate the medical needs of employees who use medical marijuana unless certain exceptions exist).  It did not.  It also did not extend the protections afforded by NRS 613.333 and NRS 613.132 to reach the circumstances giving rise to Ceballos's termination.  See supra Section II.A. (discussing the limits the Legislature has set on the protections NRS 613.333 and NRS 613.132 afford).  This court declined to allow the employees in Chavez and Sands Regent to pursue common-law tortious discharge claims to redress the discrimination they alleged, because doing so would intrude on the prerogative of the Legislature, which had enacted statutes addressing the same subject matter.  See Chavez, 118 Nev. at 294, 43 P.3d at 1026; Sands Regent, 105 Nev. at 440, 777 P.2d at 900.  Doing so would be even less appropriate here.

Effective review of the state of new state marijuana reforms in 2022

With lots of bills being introduced and debated at the federal level, it is dangerously easy to overlook the fact that marijuana reform in the US has been almost exclusively a state story for a quarter century and is likely to remain mostly a state story even if some federal bills actually become law in coming months and years.  Thus, it is especially useful that Politico recently produced this effective round up of some recent state developments under the full headline "Where cannabis legalization efforts stand across the country: Gains in state legislatures slowed down in 2022, but advocates still have the ballot."  I recommend the full piece, and here is how it gets started:

With most legislative sessions across the country already wrapped up for the year, the results are clear: “Elected officials remain far behind the times,” said Karen O’Keefe, state policy director for Marijuana Policy Project. If it were left up to voters, O’Keefe believes, every state would have some form of legal cannabis by now.

As it stands, 19 states have embraced full legalization, while 19 others have enacted medical marijuana programs. But many of the remaining holdouts are staunchly conservative states where legalization skepticism runs deep among lawmakers.

Perhaps the biggest setback for industry advocates this year was Delaware, where a bill to remove penalties for possession passed with supermajorities in both chambers, only to be vetoed by the Democratic governor, John Carney. Recreational legalization efforts also came up short in Ohio, Hawaii and New Hampshire, while medical bills failed in Kansas, South Carolina, Tennessee and Kentucky.

Some legislative efforts were doomed from the outset, particularly Democratic-sponsored adult-use bills introduced in GOP-dominated state legislatures such as Louisiana, Wisconsin and Indiana.

But not all hope is lost for pro-legalization advocates. At least a half dozen states could have legalization questions on their November ballots. If all of those campaigns succeed, half of the states in the country would allow adults to possess — and eventually purchase — weed legally.

"Changes in Traffic Crash Rates After Legalization of Marijuana: Results by Crash Severity"

The title of this post is the title of this notable new article published in the Journal of Studies on Alcohol and Drugs and authored by Charles M. Farmer, Samuel S. Monfort and Amber N. Woods. Here is its abstract:

Objective:

The objective of this study was to estimate the effects of marijuana legalization and the subsequent onset of retail sales on injury and fatal traffic crash rates in the United States during the period 2009–2019.

Method:

State-by-state quarterly crash rates per mile of travel were modeled as a function of time, unemployment rate, maximum posted speed limit, seat belt use rate, alcohol use rate, percent of miles driven on rural roads, and indicators of legalized recreational marijuana use and sales.

Results:

Legalization of the recreational use of marijuana was associated with a 6.5% increase in injury crash rates and a 2.3% increase in fatal crash rates, but the subsequent onset of retail marijuana sales did not elicit additional substantial changes.  Thus, the combined effect of legalization and retail sales was a 5.8% increase in injury crash rates and a 4.1% increase in fatal crash rates.  Across states, the effects on injury crash rates ranged from a 7% decrease to an 18% increase.  The effects on fatal crash rates ranged from a 10% decrease to a 4% increase.

Conclusions:

The estimated increases in injury and fatal crash rates after recreational marijuana legalization are consistent with earlier studies, but the effects varied across states.  Because this is an early look at the time trends, researchers and policymakers need to continue monitoring the data.

