California releases long-awaited cannabis regulations, will allow huge farms

marijuanaThere will be no cannabis cappuccinos or drone deliveries in California under the new pot rules state officials released Thursday that regulate everything from who can legally sell and deliver marijuana to how it must be packaged and transported.

The rules released by three licensing agencies — the Department of Health, Department of Food and Agriculture and the Bureau of Cannabis Control — offer the first glimpse of the future in which pot is legal throughout California.

Big farms will continue to thrive in Mendocino and Monterey. Small delivery services will finally operate legally. Pot won’t be transported in self-driving cars or on bicycles, and it isn’t allowed in strip clubs.

Those guidelines come amid mass confusion among cities that haven’t put together their own regulations for the sale of recreational marijuana, which will be legal Jan. 1. …

Click here to read the full story from the San Francisco Chronicle

California’s High Pot Taxes – A Teachable Moment

Buds are removed from a container at the "Oregon's Finest" medical marijuana dispensary in Portland, Oregon April 8, 2014. Over 20 Oregon cities and counties are moving to temporarily ban medical marijuana dispensaries ahead of a May deadline, reflecting a divide between liberal Portland and more conservative rural areas wary about allowing medical weed. Portland, Oregon's largest city, already has a number of medical marijuana clinics and has not moved to ban them. Picture taken April 8, 2014. REUTERS/Steve Dipaola (UNITED STATES - Tags: DRUGS SOCIETY POLITICS HEALTH) - RTR3KMHE

Do higher tax rates affect human behavior?

As the nation considers tax reform, according to a report, taxes on pot in California could reach as high as 45% for the consumer. Combined with the slew of regulations on the way, suddenly the libertarian fervor of buying and selling pot doesn’t seem so, well, free.

The question is: Will those pushing for the sale of pot and those buying, finally get a lesson in basic economics?

In 2016, California voters legalized the sale of recreational pot.  Many voters felt they were striking a blow for personal freedom with their vote. Since that day, all levels of the California governments have been coming to grips with how to implement the voter’s choice.  Of course, that really means how to regulate the sales and how to tax those sales.

Keep in mind that, at the time of the vote, California already had the largest pot market in the country – although its size is disputed because most of the market is illegal sales. Some have said, that as of 2015, “California  . . . has the largest legal cannabis market in the U.S., at $1.3 billion.” On the other hand, others have reported that over $7 billion in illegal crop has been seized in California. Given the Feds think they seize only around 10% of the illegal crops, you can see how large the market could well be.

On the regulatory front, local governments are setting the bar for obtaining local licenses, while at the state level, something called the Bureau of Cannabis Control, claims it is “the lead agency in developing regulations for medical and adult-use cannabis in California. The Bureau is responsible for licensing retailers, distributors, testing labs and microbusinesses.”

Little wonder that Time reports that “Operators have complained about what they see as potential conflicts in various laws and rules, or seemingly contradictory plans.”

As for taxes, a Fitch Ratings report taxes on pot may reach as high as 45% in parts of the state.

“Consumers will pay a sales tax ranging from 22.25% to 24.25%, which includes the state excise tax of 15%, and additional state and local sales taxes ranging from 7.25% to 9.25%.” Beyond that, “Local businesses will have to pay a tax ranging from 1% to 20% of gross receipts, or $1 to $50 per square foot of marijuana plants, according to the Fitch report. In addition, farmers will be taxed $9.25 per ounce for flower, and $2.75 per ounce for leaves.”

Welcome to the freedom to smoke marijuana in California. It turns out that freedom isn’t free in route to the State’s desire to collect over $1 billion in taxes.

As this unfolds, the question remains whether California consumers, regulators and legislators will study the effects of the high taxes and costs of those regulations.

Let me help them. As Calvin Coolidge would say, high taxes are not paid – they are avoided.

The evidence of that is everywhere.  As my colleague at Forbes.com, Brian Domitrovic, recently wrote: “In the 1950s and early 1960s, IRS data was clear that the 91% marginal rate produced essentially no revenue, that about 80% of earners who should have been subject to it by ordinary definitions legally avoided it. Same thing for 70% in the 1970s and 50% in the early 1980s.”

