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.
Carl Sagan loved to talk about “billions and billions”
This scale of reference matters significantly for understanding cannabis, a drug which Americans use billions and billions of times a year. The implications are in my latest piece at Washington Post’s Wonkblog.
Since I don’t vote in Arizona (though, as it happens, I was born there) I hadn’t studied the details of the cannabis-legalization propositionÂ which will appear on the ballot there this fall. So when the Sandra Day O’Connor Institute invited me to join a panel discussion, I came in thinking only what I generally think about such measures:
- Cannabis ought to be legal. Prohibition has broken down to the point where the harms associated with trying to control an illegal market generating $40 billion a year in criminal revenues greatly exceed the benefits, and there’s no plausible route back to effective prohibition.
- We ought to legalize in a way that makes moderate use by adults easy, while discouraging the formation of bad cannabis habits (an increasingly common problem) and use by minors.
- Alcohol-style legalization, which is what the ballot propositions generally offer, is a bad way to do that, because a for-profit industry (like the existing illicit industry) will make most of its money selling to heavy daily users rather than casual users, and about half the daily users – by their own self-report – have lost control of their cannabis habits.
- There are lots of other, better options.
- Even within a for-profit model, there are plenty of ways to encourage temperance, starting with keeping prices high, restricting persuasive marketing, and requiring that sales clerks have training in pharmacology and the prevention of substance use disorders and a professional responsibility to give advice in the interest of their customers, not their employers.
- It would therefore be better to handle this through the usual legislative process rather than by initiative.
- To make that workable, Congress should act to allow states to legalize (waiving the federal criminal laws that would otherwise apply) if their plans to do so meet rather strict criteria, as determined by the Secretary of HHS and the Attorney General. Those waivers should have to be renewed periodically, in order to hold the states and the industry to the promises made in order to get them.
- But since the state and federal legislative processes clearly won’t do what a majority of the voters clearly want them to do, I’d vote for any halfway-reasonable legalization initiative, both to end the arrests sooner rather than later and to nudge the legislators along.
So, going in to the discussion, I was prepared to advise Arizona voters to hold their noses and vote “yes.” Â That’s the same advice I’d give voters in California.
But clearly there are some propositions that are so bad, and so hard to fix, that the voters ought to reason the other way: vote “no” to encourage the advocates to come up with something less awful. My conclusion, after participating in the discussion, is that Measure 205 is bad enough to warrant that treatment.
What changed my mind?
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.
Jonathan Caulkins once described the debate over cannabis policy as “a Whole Foods discussion of a Walmart situation.” The graphic below illustrates his point: most of the days of use involve people with a high-school education (the purple band), high-school dropouts (the green band) or people under high-school graduation age (the red band); the people in the discussion mostly have college degrees (the orange band) if not more.
Although education is not a perfect proxy for income, the fact that 85% of pot is consumed by people who didnâ€™t graduate college makes clear that marijuana is mainly consumed by people in working-class and poor neighborhoods, not in the kinds of places that economists, attorneys, policy analysts, journalists, physicians and politicians tend to live.Â A major challenge therefore for the legitimacy of marijuana policy is to ensure that people outside the college educated bubble gain more voice in the ongoing political debate.
Hilary BrickenÂ heads the cannabis law group at atÂ Harris Moure, PLLCÂ and will lead the panel on “investing in cannabis” at the NYU Cannabis Science & Policy Summit two weeks from now. She has some good advice both for firms in the cannabis business seeking investors and for potential investors about the risks the firms need to disclose and the investors need to consider.
Since Hilary is a lawyer, her primary stress is on risks posed by the fact that the entire industry – even the part regulated by the states – is still completely illegal under federal law. Â I’ve read some pretty scary prospectuses in my day (back before Harold Pollack warned me about investing in individual companies), but I’ve never seen anything quite as bracing as this:
The federal government may raid us, seize all of our equipment and inventory, and arrest all of our employees, officers, and investors, including you.
Since I’m not a lawyer, but merely a close substitute for an economist, I would put even more stress on a less spectacular but far more probable risk, which I might put in prospectus language about as follows:
Future prices in the state-legal cannabis markets, or under federal legalization should that take place, are unpredictable, but almost certain to be far lower than current prices in those markets or in the illicit market. Cannabis is naturally cheap to produce, and competitive pressures will relentlessly force market prices for cannabis as a commodity down toward the level of costs. There can be no assurance that the Company’s best efforts to secure durable market advantage through branding, product innovation protected by intellectual property rights, or regulatory favoritism will succeed; if they do not, your investment will almost certainly become worthless.
So while all of Hilary’s legal advice is solid, I’d add one more word of economic advice about investing in the emerging legal cannabis industry.
The Mexican Secretario de GobernaciÃ³n (roughly, interior minister), Miguel Ãngel Osorio Chong, gave a fascinating talk as part of the formal national debate over cannabis policy that followed the Supreme Court decision affirming a personal right to consume the drug.
The striking Â thing about the speech was its recognition that both prohibition and commercialization have unwanted consequences, and its hint that Mexico might be alert to the possibility of finding an approach to avoid both sets of dangers.
Of course no one who has been doing drug policy for more than about twenty minutes is ever truly optimistic that a government will find something intelligent to do when there are so many unintelligent alternatives, but watch that space.
The official Spanish text of the speech is below; unofficial English translation here.
Reactions to the “Responsible Ohio” cannabis-legalization initiative have a lot to tell us about the changing politics of the marijuana question. No much of what they have to tell us is encouraging.
Cannabis policy change in the United States has been driven, until now, by people whose interest in the matter was primarily non-commercial: pot smokers yearning to toke free, culture warriors of the (cultural) left, libertarians, criminal justice reformers concerned about arrest and incarceration, and people who think that itâ€™s bad policy to criminalize the behavior of tens of millions of people unless thereâ€™s a stronger reason to do so than the risks of cannabis create.
Not that economic interests have been entirely absent; Dennis Peron was in the business of selling â€œmedical marijuanaâ€ when he spearheaded Proposition 215. But Peron was also a righteous stoner; thereâ€™s no reason to doubt the sincerity of his expressed opinion that â€œall marijuana use is medical.â€ But the main funders of the recent initiatives, and of the big marijuana-legalization groups, have been ideologically-driven billionaires such as George Soros and the late Peter Lewis.Â (How old am I? Why, Iâ€™m s-o-o-o-o-o-o old that I remember when billionaires werenâ€™t a branch of government.) And the people doing the work have been, for the most part, true believers rather than hired hacks.
That has begun to change. Americans for Safe Access has morphed from an advocacy group for medical-marijuana patients to, in effect, a trade association of medical-marijuana growers and sellers. The National Cannabis Industries Association has taken things even further, hiring a Washington lobbyist who might have been provided by Central Casting: about as far, culturally, from a typical NORML or MPP activist as itâ€™s possible to imagine.
Inevitably, then, the marijuana movement has begun to give way to the marijuana lobby. To be sure, Iâ€™ve had my share of clashes with movement folks, and I havenâ€™t always been impressed with their policy acumen or their standards of argument, but Iâ€™ve never seen any reason to doubt that theyâ€™re advocating the public interest as they perceive it. The people now being hired by the guys in suits doing cannabis-business stock promotions play by different rules. I expect them to have about the same ethical standards as lobbyists for the alcohol, tobacco, pharmaceutical, food, and fossil-fuels industries: that is, I expect them to be utterly willing to sacrifice human health and welfare on the altar of the operating statement, just like those folks at VW who decided it would be a cute idea to poison the air just a little bit to goose the performance of their diesel-driven cars. Continue Reading…