Cary Coglianese and Nancy Nord of the University of Pennsylvania Law School organized a panel called “The Cannabis Conundrum: An Experiment in Federalism or States’ Rights Run Amuck?” with Peter Conti-Brown of Wharton talking about banking regulation and Judge James Colins of the Commonwealth Court talking about a case brought against the Commonwealth by some unsuccessful applicants for growing and distribution licenses under Pennsylvania’s new medical-marijuana program. I’m on (from about 9:45 to about 26:45, aka “too long”) talking about how the states are screwing up legalization and only federal legalization can unscrew it.
Today I had the pleasure and honor of testifying before the Foreign Affairs Committee of the Canadian Senate. It really was a pleasure; the Senators asked precise and perceptive questions and avoided speechifying.
In my oral presentation, I stressed the idea that cannabis prohibition is no longer operationally feasible in the U.S. or Canada, and that we can get the drug under better control if we recognize that fact and create a well-designed system of legal availability, where by “well-designed” I mean a system crafted to provide convenient access to safe and properly labeled cannabis for moderate use by adults, without creating either a commercial industry or a revenue-hungry public enterprise. Any entity devoted to making money from cannabis sales will by its nature be devoted to the spread of cannabis use disorder, since temperate majority of cannabis users are of little commercial value compared to the minority of very heavy users, who account for more than 80% of sales.
Full text after the jump.
“Burying the lede” is what journalism teachers call it when the key fact in a story doesn’t make it to the first (“lede”) paragraph but instead gets “buried” somewhere down in the story.
Of course, scientists can make the same mistake: breathlessly reporting routine findings while ignoring what’s surprising or important. Consider, for example, this week’s report from the Colorado Retail Marijuana Public Health Advisory Committee. The authors report relatively encouraging news about the public-health impacts of legalization: cannabis use among adults and minors is high relative to other states, but there’s no observable increase after the opening of retail adult-use stores. The spike of emergency department visits due to edibles seems to have come back to earth.
But neither the report itself, nor the news stories I’ve seen about it, makes much of a fuss about what looks to me like the headline finding: (from p. 4 of the report):
In 2015, 6% of adults reported using marijuana daily or near-daily. This was lower than daily or near-daily
alcohol (22%) or tobacco use (16%). Of 18- to 25-year old marijuana users, 50% report using daily
or near-daily (13% of all 18- to 25-year olds). Among adult past-month marijuana users, 79% smoke, 30%
â€œvapeâ€ and 33% use edibles. Respondents could report using more than one method, which 50% of users
did. Finally, approximately 2% of adults drove a vehicle in the past 30 days after using marijuana.
In case you didn’t notice it: 50% of cannabis users between 18 and 25 use every day or almost every day. (The report defines “daily or near-daily use” as self-reported us 5 to 7 days per week.) We know from other studies by Beau Kilmer and his group at RAND that daily/near-daily smokers consume about three times as much cannabis per use-day as less frequent smokers, enough to be measurably impaired (even if not subjectively stoned) for most of their waking hours. That turns out to be 13% of the entire population of young adults. The National Survey on Drug Use and Health finds that about one-half of daily or near-daily smokers meet the diagnostic criteria for Substance Use Disorder. That’s a frightening share of users, and of the total population, to be engaging in such worrisome behavior.
The comparison with daily use of alcohol and tobacco seems vaguely reassuring: daily cannabis use is less common than daily use of the two others drugs. But that’s a false reassurance, because the behaviors aren’t directly comparable. Tobacco, of course, isn’t an intoxicant at all. Alcohol certainly is, but as sociological (not pharmacological) fact most drinking activity is not to the point of intoxication: most people who have a drink or two, even every day, just have a drink or two: they don’t intend to get drunk, and they don’t in fact get drunk. The scientific literature has a technical term for getting drunk: it’s called “binge drinking,” and is usually defined as four or more drinks at a sitting for a woman, five or more for a man (to allow for gender differences in weight). Binge drinking is a hell of a lot more common than you’d like it to be: about half of all drinks are consumed as part of drinking binges. But it’s still relatively rare.