"Capital Expenditure and Acquisition in Conventional Agriculture and Cannabis: A Comparative Analysis"

I am pleased to report that I am almost fully caught up on posting a lot of recently produced papers that are part of the on-going series of student papers supported by the Drug Enforcement and Policy Center.  I continue to relish the he chance to highlight great work by OSU law students and recent graduates, and the title of this post is the title of this paper authored by Steve Nosco who recently graduated from The Ohio State University Moritz College of Law.  Here is its abstract: 

Federal laws prohibiting the possession, production, and use of Cannabis create significant operational challenges for state-compliant Cannabis companies.  One of the largest challenges is acquiring the initial capital required for any new business to become self-sustaining and profitable.  Without traditional sources of capital, namely credit from commercial institutions or government lenders, only individuals with access to significant private funds can become entrepreneurs in this burgeoning industry. In the face of Federal inaction to solve this well-documented problem, States can, and should, take on a leading role.  This Paper explores existing federal programs for traditional agricultural lending and suggests how states can emulate these programs for Cannabis businesses within their jurisdictions.

"Legal-ish: An Analysis of Cannabis Law in Ohio and Recommendations for the Future of State Drug Reform"

Continuing to catch up on posting a lot of recently produced papers that are part of the on-going series of student papers supported by the Drug Enforcement and Policy Center means continuing to highlight great work by OSU law students and recent graduates.  The title of this post is the title of this paper authored by John Berk who just this month graduated from The Ohio State University Moritz College of Law.  Here is its abstract:

While bans on marijuana have been eliminated in a majority of states over the past several years, Ohio continues to be stuck in the past with a limited medical program that imposes strict limitations on cultivators, dispensaries and patients.  Full legalization in Michigan and Illinois have been hugely successful, but Ohio’s timid approach has had mixed results due to overregulation and outdated ideas about cannabis users.  It is time for Ohio to move boldly on drug reform in the cannabis space with full legalization, eliminating excessive regulation, creating aggressive criminal justice reform and possibly legalizing other substances before it is left behind by its neighbors.

Rhode Island becomes latest state to legalize adult use marijuana

As reported in this local article, "Rhode Island on Wednesday joined its two neighboring states and 16 others in legalizing the recreational use of marijuana." Here is more:

Less than 24 hours after lawmakers overwhelmingly passed the bill, Gov. Dan McKee signed the measure, which promises automatic expungement of past marijuana possession convictions and reserves a quarter of new retail store licenses for minority communities disproportionally hurt by the War on Drugs.

Speaking on the steps of the State House, awash in sunshine, McKee said the law was “equitable, controlled and safe” while establishing a regulatory framework that emphasizes public health and safety. “The end result is a win for our state both socially and economically.”

The law calls for retail sales beginning Dec. 1, but it will be a while before most of the stores are open. The state’s three currently operating medical marijuana dispensaries will be the first retailers of recreational marijuana as well, followed by six others in various planning stages.

Who wins 24 other retail licenses, and when, will be up to a new three-member cannabis control commission that will be appointed by the governor. Recreational marijuana will be taxed at 20% – a new 10% cannabis tax, a new 3% tax by the community where the marijuana is sold, and the current 7% sales tax....

Cannabis use would be banned anywhere where cigarette smoking is now banned. But if it’s legal to smoke a cigarette on Main Street in West Warwick right now, you'll be able to smoke cannabis, too. That could change. The law includes language that gives communities the power to adopt ordinances to restrict or ban the “smoking or vaporizing of cannabis in public places.”... The law allows people to have three growing plants and three dried plants. [and] it will be legal to have up to an ounce of marijuana in your possession. And possession of between one ounce and two ounces will be a civil violation. Previously up to an ounce was a civil violation, much like a parking ticket, and it was illegal to possess more than one ounce. [People with cannabis convictions] can request an expedited expungement through the courts and have any costs waived. But the law has given the courts until July 1, 2024, to provide automatic expungement to all who are eligible. Under the legislation, any prior civil violation, misdemeanor or felony conviction for possession of marijuana that would be decriminalized will be automatically erased from court record systems.

The new legislation allows for up to 33 retail licenses distributed in six zones statewide, including at the three current medical marijuana dispensaries and the six others in various planning stages.

"What Tax Revenues Should Ohioans Expect If Ohio Legalizes Adult-Use Cannabis?"

The title of this post is the title of this new report available via SSRN and produced by the Drug Enforcement and Policy Center and authored by Jana Hrdinova and Dexter Ridgway. Here is its abstract:

Advocates for cannabis reform in Ohio and in other states often stress the tax revenue that can be raised through legalization.  If a citizen-initiated statute currently under consideration in the Ohio General Assembly were to reach the ballot, Ohio voters are likely to hear from reform advocates about the potential tax revenue a new cannabis industry could bring to the Buckeye State.  The purpose of this policy paper is to provide an initial estimate of potential cannabis tax revenue in Ohio that is informed by tax revenue data and trends from a select group of other adult-use states.

