February 2017

Colorado Governor Hickenlooper’s Marijuana Advice To California

Colorado’s governor played sage to California on Tuesday, warning lawmakers that their state has a “steep hill” ahead in legalizing recreational marijuana and encouraging them to pay attention to aspects like home-grow regulations, pesticides and public security.

Hickenlooper addressed California lawmakers in Sacramento to discuss his learned lessons and words of wisdom from when his state established first-of-its-kind, adult-use cannabis sales in 2014.

“It’s one of the most challenging things we’ve ever done, one of the hardest things I’ve ever done in public life, but also one of the things I’m most proud of,” Hickenlooper said during a Senate Governance and Finance committee oversight hearing on cannabis tax system implementation.

Hickenlooper told lawmakers when voters passed Amendment 64 in 2012 and his concerns about the unintended effects of this kind of move, and of how he wasn’t at first a supporter of legalized marijuana in Colorado.

Take Colorado’s home-grow regulations, which allow for medical marijuana patients to have up to 99 plants with a physician’s approval. A “gray market” was spawned by the lax regulations in Colorado and created more possibility for out-of-state deflection, he said.

“It’s a stupid system, and I would encourage you guys to clamp down,” Hickenlooper said.

Amendment 64 permits adult residents to grow up to six plants; a variety of local ordinances have set a limit of 12 plants per household.

In hindsight, Colorado also should have put better care into its edibles regulations from the beginning — prohibiting cannabis-infused products that will be appealing to kids and ensuring clearer labels, actions that since were executed, he said. Developing powerful pesticide protocols also was highly recommended.

And there were the problems beyond Colorado’s control.

The inability for state-legal marijuana businesses to openly bank is a “terrible system,” he said.

“These are really vexing problems that you’re going to have some challenges on,” he said.

He talked highly of creating a collaborative and transparent system and also the successes which could come because of this.

From a “35,000-foot level,” Colorado has done pretty well from this experiment, Hickenlooper noted.

Health officials haven’t seen a spike in teen use; there hasn’t been a dramatic upsurge in general use or consumption; a collaborative taxation system exists to stamp out the black market and fund programs to address any unintended outcomes; and surveys reveal that residents are increasingly in favor of continuing legalization, he said.

“The United States now has almost 2/3s of the nation — I think it’s 64 percent of the people in America — lives in a state that has either legalized medical or recreational marijuana,” he said. “… I think it’s going to be among the great social experiments of the first half of the 21st century. And the more we work together, the more we can help each other, the better the results will be for our citizens.”

In response to a question about doubt on the federal level, Hickenlooper said he’s optimistic that legal states would not be interfered with by the Trump administration.

“We’re optimistic that President Trump is going to allow the experiment continue,” he said, “but they’re going to closely watch it, I’m sure.”

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Colorado Governor John Hickenlooper: The New Marijuana Consult For Governors

As stated by the Colorado Governor John Hickenlooper, you don’t constantly get charge of your legacy. As a guy who once opposed the concept of legalizing marijuana, Governor John Hickenlooper had no idea he’d eventually be a marijuana consult governors of other states would confide in for guidance on how best to deal with marijuana legislation in their particular states.

Per the Los Angeles Times, it was four years ago today that Colorado became the very first state in the country to pass legislation which made recreational marijuana legal. Only hours after this monumental landmark in U.S. marijuana legislation, Governor John Hickenlooper noted a few comical words of warning.

Governor Jerry Brown reached out to Hickenlooper for a consultation on marijuana legalization weeks before California residents were slated to vote on whether or not recreational marijuana would be legalized. Much like the scenario Hickenlooper had been put in, Brown also didn’t support this law.

Hickenlooper usually gives the same – really specific – advice to governors who reach out to him as a marijuana legalization consult. He motivates them to concentrate on marijuana-infused sweets for example brownies, gummy candies, and lollipops. This was the same advice he gave to the governors in Massachusetts, Nevada, and Maine which all had joined California in legalization recreational marijuana this year.