Cannabis, by contrast – again, this is sociology, not pharmacology – is, under U.S. conditions and practices, usually used to intoxication, as the common terms indicate: “getting medicated,” “getting stoned,” “getting wrecked.” Yes, it’s possible to take a puff or two before a dinner or a concert, or at a party, to enhance the enjoyment of food, music, and companionship, but that’s not in fact the way U.S. consumers typically take the herb. Of course, some of those daily and near-daily users aren’t getting stoned every time they use; their tolerance for THC has developed to the point where smoking just makes them feel normal. Unfortunately, all the studies show that objective impairment – reduced performance on a range of cognitive and motor tasks – can be present even when subjective intoxication is absent, and in fact impairment generally lasts longer than the feeling of being high.
And yet the prevalence of heavy use doesn’t even make it to the report’s list of “trends to continue monitoring” (i.e., things to worry about), and doing something to bring that prevalence down fails to make the list of recommendations.
More and more people using cannabis more and more often is a trend that pre-dates legalization and is not restricted to states that have legalized. Between 1992 and 2014, as Jon Caulkins calculated, the share of cannabis users who are daily or near-daily more than quadrupled nationally, from 9% to 40%. It’s not clear how much Colorado’s retail non-medical legalization in 2012, or the establishment of retail medical outlets in 2009, or legalization for medical use in 2000, influenced the current prevalence there.
What is clear is that lower prices (Colorado retail bud is now down to about $6/gramÂ and headed lower) and aggressive marketing – both accompaniments of cannabis legalization as it’s currently being pursued, though not of alternative legalization proposals – make it easier for users to slip into heavy daily use. Indeed, that’s the main – some of us would say the only significant – risk of legalization. That risk could be reduced by using taxes to prevent the price collapse Â So a report on the effects of legalization that neglects heavy use is like a review of the last performance of “Our American Cousin” that doesn’t mention John Wilkes Booth.
The Sean Parker/Gavin Newsom Adult Use of Marijuana Act has now qualified for the California Ballot this November. The measure â€“ 62 pages of legal prose â€“ has many provisions, but only a few of them are directly relevant to what seems to me ought to be the central goal here: making cannabis available for moderate use by adults while minimizing the growth of cannabis use disorder and preventing an increase in the number of adolescent users or a fall in the median age at first use (now 15-16).
The proposition provides for:
- Full commercial legalization, plus home-grow of up to six plants per household;
- Licensed production and sale, but no provision allowing the state to manage the quantity produced;
- A tax of $9.75 per ounce (33 cents per gram) of flowers, plus a 15% sales tax on the retail price (in addition to ordinary sales tax);
- Bans on direct sales to minors and possession by minors
- A nominal ban on marketing to minors (except through channels mostly consumed by adults);
- A ban on false advertising, but no requirement that advertising contain warnings;
- No required vendor training or prevention activity by sellers;
- No option for users to limit the amount of cannabis they can be sold in the course of a month;
- Required quantitative labeling for chemical content;
- Anodyne warning labels, not mentioning the risk of cannabis use disorder;
- Money for prevention and treatment;
- Money to run the regulatory system;
- No money for enforcement against the legacy illicit market;
- A three-tier license system (i.e., a system that requires a distributor between the grower and the retailer, as in the beer industry);
- Permission for home delivery.
There are also a number of provisions â€“ including one that restricts licenses to those who have been California residents since the beginning of 2015 â€“ designed to protect or enrich various incumbent players in the cannabis industry.
The key provisions in terms of preventing substance use disorder are the ones dealing with production, taxation, and marketing. All of those provisions favor the expansion of the market at the expense of public health. Unlimited production guarantees that farmgate prices will settle down at something below $1 per gram; add to that 33 cents in excise and a 15% sales tax, and the result will be prices Â substantially lower than those in Washington State, where some stores now offer highly potent cannabis (claimed to be 18% THC by weight) for $95/ounce. Thatâ€™s less, in inflation-adjusted terms, than my college classmates were paying around 1970. And today’s material is about 4-6 times as strong as what they were buying then.
To put it differently: A typical joint contains about 0.4 gram of cannabis. $95/oz. is $3.50/gm. So a joint of â€œUncle Ikeâ€™s Budget Budâ€ in Seattle has about $1.40 worth of cannabis in it. At 18% THC – aka “one-hit weed” – that should get three naÃ¯ve users wrecked out of their gourds (if youâ€™ll allow me the use of technical terminology) for about three hours each. That comes to about 15 cents per stoned hour, making cannabis far more cost-effective than even very cheap beer on a per-hour basis.
