On July 22nd, 2015, the Blue Ribbon Commission on Marijuana Policy published Pathways Report: Policy Options for Regulating Marijuana in California (full text here). The report is over ninety pages of neutral discussion and analysis of the many paths legalized cannabis can be guided. Smoke Reports is launching a four part series discussing the findings of this report. This first post will serve as an overview, and the next three posts will engage with the specific issues surrounding the protection of youth, public safety, and responsible taxation and regulation.
What is the Blue Ribbon Commission on Marijuana Policy?
The Blue Ribbon Commission on Marijuana Policy was formed in 2013 to examine the condition of potential cannabis legalization in California, and to provide neutral feedback on the sensible policies that would best serve California’s interests.
The Commission is made up of policymakers, health experts, academics, and other individuals that have spent significant time working with cannabis research and legislation. The Commission is a joint effort between Lieutenant Governor Gavin Newsom and the American Civil Liberties Union of Northern California (ACLU). However, the findings in the Commission’s report are not necessarily an endorsement from individual members of the Commission, which stresses that the report is unbiased analysis and not definite support of cannabis legalization.
The Blue Ribbon Commission’s Objective
The Blue Ribbon Commission states very clearly that their mission is to provide information for policymakers to explore sensible policy options for cannabis. The BRC focuses on the welfare of California’s youth population, and suggest goals for responsible implementation of cannabis legalization. The BRC also urges that legalization needs to be considered as an ongoing process, and policymakers need to establish a system that allows for agility when it comes to amending conflicting legislation.
The Commission recommends the following goals in their report:
- Promote the health, safety and wellbeing of California’s youth, by providing better prevention, education and treatment in school and community settings and keeping youth out of the criminal justice system. Limit youth access to marijuana, including its concurrent use with alcohol and tobacco, and regulate edible products that may appeal to children.
- Public Safety: Ensure that our streets, schools and communities remain safe, while adopting measures to improve public safety.
- Equity: Meet the needs of California’s diverse populations and address racial and economic disparities, replacing criminalization with public health and economic development.
- Public Health: Protect public health, strengthen treatment programs for those who need help and educate the public about health issues associated with marijuana use.
- Environment: Protect public lands, reduce the environmental harms of illegal marijuana production and restore habitat and watersheds impacted by such cultivation.
- Medicine: Ensure continued access to marijuana for medical and therapeutic purposes for patients.
- Consumer Protection: Provide protections for California consumers, including testing and labeling of cannabis products and offer information that helps consumers make informed decisions.
- Workforce: Extend the same health, safety and labor protections to cannabis workers as other workers and provide for legal employment and economic opportunity for California’s diverse workforce.
- Market Access: Ensure that small and mid-size entities, especially responsible actors in the current market, have access to the new licensed market, and that the industry and regulatory system are not dominated by large, corporate interests.
Considering the Unique Characteristics of California
The Commission details the past successes and failures of legalized cannabis in other states. One very important conclusion of the BRC is that California has many characteristics that make it unique from other states discussing cannabis legalization.
California is home to over 38 million people. This population is spread out over a large area, and is racially and ethnically very diverse. There are those that are impoverished and those with a lot of wealth. There is an especially large youth population, which is one of the major concerns for the Commission.
California is a major agricultural state currently experiencing a large drought. Land usage for cannabis production has been a hot topic, as public lands and watershed habitats have been abused by illegal cannabis cultivation.
California is also the oldest cannabis industry, and the substantial amount of cannabis cultivation in the state is largely unregulated. Northern California officials estimate that there may be 30,000 individual cannabis farms operating in the Emerald Triangle alone (with a population of about 250,000 people within 10,260 square miles).
Finally, California has a state government that make it difficult to amend laws passed by citizen initiative. Combined with complex local governance, cannabis is already one step behind in the legislation process. The BRC emphasizes the value of creating sensible policies from the beginning to avoid legal conflicts down the road.
Protecting the Youth from Cannabis Exposure
The foundation of the BRC is protecting California’s youth population from any dangers associated with legalization. Their conclusion is that the most effective and responsible policy solutions would consider the youth first. Education, prevention and treatment should be the primary objective of policymakers as they approach cannabis legalization.
The report further discusses the relationship between the regulation of consumable marketing and product diversion to youth. There is also analysis on how competition between taxable cannabis and illicit markets affects youth access. The report finds that legislation aimed at maximizing tax revenue will ultimately drive people away from the pricier legal market, and increase the youth population’s exposure to cannabis.