Even the Democrats who oppose tax reform know that when they tell you that the current top corporate tax rate is meaningless because the “effective” corporate rate is lower.  Corporations that can avoid that high tax by taking legal deductions.*

But that is not the only way to avoid taxes.  There is also the black market.

According to that same Fitch Report, “California’s black markets for cannabis were well established long before its voters legalized cannabis in November 2016 and are expected to dominate post-legalization production.”

Will that black market continue?  Perhaps the 650 billion black market cigarettes sold around the world could be instructive. Here in the United States, according to the Tax Foundation:

“New York is the highest net importer of smuggled cigarettes, totaling 58.0 percent of the total cigarette market in the state (a slight increase since last year’s edition of the report). New York also has the highest state cigarette tax ($4.35 per pack), not counting the local New York City cigarette tax (an additional $1.50 per pack). Smuggling in New York has risen sharply since 2006 (+58 percent), as has the tax rate (+190 percent).”

Can you see through the smoke of it all?

High taxes are quite often avoided. The same will be true for the sale of marijuana in California. With such high taxes, the black market in pot in California will continue to thrive.

Please note two final points about irony in all of this. That Bureau of Cannabis Control that is regulating nearly every aspect of pot in California? Well, it is part of the California Department of Consumer Affairs. Apparently, it is quite the affair to raise the price of pot for consumers in California.

Finally, in 2016 when Californians legalized recreational marijuana, they also raised the taxes on cigarettes – all in an effort to reduce people from smoking. A sin tax they call it. I wonder if in 2018, there will be a ballot measure to raise more taxes to stop people from smoking pot.

Of course, the real sin is that people don’t understand that simple economic law: the more something costs, the less of it you get. That includes the legal sales of pot, jobs and income.

One has to wonder whether there will be a tax reform effort for pot sales once consumers in California learn their lesson – and whether they will support tax reductions on income when they finally do understand that lesson.

Originally published at Forbes.

ormer chairman of the California Republican Party and current candidate for U.S. Senate.

Kern County bans all commercial marijuana production

As reported on Bakersfield.com:

Kern County banned commercial cannabis Tuesday.

Four of the five county supervisors said they did not want to be party to the permitting and regulation of an industry that wields such a destructive impact on the communities they represent.

“The vast majority of the pot shops in the greater Bakersfield area are in Oildale,” said Supervisor Mike Maggard.

He said his people, the residents and businesses in the poorest areas of his district, are being disproportionately impacted by marijuana dispensaries.

Maggard said suggesting that he allow an industry that has victimized his constituents for years to operate legally, simply for the money it might represent to county coffers, is offensive to him.

“I can’t turn my back on the neighborhoods I represent,” he said.

Supervisor Mick Gleason also supported the ban, but cautioned people not to expect that it will remove marijuana from Kern County. …

Click here to read the full article

California’s marijuana black market could remain huge

Buds are removed from a container at the "Oregon's Finest" medical marijuana dispensary in Portland, Oregon April 8, 2014. Over 20 Oregon cities and counties are moving to temporarily ban medical marijuana dispensaries ahead of a May deadline, reflecting a divide between liberal Portland and more conservative rural areas wary about allowing medical weed. Portland, Oregon's largest city, already has a number of medical marijuana clinics and has not moved to ban them. Picture taken April 8, 2014. REUTERS/Steve Dipaola (UNITED STATES - Tags: DRUGS SOCIETY POLITICS HEALTH) - RTR3KMHE

Legalizing marijuana, California voters were told last year, would create a “safe, legal and comprehensive system” allowing adults to consume the drug while keeping it out of the hands of children. Marijuana would be sold in highly regulated stores, the Proposition 64 campaign promised, and California would gain new tax revenue by bringing the cannabis marketplace “out into the open.”

Voters overwhelmingly bought the message, with 57 percent approving Proposition 64. But as state regulators prepare to begin offering licenses to marijuana businesses on Jan. 1, it turns out that a huge portion of the state’s weed is likely to remain on the black market.

That’s because California grows a lot more pot than its residents consume, and Prop. 64 only makes marijuana legal within the state’s borders. It also didn’t give an automatic seal of approval to every cannabis grower. Those who want to sell legally must be licensed by the state and comply with detailed rules that require testing plants, labeling packages and tracking marijuana as it moves from farm to bong.

