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In Bid to Blunt Black Market, California Eyes Marijuana Tax Cuts [FEATURE]

Steve D’Angelo was prescient. As the era of legal recreational marijuana in California began just over a year ago, the East Bay medical marijuana maven expressed concerned that taxes on the newly legal industry were too high.

“It’s going to mean that a significant number of people, less affluent consumers are going to turn to the lower prices of the underground market,” he told KPIX 5 on January 1, 2018, the day it became legal in the state.

A year later D’Angelo’s concerns have been borne out. The state had estimated that retail marijuana sales would exceed the $3 billion in 2017 sales, which came solely from medical marijuana outlets, but instead legal sales actually declined to $2.5 billion.

As a result, tax revenues for the state are significantly lower than projected. The FY 2018 state budget estimated $185 million in marijuana sales taxes, but actually gathered only about $84 million. And based on January sales, the FY 2019 budget, which estimated tax revenues at $630 million, now looks to be overly optimistic. The latest projections have tax revenues for the fiscal year at $471 million.

In California, legal pot sales are saddled with a $9.25 per ounce cultivation tax paid by growers, as well as a 15 percent retail excise tax and a 7.25 percent retail sales tax paid by consumers. When you add in local taxes, pot buyers in some counties could be paying as much as 45 percent in aggregate tax on legal weed.

To be clear, high taxes aren’t the only things strangling the state’s legal marijuana market. Industry figures and analysts point to two other factors as well: The state’s onerous and costly regulatory requirements are keeping many growers and retailers from leaving the black market, and the refusal by many localities to allow legal marijuana sales in their jurisdictions has left broad swaths of the state with no alternative but the black market. (In a bid to boost the legal market, the state last month okayed plans for statewide deliveries no matter what localities say.)

Still, cutting the tax rate is something that could begin to make a dent in the black market. Assemblymember Rob Bonta (D-Oakland) introduced a pot tax cut bill last year that was defeated, but now, with a year’s worth of disappointing marijuana market news to provide momentum, he’s back again with another pot tax cut bill this year.

Late last month, with three cosponsors Bonta refiled Assembly Bill 286, which proposes eliminating the $148 per pound cultivation tax and reducing the 15 percent retail excise tax to 11 percent for three years. The bill also has the support of newly elected state Treasurer Fiona Ma.

 “The black market continues to undercut businesses that are complying with state regulations and doing things the right way,” Bonta said as he rolled out the bill. “AB 286 will temporarily reduce the tax burden on these licensed operators to keep customers at licensed businesses and help ensure the regulated market survives and thrives. This very strategy has been shown to actually increase overall tax revenue in other states.”

One of the cosponsors is Assemblymember Tom Lackey (R-Palmdale), who authored an identical bill last year. That bill made it through two committees, only to die in Assembly Appropriations.

“Right now, the illicit market is dominating California’s cannabis industry,” said Assemblymember Tom Lackey (R-Palmdale). “These are bad people who are making our communities unsafe.  We need to give the good guys a chance to succeed otherwise our one chance at creating a regulated industry will be compromised.”

Bonta and his colleagues pointed to the experience of legal marijuana states Oregon and Washington, which have successfully taken steps to reduce tax rates and encourage the growth of the legal market. Washington saw exponential growth in marijuana tax revenue after it simplified its tax structure and reduced its rates. Tax revenues there jumped from $13.4 million in the final month of the initial tax rate in June 2015 to more than $33 million in April 2017.

“By lowering the excise tax and postponing the cultivation tax it will lower the overall price for consumers at the register, which will also reduce the differential between illicit and legal prices. Reducing this gap is critical to making the legal market more competitive against the illicit market and more attractive for consumers,” said Beau Whitney, Senior Economist at New Frontier Data.

Fixing California’s pot taxes clearly won’t resolve all the issues the state faces as it makes the transition to the world’s largest legal marijuana market, but it’s a start. 

This article was produced by Drug Reporter, a project of the Independent Media Institute.

5 Things We Now Know After 5 Years of Legal Marijuana in Colorado [FEATURE]

It's been five years since the era of legal marijuana sales began in Colorado, and that's been enough time to begin to be able to see what sorts of impact the freeing of the weed has had on the Rocky Mountain State. From the economy and the fiscal health of the state government to law enforcement and public safety, legalizing marijuana has consequences.

