Sentencing Law and Policy

Fascinating (distinct/similar?) commentary on marijuana policy and politics from inside the Beltway

As regular readers know well, I find the law, policy and politics of modern marijuana reform to be fascinating.  Two recent commentaries in the Washington Post reinforce my perspective.

First, consider this notable commentary by Peter Wehner, who worked in the last two Republican presidential administrations, under the headline "GOP should stand firm against drug legalization."  I find especially telling that this piece, as excerpted below, makes a forceful argument that (big federal) government works and that drug use is a moral issue that calls for more (big federal) government intervention:

Strong, integrated anti-drug policies have had impressive success in the United States. Both marijuana and cocaine use are downsignificantly from their peak use in the 1970s and ’80s....

In his dialogues, Plato taught that no man is a citizen alone. Individuals and families need support in society and the public arena. Today, many parents rightly believe the culture is against them.  Government policies should stand with responsible parents — and under no circumstances actively undermine them....

In taking a strong stand against drug use and legalization, Republicans would align themselves with parents, schools and communities in the great, urgent task of any civilization: protecting children and raising them to become responsible adults....

[R]arely do people say that drug use is wrong because it is morally problematic, because of what it can do to mind and soul. Indeed, in some liberal and libertarian circles, the “language of morality” is ridiculed.  It is considered unenlightened, benighted and simplistic.  The role of the state is to maximize individual liberty and be indifferent to human character.

This is an impossible stance to sustain.  The law is a moral teacher, for well or ill, and self-government depends on certain dispositions and civic habits.  The shaping of human character is preeminently — overwhelmingly — the task of parents, schools, religious institutions and civic groups.  But government can play a role.  Republicans should prefer that it be a constructive one, which is why they should speak out forcefully and intelligently against drug legalization.

Now, consider this notable commentary by Jonathan Rauch, who is a guest scholar at the Brookings Institution, under the headline "Let’s go down the aisle toward legalized pot."  I find especially telling that this piece, as excerpted below, makes a forceful argument that (big federal) government now will not work unless it adapts to new circumstances and that drug use is a moral issue that calls for (big federal) government withdrawal in light of changing attitudes:

All but a small fraction of the people who enforce the marijuana laws work for state and local governments and answer to state law.  Although states cannot break federal law, neither must they step in and enforce it.  Federal prosecutors probably could shut down regulated marijuana distributors in Colorado and Washington with relative ease by sending threatening letters to landlords and bankers.  But that would leave those states, and others that follow, with the option of legalizing marijuana without regulating it, because unconditional legalization under state law is indisputably within the states’ power.  The effect of removing states’ troops from the battlefield would be to strand the federal government with marijuana laws it could not enforce.

The chaos that might result would be counterproductive even (or especially) for drug hawks.  Instead of shutting down the states’ experiments, then, the federal government might better serve the policy goals of the Controlled Substances Act by working with Colorado and Washington to concentrate federal and state enforcement on high federal priorities, such as preventing legalized marijuana from spilling across state borders....

In a number of important respects, marijuana legalization and same-sex marriage track closely.  Both are controversial social issues about which public opinion has changed dramatically in the past few years; on both issues, polls show the public closely divided but tipping toward legalization.

Moreover, for both issues, young people are driving the trend; older opponents of legalizing both are exiting the scene.  The issues’ demographics suggest that public opinion is virtually certain to continue shifting.  A true national consensus, however, remains some distance away, and partisan and regional differences are sharp.

In recent years, the country has pushed many controversial issues — abortion, crime, education — up to the federal level.  But same-sex marriage has taken the opposite path, with leadership left to the states.  The result, though somewhat messy as policy, has been a remarkable political success at a time when the country has few to boast of.  That some states could try same-sex marriage without betting the whole country reduced the stakes and contained the conflict.  States’ experiments with gay marriage educed valuable information about its real-world consequences, or lack thereof, allowing for a better-informed, more rational debate.

Above all, localizing the dispute gave people across the country time to work out what they think and to adjust policies as public opinion changed.... State leadership on marijuana policy has all of the same advantages as on marriage.  It contains conflict by reducing the stakes; educes knowledge about what happens if marijuana policy is changed; and allows incremental adjustment to social change.  For the federal government, yielding some measure of control over marijuana policy to the states is not a threat; it is an opportunity to manage change and preserve options.  Painting federal policy into a corner serves no one, not even drug warriors.

Though I am eager to say a lot more about both of these commentaries, but I will conclude for now with the adjective that captures most of my feelings here: fascinating!

A few recent and older related posts: 

• Supporting pot prohibition as divining rod pointing toward social conservatives and away from fiscal conservatives
• "Nearly three-quarters of Americans (72%) say that, in general, government efforts to enforce marijuana laws cost more than they are worth"
• "Buzzkill? Cash-strapped states eye pot tax"
• An effective primer on the federal tax issues facing state marijuana businesses
• "Medical marijuana businesses see opportunity in Mass."
• AG Holder indicates federal response to state marijuana reforms coming "soon"
• Intriguing new comments from President Obama on federal pot prohibition policy
• "California inspired — and now inspired by — other states' marijuana legalization measures"
• "Marijuana poll: Californians' support for legalizing pot at record level"

"Nearly three-quarters of Americans (72%) say that, in general, government efforts to enforce marijuana laws cost more than they are worth"

The title of this post is the sentence and finding that struck me as the most notable and most interesting data point emerging from the just-released survey on marijuana law and policy by the Pew Research Center.  This extended press release from the folks at Pew, which carries the headline "Majority Now Supports Legalizing Marijuana," reports on all of the survey's main findings, and here are a few excerpts:

For the first time in more than four decades of polling on the issue, a majority of Americans favor legalizing the use of marijuana.  A national survey finds that 52% say that the use of marijuana should be made legal while 45% say it should not.

Support for legalizing marijuana has risen 11 points since 2010.  The change is even more dramatic since the late 1960s. A 1969 Gallup survey found that just 12% favored legalizing marijuana use, while 84% were opposed.

The survey by the Pew Research Center, conducted March 13-17 among 1,501 adults, finds that young people are the most supportive of marijuana legalization.  Fully 65% of Millennials — born since 1980 and now between 18 and 32 — favor legalizing the use of marijuana, up from just 36% in 2008.  Yet there also has been a striking change in long-term attitudes among older generations, particularly Baby Boomers.

Half (50%) of Boomers now favor legalizing marijuana, among the highest percentages ever.  In 1978, 47% of Boomers favored legalizing marijuana, but support plummeted during the 1980s, reaching a low of 17% in 1990.  Since 1994, however, the percentage of Boomers favoring marijuana legalization has doubled, from 24% to 50%....

The survey finds that an increasing percentage of Americans say they have tried marijuana.  Overall, 48% say they have ever tried marijuana, up from 38% a decade ago. Roughly half in all age groups, except for those 65 and older, say they have tried marijuana....

Among those who say they have used marijuana in the past year, 47% say they used it “just for fun,” while 30% say it was for a medical issue; 23% volunteer they used it for medical purposes and also just for fun....

More recently, there has been a major shift in attitudes on whether it is immoral to smoke marijuana.  Currently, 32% say that smoking marijuana is morally wrong, an 18-point decline since 2006 (50%).  Over this period, the percentage saying that smoking marijuana is not a moral issue has risen 15 points (from 35% then to 50% today).

Amid changing attitudes about marijuana, a sizable percentage of Americans (72%) say that government efforts to enforce marijuana laws cost more than they are worth.  And 60% say that the federal government should not enforce federal laws prohibiting the use of marijuana in states where it is legal....