Based on our analysis, we are using Michigan FY 2021 data on cannabis tax revenue as our focal point for Ohio cannabis tax revenue estimates given the demographic and tax structure similarities; we are assuming a conservative rate of diminishing retail sales growth through year five of an operational legal adult-use program; we are using state population figures as our basis for calculating per capita cannabis tax revenue rates; and we are modeling for three different Ohio pricing scenarios.  Given these assumptions, the potential annual tax revenue from adult-use cannabis in the state of Ohio ranges from $276 million in year five of an operational cannabis market to $374 million in year five of operations.

Student presentation on expunging marijuana records effectively in Ohio

As students in my Marijuana Law, Policy & Reform seminar are continuing to "take over" my class through presentations on the research topics of their choice, I continue to post here background on their topic and links to relevant materials.  The fourth of this coming week's presentation is focused on record clearing, and here is how the student describes the topic and provided readings:

Effective cannabis law reform cannot occur without also addressing the harm caused to those who have obtained criminal records due to harsh drug laws.  For decades, people throughout Ohio and the rest of the country have been punished by the criminal justice system due to non-violent cannabis offenses.  Thankfully, many states have legalized, or are in the process of legalizing cannabis.  Cannabis legalization is an important step in cannabis law reform because it means people will no longer be charged for cannabis related offenses.  However, legalization alone does nothing to help those who have already obtained cannabis related charges and convictions.  The issue with having cannabis-related convictions is not just the fines or jail time that may come with it, but also the negative consequences of having a criminal record, which continues to affect offenders long after the case is closed.  Cannabis legalization, therefore, must be accompanied by expungement reform in order to help put an end to the negative consequences that those with cannabis related criminal records are experiencing.

Thus, my presentation focuses on analyzing different expungement provisions that have been included in cannabis legalization laws.  Although many states that have legalized cannabis have included provisions on expungement reform, some of these provisions are not as effective as they could be.  Based on my research, I make the following recommendations for Ohio lawmakers to take into consideration when drafting laws on cannabis expungement.  First, I recommend lawmakers to create an individual bill focused solely on cannabis expungement to avoid conflict with Ohio’s “One Subject” rule.  Second, I recommend that cannabis records should be automatically expunged for any non-violent cannabis offenses as well as other offenses that can be tied to cannabis, such as paraphernalia and loitering offenses.  Third, I recommend that there should be no waiting period for the expungement— all cannabis records should start to be expunged as soon as the law is passed.  Lastly, I recommend that the bill should create an independent committee to carry out the expungements to avoid overburdening prosecutors and court staff.

Recommended reading:

J.J. Prescott & Sonja B. Starr, Expungement of Criminal Convictions: An Empirical Study 133 Harv. L. Rev. 2460 (2020).

Akua Amaning, Advancing Clean Slate: The Need for Automatic Record Clearance During the Coronavirus Pandemic, Center for American Progress (Jun. 25, 2020),

Mark Gillspie, Cleveland Seeks to Expunge 4k Minor Marijuana Convictions, Associated Press (April 7, 2022)

50-State Comparison: Marijuana Legalization, Decriminalization, Expungement, and Clemency, Collateral Consequences Resource Center (last updated Jan. 2022)

Student presentation on licensing schemes for marijuana reform in Ohio

The third of this week's presentations put on by my Marijuana Law, Policy & Reform seminar students will be focused on how Ohio might approach how setting up a licensing scheme for the marijuana industry.  Here is how the student describes this topic and some background readings:

Summary

In a regulated industry, licensing is the key that unlocks the door for (legal) opportunity.  The ever-expanding cannabis industry is no exception.  Those who hold licenses in this industry enjoy the benefit of legally-sanctioned conduct, while others assume the risks of operating in the black market. 

Ohio is currently faced with the question of whether an adult-use cannabis market should be established within the state.  As a part of answering this question, policymakers need to consider how to set up a licensing scheme for any potential industry.  There are several different considerations that need to be made in approaching such a scheme.  First, there is the issue of responding to different operators within the market and establishing different licenses for these various operators.  Next, there is the debate over whether to establish a limited license market, and how to respond to concerns over monopolization and social equity.  Lastly, policymakers must decide what qualifications will be necessary in order to obtain a license, and which actors will be excluded from such a privilege.