Denver's skyline (Creative Commons)
Thanks to marijuana sales reports and tax revenue reports from the state Department of Revenue, as well as a legislatively mandated biennial report from the Division of Criminal Justice, we can see what some of those consequences are.

1. They sure buy a lot of weed in Colorado, and the state's coffers are filling up with marijuana tax revenues. Total marijuana sales in the state were more than $683 million in 2014—the year legal sales began—and have since more than doubled to more than $1.4 billion last year. Since legalization, the amount of legal weed sold in the state has now topped $6 billion. That's created nearly 20,000 jobs, and it has also generated more than $900 million for the state government in marijuana taxes, licenses, and fees. Tax revenues have increased every year since legalization and those dollars help fund public school projects, as well as human services, public affairs, agriculture, labor and employment, judicial affairs, health care policy, transportation and regulatory affairs. Pot revenues still only account for one percent of state revenues, but every $900 million helps.

2. Marijuana arrests are way down, but black people are still getting busted disproportionately. Even though pot is legalized, there are still ways to get arrested on a marijuana charge, such as possessing more than an ounce or selling or growing unlicensed weed. Still, arrests have declined dramatically, dropping by 56 percent during the legalization era. Both possession and sales offenses declined, but arrests for unlawful production were up markedly, reflecting the state's continuing fight to eliminate the black market. The age group most likely to get busted was 18-20-year-olds, who can only legally use or possess marijuana if they have a medical card. They are getting busted at a rate 30 times that of adults. Arrests are way down among all ethnic/racial groups, but black people are still getting arrested for pot at a rate nearly twice that of whites.

3. Legalization has not led to more traffic fatalities. While the number of car drivers in fatal wrecks had marijuana in their systems has increased dramatically, the report notes that “detection of cannabinoid in blood is not an indicator of impairment but only indicates presence in the system.” Marijuana DUIs were up three percent, but fatal traffic accidents involving marijuana-impaired drivers actually decreased by five percent.

4. Use rates are up slightly among adults, but not among teens. The number of adults who reported using marijuana in the past 30 days has increased by 2 percent, with nearly one-fifth of men reporting past month use. That's almost double the number of women reporting past month use. These are high rates of use compared to the nation as a whole, but the state has always had relatively high use rates, even dating back before legalization. (There is a chicken and egg question here: Do Coloradans like to smoke pot because weed is legal or is weed legal because Coloradans like to smoke pot?) But what about the kids? Well, the kids are alright. Marijuana use rates among middle and high school students have been unchanged since legalization, and so have graduation rates.

5. Emergency room visits linked to marijuana increased. Some 575 people presented to hospitals with marijuana-related problems back in 2000, but that number jumped to more than 3,500 by 2016. Emergency room visits and calls to poison control centers were both up. It's important to note, however, that the vast majority of marijuana-related ER visits are related to panic or anxiety reactions and end with the patient eventually calming down and going home. Marijuana ER visits are not life-The rise is also likely a function of new, naive users, especially of edibles, biting off more than they can chew.

Chronicle AM: Feds Warn on Denver Safe Injection Site, It's J-Day in Michigan, More... (12/6/18)

Michigan became the first legal marijuana state in the Midwest today, the feds send a shot across the bow of an effort to get a safe injection site up and running in Denver, cartel violence challenges Mexico's new president, and more.

[Errata: This article initially reported incorrectly that driving under the influence of marijuana under MIchigan's legalization law would result in a ticket. DUI remains a felony in Michigan.]

Today Michigan becomes the first legal marijuana state in the Midwest.
Marijuana Policy

Michigan Marijuana Legalization Now in Effect. As of today, it is legal to possess up to 2.5 ounces of marijuana and grow up to 12 plants in Michigan. There is no public smoking allowed and driving under the influence remains a crime. The state's system of taxed and regulated marijuana sales, however, is not expected to be up and running until 2020. [This article initially reported incorrectly that marijuana DUIs would result in getting a ticket. DUI remains a felony in Michigan.]