While Americans increasingly support legalizing marijuana and fewer see its potential dangers, many still do not like the idea of people using marijuana around them.  About half (51%) say they would feel uncomfortable if people around them were using marijuana, while 48% would not feel uncomfortable.  As with nearly all attitudes about marijuana, there are substantial age differences in discomfort with others using marijuana — 74% of those 65 and older say they would be uncomfortable if people around them used marijuana, compared with 35% of those under 30.

I genuinely wonder if there is any other serious federal felony law for which 3 out of every 4 persons would say that government enforcement efforts "cost more than they are worth." I also wonder whether and how these public opinions will start to have a tangible impact on federal marijuana laws, policies and practices.

"Buzzkill? Cash-strapped states eye pot tax"

The title of this post is the headline of this lengthy new article in Politico.  Here are excerpts:

Now that voters in Colorado and Washington have legalized recreational marijuana use, dope smokers there can light up without the usual paranoid fear that the cops are at the door.  The taxman is another matter.

Cash-starved legislators are seeing dollar signs in dime bags — with talk that a tax on marijuana could pump hundreds of millions or even billions into budgets still reeling from the recession.

“I’ve seen some estimates in the high tens of millions, as much as $100 million for [Colorado],” said Rep. Jared Polis (D-Colo.), who’s pushing a federal legalization in Congress. Money like that could make a big difference, he said — including a “substantial dent in needed school improvements, particularly in poorer districts.”

It’s long been a central argument of the pro-marijuana crowd: Get marijuana out of the hands of dope dealers, tax it like you do cigarettes, then sit back and watch the money pour in.  “We all know where the money from nonmedical marijuana sales is currently going,” said a narrator in a Colorado campaign ad from last year, nodding to Mexico. "It doesn't need to be that way. If we pass Amendment 64, Colorado businesses would profit, and tax revenues would pay for public services and the reconstruction of our schools."

Dale Gieringer, director of California National Organization for the Reform of Marijuana Laws, estimates that legalizing pot would bring in at least $1.2 billion to his state alone. His study assumes a traditional sales tax plus an additional $50 levy per ounce of marijuana, which runs between $280 and $420.  His study argues that legalization could also generate $12 billion to $18 billion in new economic activity for California.

The skeptics’ response: What are you smoking?  “This is not a cash cow that can solve anyone’s fiscal problems,” said Harvard economics professor Jeffrey Miron, a pro-legalization scholar at the libertarian Cato Institute who says Gieringer’s numbers are roughly three times what they should be.  “There is a lot of exaggeration about how big the revenue can be.”

Advocates “want to be allowed to smoke in peace,” Miron said. But, they’re “nervous about making that argument.  They’re afraid that argument won’t win the day, so they have focused in many cases on the revenue side.”  Miron estimates that a nationwide legalization that taxed marijuana like alcohol and tobacco would mean $6.4 billion in new tax revenue — $4.3 billion for Uncle Sam and $2.1 billion for the states.

The estimates are necessarily hazy.  No one knows how much marijuana is bought and sold today, let alone how legalization will affect consumption and prices.  “When you go to legalize, you have reduced risk in producing and distributing the drug.  That’s a real component of the monetary price of marijuana,” said Rosalie Liccardo Pacula, the co-director of the RAND Drug Policy Research Center.

She expects prices to fall by 70 to 85 percent in both Colorado and Washington — and that means taxes, if levied as a percentage of price or value, will also fall considerably.  But she acknowledges that it’s hard to know for sure.  “You have to know more about the structure of the demand curve, which we don’t have any data on because this is black-market; it’s all conjecture,” Liccardo Pacula said.

And even lawmakers looking to cash in know they’ve got to be careful.  Tax marijuana too much and it drives users right back to illegal dealers.  Nobody knows what that price point is. “You want to make sure the black market doesn’t have an advantage over the regulated market because if it does, then the whole concept fails and people will continue to buy marijuana illegally — so there has to be a price advance for the legal market,” Polis said....

Washington state lawmakers are considering tweaks to accompany a voter-approved 25 percent tax on each of the three levels of marijuana production.  In Colorado, lawmakers on a pot legalization panel met Friday to brainstorm how to tax it.  The voter-approved November ballot initiative called for an excise tax of no more than 15 percent but didn’t specify a levy.  Last week, a statewide task force on legalization recommended they levy an excise tax and a sales tax of up to 25 percent.

Colorado’s task force also advised Gov. John Hickenlooper and Colorado’s congressional delegation to push for a federal tax code modification in Washington, D.C., that would allow the state’s marijuana businesses to claim tax deductions. Companies selling illegal substances are currently barred from receiving federal deductions and credits....

The Colorado Center on Law and Policy last August estimated that legalization would bring in $24 million in excise tax revenue, $8.7 million in state sales tax revenue and $14.5 million in local tax revenue.  Washington’s Office of Financial Management estimates that marijuana revenues levied on growers, processors and retailers will bring in just over $565 million in 2017.

A few recent and older related posts: 

• An effective primer on the federal tax issues facing state marijuana businesses
• "Medical marijuana businesses see opportunity in Mass."
• AG Holder indicates federal response to state marijuana reforms coming "soon"
• Supporting pot prohibition as divining rod pointing toward social conservatives and away from fiscal conservatives
• Intriguing new comments from President Obama on federal pot prohibition policy
• "California inspired — and now inspired by — other states' marijuana legalization measures"
• "Marijuana poll: Californians' support for legalizing pot at record level"

Notable headlines provide signs of the marijuana times

Though I remain on the road (for both work and play), Google news helps me make sure I do not miss too many notable news stories.  And this trio of marijuana headlines caught my eye in the last few days:

• From the Los Angeles Times here, "Wall Street sees opportunity in marijuana: Hoping to cash in if pot becomes legal nationwide, entrepreneurs pitch their ideas to potential investors."

• From the New York Times here, "Shuffleboard? Oh, Maybe Let’s Get High Instead"

• From the Huffington Post here, "Rand Paul: Marijuana Use Is Not Something To 'Promote,' But 'It's A Big Mistake' To Jail People Over It"

Notable new player (making notable comments) in Florida debate over medical marijuana

This local article about the people and politics of Florida provides an interesting account of why a new development in that state's consideration of medical marijuana could be quite significant.  The piece is headlined "John Morgan could take medical marijuana mainstream," and here are excerpts (with my highlight of one particular comment):

So John Morgan is throwing his political heft — code for megabucks — behind an effort to legalize medical marijuana in Florida. It's the lift the marijuana lobby has long dreamed about.

Morgan is the perfect mainstream guy for the job. That plump mug of his is as ubiquitous as palm trees, thanks to the considerable air time he buys to promote his Morgan & Morgan law firm on television and radio — not to mention a forest of billboards.

If anybody can take pot from the fringe to the middle of the road in Florida, it's Morgan. He's a big-time Democrat who writes checks with lots of zeros, but not always to his party. He's a shrewd businessman who spreads the wealth to Republicans such as Dean Cannon and Chris Dorworth when practicality demands helping out hometown power players.

In other words, he has the ear of a lot of people, as well as a compelling personal story: Morgan's father suffered from emphysema and cancer, his appetite vanquished by the cocktail of prescription medicine he was on at the end of his life, and marijuana gave him some relief.

"John's a prominent business owner, a family man ... he's a very religious Catholic ... John brings a lot of positives to this campaign beyond his ability to write a check and asking his wealthy friends to write a check," said Ben Pollara, a longtime Democratic fundraiser who joined People United for Medical Marijuana about six weeks ago and became its treasurer two weeks ago.