Exactly how much cannabis circulates in California is unknown because most marijuana grows — and purchases — have been illegal for so long. But economists hired by the state government estimate that California farms produce about 13.5 million pounds of cannabis each year, while state residents annually consume about 2.5 million pounds. That leaves 11 million pounds of pot that likely flows out of California illegally, according to the economic report commissioned by the California Department of Food and Agriculture, which regulates cannabis farmers. Other analyses have similarly found that roughly 80 percent of California-grown marijuana leaves the state.

Even the 2.5 million pounds of marijuana consumed within California won’t all be purchased through state-sanctioned shops when they open; the economists predict about half of it will probably be sold illegally.

“Those sales opportunities will still be there,” said Hezekiah Allen, executive director of the California Growers Association, which represents more than 1,000 marijuana businesses in the state.

Allen surveyed his members recently and found that 85 percent hope to get a license to sell marijuana legally under Prop. 64. But many fear they won’t be able to because some local governments will limit or ban pot businesses, or because prices could drop too low in the regulated market. And if they can’t sell weed legally, 40 percent of the respondents to Allen’s survey said they would continue operating the way they always have: on the black market.

Some long-time cannabis growers will likely go out of business, Allen said. But, “at the end of the day, a lot of businesses in general may stay outside of the regulated market.”

That means that despite the passage of Prop. 64, California cops will still have plenty of work going after illicit cannabis operations.

“You’re going to see robust enforcement efforts to prevent California from becoming the staging area for drug trafficking nationwide,” said John Lovell, a lobbyist for the California Narcotics Officers Association, which opposed the ballot measure.

A spokesman for the Prop. 64 campaign said the measure wasn’t intended to abolish all criminalization of marijuana but instead to allow opportunities for “operators who want to be responsible and compliant.”

“No one ever promised to completely eliminate the black market — that’s like promising security cameras will completely eliminate shoplifting — but it will be significantly reduced,” spokesman Jason Kinney said by email.

He added that the state’s estimates of marijuana supply and demand are unreliable because the legal marketplace created by Prop. 64 won’t begin to roll out until next year. And he pointed out that some of the tax dollars generated by legal marijuana sales will go toward cracking down on illicit operations.

State officials said they are encouraging marijuana businesses to follow the rules and become part of the regulated system, while also planning how to go after those that remain in the black market.

“We are developing a formal complaint system that will allow anyone to report illegal grows or other concerns, and then we will forward those potential issues to the appropriate (law enforcement) agencies,” said Rebecca Forée, a spokeswoman for the state’s cannabis cultivation licensing office within the Department of Food and Agriculture.

Lori Ajax, chief of the state’s Bureau of Cannabis Control, said her agency is trying to entice marijuana businesses to go legit by crafting rules that aren’t too difficult for them to live by.

“It’s making sure those people who want to be in the regulated market, that we have made a path for them, we’re not making our regulations so difficult and hard to comply with that you’re discouraging people,” Ajax said.

“First, we’ve got to get those folks in there and… then see what comes after that with enforcement.”

eporter for CALmatters

California could become a sanctuary state for marijuana

As reported by CNN Money:

California lawmakers are trying to protect the marijuana industry by establishing California as a sanctuary state for pot.

A bill moving through the state legislature would prohibit state and local police from assisting federal agents who target marijuana businesses that are legal according to state law, unless those agents have a court order.

“The reason for this is because the present administration in Washington is very unpredictable,” Assemblyman Reggie Jones-Sawyer, a Democrat from Los Angeles and the author of the bill, told CNNMoney. “This is protecting the rights of Californians.”