Public Safety: Ensuring the Health of the Population
The Commission discusses public safety, and the enforcement of laws that protect the general health of the community. One of the main topics on the table is Driving Under the Influence of Drugs (DUID). The BRC noted that further research and detection technology needs to be made available to promote safe driving, and that funds should also be invested into public education for road safety.
There are also public safety concerns regarding banking for cannabis companies. As of now, cannabis companies are unable to bank their money, and are forced to operate as cash businesses. This greatly increases the risk of crime, including robbery and violence.
The report also suggests that policymakers focus on regulations that will keep legal cannabis from being diverted to illicit markets. Based on legalization in Washington and Colorado, there is concern that a legal market would simply act as a cover for illicit cannabis operations, and this needs to be considered to protect youth exposure.
Developing Taxation and Regulation Policies for Cannabis
The Commission is very focused on taxation and regulation of legal cannabis in California, and the discussion on this subject makes up a large portion of the report. Overall, the BRC asserts that taxation should not be the primary focus of cannabis policies, as these models thrive on increased cannabis use, and therefore increased exposure to youth.
The report also finds that past failures of cannabis legalization can be associated with the allocation of tax revenue. It is easier to find support for taxable cannabis if lots of different state agencies are in line to receive allocated tax funds. This policy is not sound, and the Commission argues that funds should be singularly focused on the primary goal of educating the public, preventing youth exposure, and treating cannabis abuse among children and teens without the criminal justice system.
Federal Conflicts with California Legalizing Cannabis
Cannabis is still a Schedule I drug under federal law. Due to the Supremacy Clause, federal law trumps state law, meaning that if California legalizes cannabis, it does not completely eliminate legal risk for the cannabis industry. The Commission discusses the main hurdle for business trying to operate in the current legal environment.
Federal law stands in the way of cannabis companies being able to bank their money, leading to the increased dangers of robbery and crime associated with cash businesses. Furthermore, Internal Revenue Code 280E keeps cannabis businesses from deducting normal business expenses from their federal taxes, forcing legal cannabis businesses to drive up their costs, which funnels people back to the cheaper black market.
The US Department of Justice has released guidelines for states legalizing cannabis. These guidelines are considered an allowance for states to:
“enact and enforce legalization systems so long as the state laws adequately address these guidelines with the goal of preventing:
- Distribution of marijuana to minors;
- Revenue from the sale of marijuana going to criminal enterprises;
- Diversion of marijuana from states where it is legal under state law to other states;
- State-authorized marijuana activity from being a cover for the trafficking of other illegal drugs or other illegal activity;
- Violence and the use of firearms in the cultivation and distribution of marijuana;
- Drugged driving and exacerbation of other adverse public health consequences associated with marijuana use;
- Growing of marijuana on public lands and the attendant public safety and environmental dangers; and
- Possession or use of marijuana on federal property.”
– (page 16 of the report)
Sensible policy needs to consider these federal guidelines as extremely important if cannabis legalization is to succeed in California without federal intervention.
Options for Recreational and Medical Markets
The BRC also looks closely at the past issues involved with introducing recreational laws to a state that already has incredibly easy access under the medical system. The report finds that there are three solutions, and while they may seem simple, other states are dealing with the consequences of overlooking potential conflicts.
The first option for policymakers is to merge the recreational and medical markets and treat them the same when creating new policies. This will eliminate competition between medical and recreational dispensaries, and provide for maximum tax revenue. The issue with the unitary system is that recreational cannabis could reduce the incentive for producers to develop and market products with medical benefits. Medical information for patients would also deteriorate as retailer language would discuss the recreational effects over the medical.
The second option is for policymakers to introduce legislation that keeps the two systems completely separate. This ensures that medical cannabis is still taken seriously, and patients have access to the best information and resources for their ailments. However, the cost discrepancies that arise from the potentially pricier legal market also inflict the risk of Californians supporting the illicit market, resulting in more exposure to the youth population.
The third option is to establish a hybrid model that considers low-income patients, while also incentivizing the existing medical market to shift over to cannabis with higher taxes. This will be difficult to accomplish, and would entail a much stricter medical evaluation process so that individuals with recommendations under the quasi-legal model that currently exists are unable to remain in the medical system without legitimate health issues. The hybrid model is the most demanding because it imagines harmony between research, information, therapeutic value of products, affordability, access for patients, and the ability for existing cannabis companies to enter the legal market without friction.
Continuing the Discussion
There are other major considerations that the BRC has taken into account, and these will be addressed in the upcoming posts on the Commission’s report. Everyone is encouraged to read this report in full, as it does a great job of presenting and analyzing each different option for policymakers as they approach cannabis legalization.
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