“We didn’t control edibles firmly enough in the beginning,” John disclosed during an interview. The Colorado Governor said, there was a spike in the amount of kids being taken to the emergency room for inadvertently consuming marijuana products. In a couple of instances, kids even died.

In recent years, an extensive advertising campaign which concentrates on the risks marijuana edibles can present to kids and teens is launched by the state of Colorado. In the state of Colorado, very specific laws have been passed which require marijuana merchandises to include labels revealing they contain marijuana.

Colorado Governor John Hickenlooper isn’t scared to admit learning the ropes of recreational marijuana being legal within his state continues to be a work in progress.

Marijuana retailers in the state of Colorado brought in $996 million in sales just last year. This resulted in a turnover of more than $135 million in taxes and fees to the state of Colorado. The selling of marijuana in the state of Colorado is taxed at 10% while the standard sales tax in the state is only 2.9%. John thinks the taxing of marijuana products is still an area that needs some adjusting.

The Governor of Utah, Gary Herbert, frequently consults John for guidance, on marijuana legalization. Unlike John, however, Gary was more supportive of the concept of legalizing marijuana.

Per Hickenlooper and other governor where marijuana has been legalized, there continues to be a number of hiccups states must dance about despite marijuana being legal. Specifically, certain federal constraints. John had recently requested that Congress pass legislation to avoid federal regulators from penalizing financial institutes that serve the marijuana industry. Hickenlooper believes it would be good for state-charted banks to be able to bank in the marijuana industry without risking their charter.

The banking conundrum these states where marijuana is legal faces has really made it challenging to execute marijuana sales.

At present, wherever he goes Hickenlooper is followed by the subject of marijuana. His largest concern and sorrow isn’t that marijuana has been legalized, but that a better system wasn’t put in position before it occured.

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The Future Of Legal Marijuana Under New Attorney General Jeff Sessions

The confirmation of U.S. Sen. Jeff Sessions, R-Ala., as the next attorney general introduces the biggest challenge to legalized recreational marijuana to date. The former federal prosecutor’s view about shifting social attitudes toward weed is clear, with Sessions saying last year that “good people don’t smoke marijuana.”

“We need grown-ups in charge in Washington deciding that marijuana is not the thing that ought to be legalized,” he said in April 2016 at the Caucus on International Narcotics Control. “This drug is dangerous. You cannot play with it. It’s not funny.”

Spokane attorney Frank Cikutovich, who has represented a number of the best profile local defendants in federal marijuana crackdowns, said he takes Sessions at his word.

“He’s of the view that it’s no good, it’s the devil drug,” Cikutovich said. “He could not be more clear about what his position is. Regrettably, he’s got the power to say from this moment. We will begin enforcing the federal law to the letter.”

And that could put everyone involved in the production and sale of marijuana in federal legal difficulty.

Some 56 percent of Washington state voters approved an initiative decriminalizing marijuana in the year 2012 and permitting a closely regulated marketplace.

In the past few years since, business has boomed.

Spokane County marijuana retailers licensed by the state sold $74.1 million worth of legal pot in 2016, according to records released by the Washington Liquor and Cannabis Board.

Those sales generated $27.5 million in taxes collected by the state.

Washington and Colorado in 2012 passed the first laws in the country that permitted recreational use of marijuana, although sales didn’t star in the Evergreen State until 2014. That list now includes California, Oregon, Alaska as well as the District of Columbia. This past November, Nevada, Maine and Massachusetts passed similar laws and 28 states have legalized the usage of medical marijuana.

On the other hand, the state-by-state move to legalize marijuana consistently has worked under an uneasy understanding with federal authorities. U.S. law still considers marijuana an illegal narcotic on level with methamphetamines, cocaine and heroin.