Under the proposed law, expect to see California weed even cheaper than that within three years. (That would probably displace illicitly-grown California product in the still-illicit interstate trade; why should a dealer in St. Louis bother with buying bulk weed when he can get packed, tested, labeled product for $1600/lb. just by sending out some smurfs?)
At current national average pricing â€“ about three times the â€œBudget Budâ€ level â€“ the rate of cannabis use disorder has already soared. In 1992, about 10% of people who reported using cannabis the past month reported having used it on 25 or more days that month. That number is up to 40%. Of those daily/near-daily users, about half â€“ by their own self-report â€“ meet diagnostic criteria for cannabis use disorder: theyâ€™re using more frequently and in greater quantity than they intend to, theyâ€™ve tried and failed to cut back, and they find that cannabis use is interfering with other things they care about and causing conflict with significant others in their lives. Just over 4 million residents of the U.S. currently report meeting those criteria. (Arenâ€™t you glad you know that cannabis is natural and non-habit-forming? Because if you didnâ€™t know that, you might not be able to guess it from the actual data.)
If someone wanted to write a law to increase the prevalence of that problem, it would look a lot like the Adult Use of Marijuana Act. In other words, this is horrible, awful, very bad, no-good drug policy.
But it’s obviously going to pass. A solid majority of Californians wants legal cannabis; this is a much better written piece of legislation than Proposition 19, which almost passed in 2010; it will have more-than-adequate funding; itâ€™s supported by respectable people, including the Lieutenant Governor; and itâ€™s on the ballot in November of a Presidential year, which will maximize turnout, especially among younger voters who are most enthusiastic about cannabis legalization.
The only thing that could have stopped this law, or one like it, from being written into the statute books by the voters would have been for the Governor and the Legislature to pre-empt it by legalizing in some more public-health-friendly way. But the Governor has his political head stuck in 1980, and legislators donâ€™t want to fall foul of police and prosecutors. So they chose â€“ as a majority in Congress is now choosing at the national level â€“ to let the political process walk us step by step toward truly lousy policy, rather than standing up, taking some heat, and doing their jobs.
That leaves the voters with a choice between the existing unworkable quasi-legalization in the form of a corrupt “medical marijuana” system and a formal legalization designed to make the drug problem worse.
I’m glad I left.
The harvest is in, and ounces of 10%-THC cannabis are selling for $200 at commercial retail outlets in Washington. (Figure roughly 70 joints to the ounce, and at least 3 stoned hours per joint, so the cost of intoxication is roughly $1 per hour.) That price is fully competitive Â with both the illicit market and the medical market.
This was utterly predictable, as I know because my RAND colleagues predicted it. So much for the argument that Washington’s taxes were too high.
What is also predictable is that prices will continue to drop, both in Washington State and in Colorado, unless the authorities start to limit production volume. $200/oz. would be a fairly reasonable price target; anything much lower than that risks a big increase in heavy use and underage use. (Of course there’s no way to keep the stuff from leaking from adults, who are allowed to purchase, to minors, who aren’t.)
Falling prices are also bad news for all the folks who thought they were going to get rich selling a newly legal product at the old, illegal prices. No such luck.
Last year, the Vermont legislature asked the Vermont governor for a report on the options for legalizing cannabis. The governor’s office hired RAND to do the research. That report is now public. (I’m listed as the third author for alphabetical reasons, though I doubt I did as much as 2% of the enormous amount of work that went into it.)
The Vermont process holds out great promise, because the normal legislative process – ugly as it can be – has the possibility of producing a result much more nuanced and more carefully considered from multiple viewpoints than the initiative process, under which propositions are drawn up by advocates with the advice of pollsters, no one ever holds a hearing, and any idea that can’t be explained in a 30-second TV spot has to be dropped. The key point of the RAND report is that there are legalization options other than full commercialization. Â Niraj Chokshi of the Washington Post “GovBeat” blog provides an excellent summary.Â
The key design question – this is my view rather than the one expressed in the report, which is scrupulously neutral – is how to make cannabis legally available for use by adults and wipe out the illicit market while at the same time minimizing the growth in use by minors and in the number of people with diagnosable cannabis use disorders (currently about 4 million people nationwide, about 10% of past-year users, 20% of past-month users). There are many ways to skin that cat, but I doubt that commercialization is the best approach.
