Waiting For California To Legalize Marijuana
Marijuana is in the news today, as the Coalition for Cannabis Policy Reform (the best-financed advocacy group in California) have stated that they will not, after all, be moving forward with a ballot initiative in 2014 to legalize recreational use of marijuana. After considering their ballot measure's chances (the "Control, Regulate and Tax Marijuana Act"), the group has decided to wait until 2016 to move forward. This may come as a blow to California marijuana supporters, but in the long run it may have been the smart thing to do. Waiting another two years isn't a welcome prospect to many, but it may produce a better law and broader public support in the end.
The biggest argument in favor of California waiting is voter demographics. More liberal voters turn out for presidential elections than do for midterms. There's a counter-argument to make -- that putting marijuana legalization on the ballot will improve turnout among young and liberal voters -- but so far it remains largely unproven, due to how fast public opinion is changing on the issue and due to how little data exists on such votes. But the "let's wait" argument has it's own history: California's previous attempt at passing legalization, Proposition 19, failed. In 2010. Which was not only a midterm year, but also the year of the "Tea Party shellacking." Bypassing 2014 in favor of 2016 would avoid the problem of low turnout in midterm years, especially if 2014 turns out to be a big victory for Republicans (as many are currently predicting).
The biggest argument in favor of going ahead in 2014 is that the idea's time has come, and California could help lead the way towards nationwide legalization. It would be the most-populous state to legalize recreation use, which would carry a lot of weight in other states considering the idea. Since Proposition 19 failed, however, California has lost the "first in the nation" claim to Colorado and Washington, so this leadership effect would be slightly blunted. Advocates of going forward this year point to polling which shows a majority of California's voters are now in favor of outright legalization -- but there were also favorable polls which showed the same thing in 2010. The actual Proposition 19 voting didn't reflect these polls, however, and the initiative lost (polls showed public support for the measure at 50 percent or higher, but it only wound up with 46.5 percent of the vote). Given two more years, it is likely that the public will be even more supportive of the idea, especially after seeing how other states' experiments work out.
How the new law will be written is a somewhat touchy subject, as well. So far, there have been (by my count) four separate 2014 marijuana ballot initiatives proposed in California. The Control, Regulate and Tax Marijuana Act was the best-financed one, and it just withdrew from the field. Earlier, California was the first state in the nation to legalize medical marijuana (way back in 1996). Because California's law was the first, it was an untried legal experiment. Because it had to get past the voters, it was written with some major loopholes and a lot of vague language. This has led to no small amount of legal chaos for the state's medicinal marijuana providers. If California waits until 2016 to pass recreational marijuana, they will have some solid results in other states (currently only Colorado and Washington, but that list could easily be longer by 2016), allowing California to learn from others' mistakes in how to draft a good legalization law. Of course, the counter to this way of thinking is that this is nothing more than a good excuse for waiting forever.
Setting up a marketplace where none has legally existed for decades is a complicated business. There are questions of taxation, local control versus state control, how to set the bar for driving while intoxicated, restricting availability to children, homegrowing, restrictions on production, and plenty of other thorny issues which not every marijuana reformer agrees upon. Waiting for some solid data from other states would mean having a much better basis to decide such contentious issues. If one state overtaxes or goes too far in setting unjustifiable DWI/DUI standards, California can learn from their experience and not make the same mistakes. There are two sides to this issue, though. One view is that marijuana reformers are only going to get "one bite of the apple" -- that one proposition will pass, and we'll be stuck with whatever it says. The other view is that the big hurdle is legalization itself, and once that is crossed then any necessary adjustments to the law will be less contentious and easier to pass than the big legalization leap itself.
The best news from California marijuana activists is that they're at least starting to band together under their major common cause, rather than fighting each other. With multiple possible ballot initiatives this year, this may not seem immediately apparent. But there's a reason why it was such big news when one of them pulled out of 2014. The other initiatives will not have as much money to get on the ballot, meaning their chances have to be seen as worse than the one that just left the field. It takes quite a bit of money to get the necessary signatures in California, and it takes an even bigger pot of money to adequately advertise before the election (California's media market is enormous and very expensive to penetrate). Dan Riffle of the Marijuana Policy Project pointed this out today:
I have long believed that the prudent approach is to wait until 2016. Obviously, the sooner we tax and regulate marijuana the better, in any state. That said, given the amount of money it would take to qualify and pass an initiative in California, the stakes are particularly high there. A 2014 initiative would probably pass, but failure would prevent us from taking another chance in 2016. Rather than rushing to gamble on an initiative that would probably pass, let's spend the next two years planning and preparing for an initiative we can definitely pass.
Proposition 19 raised over $4 million, and failed. The new target is to raise $10 million to improve the next proposition's chances for success. The failure of Proposition 19 is instructive in other ways, as well. The measure did make it onto the ballot, but the advertising campaign wasn't adequately funded or very well planned. Opponents' ads made arguments the proposition's proponents didn't do a good job of countering. Since it was the first major attempt at legalization, the language of the proposition also had a few shortcomings.