The industry propagate after 2013 when the U.S. Department of Justice issued a memorandum declaring that it wouldn’t challenge states on marijuana legalization as long as they put in place safeguards to keep the drug out of the hands of minors and criminals.

Without federal government intervention, marijuana businesses have boomed. A recent report from ArcView Market Research, a cannabis industry research group, called that national sales of legal marijuana could approach $22 billion by 2020. That would mean marijuana sales would outpace revenue generated from the National Football League.

Sam Calvert, founder and owner of Greenstar Cannabis on Division Street, was clearly one of the very first shops to open in Spokane County in 2014. He said he thinks the industry has too much momentum for the brand new administration to quickly dismantle it.

“If (Sessions) does decide to take an aggressive approach, terminate the specific situation through federal enforcement, they’re going to wind up in court,” he said. It doesn’t play into my decision-making right now. I consider it on the peripheral.”

Seattle attorney Douglas Hiatt, who also has defended several marijuana cases in Eastern Washington, called that “wishful thinking.”

“They can’t believe it’s going to be taken away. But I’ve seen it before,” Hiatt said. “The law is crystal clear and we’ve run out of arguments.”

Because Washington’s strict regulations require scrupulous records for folks who grow, warehouse and sell the legal marijuana, federal prosecutors would have all the evidence they need to shut down the industry and prosecute those business owners.

And many shops sell enough marijuana merchandises that are enough to place owners in danger of severe criminal punishments, including 10-year mandatory minimum sentences in federal penitentiary.

“It’s like shooting fish in a barrel,” Hiatt said. “If people think they can’t roll this thing up, then they have another thing coming.”

‘An ever-changing determination’

During his confirmation hearings last month, Sessions was asked whether he’d continue to permit states to run under the Cole memo, which basically said the federal government would look the other way on marijuana in the states.

“If I am fortunate enough to be confirmed as attorney general,I will certainly review and evaluate those policies, including the original justifications for the memorandum, as well as any relevant data and how circumstances have changed or how they may change in the future,” he wrote.

Nonetheless, he noted that marijuana remains illegal under federal law and he is dedicated to uphold the law “with respect to marijuana, even though the precise equilibrium of enforcement priorities is an ever-changing determination predicated on the circumstances and the resources available at the time,” he wrote.

That’s a softer position than Sessions once held.

30 years ago, Sessions said that he believed the Ku Klux Klan was “OK until I found out they smoked pot,” according to testimony given to Congress when he was nominated to be a federal judge.

He afterwards said he was joking, however he stays among the sharpest critics of what he considers the dismantling of Nancy Reagan’s “Just Say No” anti-drug campaign of the 1980s.

Last April, Session said, “Colorado was one of the leading states that began the movement to suggest that marijuana isn’t dangerous. And we’re going to find it, in my opinion, ripple throughout the whole American citizenry. And we’re going to see more marijuana use and it’s not definitely going to be great.”

A group empaneled to counsel Sessions as well as the Trump administration on the marijuana problem comprises 14 prosecutors named by the National District Attorney’s Association. One of them is District Attorney Stan Garnett in Boulder, Colorado.

At their very first meeting, a number of the district attorneys wanted to send letters to governors of states which have approved medical marijuana, telling them to shut those businesses down within 90 days, Garnett told the Boulder Daily Camera last week.

Garnett said he counseled his fellow prosecutors against that move, saying it failed to honor the significance of state and local control.

“I believed that was a particularly unrealistic and ill-advised notion,” Garnett told the Daily Camera. “Legalization has been mainly successful everywhere it’s been tried, therefore it will be a highly unpopular move and difficult to accomplish successfully.”

‘Marijuana to go back underground?’

Individual users would have little to be worried about in the event the federal government takes a brand new, hard line on marijuana enforcement, Cikutovich said.

“The government doesn’t have the resources to go after millions of people,” he said. “But the people in the industry need to be very concerned. They have to be ready to parachute out of the industry immediately if it changes.”