An Act to Control and Regulate Adult-Use Cannabis is a ballot initiative which seeks to introduce an adult-use market in Ohio, and it proposes a detailed framework for licensing this market.  This project analyzes the licensing scheme that would be established in the state, should this initiative eventually be signed into law, and evaluates how this proposed scheme responds to the policy concerns that are inherent in licensing.

Background

Full Text of Ohio 2020 Marijuana Reform Ballot Initiative

Local press article on law enforcement seizure of assets from black-market cannabis operations 

Primer on “plant-touching” cannabis businesses 

Cato Institute blog post on corruption associated with limited licensing

New Jersey Policy Perspective blog post on social equity issues associate with limited licensing

Reason Foundation report examining issues surrounding criminal conviction restrictions in marijuana licensing

Register now for "Ohio Cannabis Reform in Focus"

The quoted portion of the title of this post is the title of this exciting event taking place next month, on April 7, 2022 from noon-2:30 pm as a  hybrid even in person in Saxbe Auditorium in Drinko Hall at The Ohio State University Moritz College of Law and also on Zoom.  Folks can and should Learn More and Register at this link.  Here are the basics about the event:

The year 2022 might see significant cannabis reforms in the state of Ohio, both to the existing medical marijuana regime as well as the proposed legalization of adult-use marijuana. Please join the Drug Enforcement and Policy Center for two expert panels that will put focus on these two possible routes to reform and the implications they may have for patients and Ohioans alike.

Medical Marijuana Reform panel
noon-1:10 p.m. EDT

After three years of operation, the Ohio Medical Marijuana Control Program continues to grow and yet continues to be plagued by high levels of patient dissatisfaction due to access limits and high costs. The recent approval of dozens of new dispensary licenses comes as major reform bills have been introduced in the Ohio General Assembly with the aim of improving the Ohio MMCP's functionality for both patients and the cannabis industry. Please join our panel of experts as we discuss on-going and proposed reforms, why they are needed and how they could impact the various stakeholders.

Panelists:
Ohio Senator Steven Huffman
Andrew Makoski, Administrative Attorney, Ohio Department of Commerce
Additional panelist TBA

Adult-Use Marijuana Reform panel
1:20-2:30 p.m. EDT

The fall of 2021 was eventful when it comes to Ohio marijuana reform proposals. Two major bills were introduced in the Ohio General Assembly, and a voter-initiated statute campaign collected enough signatures to be sent to the General Assembly for considerations. Yet, despite polling suggesting public support for these kinds of reforms, the Ohio political leadership appears unlikely to advance adult-use legalization in 2022. Please join us for a panel of experts and policy advocates as they discuss the future of marijuana legalization in Ohio as a matter of politics and policy, including the arguments for and against reform and the possible consequences of action or inaction on the part of Ohio General Assembly.

Panelists:
Ohio Representative Ron Ferguson
Thomas Haren, Partner, Frantz Ward
Jodi Salvo, Director of Substance Use Prevention Services, OhioGuidestone

Thrilled to be speaking at SXSW panel on "Post Pot Legalization: The Good, The Bad & The Ugly"

I have the great honor and pleasure of being in Austin for about 24 hours to serve as a presenter on this panel at SXSW, titled "Post Pot Legalization: The Good, The Bad & The Ugly." The panel is part of a series of great panels presented by Stand Together Trust tomorrow, and here is the description of my panel:

Marijuana reform has been a long-time coming policy priority in the eyes of the nation.  It is an issue that has united a number of unlikely allies and deepened divides.  There’s no question that marijuana is on track to become fully legalized – the question becomes what happens next?

This group of experts, influencers, policymakers and academics will offer insights into upcoming trends including the good, the bad and inevitable of how a post-legalized America will move forward.

I am so looking forward to the discussion during this panel, and I have been told that records will be available sometime after the event.