Other states learned from California's mistakes, though. The reform advocates spent a lot of time doing necessary outreach and groundwork in Colorado and Washington to avoid the problems that Proposition 19 experienced. This included getting diverse groups on board with the general idea, and listening to their concerns over the issues. One of the main reasons for not moving forward in California in 2014 is that there simply isn't enough time to do the groundwork and reach out to affected parties in the state before the election -- groups such as public health officials, law enforcement organizations, and others. Getting them comfortable with the legalization concept goes a long way towards gaining widespread public acceptance.
The best news, though, is that California reformers have created an umbrella organization called the Coalition for Cannabis Policy Reform to pool their resources and all work on the same page (instead of at odds with each other). The full list of who makes up the Coalition is impressively broad. It includes advocacy groups such as the Drug Policy Alliance, California NORML, Marijuana Majority, Marijuana Policy Project, Oaksterdam University, Americans for Safe Access, and Students for Sensible Drug Policy. It also includes groups with their own varied outlooks and constituencies such as the ACLU, Law Enforcement Against Prohibition, the Emerald Growers Association, and the California NAACP. That is a pretty impressive list of groups working together towards a common goal.
Californians are likely going to have to wait until 2016 to cast their ballot on the issue of legalizing marijuana for recreational use (unless one of the other initiatives defies expectations and makes it onto this year's ballot). This likely means a wait of two years, even while other states get the chance to vote on it later this year. It will be a frustrating wait for those who want to move forward in California more quickly. But if it means two additional years of preparing the ground and gaining public acceptance, taking the time and opportunity to learn from other states' mistakes, and -- most importantly -- if it means getting more and more advocacy groups to work together instead of against each other, then the wait may well be worth it. In 2016, the chances may be better among California voters to pass the best-written recreational marijuana law yet -- a law which could serve not only as a blueprint for other state efforts, but also eventually for a federal law to legalize marijuana which would end the War On Weed forever. Waiting two years is going to be disappointing to many, but in the end the wait might be worth it.
-- Chris Weigant
Cross-posted at The Huffington Post
Follow Chris on Twitter: @ChrisWeigant
It seems to me a critical factor in legalization of Cannabis is altering the landscape of the revenue enhancement game at the government level..fed, state and national.
Cannabis has been a cash cow for police departments for decades by means of asset forfeiture laws. In effect, police departments are turned into privateers, who reap a revenue stream from assets they uncover...cars, homes, electronics, aircraft all auctioned and turned into operational revenue. This is a powerful incentive, and it drives police departments to put a huge amount of effort into anti drug activities. Who wants to cut off their own revenue stream?
The prison industry, especially the private industry prisons also reap a huge amount of money from the huge number of marijuana offenders they incarcerate, at taxpayer expense.
Tax revenues from legal marijuana sales will far exceed forfeiture monies. IMHO, the single most effective strategy to move legal marijuana forward is to give the above entities a piece of the action, in exchange for a change in mission focus. Police get a chunk of the sales tax, but the money is now earmarked to other, more socially productive sorts of policing.
Prisons get a share, but the ratio of inmates to staff is smaller, lowering the the level of prison violence and allowing more attention to rehabilitation and treatment of mental illness. Still lots of corrections jobs but jobs are professionalized and their descriptions are changed.
Get prisons and police on the side of reform, and the the political landscape will change dramatically. Think of it as a buyout.
TheStig -
That's an interesting take on it -- undermine the economics of the issue.
One further thing you didn't mention is what the group LEAP (Law Enforcement Against Prohibition) points out -- local police and state police also get direct grants from the feds for fighting drugs. The more arrests they make for low-level drug infractions, the more money they get from Washington.
There are a lot of perverse incentives built in to the system as it stands today. Dismantling the "War On (Some) Drugs" is going to be a long process, that's for sure.
There was a HuffPost article a few days back on the tax issue which seemed to make a lot of sense. I will dig up the link for you, as I think you'd like it. It makes the basic argument that the best way to tax the new industry is the same way alcohol and tobacco are taxed -- excise taxes at the point of manufacture, rather than sales taxes. It's a very well-thought-out piece, by someone who appears to understand such tax issues (taxing issues?). I promise, I'll dig up the link in a bit...
-CW
Visiting the CCPR web page, I noticed the conspicuous absence of business coalition partners.
Not to be silly (well, maybe just a little silly), but where is Frito-Lay? Taco Bell? Dominos Pizza?
Snack and fast food industries reap a fortune from Cannabis, and I strongly suspect their market research has quantified it. These industries can testify to the fact that pot use is mainstream, and makes an important contribution to the US economy.
Seriously, the lack of corporate sponsorship signals that legalization is far from a done deal.
Not to be silly (well, maybe just a little silly), but where is Frito-Lay? Taco Bell? Dominos Pizza?