Morgan was motivated by news coverage of a People United poll showing that seven out of 10 Floridians would support a constitutional amendment to support legalizing marijuana for medical use. "I believe that 90 percent of Republican legislators would vote for this inside the privacy of the voting booth," said Morgan, though he says he doesn't use the drug....

Morgan's drive seems genuinely rooted in his father's experience. "It was a very painful death," Morgan said. "My brother was able to get him marijuana, which enabled him to be able to be settled down and have a serenity he had not enjoyed until that time. I've seen it firsthand."...

The subject of marijuana is still so toxic in Tallahassee that Pollara doesn't expect legislation aimed at legalizing pot for medical reasons to get much of a hearing.   People United's best shot is gathering the nearly 700,000 signatures by February of next year to get a constitutional amendment on the ballot.  Pollara, former state finance director for Hillary Clinton's presidential campaign, estimates it'll take up to $10 million to bankroll the effort....

Some have questioned what Morgan's involvement with the issue could mean for Charlie Crist, who works for Morgan's law firm and is widely seen as a Democratic challenger to Gov. Rick Scott.  But Charlie is the ultimate populist, and if People United's polling numbers are even close to accurate, then medical marijuana is a perfect populist issue for Crist — and Morgan.

I have long speculated that private support for marijuana reform is considerable even among many Republicans.  But the assertion about that 90% of Florida's Republican legislators would support medical marijuana legalization strikes me as wishful thinking.

New Hampshire perhaps poised to become twentieth US jurisdiction to legalize medical marijuana

As reported in this new AP article, headlined "House to vote on medical marijuana bill," there is reason to believe New Hampshire could soom become the next state to legalize medical marijuana. Here are the details:

New Hampshire may take a step closer to legalizing medical marijuana this week, with a House vote scheduled on a proposal that would sanction five dispensaries and allow patients or caregivers to grow up to three adult plants.

An amended version of the bill restricting out-of-state patients from purchasing or growing marijuana in New Hampshire and tightening other language was overwhelmingly approved by a House committee.

The New Hampshire Legislature has previously passed three medical marijuana bills, all vetoed by former Gov. John Lynch. Gov. Maggie Hassan has endorsed a tightly regulated medical marijuana law, but raised concerns about this bill’s home-grow option.

Because eighteen states and DC already have already legalized medical marijuana, the next state to legalize marijuana will be the 20th jurisdiction to do so. This even-number milestone may not be that significant, but I do think it will be especially (and constitutionally?) important if (when?) more than half of all US jurisdictions have legalized marijuana in some manner.

"Bills take aim at federal marijuana ban"

The title of this post is the headline of this lengthy new article in today's USA Today.  Here are excerpts:

A few House members have begun a broad effort to overturn a 43-year-old federal ban on marijuana and say they're prepared to keep up the pressure even if it takes years.  About 10 lawmakers, mostly liberal Democrats, are writing bills that will serve as legislative guideposts for the future if the GOP-controlled House, as expected, ignores their proposals during this Congress.

Rep. Earl Blumenauer, D-Ore., said it's time to end the federal ban because 18 states and the District of Columbia have legalized marijuana and many other states are exploring that option in response to growing public pressure.  "Maybe next year, maybe next Congress, but this is going to change.  And the federal government will get out of the way," he said. "I'm very patient.  I've been working on this one way or another for 40 years, and I think the likelihood of something happening in the next four or five years is greater than ever."

Peter Bensinger, a former head of the U.S. Drug Enforcement Administration, urged lawmakers to keep the ban despite the pressure to legalize pot.  Advocacy groups, which have spent a lot of money over the years to push legalization, gloss over the negative effects of marijuana though studies show people do get hooked and smoking pot impairs judgment and could cause cancer like cigarettes, he said. "Legalizing it is going to cost lives, money, addiction, dependency," Bensinger warned in an interview Wednesday.

A number of lawmakers share that view, which is why previous congressional attempts to decriminalize marijuana went nowhere.  Rep. Jared Polis, D-Colo., acknowledged that getting any marijuana bill through a bitterly divided Congress — which is consumed by debates over spending, gun regulations and other matters — won't be easy.

"It will take more states moving in the direction Washington and Colorado have before there's a sufficient pressure on (Congress) to change the law," he said. "It's harder to get the attention of members of Congress from states where the legal status has not been changed because it's simply not a relevant issue for their constituents."...

Though legalization advocates argue pot has proven benefits such as relieving chronic pain and is not addictive, the federal government cites other studies showing pot has no medical benefits and acts as a "gateway," leading users to try even more dangerous drugs such as cocaine and heroin.

According to a 2011 federal survey, about 18 million people over the age of 12 have used marijuana at some point in their lives, making pot the country's most-popular illegal drug under federal law.  That means 7% of the nation's 12-and-over population has used pot at some point.

The legalization push in the House has very little bipartisan support.  The 10 lawmakers co-sponsoring Polis' bill include California Democrat Barbara Lee, who represents San Francisco, New York Democrat Jerrold Nadler, whose district includes Manhattan, and one Republican, Californian Dana Rohrabacher, a Tea Party libertarian from conservative Orange County.  Blumenauer's bill has six co-sponsors, including Rep. Steve Cohen, D-Tenn., and Rep. Chellie Pingree, D-Maine, but no Republicans....

California became the first state to allow the use of pot for medical purposes in 1996. Seventeen other states — Colorado, Washington, Alaska, Arizona, Connecticut, Delaware, Hawaii, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, Rhode Island, Michigan and Vermont — and the District of Columbia have medical marijuana laws, according to the National Conference of State Legislatures. Almost all of these states have set up patient registries to keep track of medical marijuana users. Eleven states allow marijuana dispensaries.

In November, voters in Colorado and Washington took the unprecedented step of legalizing recreational use as well. Nowhere in the world is it legal to grow and distribute pot, but that will be legal in those two states once authorities work out the regulatory details, according to Beau Kilmer, co-director of the Rand Drug Policy Research Center in Santa Monica, Calif.

Recreational-use ballot measures are likely in California and Oregon in the next few years, though Californians rejected similar language in 2010 and Oregonians said no in 2012.

According to the Marijuana Policy Project, lawmakers filed medical marijuana bills in 17 states this year: West Virginia, Texas, South Dakota, Oklahoma, North Carolina, New York, New Hampshire, Missouri, Mississippi, Minnesota, Maryland, Kentucky, Kansas, Illinois, Iowa, Florida and Alabama.

Allen St. Pierre, executive director of the National Organization for the Reform of Marijuana Laws, said if the federal ban is overturned in this Congress, liberal states are likely to adopt legalization laws within a decade. "Anywhere the saltwater touches the West Coast, there will be legalization. All of New England will move in this direction reasonably quickly," St. Pierre said.

Legalization will take years to become reality in conservative America, just as it took states such as Oklahoma a long time to allow alcohol sales after Prohibition was repealed in 1933, St. Pierre said. Unless the federal ban is lifted, all current and future state laws will violate the Controlled Substances Act, a 1970 U.S. statute that classifies marijuana as a dangerous, addictive drug with no medicinal value.

The broad push in the House comes as the Obama administration grapples with how to respond to the state pot laws.  Attorney General Eric Holder is likely to announce the administration's plan soon.