Notable Code for America paper on "Automatic Record Clearance Policies in Legalization and Decriminalization Legislation"

I just saw this recent 18-page report from the folks at Code for America.  The full title of the report highlights the goals and essential contents of this notable new document: "Recommendations for Automatic Record Clearance Policies in Legalization and Decriminalization Legislation: 11 best practices for creating high-impact, implementable policies that clear conviction records — automatically."   Long-time readers know I have long been particularly interested in criminal justice impacts of marijuana reform and especially record clearance efforts.  (I wrote one of the first big explorations of this topic in my 2018 article, "Leveraging Marijuana Reform to Enhance Expungement Practices," and more recently co-authored another piece titled "Ensuring Marijuana Reform Is Effective Criminal Justice Reform.")

This new document is a great primer on this enduring topic, and this two-pager provides the particulars of the 11 recommendations in the full report.  But I would urge everyone to take the time to check out the full report, and here is part of its text:

Our recommendations are presented in three categories.  First are recommendations about the process of automatically clearing records.  They include an advisory against relying on petition-based record clearance, a statement on the importance of the process being initiated and coordinated by a state-level agency, and an explanation about why there need to be deadlines attached to every major milestone of the automatic record clearance process.  These recommendations are very important for implementation, but are also important to maximizing impact.  In order to build public trust in automatic record clearance, we close this section with a recommendation that government study and publicize findings on the impact of automatic record clearance, especially as it relates to equity-related metrics such as racial disparities.

Next are recommendations about who should be eligible for automatic record clearance.  In order to maximize impact, legislation needs to provide eligibility that is as expansive as possible.  The recommendations explain that, at a bare minimum, all records should be cleared for conduct that is no longer criminalized or can no longer be charged.  We advise against including conditions that disqualify people from eligibility because they reduce impact and also make implementation more challenging. Expansive eligibility must be anchored in the law, so we offer an advisory to be as specific as possible when drafting legislation — leave nothing open to interpretation because that causes challenges for implementation.  We also recommend that after a bill is passed, no system actors (e.g. judges, prosecutors) should have discretion over who gets relief in the process of automatically clearing records because it leads to inequity and is nearly impossible to implement.

Finally, we offer recommendations about who should have access to and jurisdiction over cleared records.  People living with convictions should be able to access confidential documentation about their criminal case histories, whether their records are cleared or not, and there is a big opportunity for government to offer this as a human-centered, trauma-informed digital service.  We recommend that courts maintain confidential documentation of records that have been affected by record clearance rather than having all traces of records completely destroyed.  We also recommend that courts maintain jurisdiction over these records so that people can continue to exercise their legal rights to pursue any other post-conviction relief remedies besides automatic record clearance, and so that people can access the information about their cleared records should they need it in the future.

Initiative effort to legalize marijuana in Ohio advances to legislative consideration, on track for Nov 2022 vote if Ohio General Assembly does not act

As reported in this local article, headlined "Recreational marijuana proposal clears another hurdle, heads to Ohio legislature before November ballot," an interesting reform effort in the Buckeye State is now one step closer to getting recreational marijuana on Ohio ballot this year.  Here are the details:

Ohio Secretary of State Frank LaRose told state legislative leaders in a Friday letter that a proposed initiated statute that would legalize recreational marijuana obtained enough signatures to get on the November ballot, and now the General Assembly has four months to consider passing the measure. State law requires at least 132,887 valid signatures to get on the ballot, which the Coalition to Regulate Marijuana Like Alcohol obtained. County boards of election recently finished verifying the signatures, and LaRose sent the letter to lawmakers.

But before the proposal makes the Nov. 8 ballot, the General Assembly gets to take a stab at passing the measure or passing it in an amended form. According to the Ohio Constitution, if lawmakers fail to pass a proposal, the coalition can circulate more petitions, demanding it appears on the ballot in the next general election.

The coalition, made up of businesses in Ohio’s medical marijuana industry, prefers the legislature to pass a law expanding the program to Ohioans age 21 and older. However, it also said that it has polling showing that marijuana is no longer a partisan issue in Ohio, and it believes the initiated statute would pass at the polls. “We are ready and eager to work with Ohio legislators over the next four months to legalize the adult use of marijuana in Ohio,” coalition spokesman Tom Haren said in a statement. “We are also fully prepared to collect additional signatures and take this issue directly to voters on November 8, 2022, if legislators fail to act.”

Under the proposal, adults would be allowed to purchase, possess and grow marijuana at home. Existing Ohio medical marijuana dispensaries could expand their businesses to sell to adults 21 and older, and new marijuana businesses could be added to accommodate recreational demand. Marijuana purchasers would be taxed 10% at the point of sale for each transaction. The coalition estimates recreational marijuana revenues could generate $400 million a year in new revenue.