New Yorkers Want to Legalize Marijuana to Fix the Subway. Lawmakers are eyeing legal marijuana tax revenues as a means of helping to modernize New York City's subway system. Subway officials say they'll need $40 billion to upgrade, and legal weed could help. "The biggest issue we hear about as elected officials is the state of the subway system," said Corey Johnson, the New York City Council speaker. "To be able to tie these things together is something that could be highly impactful and potentially transformative."

Harm Reduction

Denver DEA, US Attorney Warn City on Safe Injection Sites. As city and county officials move toward establishing a safe injection site for drug users, representatives of the federal government are warning that they are illegal and anyone involved could be looking at years in federal prison. In a joint statement, the feds were blunt: "Foremost, the operation of such sites is illegal under federal law. 21 U.S.C. Sec. 856 prohibits the maintaining of any premises for the purpose of using any controlled substance. Potential penalties include forfeiture of the property, criminal fines, civil monetary penalties up to $250,000, and imprisonment up to 20 years in jail for anyone that knowingly opens, leases, rents, maintains, or anyone that manages or controls and knowingly and intentionally makes available such premises for use (whether compensated or otherwise). Other federal laws likely apply as well." The feds also argued that safe injection sites don't actually produce claimed harm reduction benefits and that "these facilities will actually increase public safety risks" by "attracting drug dealers, sexual predators, and other criminals." Those claims are, at best, debatable.

International

Mexican Cartel Gunmen Kill Six Cops in Deadliest Attack of the AMLO Era. In the deadliest attack since President Andres Manuel Lopez Obrador (AMLO) took office last Saturday, gunmen of the Jalisco New Generation Cartel attacked police transporting a prisoner in Jalisco state, leaving six police officers dead. The attackers came in three vehicles and escaped, setting up roadblocks of burning vehicles they had commandeered. AMLO came into office pledging to quell widespread cartel violence.

Chronicle AM: Denver to Expunge Pot Convictions, Columnist Calls for Prescription Heroin, More... (12/5/18)

 A Washington Post columnist calls for prescription heroin, the federal hemp bill will apparently ban the participation of people with drug felonies, Denver joins the movement to expunge old pot convictions, and more.

Prescription heroin--Washington Post columnist suggests it could save lives in the face of fentanyl. (Creative Commons)
Marijuana Policy

Denver Becomes Latest City to Expunge Low-Level Marijuana Offenses. Mayor Michael Hancock announced Tuesday that his administration will "move to vacate low-level marijuana convictions for Denver residents." The move comes after months of preliminary work by the Office of Marijuana Policy and the City Attorney's Office. "For too long, the lives of low-income residents and those living in our communities of color have been negatively affected by low-level marijuana convictions," Hancock said in a press release. "This is an injustice that needs to be corrected, and we are going to provide a pathway to move on from an era of marijuana prohibition that has impacted the lives of thousands of people."

Industrial Hemp

Federal Bill to Legalize Hemp Bans Drug Felons from Participating. Congressional negotiators have agreed on compromise language for the hemp provision of the farm bill that would ban people with felony drug convictions from participating in the hemp industry. The ban was inserted into the Senate version of the bill late in the process and over the objections of drug policy reformers. It's not quite a done deal—the language could be changed in conference committee—but at this point, it looks like the ban is in.

Heroin and Prescription Opioids

Washington Post Columnist Calls for Prescription Heroin. In a piece published Tuesday, Washington Post columnist Megan McArdle has called for access to prescription heroin in a bid to prevent fentanyl-related overdose deaths. In the column titled An Incredibly Unpopular Idea That Could Stem Heroin Deaths, McArdle notes that "most people don't want addiction made safer or easier; they want it stopped, cold…but you don’t free slaves by killing them, and as long as fentanyl suffuses the illicit drug markets, that’s what a 'tough love' policy amounts to." Harm reduction measures and increased access to treatment would help, McArdle writes, but "lowering the death toll may well require a more drastic step: legalizing prescriptions of stronger opiates. Prescription heroin? Remember, I said you might not like the solution. I don’t like it, either — and frankly, neither do the drug policy researchers who told me it may be necessary. But when fentanyl took over the U.S. illicit drug markets, it also got a lot of addicts as hostages. We’ll never be able to rescue them unless we can first keep them alive long enough to be saved."