An effective primer on the federal tax issues facing state marijuana businesses

This notable new Forbes commentary by attorney Robert Wood, headlined "Dude, Can Marijuana Beat The Tax Man?," provides an effective overview of notable new issues raised by the intersection of modern marijuana reform and not-so-modern federal tax laws.   Here are excerpts from this latest piece (with links to some key resources in this area):

Aren’t marijuana growers, dealers and dispensaries just trying to pay their taxes and make a profit like everybody else?  In the staid world of tax law, it can seem downright strange to be worried whether someone has “trafficking” tax problems.  Such is the odd symbiosis between conflicting federal and state laws.

Federal law still outlaws marijuana even in states that legalize it.  Reminiscent of Al Capone, that makes taxes a big problem.... [L]egal dispensaries are still drug traffickers to the feds, so Section 280E of the tax code denies their tax deductions. Intended to prevent tax deductions by drug dealers, it covers medical marijuana too.  The IRS says it must enforce Section 280E no matter what state law says.

Indeed, of all the federal enforcement efforts, taxes hurt most.  “The federal tax situation is the biggest threat to businesses and could push the entire industry underground,” the leading trade publication for the marijuana industry reports.  One answer is for dispensaries to deduct other expenses distinct from dispensing marijuana. See Californians Helping to Alleviate Medical Problems Inc. v. Commissioner.

If a dispensary sells marijuana and is in the separate business of care-giving, the care-giving expenses are deductible.  If only 10% of the premises are used to dispense marijuana, most of the rent is deductible.  Good record-keeping is essential.  See Medical Marijuana Dispensaries Persist Despite Tax Obstacles.

Another idea is that Marijuana sellers might operate as nonprofit social welfare organizations.  See Growing the Business: How Legal Marijuana Sellers Can Beat a Draconian Tax.  That way Section 280E shouldn’t apply.  A social welfare organization must promote the common good and general welfare of people in its neighborhood or community.  Operating businesses in distressed neighborhoods to provide jobs and job-training for residents?  That could fit a dispensary nicely.

Meanwhile, Congressmen Jared Polis (D-CO) and Earl Blumenauer (D-OR) introduced a bill to end the federal prohibition on marijuana and allow it to be taxed.  This legislation would remove marijuana from the Controlled Substances Act.  That way growers, sellers and users could no longer fear violating federal law.  Their Marijuana Tax Equity Act would also impose an excise tax on cannabis sales and an annual occupational tax on workers dealing in the growing field of legal marijuana.

Is a "model" medical marijuana law been concocted in the laboratory of Illinois?

As all good law geeks know, in a renowned dissent in New State Ice, Justice Louis Brandies famously observed that "one of the happy incidents of the federal system [is] that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country."   This laboratory metaphor seems especially apt for what we see going on with marijuana reform in so many states; I especially like the notion that different states can and will refine their on-going social and economic marijuana experiments after seeing what works and does not work in other locales.

With that (social) science background, I found especially interesting this new local story from Illinois, which is headlined "House committee endorses medical marijuana pilot project."   Here is how the piece starts:

An Illinois House committee on Wednesday endorsed a proposed four-year pilot project to legalize medicinal use of marijuana.  State Rep. Louis Lang, D-Skokie, said if the project is approved, it would be the toughest medical marijuana law in the nation.  Currently, 18 states and the District of Columbia have laws permitting medical use of marijuana.

Lang, who is sponsoring the current version, said a similar measure that he unsuccessfully proposed last year outlined the toughest regulations ever written on the subject, and this year’s proposal “goes many steps further.”

“This is clearly model legislation for the country, if we were to pass it,” Lang said.

The proposal would allow patients diagnosed with specific conditions — such as cancer, multiple sclerosis and HIV — to get a special ID card allowing them to buy limited amounts of medical marijuana from state-licensed dispensaries.

Patients and caregivers would have to buy marijuana from one of 66 state-licensed dispensaries, which would get the marijuana from one of 22 state-licensed growers. “The bill will allow very sick people to get a product that they need to feel better,” Lang said. “Their quality of life is at stake.”

Given that two states have now already legalized small quantities of marijuana for recreational uses and they only a few states have been eager to embrace very tough regulations for medical marijuana, I am not sure State Rep. Lang should be so confident that the legislation he has proposed is likely to be embraced by lots of other states.  That said, if (and when?) there is a move in Congress to start to back away from federal pot prohibition, perhaps those states which experiment with the toughest medical marijuana laws will end up getting a special gold star for their laboratory reports.

"Medical marijuana businesses see opportunity in Mass."

One need not remember this classic scene from a classic political movie to know that one of the best ways to understand and predict human behavior (of politicians and others) is to "follow the money."  This fascinating new Boston Globe article, with the headline that is quoted in the title of this post, has me thinking about these realities and the many ways in which they seem sure to impact our nation's quickly evolving perspectives on marijuana use and distribution.  Here are excerpts from the article:

Kayvan Khalatbari rings up more than $1 million in annual sales at Denver Relief, the medical marijuana dispensary he runs out of a downtown storefront, and business keeps getting better.

But rather than opening an additional store, Khalatbari, 29, is expanding in a different direction: He has been devoting more time to doing lucrative consulting work for about 15 fledgling cannabis entrepreneurs who are interested in setting up shop in Massachusetts.

Denver Relief is one of several companies in Colorado — the epicenter of the nation’s medical marijuana industry — eager to capitalize on the expected “green rush” as Massachusetts’ medical marijuana program gets off the ground this year.

There is lots of money to be made by the ancillary businesses — including consulting, accounting, law, and marketing — as well as in the treatment centers. “There is a great opportunity here in Massachusetts,” said Khalatbari, who charges $250 an hour for his services.

Tripp Keber, widely considered the king of cannabis-infused products, is also looking East. His Dixie Elixirs & Edibles enterprise earned more than $1 million in 2012 by selling medicated carbonated beverages, infused edibles such as chocolate truffles and fruit lozenges, and other items to roughly 500 medical marijuana dispensaries in Colorado, where medical marijuana has been legal since 2000. The medical marijuana business has spawned a variety of companies making products like drug-laced mints and containers. The bag at bottom right holds medicated drinks, balms, and salves.

Keber projects his company’s sales will more than triple this year as Dixie Elixirs strikes deals in Arizona, Washington, D.C., Connecticut, and Massachusetts. He is in discussions with six Bay State entrepreneurs, including one in Nantucket, to license the brand and technology.

At Dixie’s Colorado headquarters, molecular biologists wearing white lab coats work with mechanical engineers, chemists, food scientists, and a chef to create dozens of products in a Willy Wonka-like setting. They concoct a rainbow of elixirs, including sparkling pomegranate sodas formulated with up to 75 milligrams of THC (the active ingredient in marijuana) per 12-ounce serving and mandarin orange-flavored energy boosters with about 60 milligrams of THC and as much caffeine as a cup of premium coffee. The standard dose is about 10 milligrams, so such products are not intended to be single-serve.

Keber has more than 40 employees after acquiring four medical marijuana businesses and is negotiating to take over two more. To support the growing empire, Dixie has hired three law firms, five consultants, a graphic designer, and a security company.

“Medical marijuana has created a cottage industry. This business is growing exponentially,” Keber said during an interview in his office, where he proudly showcases Dixie’s most recent honor: a fake marijuana leaf in a snow globe emblazoned with the words “Most Valuable MMJ Business,” awarded by local cannabis consultants. (MMJ is industry shorthand for medical marijuana.)

“Two to three years ago, we couldn’t get someone to return our calls,” Keber said. “Now, on any day, we have three to five vendors calling, e-mailing, or knocking on our door wanting to do business with us.”