But however you come out in the end, the major contribution of the report is to break through the simple prohibit/legalize dichotomy and display the wide range of options we have to choose from. Â
John Buntin at Governing looks to the development of alcohol policy after Prohibition for cautionary lessons about the future of the legal commercial cannabis industry, and some alternatives to that future. It’s the kind of solid, thoughtful reporting that isÂ Buntin’s hallmark, and well worth a read.
Ballot initiatives are a terrible way to make policy changes when the technical details matter. Despite the simple-minded sloganeering on both sides, the question of creating a legal cannabis market is about as technical as they come, with equally valid public goals in sharp conflict, many unknowns, a variety of tricky design issues, and some big risks.
But sometimes initiatives are the only way to go, because legislators simply wonâ€™t do what a majority of voters want.
Cannabis legalization is that sort of issue, too: legislators are scared of cops and prosecutors, and most cops and prosecutors really hate legalization.
In Oregon, advocates went to the legislature and said, â€œWe can and will put legalization on the ballot unless you handle the issue.â€ The legislature didn’t move. So the advocates acted on their threat, giving us Measure 91.
What they produced is noticeably less crazy than the measure that failed in 2012: for example, the quotation from the Book of Genesis about â€œherb bearing seedâ€ is missing. Â It seems to reflect a good-faith effort to craft a law that will allow adults to get cannabis, wipe out the illicit market, provide some revenue, and prevent a big increase in use by minors.
But Measure 91 does not reflect a sophisticated understanding of the problems of illicit markets or a nuanced view about substance use disorder. Focusing on the goal of eradicating the illicit cannabis market in Oregon, it doesn’t pay enough attention to the risk that Oregon might become a source of illicit supply to neighboring states. Focusing exclusively on preventing use by minors, it neglects the risk of increasing dependency among adults.
The basic fact about a legal cannabis market is that the product will be remarkably cheap to grow; once competition and industrial-style production have taken effect, Â a legal joint would cost (before tax) about what a tea-bag costs, rather than the illegal or medical-dispensary price, which is 100 times as high. And the tax provided for in Measure 91 would add only about 50 cents to the price of a joint: not a high price to pay for two hours or more of being stoned.
Lower prices wonâ€™t much change the behavior of adult casual users; even at todayâ€™s illegal prices getting stoned is a bargain compared to getting drunk.Â But lower prices would matter a lot to frequent users, and most of all to frequent underage users, simply because what they spend on pot represents significant element in their personal budgets: at current prices, the cost of a heavy cannabis habit can exceed $5000 per year.
Of course the claim that barring minors from buying in cannabis stores will keep them from having access to diverted supplies doesn’t pass the giggle test: just consider how easy it is for a minor to get alcohol from an older friend or relative or from the poor heavy drinker hanging around the liquor store, willing to buy a case for a teenager as long as he gets to keep a couple of bottles for himself. Cheap cannabis for grown-ups inevitably means cheap cannabis for kids.
Unless the legislature decided to raise it, the $35-per-ounce tax in Measure 91 would lead, within a couple of years, to prices way below current illicit prices and way below legal prices in Washington State. That in turn would mean big increases in use by minors and in the number of Oregonians with diagnosable cannabis problems. It would also mean substantial diversion of cannabis products legally sold under Oregonâ€™s low taxes to Washington, where taxes are much higher. (Currently the flow goes the other way, with the two biggest-selling legal cannabis stores in Washington being the two closest to Portland.)
It wouldnâ€™t be hard to draft a better-balanced measure than the one to be voted on in two weeks. For example, it might be wiser to limit legal production and sale to co-ops or non-profits, keeping the profit motive out of the business altogether.
But the choice Oregon voters face isnâ€™t between whatâ€™s on the ballot and some perfectly designed cannabis policy; itâ€™s between whatâ€™s on the ballot and continued prohibition at the state level, until and unless a better initiative can be crafted, put before the voters, and passed into law.
Measure 91 would enact an ordinary law, not a constitutional amendment. If it passes, the legislature will be free to amend it the next day by a simple majority vote; such moves are allowed not only by law but by the conventions of Oregon politics.
So the question facing Oregonians who want adults to be able to buy cannabis legally â€“ without the nonsense of finding a â€œkush doctorâ€ and faking an ailment â€“ is whether to defeat the proposition and hope that the legislature will act on its own (or that a better-drafted bill will appear on the ballot in 2016) or whether instead to pass the current proposition and hope that the legislature will move to fix whatâ€™s wrong with it.
