Legalized Pot in California: No Gold Rush, No Cash Cow

There’s no way I will associate myself as a parent first, and as a public servant second, with something that is loosely drafted, that is looking to capitalize on the next California Gold Rush.
Lt. Gov Gavin Newsom

Our Blue Ribbon Commission on Marijuana Policy released our final report today (link here). The report is not an argument for or against legalization but a discussion of what the policy consideration should be if in fact California’s voters choose to legalize recreational marijuana. Gavin’s quote hits one of the key themes of the report, which is that protection of public health is more important than money generation (whether that money is corporate profits or state tax revenues). In America, public health only has a shot against big money if regulations are strong and the oversight process allows public input rather than being a cat’s paw of industry (As Oregon unfortunately has and Ohio might also adopt).

Relatedly, we advocate ongoing policy flexibility rather than a ballot initiative that sets everything in stone up front. The experience of other legalizing states shows that some anticipated problems don’t in fact occur whereas other things go unexpectedly pear-shaped. Because none of us can see the future with complete accuracy, any marijuana regulatory process will have to be dynamic and evolutionary in response.

The Hows of Marijuana Legalization

weed Americans have expended tremendous energy debating the why/why not question of marijuana legalization. In contrast, little attention has been given to the hows of marijuana legalization, e.g., would a legal industry be for-profit or non-profit? How and at what level would it be taxed? How would it be regulated? The hows matter enormously. Indeed, once they are spelled out, some people who think they are against marijuana legalization realize that they could support it, and some people who think they are for marijuana legalization realize that they don’t want it after all.

The California Blue Ribbon Commission on Marijuana Policy was set up by the Northern California ACLU to dig into the hows of marijuana legalization. The Commission is not itself going to write a marijuana legalization ballot initiative nor is it going to oppose or endorse any that are written by others. Rather, we are a mix of a think tank and a public education enterprise, encouraging the public to consider carefully what marijuana legalization might look like if it were adopted in California. Everyone is welcome to attend the public events of the Commission as well as to send in their thoughts directly through our website.

My fellow commissioner Professor W. David Ball and I were recently on KQED Forum to discuss the Blue Ribbon Commission’s work. Listening to the broadcast will give you a flavor of the issues with which Californians will have to grapple as they consider the 2016 marijuana legalization ballot initiative(s).

Congress meddles in DC cannabis policy. Bad move. Good results?

No, Congress shouldn’t have meddled in DC home rule by blocking the city from legalizing cannabis on the alcohol model. But the result is to leave in place the “Grow and Give” system the Washington voters approved. On its merits, that system deserves a trial, and we should watch the results closely

Jamaican government proposes non-commercial legalization of ganja

Mark Golding is the Jamaican Minister of Justice. Below the fold is the text of a press release from his office about legislation that would decriminalize of cannabis possession and legalize its production and sale for medical use and for use in Rastafarian religious observance.

In addition, the fine print:

Permits the cultivation of five or less ganja plants on any premises, which will be regarded as being for medical or therapeutic use of the leaves or for horticultural purposes

In other words, the proposal is for complete but noncommercial legalization.

Key sentence:

The system of complete legal prohibition of ganja in Jamaica has been in place since 1948, has not worked and is no longer considered fit for purpose.

Note the cross-national difference in terminology: to “table” a bill means to offer it, not to defer its consideration. Also note that under a parliamentary system, a Cabinet bill is likely to become law without much modification.
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Rob MacCoun on growing your own cannabis legalization

Stop right now and read Rob MacCoun’s essay on cannabis legalization. Whether or not you’re actually interested in the issue – more exciting than it is important – Rob’s piece shows how policy analysis is done. In particular, he focuses on what advocates almost always deny: the fact that policy choices involve tradeoffs among competing values.

Let me offer one technical amendment to what Rob says: in my view, high taxes – as long as they allow prices close to current illicit prices – will decrease health risk and also increase revenue.

Legalizing pot carries risks. So does prohibition.

As predicted, the Wall Street Journal refused to correct the Bennett/White op-ed that strongly implied (without quite stating explicitly) that I believe cannabis legalization would sextuple the rate of cannabis dependence to 16.2 million. (My previous whining about that here.) However, the Journal did publish my letter, with only helpful edits and an accurate headline that’s a pretty good haiku-length statement of the case.

Like the original article, the letter is behind a paywall, so – on the off chance that some RBC readers don’t pay tribute to the Murdoch empire – I’ve pasted it in below.

 

Legalizing Pot Carries Risks, but So Does Prohibition

To the Editor:

William Bennett and Robert White (“Legal Pot Is a Public Health Menace,” op-ed, Aug. 14) cite my research as support for their claim that the legalization of cannabis would mean creating 16.2 million “marijuana addicts.”

Not only is the attribution false; the claim it purports to buttress is absurd. I made no such prediction, and the idea that legal cannabis could create more addicts than legal alcohol doesn’t pass the giggle test. It would be astounding if the actual number were one-third as high as Messrs. Bennett and White project

Cannabis legalization on the current alcohol model—low taxes and loose regulations—would indeed risk a large increase in the extent of cannabis abuse. That is why some of us are working hard for high taxes and sensible regulations on cannabis, as well as stronger controls on alcohol, which is after all a much more personally and socially dangerous drug.