Asset Forfeiture

Nashville Bends to Police Pressure, Extends Federal "Equitable Sharing" Program. Under pressure from local law enforcement and seeking to avoid raising taxes, the Nashville Metro Council voted 25-5 to renew its participation in the federal asset forfeiture equitable sharing program, which allows state and local law enforcement agencies to divert drug-related cash seizures to the federal government, which in turn returns 80% of the booty back to the seizing agency. 

Chronicle AM: Judiciary Committee Change, Massachusetts Marijuana Sales, More... (11/19/18)

There's a changing of the guard at the top of the Senate Judiciary Committee, a Pennsylvania medical marijuana patient sues over gun access, a new report finds fake and counterfeit drugs killing tens of thousands each year in Africa, and more.

Massachusetts will see its first marijuana stores open this week. (Sondra Yruel/Drug Policy Alliance)
Marijuana Policy

Graham to Replace Anti-Marijuana Hardliner Grassley as Head of Senate Judiciary Committee. Sen. Chuck Grassley (R-IA) announced last Friday that he is stepping down as chairman of the Senate Judiciary Committee. He will be replaced by Sen. Lindsey Graham (R-SC), who, while not exactly a friend of marijuana law reform, is not nearly as oppositional as Grassley. While Grassley has stifled marijuana bills during his tenure as chair, Graham has cosponsored bills to protect legal medical marijuana states from federal interference, reschedule marijuana, and remove CBD from the list of banned substances. (Grassley has also been a champion late in his career for enacting at least modest criminal justice and sentencing reform.)

Massachusetts's First Marijuana Stores to Open Tuesday. Slightly more than two years after voters approved marijuana legalization, the state's first retail marijuana outlets are set to open their doors tomorrow. The state Cannabis Control Commission announced last Friday that retail shops in Leicester and Northampton had received final sign-offs to start selling recreational weed.

Medical Marijuana

Indiana Poll Finds Strong Support for Medical Marijuana. Even in red-state Indiana, they like their medical marijuana, a new poll finds. The poll from Ball State University finds that 81% of Hoosiers believe marijuana should be legal for medical reasons. The poll had support for full legalization at only 39%.

Pennsylvania Doctor and Medical Marijuana Patient Sues for Right to Own a Gun. A Philadelphia physician who is also a medical marijuana patient filed a lawsuit in federal court last Thursday challenging a federal law that prevents him from owning a firearm because he uses medical marijuana. Dr. Matthew Roman was blocked from buying a gun earlier this year when he honestly answered a question about marijuana use. Roman's lawsuit claims that the blanket prohibition against marijuana users violates the constitutional rights of tens of thousands of nonviolent, law-abiding American citizens. The filing, in US District Court for the Eastern District of Pennsylvania, claims the law violates both the Second and Fifth Amendments of the Constitution.

Harm Reduction

Opioid Reversal Drug Company Gouged Taxpayers With 600% Price Increase. A new report from the Senate's Permanent Subcommittee on Investigations finds that a pharmaceutical company "exploited the opioid crisis" to gouge taxpayers by increasing the price of its overdose reversal drug by 600% between 2014 and 2017. The report found that the company Kaléo raised the price of its drug EVZIO from $575 in 2014 to $4,100 in 2017. EVZIO is an auto-injector form of the drug naloxone. The price hikes cost taxpayers more than $142 million over the past four years in Medicare and Medicaid charges.

International

Fake and Counterfeit Drugs Are Killing Thousands in Africa, Report Finds. A new European Union-funded report finds that tens of thousands of Africans are dying because of fake and counterfeit drugs. Fake or substandard anti-malarial drugs alone were linked to anywhere between 64,000 and 158,000 deaths each year, the report found. The fake drugs are especially entrancing to the region's poor, who often cannot afford prescribed drugs and turn to the streets to buy cheaper alternatives. "So this is a criminal activity, you can focus on and try to find the source of this. The problem is also the access of the real medicine, the cost to buy them is too high so poor people are just despaired (they despair) to find something, anything that they think could help them," said Ruth Dreifuss, Chair of the Global Commission on Drug Policy.