When states start medical marijuana programs, the business impact extends far beyond dispensaries and cultivation operations, said Chris Walsh, editor of the Medical Marijuana (MMJ) Business Daily, a trade publication based in Denver. Many other types of companies crop up to provide services, including hydroponics shops, software firms, and packaging vendors. For instance, MMC Depot, a Colorado company that sells high-end glass jars and colorful plastic prescription bottles to hold marijuana, is interested in opening an East Coast branch in Boston. “These other businesses generate millions of additional dollars in revenues and put more people to work,” Walsh said.

In Denver, Brian Vicente has built a law practice around medical marijuana. He helps start-ups across the country cope with local laws, negotiate leases, draw up mergers and acquisitions, and — if needed — represents them in court. The company is doing so well it recently moved from a modest office — with waiting room magazines that included The Hemp Connoisseur and High Times Medical Marijuana — to a brick mansion across the street.

Vicente’s firm has doubled its space and shares some with other medical marijuana firms. He was one of the first Denver professionals to set up an office in Massachusetts and hire a full-time lawyer, based in the Financial District, who helped organize the recently formed Massachusetts Medical Marijuana Association.

He estimates Massachusetts could enroll more than 100,000 patients within two years — similar to the patient base in Colorado. “We know this issue is going to be big, and we want to help it grow in the right direction,” Vicente said.

"Sen. Leahy: Sequester should halt federal marijuana raids"

The title of this post is the headline of this Washington Times account of some discussion about federal marijuana policy today in the Senate Judiciary Committee. Here are the details:

The Obama Justice Department is still trying to figure out how to handle the legalization of marijuana possession in Colorado and Washington state, but one senator on Wednesday said that in an era of stretched budgets, the feds should back off.

“I would suggest there are more serious things than minor possession of marijuana,” Sen. Patrick J. Leahy, Judiciary Committee chairman, told Attorney General Eric H. Holder Jr.

Minutes earlier, Mr. Holder had warned that the budget sequesters are forcing him to cut more than $1 billion from his department’s operations and said that could hurt national security.

Mr. Leahy, Vermont Democrat, said that’s all the more reason to not continue targeting marijuana users.

Mr. Holder is trying to figure out how the federal government, which still considers marijuana a major illegal drug, will deal with pot users in states where it’s been legalized. He said he expects to have a policy soon.

UN agency and former DEA officials complain about the end of pot prohibition in two states

As reported in this notable Wall Street Journal article, headlined "Government Urged to Act Over Pot Laws," there are some notable new folks making noise about the efforts by two US states to end pot prohibition. Here are the interesting details:

A United Nations agency and a group of former U.S. Drug Enforcement Administration heads pressed the U.S. government Tuesday to challenge laws making recreational pot use legal in Colorado and Washington state.

The U.N.'s International Narcotics Control Board, which monitors implementation of U.N. drug-control conventions, said in its 2012 annual report that the states' pot laws violate international narcotics conventions and that it "urges the Government of the United States to take the necessary measures to ensure full compliance with the international drug control treaties on its entire territory."

Separately Tuesday, eight former DEA administrators issued a joint warning that the government must act now or lose the chance to nullify the Colorado and Washington laws. U.S. Attorney General Eric Holder said last week he is in the last stages of reviewing the laws.

"We are urging Attorney General Holder, as he did in the case of the Arizona immigration law, to file a lawsuit challenging the Colorado and Washington laws without delay," said one of former DEA Administrators, Judge Robert Bonner, in the statement.

"It's not up to the U.S. Attorney General to decide that he is going to abandon the law; it is his job to enforce the law," said Peter Bensinger, another of the former DEA administrators, in an interview.

Both states are working on rules to codify how marijuana's production, processing and sale will be regulated after voters in the states last November passed ballot measures letting adults use pot recreationally.

"It doesn't change what we're doing," said Brian Smith, spokesman for the Washington State Liquor Control Board, which is formulating pot-use rules there.

"This is an over-reach by outside entities," said Colorado state Rep. Jonathan Singer, a legalization advocate. A spokesman for Colorado Gov. John Hickenlooper said the office had no comment.

As political observers know, in nearly all other settings, folks on the right side of the aisle are typically quick to complain if and whenever either the United Nations or a federal agency tries to dictate whether and how an independent US state seeks to conduct its legal business.   I sure hope, just because we are now dealing with state laws concerning the use and distribution of a plant — rather than, say, state laws concerning the use and distribution of firearms or state laws concerning the operation of the death penalty — that the folks on the right do not conveniently forget the usual states' rights mantra in opposition to UN meddling or big federal agency over-regulation of state business.

A few recent and older related posts: 

• AG Holder indicates federal response to state marijuana reforms coming "soon"
• Supporting pot prohibition as divining rod pointing toward social conservatives and away from fiscal conservatives
• "What the Gun Lobby and the Marijuana Lobby Have in Common"
• If force to choose, would you legalize marijuana or prohibit tobacco?
• Intriguing new comments from President Obama on federal pot prohibition policy
• "California inspired — and now inspired by — other states' marijuana legalization measures"
• "Marijuana poll: Californians' support for legalizing pot at record level"

"The right way to regulate pot"

The title of this post is the headline of this notable new Los Angeles Times editorial.  Here is how it starts and ends:

Political movements like the tea party may come and go, but the pot party seems to get stronger with every national election, putting the federal government in an increasingly untenable position.

To date, more than one-third of the states and the District of Columbia have legalized marijuana, at least for medical purposes, and, according to Americans for Safe Access, eight other states are considering bills to do the same. As a result, we're getting close to the point where half the country will have legalized a drug designated a Schedule 1 controlled substance by the federal government, meaning it has no known medical uses and is as dangerous as heroin. This has been an overly restrictive classification since it was imposed in 1970, yet what's remarkable about the anti-prohibition movement is that it still hasn't prompted the government to reconsider its stance. A bill in Congress would do just that, but it also points out that there's a right way and a wrong way to proceed....

Regulatory failures have made it all too easy for recreational pot smokers to get their hands on the drug, even though that's not what California voters intended when they legalized medical marijuana in 1996. What we'd like to see is federal legislation that would treat marijuana like an ordinary prescription drug, complete with FDA oversight. Anything less would probably just add to the confusion and abuse.

"Marijuana poll: Californians' support for legalizing pot at record level"

The title of this post is the headline of this notable new local report on a notable new poll in California.  Here are highlights (with a few details emphasized):

Californians support legalizing pot in greater numbers than ever -- and they want the federal government to cool it with the crackdowns on medical marijuana dispensaries.

In a Field Poll released Wednesday, California voters, by a margin of 54 percent to 43 percent, supported allowing legal sales of marijuana, as long as restrictions are in place on age, driving under the influence of the drug and licensing those who sell it.  That represents the highest level of support since the Field Poll began asking the question 44 years ago, when most California believed pot was the gateway drug to more hurtful substances.

Only 13 percent of California adults supported legalizing marijuana in 1969 -- the year of Woodstock.   "Now, we're getting to the point where baby boomers have lived with this stuff for most of their lives," said Mark DiCamillo, director of the Field Poll.

Two-thirds of 834 registered voters said they opposed the Obama administration's raids on medical marijuana outlets, in which nearly 200 dispensaries -- most in California -- were targeted in President Barack Obama's first term.  Local governments have taken cues from the administration: Two hundred cities and counties have banned medical marijuana dispensaries.   The state Supreme Court is poised to issue a ruling on whether local governments can shut down dispensaries.