The bill passed the state Assembly 41-33 last week. Most Democrats supported the bill, and most Republicans opposed it. …

Click here to read the full article

On Legal Marijuana, Congress Should Stay Sessions’ Hand

Buds are removed from a container at the "Oregon's Finest" medical marijuana dispensary in Portland, Oregon April 8, 2014. Over 20 Oregon cities and counties are moving to temporarily ban medical marijuana dispensaries ahead of a May deadline, reflecting a divide between liberal Portland and more conservative rural areas wary about allowing medical weed. Portland, Oregon's largest city, already has a number of medical marijuana clinics and has not moved to ban them. Picture taken April 8, 2014. REUTERS/Steve Dipaola (UNITED STATES - Tags: DRUGS SOCIETY POLITICS HEALTH) - RTR3KMHE

The Trump administration has stayed relatively quiet on the subject of state measures to legalize recreational marijuana. However, recent statements from Press Secretary Sean Spicer and Attorney General Jeff Sessions would suggest a change in tone from candidate Trump’s earlier statement that he’d be willing to let states chart their own course on marijuana policy. Although such a change in policy will likely prove ineffective, the uncertainty it creates only goes to highlight the necessity of congressional action to give states the necessary leeway to pursue their own reforms without relying on executive indulgence.

Since the passage of California’s Proposition 215 in 1996, some 28 states have legalized medical use of marijuana, and eight have passed full legalization, with half of that number coming in the last election. While those eight states passed their reforms at the ballot box, a number of other states are considering legalization bills in the current legislative session. Naturally, this change in the legal landscape has accompanied a shift in public opinion. According to Gallup, support for legalization has gone from about 25 percent in 1995, the year before Proposition 215, to 60 percent late last year.

All of this has occurred with varying degrees of forbearance on the part of the federal government. The Clinton and Bush administrations pursued fairly aggressive policies toward dispensaries and even patients in medical marijuana states, and the Obama administration continued the trend. Then, in 2013, the Obama DOJ issued the Cole memo, which instructed federal authorities to lay off those who were in compliance with state law. This relative détente has held up to the present. In fact, this approach of ad hoc federalism enjoys solid public support. A Quinnipiac poll from February found 71 percent of Americans opposed federal enforcement of prohibition in states that have legalized, and even among Republicans that figure stood at 55 percent to 36 percent against.

Of course, this shift from the long-dominant prohibitionist orthodoxy hasn’t been without controversy. In 2011, just after legalization passed in Colorado and Washington, Hillary Clinton maintained that there was “too much money” in black market marijuana for it to be legalized, and Ed Feulner, former president of the Heritage Foundation and member of Trump’s transition team, just this past fall called for a re-declaration of the War on Drugs, explicitly including marijuana. In that piece he singled out data from Colorado showing increases in “marijuana related” emergency room visits and hospitalizations, as well as “pot-positive” traffic fatalities. However, as detailed in a report by the Colorado Department of Public Safety in March 2016, the data don’t lead so readily to alarmist conclusions. In fact, Colorado’s own governor, John Hickenlooper, has gone from musing about undoing legalization if only he had a magic wand to guarded optimism.

Despite the ominous statements from administration officials, Trump himself apparently struck a more accommodating tone in a meeting with state governors in late February. Even though he made no explicit mention of marijuana, he signaled a willingness to let states pursue their own policies without fear of federal interference. Given the impossibility of policing a combined population of 70 million in the states that have legalized with the roughly 5,000 special agents of the DEA, it would seem like an easy call for the administration to prioritize investigations of otherwise violent traffickers over hounding commercial growers and retailers complying with state law. Furthermore, letting legalization run its course in the states might be one of the best ways to undercut the black market. In an NPR report from 2014, one Mexican grower they interviewed reported that the wholesale price per kilo had fallen by more than half, and, per the Washington Post, overall seizures at the border had fallen from 4 million pounds in 2009 to 1.5 million in 2015.

The current disconnect between federal marijuana policy and the ongoing reforms at the state level is untenable. Rather than revert to the tried and failed prohibitionist approach, it’s time for Congress to codify the current ad hoc federalism of Obama’s second term and give the states and their burgeoning marijuana industries the breathing room they need. In so doing, they will sap the strength of the cartels, create jobs, and allow law enforcement to turn its attention to more important work.

Dan Spragens is a criminal justice reform intern at Reason Foundation.

Recreational Marijuana: What Prop. 64 Will Actually Mean in California

California voters on November 8 approved Prop. 64, which is an initiative statute that legalizes marijuana and hemp under state law, with specified limitations. The ballot measure designates state agencies to license and regulate the recreational marijuana industry and it imposes a state excise tax on retail sales of marijuana equal to 15 percent of the sales price, as well as state cultivation taxes on marijuana of $9.25 per ounce of flowers and $2.75 per ounce of leaves.