Mexico Supreme Court Rejects Law Regulating Tr0ops Fighting Drug Cartels. In a 9-2 decision last Thursday, the nation's highest court threw out a new law aimed at regulating the use of the military to fight drug cartels. The law was meant to set out rules of engagement for the armed forces in their fight with organized crime, but human rights groups warned it could clear the way for more military human rights abuses. The court ruled that Congress does not have the power to legislate on "domestic security" and only the executive can dispatch troops. The court ruling came a day after incoming security minister Alfonso Durazo said there was "no way" to withdraw the military from the fight because it is more trustworthy than the police.

Chronicle AM: Brazil's New Leader is Bad News on Drug Policy, CO Legalization Faces RICO Suit, More... (10/30/18)

A lawsuit using federal RICO statutes to challenge Colorado marijuana legalization got underway today, North Dakota medical marijuana patients and caregivers can now apply to the registry, Brazil's president-elect is a giant step backward on drug policy, and more.

Brazilian President-Elect Jair Bolsonaro favors harshly repressive drug policies. (Creative Commons)
Marijuana Policy

Colorado Lawsuit Challenging State's Marijuana Law Goes to Trial. A lawsuit filed by two landowners who claim that a nearby marijuana grow has reduced their property values -- in part because the smell allegedly makes horse riding less attractive -- got underway in federal court in Denver Tuesday. The case is based on federal racketeering laws, and an adverse decision could have significant disruptive effects on the state's marijuana industry. The lawsuit was filed by Safe Streets Alliance, a national anti-marijuana group.

New Jersey Lawmakers Aim for Marijuana Hearings Next Month. State Senate President Stephen Sweeney (D-3rd District) told reporters Monday he had been meeting with Sen. Nicholas Scutari (D-22nd District) on advancing marijuana legalization legislation, and "I think we're real close." While Sweeney did not offer any firm timelines, Scutari said he has been looking at holding a hearing on November 26.

Medical Marijuana

More Than 200 Unlicensed Michigan Dispensaries Must Close Down By Wednesday. The state's Medical Marijuana Licensing Board has approved 14 more dispensary licenses, but some 215 pot businesses that have not obtained licenses, most of them in Detroit, received cease and desist letters Tuesday and must close their doors by Wednesday if they want any chance at getting a license in the future.

North Dakota Patients and Caregivers Can Now Register. The state Department of Health began accepting applications Monday for medical marijuana patients and caregivers, with registry cards to begin being mailed out in December. It costs $50 to apply. The move comes just under two years after voters there approved a medical marijuana initiative.

Heroin and Prescription Opioids

Massachusetts Governor Seeks $5 Million for Opioid Drug War. Gov. Charlie Baker (R) will file legislation seeking $5 million for a pilot program for a "regional, multi-agency approach to fentanyl interdiction and crime displacement," he said Monday. He said his proposal targets drug dealers who move from town to town to evade police crackdowns. "We want to give departments the resources to coordinate with each other across their districts, essentially flooding the zone against the drug dealers who are peddling addiction and death in their communities," Baker said. "We want to go after the dealers who too often evade authorities by moving to another nearby location in a different municipality." The $5 million would be used to "supplement surveillance work and overtime costs for units," he said.

International

Brazil's Presidential Election Winner is Bad News on Drug Policy. Jair Bolsonaro, the winner of Sunday's Brazilian presidential election and known as "the Trump of Brazil" for his right-wing populist views, is bad news for drug reform in Latin America's most populous country. He favors intensifying ongoing bloody crackdowns on people involved with drugs, he has said on repeated occasions that police should kill people suspected of drug trafficking, and he has openly praised Philippines President Rodrigo Duterte's bloody drug war, saying "he did the right thing for his country." He opposes marijuana legalization, saying it would "benefit traffickers, rapists, and hostage takers." And Bolosonaro isn't just bad on drug policy; he gets downright weird. He has also claimed, in a bizarre homophobic rant, that smoking pot makes people gay.

Republicans Are Playing Dirty in Their Bid to Stop North Dakota's Legal Pot Initiative

As North Dakotans prepare to head to the polls in November to vote on the Proposition 3 marijuana legalization initiative, they rely on their state government to come up with an estimate of what it will cost taxpayers. It's not just this initiative—state law mandates that voters be informed of the potential budgetary impacts of any measure on the ballot.