Nearly three-fourths -- 72 percent -- of Californians back the state's existing medical marijuana law, approved by voters in 1996. And a strong majority -- 58 percent -- would support allowing medical marijuana dispensaries in their own community.  "Certainly, it's a rebuke of the Obama administration's tactics," said Kris Hermes, a spokesman for Oakland-based Americans for Safe Access, a medical marijuana advocacy group. "It should indicate that the Justice Department's tactics are unacceptable and should be reconsidered."

Obama once criticized President George W. Bush for his aggressive approach to shutting down medical marijuana dispensaries.  But Obama is on pace to exceed Bush's record of medical marijuana busts.

Though voters support medical marijuana, just over two years ago they rejected a ballot measure to legalize pot, Proposition 19, by a 53 to 47 percent margin.  Legalization had only narrow support -- 50 to 46 percent -- in a Field Poll four months before that election, and the measure's chances for success were derailed by what political analysts called a lackluster campaign and a vague regulatory plan.   Well-run campaigns and more detailed regulatory plans led to pot legalization last November in Colorado and Washington state.

A coalition of Proposition 19 supporters met in December to discuss potential future California ballot measures.  They've said that they're targeting the 2016 presidential election ballot, though they haven't ruled out putting it on the ballot in 2014.

A younger and more tolerant electorate is changing the political landscape.  Among voters between the ages of 18 and 29, legalization has a 58-39 edge; among 30- to 39-year-olds, it has a 61-38 percent advantage.  Voters 65 or older are the least likely to support legalization, with only 43 percent in favor and 52 percent against.

Independent voters most strongly support legalization, at 59 percent, closely followed by Democrats, at 58 percent. Only 42 percent of Republicans favor legalization. And Latinos are just as against it, with only 41 percent in favor. But Latinos between the ages of 18 and 39 support it, 53 to 47 percent.  Only 30 percent of Latinos 40 and older support legalization....

The poll, taken Feb. 5 to 17, has an overall margin of error of plus or minus 3.5 percentage points.

This poll is significant for any number of reasons, especially with word coming from AG Eric Holder that the US Justice Department would issue "soon: some guidance on how it plans to treat states that have legalize marijuana (details here). The fact that a heavy majority of voters in California do not like the "tough love" approach taken by the Obama Administration to date before will help that Administration consider alternatives.

The poll data points I have highlighted are meant to stress reasons why I think all political candidates on all sides of the aisle will soon start realize that strong support for strong federal pot prohibition efforts is now full of political risks. Younger and independent voters are critical constituencies for winning elections now and especially into the future, and there is especially good reason to believe that views on pot policy will be quite salient and important to these constituencies in coming elections. As I have said in prior posts, any and all Republicans concerned about their "national brand" might be very wise to start talking up (as Paul Ryan did in the last election cycle) the idea of leaving pot policies up to the states and getting the feds out of the pot prohibition business.

AG Holder indicates federal response to state marijuana reforms coming "soon"

As reported in this piece from The Hill, "Attorney General Eric Holder promised Washington and Colorado state attorneys general on Tuesday that the Justice Department would issue its verdict 'soon' on how it plans to treat the states’ recent moves to legalize marijuana." Here is more from the report:

“We’re still in the process of reviewing both of the initiatives that were passed,” said Holder, speaking at the National Association of Attorney General annual conference in Washington, D.C.

“You will hear soon. We’re in the last stages of that review and we’re trying to make a determination as to what the policy ramifications are going to be, what our international obligations are — there are a whole variety of things that go into this determination — but the people of [Colorado] and Washington deserve an answer and you will have one soon.”

Holder was responding to Colorado state attorney general John Suthers, who asked the nation’s top law enforcement official when the DOJ would be weighing in on the state laws that have been in effect for nearly two months. The DOJ is charged with enforcing the federal prohibition on marijuana, and the state laws run counter to the long-existing ban, creating a debate over which law should be enforced and which law is most responsive to the will of the people.

Marijuana has been a centerpiece of the federal government’s “war on drugs,” aimed at cracking down on drug use in the United States. But the growing number of people who support the decriminalization of pot — which is still legally classified nationally in the same category as heroin — has some policymakers in Washington, D.C., rethinking their approach.

On Monday, nearly a dozen House Democrats introduced several bills that would decriminalize marijuana and remove the drug from the list of controlled substances, while requiring the federal government to regulate it and impose penalties on tax-evaders.

"Marijuana dealers get slammed by taxes"

The title of this post is the headline of this new piece over at CNN Money.  Here is how it begins:

Thanks to a decades-old law targeting drug runners, entrepreneurs in the nascent medical marijuana industry face a unique burden: an effective federal income tax rate that can soar as high as 75%.

The hefty levy is the result of a 1982 provision to the tax code, known as 280E, that stemmed from a successful attempt by a convicted drug trafficker to claim his yacht, weapons and bribes as businesses expenses, according to 280E Reform, a group working to overturn the statute. Enacted in the wake of that PR debacle, the rule bars those selling illegal substances from deducting related expenses on their federal income taxes.

It may have been effective against cocaine dealers and smugglers of other hard drugs, but the law now means purveyors of medical marijuana in the 18 states that have legalized the drug can't can't take typical things like rent or payroll as a business expense. That's taking a heavy toll on this new field.

"I'd personally love to give my employees a raise," said Kayvan Khalatbari, co-owner of Denver Relief, a medical marijuana center in its namesake city. "But because of the industry we're in, that's not always possible." Khalatbari said Denver Relief does just over $1 million a year in sales, and that not being able to take some standard business deductions costs him tens of thousands of dollars annually. He estimates his effective federal tax rate is about 50%.

For Denver Relief -- one of the largest marijuana dispensaries in Colorado, with a full-time staff of 15 -- the burden isn't killing the business. But for others, it's been lethal. Jim Marty, an accountant in Colorado specializing in medicinal marijuana tax law, said he has one client that didn't turn a profit in 2009, 2010 or 2011. In 2012, though, she was handed a $300,000 tax bill from the IRS for those three proceeding years.

Entrepreneurs whose businesses are legal under state laws are getting hammered by outdated federal tax rules. "If you have a license from the state hanging on your wall, that doesn't fit the definition of trafficking," Marty said. "Yet the IRS is aggressively auditing this industry." He said he often sees clients facing effective tax bills of 65% to 75%. That compares to 15% to 30% for businesses in general.

I generally favor high "sin" taxes, based in part on the reality that many "sin" products result in significant taxpayer costs from collateral harms. But in the arena of new state marijuana businesses, I fear that the uniquely heavy federal tax burden might prompt some to operate in the grey or black markets rather than under a regulated state regime.  Chalk this up to another important matter that the states and feds are going to need to work through as the modern marijuana laboratories of democracy continuing with their real-time experiments.

Notably, this new commentary by Christopher Matthews at Time, headlined "Will High Marijuana Taxes Encourage Black Markets?," talks through the connection between tax rates and market realities. Here is how it concludes:

For opponents of prohibition, taxes are the one of the best tools to convince citizens and governments of the benefits of a well-regulated marijuana industry.  But the marijuana industry in America — in all its various stages of legality — is large and well-developed. Some even estimate it to be the single largest cash crop in the country.  Given that fact, one can’t expect the black market to dissapear overnight if taxes and regulations make legal marijuana prohibitively expensive.  And as legislators continue the process of setting up a tax and regulatory structure for this budding industry, it’s a reality they had better take into account.