In addition, Prop. 64 exempts medical marijuana from some taxation and establishes packaging, labeling, advertising and marketing standards and restrictions for marijuana products. The ballot measure allows local regulation and taxation of marijuana. Additionally, Prop. 64 prohibits marketing and advertising marijuana to minors and it authorizes resentencing and destruction of records for prior marijuana convictions under specified circumstances.

According to the fiscal estimate prepared by the Legislative Analyst and Director of Finance, the enactment of Prop. 64 will result in “net reduced costs ranging from tens of millions of dollars to potentially exceeding $100 million annually to state and local governments related to enforcing certain marijuana-related offenses, handling the related criminal cases in the court system, and incarcerating and supervising certain marijuana offenders.

“Net additional state and local tax revenues potentially ranging from the high hundreds of millions of dollars to over $1 billion annually related to the production and sale of marijuana. Most of these funds would be required to be spent for specific purposes such as substance use disorder education, prevention and treatment.”

According to the official ballot arguments, a YES vote on this measure meant: “Adults 21 years of age or older could legally grow, possess and use marijuana for nonmedical purposes, with certain restrictions. The state would regulate nonmedical marijuana businesses and tax the growing and selling of medical and nonmedical marijuana. Most of the revenue from such taxes would support youth programs, environmental protection, and law enforcement.

“Prop. 64 creates a safe, legal system for adult use of marijuana. It controls, regulates and taxes marijuana use, and has the nation’s strictest protections for children. It provides billions for afterschool programs, job training, drug treatment, and cracking down on impaired driving. Fix our approach to marijuana.”

A NO vote on this measure meant: “Growing, possessing or using marijuana for nonmedical purposes would remain illegal. It would still be legal to grow, possess or use marijuana for medical purposes.

“Proposition 64 purposely omits a DUI standard to keep marijuana-impaired drivers off our highways. California Association of Highway Patrolmen and Senator Dianne Feinstein strenuously oppose. Legalizes ads promoting smoking marijuana, Gummy candy and brownies on shows watched by millions of children and teens. Shows reckless disregard for child health and safety.”

According to a summary prepared by the independent Legislative Analyst Office, marijuana is generally illegal under existing state law – either to possess it or use it. In 1996, voters approved Proposition 215, which made it legal under state law for individuals of any age to use marijuana in California for certain medical purposes. Individuals must have a recommendation from a doctor to use medical marijuana.

In 2003, the Legislature legalized medical marijuana collectives, which are nonprofit organizations that grow and provide marijuana to their members. As a result of 2015 legislation passed by the Legislature, the state is currently adopting new medical cannabis regulations. Local governments will continue to have the ability to regulate where and how medical marijuana businesses operate in this state.

The LAO notes that, under federal law, it is illegal to possess or use marijuana, including for medical use. The U.S. Supreme Court ruled in 2005 that federal agencies could continue under federal law to prosecute individuals who possess or use marijuana for medical purposes even if legal under a state’s law.

Currently, however, the U.S. Department of Justice chooses not to prosecute most marijuana users and businesses that follow state and local marijuana laws if those laws are consistent with federal priorities. These priorities include preventing minors from using marijuana and preventing marijuana from being taken to other states. More than half a dozen requirements must be met under the DOJ’s “Cole Memo.”

In addition to California, voters in Arizona, Nevada, Maine and Massachusetts also passed ballot measures to legalize recreational use of marijuana. Colorado, Washington, Oregon and Alaska currently allow its limited use. Medical marijuana was also on the ballot in four states this year.

Due to the voters’ enactment of Prop. 64, California now (1) legalizes adult nonmedical use of marijuana, (2) creates a system for regulating nonmedical marijuana businesses, (3) imposes taxes on marijuana, and (4) changes penalties for marijuana-related crimes.

Specifically, Prop. 64 changes state law to legalize the use of marijuana for nonmedical purposes by adults age 21 and over. As a result, adults age 21 and over will be able to purchase marijuana at state-licensed businesses or through their delivery services (effective January 1, 2018). Businesses can generally not be located within 600 feet of a school, day care center, or youth center, unless allowed by a local government. Proponents claim that marijuana will have limited access and that these are the strongest protections for youth of any other states’ measures.