A federal enforcement agent, who spoke only on the condition of anonymity, said he wouldn’t anticipate immediate raids in the event the Trump administration decides to go after the marijuana industry.

In 2011, local federal authorities cracked down on medical marijuana dispensaries by sending them as well as their landlords letters warning of future legal action if they continued. Four of those businesses continued as well as their owners were indicted.

Sessions “may have huge issues with marijuana, and he may share that,” the law enforcement source said. “But how he would then change the enforcement priorities of the department is purely speculative at this point.”

Seattle lawyer Jeffrey Steinborn, who like Cikutovich and Hiatt has worked for many years to defend marijuana clients, said the success of the industry may be its best defense. And legal marijuana’s best ally could possibl be President Trump, who said during the campaign that marijuana legalization should be left to the states.

“I really believe we should study Colorado and see what’s happening,” Trump told a crowd on Oct. 29, 2015. “I think in terms of marijuana and legalization, it should be a state issue, state by state.”

But if Sessions convinces his boss to turn back the clock to the drug wars of the Reagan era, the industry will adapt, Steinborn said.

“Marijuana can go back underground in the blink of an eye,” he said. “And it will if it has to, because it ain’t going away.”

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New Bill Seeks To End Federal War Against Marijuana

A new congressional legislation, that will protect those individuals who are acting in conformity with state marijuana laws from federal prosecution and punishment, was filed by a bipartisan group of seven Republicans and six Democrats.

Titled the “Respect State Marijuana Laws Act of 2017,” the bill adds a brand new provision to the Controlled Substances Act that reads:

“Notwithstanding any other provision of law, the provisions of this subchapter related to marihuana shall not apply to any person acting in compliance with State laws relating to the production, possession, distribution, dispensation, administration, or delivery of marijuana.”

In a drawn-out floor address declaring the bill, chief sponsor Rep. Dana Rohrabacher R-CA asserted that the legislation falls in line with the principles of limited government and states’ rights that so many in his party profess to value:

“My bill would subsequently make sure that Federal law is aligned with the States’ as well as the people in those States’ desires so that the residents and businesses wouldn’t have to worry about Federal prosecution. For those few States which have thus far kept a policy of strict prohibition, my bill would alter nothing. I think that this is a reasonable compromise that places the primary responsibility of police powers back in the States and the local communities that are most directly affected.”

“I happen to believe that the Federal Government shouldn’t be locking up anyone for making a decision of what he or she should in private consume, whether that person is rich or poor, and we should never be giving peopl the excuse, particularly Federal authorities, that they have a right to stop people or intrude into their lives in order to prevent them and prevent others from smoking a weed, consuming something they personally want to consume.”

Rohrabacher, who ardently supported Donald Trump during the 2016 campaign and was apparently regarded as a potential secretary of state nominee, mentioned the new president’s assurances to honor state marijuana laws.

The California representative subsequently gave a little history lesson, likening present federal policy impeding state laws to the British monarchy that U.S. founding fathers rebelled against, and comparing marijuana criminalization to the previously unsuccessful prohibition of alcohol.

Turning one marijuana stereotype on its head, he decried the federal government’s “paranoia” regarding the reality about marijuana as evidenced by the DEA’s longstanding attempts to block research on its medical advantages.

And referencing the increasingly controversial debate about health care reform, Rohrabacher said:

“Remember, as we discuss people’s health care, Republicans over and over again say: You shouldn’t get in between a physician and his patient. We believe in the doctor-patient relationship. That is certainly true for medical marijuana too. Do we believe in these principles?”

The brand new bill is the fourth piece of marijuana reform legislation to be introduced in the 115th Congress.

It’s identical to a bill Rohrabacher and others filed in the past Congress, which ended up garnering 20 co-sponsors but didn’t get a hearing nor a vote.

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Religious and Conservative Legislators To Support Marijuana Legalization?