North Dakota's Theodore Roosevelt National Park, where the prairies meet the badlands. (Creative Commons)
But for voters to accurately assess the cost of a measure, the cost estimates must reflect reality. That's not the case with the cost report issued last week by the state's Office of Management and Budget (OMB) and approved in a party-line vote over the objections of Democratic lawmakers.

The OMB report put the cost of implementing the marijuana measure at $6.7 million, but two-thirds of that figure is to pay for a program not mandated in the initiative. OMB said it would take $2.2 million in clerical costs to expunge some 18,000 marijuana arrest records, as the initiative requires, but that it would also cost $4.4 million for a youth education campaign that the state Health Department argued would be necessary and the salaries of two full-time employees to run it for the next four years.

The Health Department may think such a campaign is necessary, but the initiative itself does not require—or even mention—any such campaign, and to include the Health Department's wish list in the measure's fiscal impact statement is just plain dishonest. That didn't stop Republican lawmakers from voting to approve it.

Democrats tried to stop them. House Minority Leader Corey Mock (D-Grand Forks) offered an amendment to approve the fiscal impact statement but omit the Health Department’s figures, with other costs to be determined.

"This does not lead to a $6.7 million fiscal impact. It’s a $2.2 million fiscal impact, with more that’s likely to happen but it cannot be determined," Mock said. "It will cost more than $2.2 million. We just don’t know how much."

The amendment failed on a 10-5 party line vote. The Legislative Management Committee then approved by the same margin a motion by House Majority Leader Al Carlson (R-Fargo) to accept the fiscal impact statement with the Health Department's cost estimate included.

Sen. Erin Oban (D-Bismarck) told the Bismarck Tribune after the vote that the fiscal impact statement as passed amounted to a lie.

"There seems to be a disagreement among this committee about what we want versus what the language in the measure actually says," Oban said. "I think there was universal agreement, probably around this table, about wanting, if Measure 3 passed, an education campaign from the health department about the impacts of marijuana, especially on youth, for prevention purposes. But the measure does not require that. To me, it is lying to claim that Measure 3 required that because it didn’t."

One Republican lawmaker, Sen. Jerry Klein (R-Fessenden), defended including the Health Department costs on rather dubious grounds.

"Until the measures are passed, and the Legislature and all the agencies can dig in and put an actual cost on it, I think our job has been simply to approve something that somebody said might cost this," Klein told the Tribune.

The Health Department argued that because it has a responsibility to protect the health and welfare of North Dakotans, the educational campaign would be warranted, but again, it is not mandated in the initiative itself, and the Health Department doesn't exactly have a great record when it comes to marijuana measures.

As North Dakota columnist and political blogger Rob Port pointed out in a column laying into the shady cost estimates, the Health Department was way, way off in its estimate of the costs of the successful 2016 medical marijuana initiative there.

"What people should keep in mind is that two years ago when the health department presented their information on what they estimated to be the cost of medical marijuana if it passed they said $8.7 million," he quoted one lawmaker as telling him after the vote. "For fiscal year ending June 30, 2018, their actual cost was $363,000."

That inflated figure didn't stop voters from approving medical marijuana in 2016. Perhaps the inflated figure this year won't stop voters from approving marijuana legalization in 2018, but it would be better if North Dakota Republicans could just be honest about the costs.

Chronicle AM: Federal Marijuana Research Bill Advances, ACLU Smart Justice Campaign, More... (9/13/18)

A federal marijuana research bill advances (although with an undesirable provision), the ACLU rolls out a national plan to reduce state prison populations by half, and more.

A federal marijuana research bill wouldn't let anyone with a pot conviction participate. (Creative Commons)
Marijuana Policy

North Dakota Officials, Lawmakers Make Huge Stretch in Estimating Legalization Initiative Costs. The state's Office of Management and Budget has released a report on the cost of implementing the Proposition 3 marijuana legalization initiative that vastly overstates the cost by including costs for an education program that the initiative does not mandate. OMB put the cost of implementation at $6.7 million, but $4.4 million would be for a youth education campaign that the state Health Department argued would be necessary. Legislative Democrats sought to approve the fiscal impact statement without the education campaign funding, but were defeated by House Republicans. The fiscal impact also includes $2.2 to pay for clerical costs in expunging some 18,000 marijuana arrest records but does not include any estimate of tax revenues from legal marijuana.