In addition, Prop. 64 changes the name of the Bureau of Medical Cannabis Regulation to the Bureau of Marijuana Control and makes the Bureau responsible for regulating and licensing nonmedical marijuana businesses (it is obviously already handling the regulation of medical cannabis in this state). In addition, the ballot measure requires other state agencies to regulate and license different parts of the nonmedical marijuana industry (including Department of Food & Agriculture and the Department of Public Health). These state agencies will have responsibilities similar to the ones they currently have for medical marijuana.

Under the ballot measure, cities and counties can regulate nonmedical marijuana businesses. For example, cities and counties can require nonmedical marijuana businesses to obtain local licenses and restrict where they could be located. Cities and counties can also completely ban marijuana-related businesses. However, they cannot ban the transportation of marijuana through their jurisdictions.

The ballot measure imposes new state taxes on growing and selling both medical and nonmedical marijuana. The new tax on growing marijuana will be based on a dollar amount per ounce of marijuana, and the new excise tax will be based on the retail price of marijuana products sold.

The measure will also affect sales tax revenue to the state and local governments.

After initial spending, revenues will be allocated as follows:

  • 60 percent for youth programs — including substance use disorder education, prevention and treatment.
  • 20 percent to clean up and prevent environmental damage resulting from the illegal growing of marijuana.
  • 20 percent for (1) programs designed to reduce driving under the influence of alcohol, marijuana and other drugs and (2) a grant program designed to reduce any potential negative impacts on public health or safety resulting from the measure.

In addition, Prop. 64 imposes packaging and labeling requirements so that all marijuana sales will include a standard warning label. These cannot be targeted towards children and packages must be child-proof. While Prop. 64 allows for the advertisement of marijuana-related products, it cannot be targeted toward children.

Prop. 64 also changes state marijuana penalties. And, under the ballot measure, individuals serving sentences for activities that are made legal or are subject to lesser penalties under the measure will be eligible for resentencing.

According to the proponents, “Proposition 64 finally creates a safe, legal, and comprehensive system for adult use of marijuana while protecting our children. Marijuana is available nearly everywhere in California — but without any protections for children, without assurances of product safety, and without generating tax revenue for the state.

“Prop. 64 controls, regulates and taxes adult use of marijuana, and ends California’s criminalization of responsible adult use. How Prop. 64 Works:

  • “Under this law, adults 21+ will be allowed to possess small amounts of nonmedical marijuana, and to grow small amounts at home for personal use. Sale of nonmedical marijuana will be legal only at highly regulated, licensed marijuana businesses, and only adults 21+ will be permitted to enter. Bars will not sell marijuana, nor will liquor stores or grocery stores.

“Child Protections:

  • Drug dealers don’t ask for proof of age and today can sell marijuana laced with dangerous drugs and chemicals. 64 includes toughest-in-the-nation protections for children, requiring purchasers to be 21, banning advertising directed to children, and requiring clear labeling and independent product testing to ensure safety. 64 prohibits marijuana businesses next to schools.”

On the other hand, opponents of Prop. 64 argued the following: “Flaw #1: Doubling of highway fatalities. Flaw #2: Allows marijuana growing near schools and parks. Flaw #3: Will increase, not decrease black market and drug cartel activity. Flaw #4: Could roll back the total prohibition of smoking ads on TV. Flaw #5: Proposition 64 is an all-out assault on underprivileged neighborhoods already reeling from alcohol and drug addiction problems.”

Prop. 64 as a practical matter allows adults aged 21 or older to buy, possess or transport small amounts of marijuana for personal use. They can also cultivate up to six plants as long as it is not visible to the public. They cannot sell it. The ballot measure also provides extensive state licensing schemes based upon the work currently being done by a number of state agencies that are charged with implementing the medical cannabis laws. The ballot measure establishes standards for marijuana products and it allows local government to regulate and tax marijuana.

Major concerns from opponents of marijuana legalization have focused on the advertising restrictions and whether enough will be done to protect children; the failure to include a DUI standard (Prop. 64 provides funding to the California Highway Patrol to undertake the determination of this standard); and whether so called “on-demand delivery” will be permitted (which the proponents claim is prohibited).