Sensing the pressure from the Just Like Alcohol proposal, the legislature has advanced several marijuana bills lately. But none of them have moved across the finish line. On Tuesday, the Ohio House Health Committee advanced a bill to legalize marijuana for people on the autism spectrum. On Dec. 16, the Ohio Senate sent to the House a bill that would legalize marijuana to any patient whose symptoms ‘may reasonably be expected to be relieved by the drug. Democratic and Republican lawmakers also introduced bills that would legalize recreational marijuana.

Those of us working at the Drug Enforcement and Policy Center, which is based at The Ohio State University Moritz College of Law, have been closely following this initiative and all the other marijuana reform proposals being actively discussed in the Buckeye State.  DEPC has created a set of materials to aid in understanding the Ohio initiative process as well as the substantive particulars of different legislative reform proposals.  These Ohio materials are collected here under the heading "A Comparison of Marijuana Reform Proposals in Ohio." 

A few prior recent related posts:

• "Cannabis Crossroads: What’s in Store for Marijuana Reform in Ohio?"
• Initiated statute effort to legalize marijuana in Ohio advances with submission of signatures to prompt legislative consideration
• Notable and dynamic marijuana legalization efforts in bellwether (or deep red) Ohio

Detailing how state marijuana reforms may increase (at least the visibility of) illegal operators

Natalie Fertig has this great new (and lengthy) article in Politico Magazine about the persistent challenges posed by illegal marijuana market in a country that for now has only half-legalized the cannabis plant.  The full title of this piece highlights its themes: "‘Talk About Clusterf---’: Why Legal Weed Didn’t Kill Oregon’s Black Market. Legalization was supposed to take care of the black market. It hasn’t worked out that way."  I recommend the piece in full, and here are excerpts:

People have grown marijuana illegally in southern Oregon for at least half a century.  It was easy to conceal illicit activity in private woods and national forests when the nearest human could easily be a few miles away.  But there’s nothing hidden about what’s going on now.

The Red Mountain Golf Course, a 24-acre plot of land just outside Grants Pass, the county seat, sold for just over half a million dollars in June 2021.  Three months later, Josephine County Sheriffs and Oregon State Troopers raided the former golf course and seized more than 4,000 marijuana plants and arrested two people on charges of felony marijuana manufacture.  It wasn’t an isolated incident.  Around the same time, law enforcement seized 380 pounds of processed marijuana stuffed in a car abandoned at the scene of a crash.  Cops also seized 7,600 marijuana and hemp plants, 5,000 pounds of processed marijuana and $210,000 in cash from two grow operations just outside Cave Junction.  Two men were arrested and held for unlawful manufacture of a marijuana item and other charges.

While these eye-popping figures draw headlines, the raids are just a cost of doing business for the cartels, according to law enforcement officials.  Many buy or lease six or seven properties, knowing that some might get shut down by the police.  Like any smart entrepreneurs, the cartels budget for those losses....

The proliferation of unlicensed cannabis farms is scaring local residents and scarring the landscape.  Personal wells have run dry and rivers have been illegally diverted.  Piles of trash litter abandoned grow sites.  Locals report having knives pulled on them, and growers showing up on their porches with guns to make demands about local water use. Multiple women say they’ve been followed long distances by strange vehicles. Locals regularly end conversations with an ominous warning: “Be careful.”...

Earlier in the year, the legislature passed a bill, sponsored by Republican state Rep. Lily Morgan, that increased penalties for growing cannabis illegally and gave state regulators the authority to investigate hemp growers.

Jackson County Sheriff Nate Sickler says the tougher rules for hemp cultivation and the money lawmakers funneled to local enforcement efforts are an excellent start.  “If we’re able to get our positions funded, I really think we can make a significant impact [on] illegal marijuana,” said Sickler. “Are they going to go away? It’s probably never going to happen.”...

There are as many suggested solutions to southern Oregon’s weed problem as there are factors creating it. Some say tweaks to federal and state hemp regulations — and more money for law enforcement — will get the illicit grows under control. Others argue that only federal decriminalization will solve the problem, because it would reduce the market for illicit weed. Anti-legalization advocates, meanwhile, point to Oregon’s woes as proof that legalization doesn’t live up to its promise of eliminating the illicit market.