"Pot on the patio? Colorado's 'surreal' path to legalizing marijuana"

The title of this post is the headline of this lengthy and interesting new Christian Science Monitor article.  Here are some extended excerpts:

In the wake of the decision by voters in Colorado last November to legalize recreational marijuana for adults, the question of how to actually integrate legal pot into the practical, and often bureaucratic, realities of modern American life has fallen on two dozen Coloradans.

By the end of the month, the Amendment 64 Implementation Task Force must submit a report to the Colorado Legislature that lays out its suggestions for how the state should regulate legal marijuana.  It has been a curious process.

On one hand, the task force has considered new rules for what Colorado should do when it inevitably becomes a center of "pot tourism," it has debated whether smokers can use their backyard patios to light up, and it has considered how to deal with "marijuana clubs" that will appear.  Yet, at the same time, marijuana use remains illegal according to federal law, and the Department of Justice may step in and try to invalidate everything the task force has done.

In a time when as many as 25 states are considering pro-marijuana laws, what Colorado does could be broadly significant.  How it converts a massive black market into what experts call "problematic adult commerce" on the fringes of society -- akin to gambling, drinking, and go-go clubs -- all amid lingering legal concerns, could provide a framework for other states to follow.

So far, the results from the task force point to legal marijuana regulations that in many ways mirror regulations on alcohol and tobacco yet, because of the drug's unsettled legal status, are in some ways distinctly separate.   "We made an industry out of cigarettes, we made an industry out of alcohol and now we're creating an industry out of marijuana -- frankly, it's surreal sometimes," says task force member Mary Beth Susman, president of the Denver City Council.  "We're making rules about an activity that is illegal according to the federal government, and sometimes we're making rules that in the normal course of events would be illegal themselves in order to stay under the radar of the federal government."

So far, the Obama administration has kept its hands off the emerging experiments in Colorado (and Washington State, where voters also approved a ballot initiative that legalized pot), though it could be waiting until the Legislature formalizes new pot laws. That's expected by May 8.

Last November, 55 percent of Colorado voters approved adult use of marijuana, meaning that the state would regulate the cultivation and sale of marijuana while allowing legal possession of up to 1 ounce per person.  As caveats, the referendum allows towns and municipalities to opt out of retail marijuana sales and extends criminal and civil liability to smokers who drive high.  The law also allows the state to collect hefty new taxes from license production and retail sales that will go toward state education funds.

Nationally, a slim majority of Americans now support legalization of adult use of marijuana, up from 10 percent in 1971.  Some 100 million Americans have tried the drug at least once, 25 million have smoked in the past year, and 14 million are regular users, according to surveys by the US Department of Health and Human Services

Colorado, a pioneer state with heavy libertarian leanings, has become a major destination for free-spirited young Americans. This makes it an apt legalization laboratory, suggests Allen St. Pierre, the executive director of the National Organization for the Reform of Marijuana Laws (NORML).  Colorado has already led the way in setting up separate taxation and code enforcement for medical marijuana dispensaries, which the state approved in 2000. Today, there are more dispensaries in Denver than there are liquor stores.

Moreover, the Amendment 64 task force's work comes as a growing numbers of states and even Congress begin seriously deliberating medical marijuana and decriminalization. According to NORML, 10 states are proposing outright legalization bills, 15 are eyeing medical marijuana bills, and five are considering industrial hemp bills.  In total, 25 states are considering more than 45 separate pro-marijuana proposals.  On Thursday, Maine lawmakers introduced a Colorado-style bill that would legalize and regulate marijuana to allow adults to use it for recreational purposes.

"Colorado is going to be our first vetting, and they're going to have to go set the standard for a good part of the country on everything from public safety, workplace impairment, custody of children, and defining public use," says Mr. St. Pierre.

That fact has steered the task force's work down peculiar pathways, says Ms. Susman. Some questions are proving difficult to answer.  One, she says, is how the state deals with legal smokers who light up in front of children.  Other issues include how to appease insurance companies with clear financial interests in the health of consumers, government and law enforcement's responsibility to keep the public safe, and the role of making sure consumers have incentive to use the drug responsibly.

Part of the challenge will be to prove to the federal government that the state is solving a societal problem, not creating or fueling one. "If the task force members are savvy, they will try to create a regulatory structure that's going to draw the least attention from the federal government as possible," says Rob Mikos, a law professor at Vanderbilt University in Nashville, Tenn....

Ms. Susman says she's caught herself many times during task force deliberations pondering the enormity, and sometimes absurdity, of its task.  For example, by setting a very low cap on how much marijuana an out-of-state visitor can buy -- say an eighth of an ounce -- the state can make it prohibitively expensive for drug dealers to use the state as a source.  "If they're going to resell it, they'd have to pay retail 128 times to buy a pound," she says.  "Discussing something like that makes me almost want to giggle."

I continue to give this legal reform storm considerable attention because I strongly believe that the success or failure of the legalization experiment in Colorado over the next few years could have a profound impact on national drug policies and criminal justice systems.  Especially if advocates of marijuana reform are effective at documenting that the tangible benefits of regulated pot legalization in Colorado outweigh the tangible costs, I think it will be that much easier for these advocates to promote significant reform efforts in other states and at the federal level.

Importantly, I expect that advocates for pot reform in Colorado and elsewhere should have an easier time, at least in the short-term, highlighting tangible benefits from legalization than will opponents be able to pinpoint tangible costs.  Proponents of reform should be able to point quickly not only to significant new tax revenues, but also to related job creation and business development resulting immediately from the legalization of a product with significant demand among folks with significant resources.  In contrast, because the harms of increased pot use (like increased alcohol use) tend to be long-term, opponents are likely to have little other than the occassional drugged driving anecdote to use to highlight legalization's costs.  In addition, many state officials and business leaders in Colorado should, at least initially, be more invested in making legalization work than in advocating for a return to prohibition.

If I am right that reform advocates can and will report lots of early "success" with legalization in late 2013, then it seems likely that local, state and national pot policy becomes a very big issue is the 2014 election cycle.  And if swing state Colorado has continued "success" with legalization in a few years, it seems possible (perhaps even likely) that some or all of the mainstream candidates who run for President in 2016 will be on the side of reform at the federal level rather than persistent prohibition.

Colorado's marijuana task force (wisely?) decides not to try to prohibit pot tourism

As reported in this new AP piece, headlined "Colorado marijuana regulators sign off on pot tourism," the task force working through the range of new issues raised by marijuana legalization in Colorado has reached a significant decision about how to handle folks traveling to the state to partake in its new legal marketplace.  Here are excerpts from the article:

Marijuana tourism is on the way to Colorado, under a recommendation made Tuesday by a state task force to regulate the drug made legal by voters last year.   But Colorado should erect signs in airports and borders telling visitors they can't take pot home, the task force recommended.

Colorado's marijuana task force was assembled to suggest regulations for pot after voters chose to flout federal drug law and allow its use without a doctor's recommendation. Made up of lawmakers, law enforcement authorities and marijuana activists, the task force agreed Tuesday that the constitutional amendment on marijuana simply says that adults over 21 can use the drug, not just Colorado residents.  If lawmakers agree with the recommendation, tourists would be free to buy and smoke marijuana.

"Imposing a residency requirement would almost certainly create a black market for recreational marijuana in the state," said Rep. Dan Pabon, a Denver Democrat who sits on the task force.  Tourists could see purchasing caps though, possibly as low as an eighth of an ounce per transaction.

Afraid that marijuana tourism could open the door for traffickers to load up and take it across state borders for illegal sale, task force members agreed that non-residents should be able to buy only limited amounts, though a specific amount wasn't set.   "Marijuana purchased in Colorado must stay in Colorado," Pabon warned.  "We could attract greater federal scrutiny and displeasure of our neighbors," if marijuana flows across state lines, he said.