As a result of the enactment of Prop. 64, state agencies will be tasked with creating a regulatory program for both medical and recreational cannabis usage in this state. Local jurisdictions will have to decide whether they want marijuana-related activities to be sanctioned within their jurisdictions considering the societal and revenue impacts of the products. And the state may be looking at $1 billion annually in new state revenues as a result of Prop. 64.

Chris Micheli is an attorney and legislative advocate with the Sacramento governmental relations firm of Aprea & Micheli. He can be reached at (916) 448-3075.

Legalized Marijuana Edges Closer to Reality

Buds are removed from a container at the "Oregon's Finest" medical marijuana dispensary in Portland, Oregon April 8, 2014. Over 20 Oregon cities and counties are moving to temporarily ban medical marijuana dispensaries ahead of a May deadline, reflecting a divide between liberal Portland and more conservative rural areas wary about allowing medical weed. Portland, Oregon's largest city, already has a number of medical marijuana clinics and has not moved to ban them. Picture taken April 8, 2014. REUTERS/Steve Dipaola (UNITED STATES - Tags: DRUGS SOCIETY POLITICS HEALTH) - RTR3KMHE

Despite a mixed bag of support for the many propositions on California’s voluminous ballot, legalized recreational in-state marijuana use appears to be headed from far-off dream to dawning reality.

“Last month, the two most prestigious California public opinion outfits — the Field Research Corporation and Public Policy Institute of California (PPIC) — both pegged support for Proposition 64 at 60 percent,” Ed Kilgore noted at New York Magazine. “Field nostalgically noted that its first poll of California on the subject, in 1969, showed only 13 percent support for legalization. A new PPIC survey in October showed legal weed pulling a mere 55 percent with 38 percent opposed. That’s still a 17-point margin. Indeed, there has only been one bad poll for Proposition 64.”

A decisive year

Although California has long been forced into the role of bellwether state by policy activists hoping to go national with Golden State victories, broader change in a pro-pot direction has been largely recognized as nearly inevitable given the sheer size of the market for pot that Prop. 64 would legitimize and expand. “Californians are on the verge of tripling the number of American adults who can legally acquire marijuana without interference from doctors, dealers or cops,” Reason magazine’s Matt Welch observed at the Los Angeles Times. “If Maine and Nevada voters do likewise, as seems probable, that would further expand the zone of recreational freedom to cover nearly one-fifth of the U.S. population.”

Pro-pot advocates have cast a broad net this election season. “Voters in five states — Arizona, California, Maine, Massachusetts and Nevada — will decide whether to legalize recreational marijuana for adults,” as NBC News reported. “Medical marijuana is on the ballot in Arkansas, Florida, Montana and North Dakota.”

“Two national surveys released in mid-October confirm that, with the Pew Research Center revealing that 57 percent of U.S. adults say the use of marijuana should be made legal — while 60 percent were opposed a decade ago. The latest Gallup Poll showed that support for legalizing marijuana is at 60 percent, the highest ever recorded in this survey. After Colorado and Oregon became the first states to allow the recreational use of pot, in 2013, support for legalization reached a majority for the first time.”

Business first

Entrepreneurs have already begun a rush to fill current and perceived appetites for a new generation of recreational weed products and services. “Startups are cropping up throughout the Bay Area that put a signature Valley spin on the age-old practice of selling marijuana, offering sleek on-demand delivery apps for users and high-tech software for growers and dispensaries,” the San Jose Mercury News recently noted. “The business models are risky — marijuana is illegal under federal law and stigma around the drug prevents cannabis startups from scoring funding from many major investors. But with recent polls suggesting Californians are poised to expand marijuana consumption beyond medical use, experts expect cash to pour into the industry.”

Already, changes to state law governing how licenses are granted to new marijuana businesses have helped open the floodgates. “New pot businesses have been springing up under medical marijuana licensing rules signed into law by Gov. Jerry Brown last year,” the Sacramento Bee reported.

Jump ball

Analysts have remained divided, however, on the partisan implications of legalization. While many traditional Republican critics have suggested that more permissive drug laws are of a piece with an expansive entitlement state, libertarian supporters like Welch have countered that more free-market innovations are likely to follow in Prop. 64’s wake. “What’s the 2016 equivalent of medical marijuana shops?” he asked. “Charter schools come quickly to mind. Wherever the one size is not fitting all to the end user’s satisfaction, there is an opportunity for governmental bodies to allow for some real or metaphorical outside lab work. Beware any entity that would prematurely close such experiments down.”