Over half of US states—28—have legalized medical marijuana. Legalization is supported by sixty percent of Americans, based on an October 2016 Gallup poll—including 42% of Republicans. A few of these cannabis supporters live in states that are traditional, and some are even in their own state’s legislature,currently supporting marijuana reform measures.

In Missouri, South Carolina, Tennessee, Texas and Utah— traditionally Republican locales— marijuana reform bills are introduced for consideration in the coming sessions.“And, it’s worth noting that Republicans, who control state legislatures in most of these states, are behind the drive,” writes Maureen Meehan in High Times on Jan. 16.

This month in Missouri, a Republican representative and licensed doctor, Jim Neely, introduced a bill to give terminally ill patients access to medical marijuana. His daughter died of cancer in 2015, and Neely believes the drug would have helped relieve her pain. An initiative to legalize recreational marijuana in Missouri last year didn’t make it on the November vote. However, Neely stated that the culture appears to be open now, noting, “I believe the timing is great.” He said on Jan. 13 that he’s confident the bill will make it to the House floor, thanks to his conservative bona fides and medical professional qualifications.

In Tennessee, two Republican legislators, Steve Dickerson and Jeremy Faison, a physician, introduced a measure to legalize therapeutic marijuana in December. They think it’s going to be an economic advantage to the state. The bill allows for 50 grow houses to be constructed, 15 of them designated for economically distressed zones.

The Tennessean reports that the marijuana measure is also part of a drive by lawmakers to undertake an opioid outbreak. More opioid prescriptions are handed out than there are individuals in Tennessee, and marijuana is viewed as a feasible, non-addictive alternative for pain alleviation.

Republican representative Ryan Williams co-sponsored a similar bill to legalize medical marijuana during the 2015 session, but it died in committee. He told The Tennessean there will likely be a “huge push” for medical marijuana during the 2017 legislative session to deal with the opioid outbreak.

Marijuana has rapidly become a non-partisan problem. Young Republicans are undoubtedly mainly sold. Based on a 2015 Pew Research survey, 63% of Republican millennials thinks marijuana should be legalized. But even senior conservatives are getting on board.

Ann Lee is the octogenarian founder of Republicans Against Marijuana Prohibition (RAMP). A lifelong Republican, she used to think cannabis proved to be a dangerous gateway drug, until her son became a paraplegic at 28-years-old, in 1990. She read about the therapeutic effects of cannabis for nerve pain and became convinced that it ought to be legalized. She believes prohibition flies in the face of the Republican principles of fiscal responsibility, small government, and personal liberty. RAMP was founded by Lee after speaking on a pro-marijuana panel in the year 2012 and uncovering that 60% of the speakers shared her political affiliation, but believed they were alone.

She now works with other Republicans against prohibition, like the conservative and religious Texan cannabis activist, Jason Vaughn. In April 2015, he wrote an essay that went viral, entitled “A Pro-Life Defense of Marijuana Legalization.” In it, Vaughn explains, “I’ve always been a fan of limited government and personal responsibility. When I started to really consider the facts of how many Texans are jailed each year for possession it really clicked.” His legalization is linked by Vaughn to his pro-life beliefs by asserting that criminalization results in death and more crime, and he’s for life, after all. He said that he was inspired by Texas Republican representative David Simpson, who has long opposed marijuana prohibition, and who introduced a revolutionary reform bill to terminate the war on pot in Texas in 2015, which was defeated by his colleagues in May of that year.

Simpson’s approach is exceptional in cannabis advocacy. In an op-ed titled “The Christian case for drug law reform,” he wrote, “I don’t believe that when God made marijuana he made a mistake that government needs to fix.” Simpson doesn’t believe in prohibiting any plants, and in fact is against prohibitions generally, at least not on anything but violence. “The Bible warns about excessive drinking, eating and sleeping (Proverbs 23:21), but it doesn’t prohibit the activities or the substances or conditions connected with them—alcohol, food and exhaustion,” Simpson noted. “Elsewhere, wine and feasting are recognized as blessings from God. Scripture stresses respect for our neighbor’s freedom and conscience, moderation for all and abstinence for some.”