Medical Marijuana

Marijuana Bill Approved by Congressional Committee Approves Medical Marijuana Research Bill, Leaves in Provision Barring People with Drug-Related Misdemeanors. The House Judiciary Committee voted Thursday to approve the Medical Cannabis Research Act, HR 5634. The bill would require the Justice Department to begin issuing more licenses to grow marijuana for research purposes but was controversial with drug reformers because of a provision barring anyone with a "conviction for a felony or a drug-related misdemeanor" from any affiliation with research cultivation operations. "There is no legitimate health or public safety justification for the inclusion of this language and we urge you to strike this unnecessary, punitive ban on individuals with previous drug law violations," reads a letter sent to the committee's leaders on Wednesday by the American Civil Liberties Union, Human Rights Watch, #cut50, the Drug Policy Alliance and other groups. "To help lower recidivism rates and improve public safety, we should be making it easier for people with records to obtain jobs, not more difficult." An effort to amend the bill in committee to remove the provision was halted after Chairman Bob Goodlatte (R-VA) said he would not be opposed to changing the language before it goes to a House floor vote.

Sentencing

ACLU Launches "Smart Justice" Campaign with State-By-State Blueprints for Cutting Incarceration in Half. The American Civil Liberties Union's Campaign for Smart Justice today unveiled the Smart Justice 50-State Blueprints, a comprehensive, state-by-state analysis of how states can transform their criminal justice system and cut incarceration in half. The Smart Justice 50-State Blueprints are the first-ever analysis of their kind and will serve as tools for activists, advocates, and policymakers to push for transformational change to the criminal justice system. They are the result of a multi-year partnership between the ACLU, its state affiliates, and the Urban Institute to develop actionable policy options for each state that capture the nuance of local laws and sentencing practices. The 51 reports -- covering all 50 states and the District of Columbia -- will be released in multiple phases, beginning with an initial rollout of 24 state reports. The reports are all viewable on an interactive website that allows users to visualize the reductions in jail and prison population that would result from the policy decisions that states pursue. The interactive feature is here: https://50stateblueprint.aclu.org

Trump's Tariffs and Trade War Will Hit the Marijuana Industry, Too

The Trump administration has included vaping devices and their components among the Chinese products subject to punitive tariffs, and that's going to have an impact on the marijuana industry. But it's not just vaping devices: Many other products made in China, from fixtures to packaging materials and more that are used in the pot industry, are also subject to increased tariffs.

The bottom line will be increased costs for legal marijuana companies and increased prices for their customers. To the degree that tariffs subdue growth in legal marijuana markets, they could also end up putting a hit on marijuana tax revenues for states and localities.

Companies selling vaping products are on the front line, said Arnaud Dumas de Rauly, co-CEO of the Blinc Group, which develops and sells technology and products related to vaping and runs an incubator program to research, develop, and brand technologies for marijuana and nicotine vaping. Dumas de Rauly made his comments in July 24 testimony at public hearings on the tariffs held by the Office of the U.S. Trade Representative.

The vast majority of vaping devices, as well as batteries, filters, and cartridges, are manufactured in China, Dumas de Rauly noted, and there are currently few alternatives for producing them. But the profit margin on such devices is only 10 to 15 percent, and that means companies will either have to find alternative sources, eat the hit to their bottom lines, or, more likely, pass the increases on to consumers.

And that will have an impact on the "entire cannabis consumption market -- including medical and recreational marijuana," Dumas de Rauly said.

It's not just consumers who will feel the impact, Dumas de Rauly warned. Higher prices mean decreasing sales and shrinking tax revenues and "25 percent of sales come from cannabis vaping products," he said.

The business press, which now actually treats the marijuana business as a real industry, found plenty of people who echoed Dumas de Rauly's sentiments. In an interview with Forbes, Brooke Davies, executive director of Cannabis Organization of Retail Establishments, a non-profit trade association representing cannabis retailers in Washington State, said that tariffs were already having an impact. Small growers there, already under pressure from dropping marijuana prices, will see profit margins shrink even further because the glass jars they buy from China to package their buds are being hit by tariffs.