This piece was originally published by CalWatchdog.com

Pot tax goes down in flames in California Legislature

As reported by the Los Angeles Times:

A bill to put an excise tax on medical marijuana in California was killed Thursday by a Senate panel after advocates for cannabis users said it would put a financial burden on patients.

The Senate Appropriations Committee shelved AB 2243 with knowledge that California voters will consider a 15% pot tax on Nov. 8 when they take up Proposition 64, which would also legalize recreational use of cannabis.

The legislation by Assemblyman Jim Wood (D-Healdsburg) would have charged up to $9.25 per ounce of marijuana flowers, $2.75 per ounce of pot leaves and $1.25 per ounce of immature pot plants.

Wood said the funding is needed to help cover enforcement and environmental costs under a new system approved last year that will license the growing, transport and sale of medical marijuana. …

Click here to read the full article

Legalizing Marijuana … While Cracking Down on Tobacco

cigarette smoking ashesGovernor Jerry Brown just signed a package of tobacco regulatory bills sent to him by the California Legislature which is being billed as a “major victory for public health.”

Among the bills signed yesterday, was an increase in the age at which one can consume tobacco products from 18 to 21 and banning the use e-cigarette vaporizers in public places.

What is the point? In case the Legislature has not gotten the memo, the state is poised to legalize the recreational use of marijuana in California on the November 2016 ballot. So we’re legalizing marijuana but cracking down on tobacco – doesn’t that strike anyone around the Capitol as being a bit odd.

Based on polling, we know the public’s favorability of legalizing marijuana has dramatically increased over the last several decades. But is there is there any evidence that the California public is now all of a sudden demanding tougher tobacco regulation? I don’t think so.

As for controlling the use of tobacco by minors, the California Legislature is about 30 years too late. This type of legislation may have mattered in 1988 when California voters passed the first of its kind Prop. 99 which increased taxes on tobacco to fund public health programs. At that time, the Legislature was completely captured by the tobacco industry, and it has taken about 40 years to wean state lawmakers off campaign contributions from “big tobacco.”

Prop. 99 was found to have significantly reduced tobacco use and fatalities in California. At this time, public health advocates were calling for the California Legislature to send a message to the tobacco industry to quit targeting are kids and do something about the tobacco epidemic.

But 30 years later, this type of restriction is basically meaningless, and done more for appearances than any actual public policy benefit.

In the meantime, the Legislature has collected large amounts of tobacco campaign contributions, most of it funneled through the California Democratic Party, for a very long time. And now that those campaign contributions are starting to dry up, they decide it is now time to “get tough on tobacco.”

This is another example of the California Legislature trying to create a major legislative victory out of nothing, so it looks like they are doing a good job on policy issues such as “protecting public health,” and “standing up to big tobacco” in the run up to the 2016 election.

The reality is that raising the smoking age will not do much if anything to curb tobacco use. Research shows that most kids start smoking before age 18, and that restricting use to age 18 is not effective at preventing use to begin with.

According to the National Survey on Drug Use and Health, more than 80 percent of all adult smokers begin smoking before the age of 18; and more than 90 percent do so before leaving their teens.

So what’s the Legislature’s solution, increase the smoking age to 21, even longer after teens have already started smoking. Moreover, making it illegal to smoke could even enhance its appeal to teens, and serve to be counter productive.

As for banning the e-vaporizers in public. These are intended to help people stop smoking by providing a smoke-less alternative. The smoking cessation industry has already criticized the banning of these instruments as being counterproductive to reducing tobacco use.

In California, individuals are considered to be “adults” at age 18, so why shouldn’t they be able to make their own decisions at that age regarding tobacco use. Does the California Legislature really need to tell legal adults everything that they should and should not be doing?

The last thing California needs is the California Legislature trying to act as the “responsible adult” on every marginal issue. Adding insult to injury, is California lawmakers “declaring victory” against an industry that has been one of their core supporters for the last 40 plus years.

Kersten Institute for Governance and Public Policy

This piece was originally published by Fox and Hounds Daily