Snack and fast food industries reap a fortune from Cannabis, and I strongly suspect their market research has quantified it. These industries can testify to the fact that pot use is mainstream, and makes an important contribution to the US economy.
And here's another instance (much like the gun control issue) where the Obama/Democrat/Leftist agenda is impacted by the legalization push..
Cannabis use leads to unhealthy eating habits and obesity... :D
Michale
TheStig -
I doubt corporations are going to get on board for a while.
The founder of Men's Wearhouse ("You're gonna like the way you look...") is a big backer of marijuana reform, as is George Soros, though.
One of the reasons the CA situation is unsettled is that there was a multi-millionaire backing one of the propositions, but he died very recently (at the end of last year, I believe). He had been backing the "let's do it in 2014" idea, but his absence meant a big lack in projected fundraising.
-CW
TheStig -
Here's that link:
http://www.huffingtonpost.com/pat-oglesby/how-not-to-tax-marijuana_b_4739009.html
Sorry it took so long... it's a good read.
-CW
CW-
Excellent link. One criticism though. I think it better to tax THC than hemp. Taxing by dry weight is taxing hemp, which would favor growing ultra potent strains. That might not be the best way to go.
TheStig -
They'll come up with a tax system much like the "beer/wine/liquor" split, I'm sure. Hemp won't even be included in that equation, that's my guess. But then, again, this is an argument for waiting and correcting other states' mistakes...
-CW
CW -
I think it's going to be challenging to come up with a beer/wine/liquor taxation equivalent for THC recreational products.
Alcohol is a bulk product, usually diluted in water, and concentration is easy to assay by density. You don't get appreciable alcohol from common agricultural sources, there are intermediate steps of fermentation and distillation. These intermediate steps are a boon to the tax man - bulk production above moonshine levels is fairly easy to track and monitor.
Marijuana is a recreational THC product right out of the field, with rough grades of stems (hemp) leaves and flowers.
http://www.unodc.org/unodc/en/frontpage/2009/June/why-does-cannabis-potency-matter.html
An effective dose of THC is roughly 3 orders of magnitude smaller than that of alcohol. The THC content of different Cannabis strains varies substantially, and THC content from a given strain varies with environmental conditions. Assaying THC is not that hard these days (enzyme-linked immunosorbent assay "ELISA" kits are widely available) but it's more complex and more expensive than just dipping a float into a bucket or measuring refractive index.
All the above will make THC production somewhat harder to track and rationally tax compared to alcohol.
Another thing:
I think branding is good news for effective marijuana taxation. Most consumers like predictable experiences, to get consistent product will require a lot of blending, like mass market tobacco or coffee. Concentrate taxation at the brand level and accept some leakage at the home grown "moonshine."
I don't worry much about underage consumption. Kids will smoke more pot? Get real!
TheStig -
Actually, I think in CO the labeling law they put into place dictates they have to have the strain tested, and put the THC content on the label. So the system's already in place, really.
The marketplace right now is in a transition state. Right now, the only weed being sold in CO are plants that started life as legal medicinal marijuana. The licenses to grow recreational pot only started on 1/1. So in another month or so the market is going to shift a bit (and prices can be expected to come down somewhat) when the first legal recreational harvest comes in.
However, to your branding point, what the growers are worried about is eventually having farmers growing weed by the hundred-acre plot. Many growers bemoan this (by saying something like "nobody wants to get WalMart weed," or "McDonald's weed" or "the Starbucks of weed") but this is mostly because they are terrified of the free market and competition.
What will happen over time, if the state loosens up how much can be legally grown (they control the permitting process), is that there will indeed be "McWeed," and it might be sold by RJ Reynolds. It'll be consistent, but not all that potent. It'll be "good enough" for most people, at a very reasonable price (akin to what beer costs). That's all fine and good. But there will always be a higher-end market (if you'll excuse the pun).
After all, you can now buy a six-pack of Schlitz in the liquor store, but you can also drop $100 for a bottle of champagne or some fancy label of Scotch. Eventually, the marijuana market will be exactly the same. High-end "artisinal" grower pot, and then garden-variety "gimme a pack of marijuana" pot. There'll be room enough for everyone in this market, in fact. And the overall price will get a lot more reasonable.
Taxing it accurately may prove more difficult, as you point out, but not impossible.
-CW
CW-
I'm very much in favor of legalizing Cannabis, and decriminalizing drug use in general, but I think it's vital to get taxation right, and quickly.
Colorado's labeling scheme still seems in the to-be-determined phase.
http://www.hightimes.com/read/colorado-contemplates-pot-potency-regulations
Testing standards for safety (contaminants), psychoactive potency (THC) and therapeutic potency (CBD) still need to be worked through.
I agree a mature marijuana market will be highly fragmented. Some of it will resemble beer/cigarettes, other parts liquor, fine wine/cheese, over-the-counter remedies, pharmaceuticals and fibers. There will be market niches based upon oral and respiratory ingestion.