Task force members were less successful agreeing to recommendations on marijuana growing and public use. Colorado's marijuana law allows home growing but requires plants to be in a locked, secure location out of public view. The task force couldn't agree whether a "locked" and "secure" location would mean a backyard surrounded by a fence, or whether an enclosure such as a shed or greenhouse should be mandatory.

One of the task force's most vocal marijuana critics, Greenwood Village Police Chief John Jackson, worried that backyard pot gardens would need more than a chain-link fence to keep kids out. Not all task force members agreed. User advocate Meg Sanders said the covering requirement wouldn't be fair to rural Coloradans....

Public use also prompted a dispute that wasn't resolved Tuesday. Jackson and others wanted to ban marijuana use on publicly visible patios, porches and backyard. Marijuana activists chafed. "So I can drink a beer on my porch? But I can't smoke a joint?" asked marijuana advocate Christian Sederberg.

State Sen. Cheri Jahn, D-Wheat Ridge, said lawmakers would hesitate to regulate something legal people do on private property. What about backyard grills that send the smell of hamburgers into the nose of a neighbor who's vegetarian?, she asked. "I don't know how far we want to go telling people what they can't do on their own porches," she said....

The task force has until Feb. 28 to recommend marijuana regulations, which will ultimately be set by the state Legislature and the Department of Revenue, the agency which oversees gambling and alcohol and will also regulate recreational pot.

Is a (harmful?) gray market inevitable even if pot becomes fully legal?

The question in the title of this post (which itself is full of questions) is prompted by this new local article out of Colorado, which is headlined "Marijuana-for-donation swaps test limits of Colorado law." Here are excerpts from the press report:

His store's location stinks, the owner of the head shop admits. It's in a nondescript building on an out-of-the-way road below the Colfax Avenue viaduct across from Sports Authority Field at Mile High. Unless you're trying to find Broncos parking, you might never even know there's a there there for a store to be.

So, to bring feet to his street, the owner of 4 Strains Pipe and Tobacco — which sells supplies for smoking this, that and what have you — came up with this marijuana-tinged ad on Craigslist: "CO AMENDMENT 64 COMPLIANT. 21 AND UP GET YOUR 2 GRAMS OF BUD FREE WITH $30 OR MORE PURCHASE IN OUR HEAD SHOP. THIS IS FREE AS A GIFT. ONE GIFT PER DAY PER PERSON. NO JOKE."

In post-marijuana-legalization Colorado, the pitch is bold. It's creative.  But is it legal? It depends on the definition of "remuneration."

"It's a tricky issue," says Christian Sederberg, an attorney who helped write Amendment 64, which legalized limited possession and — eventually, but not yet — retail sales of marijuana in Colorado. Since Colorado voters approved Amendment 64 in November, dozens of offers for "free" marijuana have sprung up on the frontier between legal and illegal.

Craigslist is home to numerous ads offering free marijuana for a donation. Backpage, another ad site, has more.  Each ad has essentially the same hook: It's not the pot you're paying for. "i can gift my smoke to others and am taking donations for power/rent," one ad states.

Amendment 64 allows adults to give one another up to an ounce of marijuana, provided it is done "without remuneration."  What exactly that means, though, is still being worked out by lawmakers, regulators and a task force appointed to suggest rules for legal marijuana in the state.

Ro Silva, a spokeswoman for the Colorado Department of Revenue, which will eventually oversee recreational-marijuana businesses, said the state currently doesn't have any rules on when an exchange of marijuana and money is a sale and when it's something else.

The owner of 4 Strains — who asked to be identified only as Mike P. because he is worried about robbers coming to his home — said he consulted with a lawyer prior to posting his ad and is doing everything in good faith with the law.   "The marijuana is not for sale," he said.  "You're actually purchasing smoking accessories, tobacco, T-shirts, fine art. As a gift for them patronizing our store, we're giving them 2 grams of marijuana for free. ... It's just an incentive."

Sederberg, though, said the position is a risky one and that police and the courts could see it differently.  "The concept of remuneration has not been clearly established," he said.

Colorado Springs police this month arrested three men allegedly behind a marijuana-for-donation delivery service.  Billygoatgreen MMJ advertised on Facebook and Craigslist and offered to give pot for free while soliciting "suggested donation[s] towards researching [marijuana] and improving our cultivation operation," according to an e-mail the service's owners wrote to the Colorado Springs Independent.

Meanwhile, counter-ads have popped up on Craigslist, warning would-be marijuana providers that the cops might be watching. Sederberg said the frontier era of Colorado marijuana law will likely civilize quickly.  Regulations are coming.  Court rulings will help clarify things. It may be only a matter of time until remuneration comes to include donation.

"The bigger point," he said, "is we need to get the regulated marketplace in place as soon as possible. "Ultimately, I think a lot of this is going to go away."

In this setting, I think the vice of gambling rather than the vice of alcohol provides a useful reminder that the (inevitable?) development of gray markets and clever marketing schemes is not always a reason to favor prohibition over legalization. After all, the huge on-line poker industry was a big gambling gray market in the US for a decade and it help contribute to the national poker boom that aided so many legitimate businesses. And casinos are amous, of course, for giving stuff away (comps) to get people to come and gamble more.

I raise these points in part to encourage a balanced reaction to any and all of the (too common?) efforts by "pot pioneers" to skirt close to the edge of the law in running their businesses as marijuana reform gathers steam nationwide.  As this article highlights, there will surely be lots of legal gray areas as this industry and new state regulation develop.  In my view, the fact that some (many? most?) in the pot business will run a market in the gray areas is not itself a reason to conclude the industry should be shut down before the rules of thr road get clarified.

Hawaii house extinguishes bill proposing full legalization of marijuana

There had been some notable buzz that Hawaii could become the first state with a legislative body voting to legalize recreational marijuana (as opposed to the voter iniatives which brought legal reform in Colorado and Washington).  But, as this AP article reports, a "bill that would have legalized marijuana in Hawaii has died in the state House."  Here is why and the surrounding debate:

House judiciary committee Chairman Karl Rhoads said Tuesday that he decided to kill the bill after learning from House leadership that the initiative does not have enough votes to pass the House. Key lawmakers in the Democratic-controlled House supported the measure, including the speaker and the majority leader.

Pamela Lichty, head of the Hawaii Drug Policy Action Group, says the organization is disappointed with the outcome but will continue to advocate for marijuana decriminalization through other measures. She says that the fact that there were more than 20 marijuana-related bills introduced this year is a sign of public support for the initiative. She says the organization plans to continue to advocate for bills related to medical marijuana, which is legal in Hawaii.

The proposal that failed Tuesday would have legalized marijuana for recreational use for people aged 21 or older. It can’t be revived until future sessions. The initiative ignited an outpouring of public testimony that reflected sharply divided public opinion.

At a public hearing on the bill, law enforcement officials told Hawaii lawmakers that marijuana is a dangerous drug. They said the societal costs of legalizing weed aren’t worth the risks of allowing marijuana culture to proliferate. Opponents of the bill included the state attorney general, the county police departments and the Coalition for a Drug-Free Hawaii.

Numerous community members voiced opinions in favor of legalization, including the American Civil Liberties Union of Hawaii. Proponents said the move would conserve state resources and respect residents’ freedom of choice. They said the state’s current law against marijuana disproportionately impacts Native Hawaiians and other minority groups.