"The Trump tariffs will undoubtedly hurt the rural parts of Washington State," Greg James, publisher of Marijuana Venture and Sun Grower magazines, told Forbes. "There could well be a snowball effect that results in the outdoor growing community having an even harder time selling their crop," he said.

It's not just growers or vaping companies taking a hit. "Any items essential to the day-to-day operations of a cannabis business, from construction equipment to cell phones, will likely increase in price," Kevin Hagan of the Princeton Public Affairs Group told Forbes.

Meanwhile, CNBC reported that unlike other sectors targeted for tariffs, such as imported steel, aluminum, solar panels, and washing machines, whose impacts are slower to show up (how often do you buy a washing machine?), the tariffs on vaping products will have an almost immediate impact. That means consumers will quickly see price increases and adjust their behavior accordingly.

But for some people -- medical marijuana patients -- marijuana isn't a luxury, but a necessity.

"For those who need it, they don't have a choice," Mary Lovely, a professor of economics at Syracuse University and nonresident senior fellow at the Peterson Institute for International Economics in Washington, D.C., told CNBC.

Maybe they can comfort themselves by reading Donald Trump's tweets. As he exclaimed in a tweet the same day as the Office of U.S. Trade Representative hearings, "Tariffs are the greatest!... All will be Great!"

This article was produced by Drug Reporter, a project of the Independent Media Institute.

Chronicle AM: PA Gov Says State Not Ready for Legal Pot, New FDA Guidelines on MATS, More... (8/9/18)

The FDA has issued new draft guidance aimed at expanding the use of medication-assisted treatments (MATs) for opioid addiction, Pennsylvania's governor says the state isn't ready for legal weed, the Oklahoma medical marijuana fight isn't over yet, and more.

Pennsylvania Gov. Tom Wolf (D) isn't on the same page as his counterparts in New York and New Jersey. (Creative Commons)
Marijuana Policy

Pennsylvania Governor Says State Not Ready for Marijuana Legalization. Gov. Tom Wolf (D) said during a radio interview on Tuesday that he doesn't think the state is ready to legalize marijuana. "There are, what, six states that have legalized recreational marijuana in the United States," Wolf said. (The actual number is nine.). "I don't think the citizens of Pennsylvania are ready for it, and so the answer I would say is no… I don't think Pennsylvania's actually ready for recreational marijuana." The position puts Wolf at odds with two neighboring Democratic governors, Phil Murphy of New Jersey, who is strongly pushing legalization, and Andrew Cuomo of New York, who just signed off on the notion.

Los Angeles Won't Vote on Raising Pot Tax in November. The city council has reversed a decision to place a 1% marijuana tax increase on the November ballot. The city estimated it would raise approximately $30 million per year from the tax increase, but faced immediate blowback from industry groups who said pot taxes were already too high and are driving consumers to the black market.

Medical Marijuana

Oklahoma Agencies Still Have "Concerns" Over Legal Medical Marijuana. Interim health commissioner Tom Bates told lawmakers Wednesday that the Health Board still has concerns about how medical marijuana will be implemented and that a special session of the legislature may be needed to see the program properly implemented. The board wants lawmakers to amend the law so that, among other changes, commercial grows are indoor only, patient home grows are prohibited or require a special license, smokable marijuana is prohibited, THC levels are limited to 12% or less, a pharmacist is required on-site at dispensaries, and that a list of qualifying conditions for patients be created. Some of the changes are among those recommended in the Health Board's first try at setting interim rules, which were retracted in the face of loud public opposition. Any effort to re-adopt them is certain to lead to renewed clamor.

Heroin and Prescription Opioids

FDA Seeks to Expand Use of Medication-Assisted Therapies for Addiction. The Food & Drug Administration (FDA) on Monday released new draft guidance aimed at promoting the creation and more widespread use of medication-assisted therapies (MATs) for opioid use disorder. The guidance adjusts how FDA evaluates new treatments for opioid addiction. Instead of only determining whether a treatment lowers opioid use, the agency will now assess whether the medication could help lower overdose rates and limit the spread of infectious disease. "We must consider new ways to gauge success beyond simply whether a patient in recovery has stopped using opioids, such as reducing relapse overdoses and infectious disease transmission," said Scott Gottlieb, FDA commissioner.

Drug War Issues

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