Cannabis legalization in any form will create some harm; every drug policy has disadvantages. But against that must be set the enormous harms from cannabis prohibition: $40 billion a year in illicit revenue, some of it going to violent criminal organizations in Mexico; tens of thousands of people in prison; and more than half a million users arrested each year.

Our goal should be to eliminate as much as possible of the damage from prohibition while minimizing the harms that would result from a badly designed legalization.

Mark Kleiman

Los Angeles

16.2 million cannabis addicts? No, of course I didn’t say that. Bill Bennett just made it up.

In his latest anti-cannabis-legalization screed, (behind the Wall Street Journal paywall), written with a former federal prosecutor named Robert White, William Bennett writes:

Mark A.R. Kleiman, a professor of public policy at the  the university of California, Los Angeles, has estimated that legalization can be expected to increase marijuana consumption by four to six times. Today’s 2.7 million marijuana dependents (addicts) would thus expand to as many as 16.2 million with nationwide legalization.

Now, if Bennett wants to make silly predictions, and if Rupert Murdoch wants to publish them, all I can say is, “It’s a free country.” But I think I’m entitled to protest when he attributes that silliness to me. It’s hard to count how many ways that short paragraph is wrong, but the central points are simple:

1. An estimate of the possible change in quantity consumed is not an estimate of the change in the number of dependent users. Consumption can also grow because the amount consumed per dependent user increases.

2. Even most dependent users are not, by any reasonable definition, “addicts.”

3. The large estimated impact on consumption depends the  factor-of-ten price decrease (to about $1-2/gm. for moderately potent product) that would result if cannabis were treated like an ordinary commodity. If taxation or production limits prevent such a drastic decrease, the effect of legalization on consumption would be much smaller.

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Three Ways of Looking at Marijuana Consumption Data

Here’s a nice chart from Andrew Sullivan on marijuana consumption in Colorado. It illustrates a point that has been made many times by drug policy analysts such as Mark Kleiman and Beau Kilmer: The total volume of pot consumption is accounted for almost entirely by users who smoke every day or nearly every day. Envisioning how different stakeholders would respond to this evidence can be helpful both for appreciating the impossibility of value-free evidence-based policy and for understanding one of the basic dilemmas of legal marijuana regulation.

colorado

AT THE PUBLIC HEALTH CONFERENCE: “Colleagues, you can see from this chart that not all marijuana users are of equal concern to us. Some people use the drug rarely, and we know that such users tend to be high social capital individuals who could set their lives right in the unlikely event that they did develop a drug problem. So we should focus instead on these heavy users in the bottom two bars of the chart, who tend not incidentally to be people with less education, less income and poorer access to health care. The evidence we have shows that the primary risks of this drug, for example marijuana dependence, mental health problems and poor school and work performance, are concentrated in the subset of people who use every day or almost every day. Let us therefore resolve to keep the size of this group as small as possible through high taxes that discourage heavy consumption, caps on THC content that reduce the ability of the drug to promote dependence and limits on advertising and points of sale in vulnerable communities.”

AT THE CORPORATE BOARD MEETING: “Well friends, you can see from this chart that not all of our customers are of equal concern to us. We can’t make much money from the people in the top few bars of the chart, so we should focus mainly on the heavy users who provide us the bulk of our revenue. We need to move as much of the population as possible into this high-revenue bracket. So let’s all agree to press for lower taxes, higher THC content and as much advertising and as many retail locations as possible in the communities where our best customers tend to live.”

AT THE STATE LEGISLATURE: “Fellow committee members, as you know we have seen this chart twice today, once when the public health advocates visited and again when the marijuana industry lobbyists visited. Both groups agreed on the evidence but they wanted us to respond to it in opposite ways. And that’s not the end of what we have to consider. The state budget analyst’s office has calculated that almost 90% of the marijuana tax revenue we wanted from legalization comes from the people in the bottom bars of this chart. We care about public health but if we implement policies that make too many of those heavy marijuana users quit, the tax revenue hit we will take might force us to sacrifice other important priorities.”

HRC talks to CNN about MJ

A CNN interviewer asked Hillary Clinton about cannabis policy.

On medical use, she replied that we need more research, including research about drug interactions, but in the meantime people with serious medical conditions where there’s “anecdotal evidence” of efficacy ought to have access.

On non-medical (“recreational”) use, she said that the states are the laboratories of democracy, that two states are trying legalization, and that we should wait and see how that goes.

Perfectly reasonable answers, as far as they went, and perhaps a little bit more pro-cannabis than I might have expected from such a cautious candidate.

But they cried out for follow-up questions:

1. As President, what would you do to promote medical research on cannabis and cannabinoids? Would you tear down the barriers to research now created by federal policy: in particular, the UMiss monopoly on cannabis for research purposes and the requirement that every study receive a “grant” of cannabis from a special committee within HHS?

2. While the states are doing their experiments, to what extent should the federal government help, or at least get out of the way? Colorado and Washington are now issuing state licenses to commit federal felonies. Current banking regulations make it difficult-to-impossible for cannabis stores to have bank accounts or to take credit cards, creating a huge all-cash business that is therefore an attractive robbery target. A state that wanted to experiment with state-monopoly retailing (arguably the best approach) would currently be barred from doing so by federal law. As President, would you propose changes in the Controlled Substances Act to make state-level experiments legal?

Instead, of course, the CNN interviewer asked her whether she intended to inhale. Arrrgggghhhhhh!

How long is it going to take for the press corps to stop giggling about cannabis policy and start reporting on it?