Given the balance of political forces, it seems more reasonable to trust the legislature to rein in a too-lax legalization scheme than to expect it to do what no legislature in the nation has been willing to do yet: pass a full cannabis-legalization law.
Itâ€™s not hard to identify the key points that need amendment, within the context set by the initiative: cannabis sold by a set of for-profit enterprises under state regulation. (That leaves aside such interesting ideas as just letting consumers grow their own, or requiring that growers and retailers be not-for-profit co-ops or public-benefit corporations, as well as the alternative of state-monopoly retailing, which has some attractive features but canâ€™t be done while the federal Controlled Substances Act is in place, because the state canâ€™t tell its officials to violate federal law.)
* Recognize preventing adult substance use disorder among the goals of the law.
* Assign some of the regulatory authority to the health department rather than giving it all to the revenue department.
* Give the regulators explicit authority to restrict the quantity of cannabis that can legally be grown. (Ideally, growing rights ought to be auctioned off rather than given away, giving the financial windfall to taxpayers instead of to the lucky few who end up with licenses.) * Increase the proposed taxes, and make them adjustable to keep legal prices at about the current illegal level as production costs fall. In the end, to prevent a big price decrease, the tax would have to be a very large fraction of the current illegal or quasi-medical price of about $10/gram. Â Ideally, taxes would be based on the intoxicating power of the product â€“ measured in milligrams of THC, the primary active chemical â€“ rather than on the total weight of the plant material. (We tax whisky more heavily than beer or wine; why shouldn’t cannabis taxation work on the same principle?)
* Require that retail clerks have some serious training in pharmacology and substance use disorder, and make it part of their job to discourage excessive and dangerous consumption patterns, rather than letting their bosses just tell them to sell as much product as they can.
* Make sure thereâ€™s enough enforcement against illicit growing and dealing to make the legal market competitive.
* Rein in the medical-marijuana business. Once Oregonians with medical need can buy tested and labeled product at commercial outlets, thereâ€™s no need to have an entire parallel distribution system. It makes sense to offer tax exemptions for limited quantities to genuine patients, but the current practice of â€œpatientsâ€ buying â€œmedicalâ€ supplies for illicit resale has to stop.
There are lots of other good ideas around. (See the forthcoming RAND report on legalization options for Vermont.) But those will do for a start.
Would the legislature pass them all? Probably not. But Oregonâ€™s chances of getting to a temperate cannabis policy will be better if the voters force the legislators to get off the dime.
Itâ€™s not an easy choice; as a Californian, Iâ€™m glad I donâ€™t have to make one like it (yet). But if I had to vote in Oregon, Iâ€™d vote â€œYes.â€
Neither deals seriously with the balance of advantage and disadvantage; the Times simply blows off the question of substance use disorder and pretends that passing a law forbidding sales to minors takes care of the problem of increased use by minors, while Frum never mentions the damage done by the $40-billion-per-year illicit market created by cannabis prohibition and proposes nothing that would shrink that market.
And neither the Times editorial board nor David Frum seems interested in the question of how to legalize, as opposed to whether to legalize. The Times doesn’t notice that commercialization is only one approach to legal availability, and arguably not the best; Frum simply dismisses a temperate approach to legalization as politically unworkable, without explaining how to make his kinder, gentler prohibition a political winner.
Alas, I sometimes suspect they’re both right. As a matter of practical politics, our only choices may be a badly-implemented prohibition or a badly-implemented legalization. Â (If so, I’m inclined to try the Devil I don’t know.) Â So far, my attempts to put political and organizational muscle behind the idea of smart legalization have merely illustrated the wisdom of Ralph Yarborough’s maxim, “They ain’t nuthin’ in the middle of the road but yaller lines and dead armadillas.” Â I don’t find life as political roadkill especially uncomfortable, but it does get frustrating. It’s not just that continued prohibition and commercial legalization are both bad ideas; it’s that the arguments for those two bad ideas leave no media space, or mindspace, for discussion of the good ideas that might lie between them.
Footnote Ann Althouse does a good demolition job on the Times editorial, though to the best of my knowledge there’s no evidence of intoxication or health damage from second-hand cannabis smoke or vapor.