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Drop in Marijuana Prices Could Mean Trouble In Tax Revenue

The coming of 2017 will bring many changes to the nation, including dropping cannabis costs in states that have legalized a recreational market. This news may be cheered by cannabis users, but it heralds the beginning of an enduring budgetary concern for states that tax legal marijuana sales based entirely cost.

The rationale is illustrated by new data from one legalization state. Colorado’s Department of Revenue uses this info to compute the value of the state’s 15% tax on weed generation and determines the going price for cannabis every six months. The progression of cannabis prices over time in Colorado absolutely parallels the pattern in Washington after that state legalized: Prices briefly spiked as a result of first supply deficits, but then started falling as the cannabis industry grown and developed. Wholesale costs in Colorado tumbled 24.5% over the previous year to $1,471 per pound.

The noticeable descent of post- legalization prices was called by the majority of marijuana policy specialists. Nothing increases the cost of a commodity like making its production, use and sale prohibited, and that’s the reason why a simple-to-grow plant like cannabis managed to control wholesale prices of $5,000/pound or more under prohibition. However, as a walk down the aisle of your neighborhood grocery store will convince you, plant products that are legal – be they almonds, corn, allspice or red roses – don’t sell for anything near that sum, and legalized pot won’t either. Truly some analysts believe that after a fully developed legal marketplace is set up, the natural wholesale area for marijuana could drop to less than $50 a pound.

Colorado, like Washington, Oregon, Nevada, Massachusetts and Maine, taxes marijuana as a percentage of the drug’s price. For these six states, slumping prices translate automatically into slumping tax revenue per sale. In Colorado’s scenario, the 24.5% fall in marijuana’s price brings the sum of tax per unit of marijuana down by precisely the same percentage. The state will begin 2017 evaluating a tax of just 15 cents per typical-sized joint. The state’s tax revenue per unit of marijuana sold is definitely going to be lower in 2018 and still lower after that, even if wholesale costs fall much less than what most analysts project in the forthcoming years.

This places Colorado along with the other states with price-linked taxes in a bind. The only way to accumulate the same quantity of revenue from year to year when taxes collected per sold unit are rapidly declining is to have significantly increased sales volume. For instance, in the case of Colorado, unless the state’s quantity of consumption increases by 1/3 in 2017, it will take in less marijuana tax revenue than it did the past year. With each succeeding fall in cannabis prices, another compensating upsurge in consumption would be required to prevent tax revenue from withering.

However an explosion in the population’s marijuana consumption could incur other costs, such as more auto accidents by motorists that are stoned, a rise in heavy cannabis users dropping out of school, and so forth. It will by definition lose tax revenue, possibly making the recreational pot system unable to cover its own regulatory costs in case the state embraces measures to cut soaring consumption. This will definitely infuriate voters who presumed legalization wouldn’t just cover business regulation but would likewise finance schools, health-care programs and so on.

This dilemma is avoided by two states with legal recreational marijuana. Cannabis is taxed by Alaska at $50 per ounce irrespective of its present price. California determines both a sales tax predicated on price|cost along with a grower tax that, like Alaska’s, is a flat sum per ounce. By coupling a price-based sales tax with an invariant tax per ounce on growers, California puts a strong floor under its cannabis tax revenue no matter how far weed’s price drops.

The six legalization states with taxes based completely on marijuana’s price have political and financial challenges ahead of them. Any other states that legalize would be a good idea to contemplate what cannabis specialist Pat Oglesby calls California’s “belt and suspenders” strategy to marijuana tax, which insulates a state from the danger of needing to subsidize an industry whose formation was designed to alleviate taxpayer’s burden instead of increase it.

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