Beau Kilmer is a senior policy researcher at the RAND Corporation, where he codirects the RAND Drug Policy Research Center. His research lies at the intersection of public health and public safety, with a special emphasis on substance use, illicit markets, crime, and public policy. Some of his current projects include estimating the size of illegal drug markets, assessing the consequences of alternative marijuana policies, measuring the effect of South Dakota's 24/7 Sobriety Program on drunk driving and domestic violence outcomes, and evaluating other innovative programs intended to reduce violence. Kilmer's research has appeared in leading journals such as Addiction, American Journal of Public Health, Journal of Quantitative Criminology, Proceedings of the National Academy of Sciences, and his essays have been published by the BBC, CNN, Los Angeles Times, New York Times, Wall Street Journal, and USA Today. His book on marijuana legalization, "Marijuana Legalization: What Everyone Needs to Know" (co-authored with Jonathan Caulkins, Angela Hawken, and Mark Kleiman) was published by Oxford University Press in 2012. Before earning his doctorate at Harvard University, Kilmer received a Judicial Administration Fellowship that supported his work with the San Francisco Drug Court.

The Chronicle interview took place by phone Wednesday morning.

Drug War Chronicle: What are we learning from marijuana legalization so far in Colorado and Washington, especially about prices, tax rates, and regulatory structures?

Beau Kilmer: With respect to prices, I think it's too soon to make a serious judgment. I would expect them to fall eventually as the number of producers increases and there is more competition. Regarding taxes, there is clearly tax revenue coming in, but not as much as expected, partly because medical marijuana markets don't face the same taxes. These markets are in transition, and there are data lags. It's too early to do cost-benefit analyses, and when the data does start coming in, what happens a year or two from now, good or bad, could be completely different from what happens in five or 10 years.

There are two other things we need to consider in doing a cost-benefit analysis. First, when you hear that factor X or Y has decreased or increased, it's important to ask: Compared to what? People will say that this changed in Colorado, but how did it change or not in other states? This is often outside the capacity of news organizations, but when you hear people making these claims, you need to be asking questions. What about neighboring states? If media organizations did that, it could actually improve the quality of the discussion we're having.

The second thing is, don't forget about alcohol. If people are more likely to use alcohol and marijuana together, you have to worry about driving under the influence. Marijuana impairs you somewhat, alcohol impairs you more, and the interaction between marijuana and alcohol can increase the probability of impairment. On the other hand, if they are economic substitutes, if some heavy alcohol users are moving away from consuming it and consuming more marijuana, that could potentially be a net win for society. There are social costs associated with heavy marijuana use, but the social costs associated with alcohol are much greater -- fatal overdoses, chronic disease, violence. We really need to pay close attention to how legalization influences not only marijuana consumption, but also alcohol consumption. We will be watching this, not only in Colorado and Washington, but also in Uruguay.

Chronicle: How worried do we have to be about marijuana dependence, anyway? Is it any worse for the individual or society than, say, dependence on coffee?

Kilmer: Some people do run into problems. It affects their relationships, their employment, their daily behaviors, and can impose costs on them and some of their intimates. Some of those people may benefit from substance abuse treatment. On the other hand, some users get arrested and diverted into treatment when they don't really need it. Many experts agree that it poses less addictive risk than other drugs, not only in the likelihood of addiction, but also the degree. Having a cannabis use disorder is different from having a heroin use disorder.

When it comes to costs to society, a lot of it comes down to different intangibles. It's hard to quantify consequences, say, in terms of relationships with family members. We reviewed studies that look at marijuana compared to other substances, and when it comes to addiction risk, marijuana seems to be at the bottom of the list. It's not that it's not without costs, but in terms of harms associated with it, there seems to be much more harm associated with cocaine, heroin, or alcohol use disorders.

Chronicle: There are several different legalization models out there -- state monopoly stores vs. private stores, for example. Do you have a favorite model?

Kilmer: I completely understand why some jurisdictions would try something other than marijuana prohibition. There's a lot I don't like about it, especially the collateral consequences, but I'm not sure what the best alternative regime is. What's best for one jurisdiction may not be best for another. It's not clear that one size fits all. My opinion is that I will pay close attention to what happens in Colorado and Washington and Uruguay and some of these other places and use that information to update my opinions about marijuana policy. I hope other people do the same.

It's important to keep in mind that there is a lot of policy space in between prohibition and what we see in Colorado and Washington. There are a lot of options out there. You could just allow home cultivation, or you could do something like production co-ops or collectives. It will be really interesting to watch Uruguay, which has three routes: grow your own, join a co-op, or go to the pharmacy.

From a public health perspective, a state monopoly makes a lot of sense. It makes it easier to control prices and advertising. There is a lot of research that has looked at the state monopoly model for alcohol, and it tended to be better for public health. This model doesn't get a lot of attention in the United States, but there are other jurisdictions that may want to think about it.

The other potential advantage of starting with a state monopoly, is that it gives you more options. If a jurisdiction later decides it wants to allow commercial business, you can transition to a commercial model. But once you go from prohibition to a commercial model with for-profit firms and lobbyists, it gets a lot harder to put that genie back in the bottle. It gets entrenched. That's something to keep in mind.

The commercialization aspect is something we need to pay close attention to. In Uruguay, there is no advertising. The folks in Colorado and Washington are working hard to develop reasonable restrictions on advertising, but with the First Amendment here, we can't ban it.

Sunset laws may be advisable. There is a lot of uncertainty, and we don't know what the best model might be. You could start with a co-op model, try that for five or 10 years, then make a decision about whether to continue or go in a different direction. There are a lot of options, and we don't necessarily have to treat policy changes as permanent.

Another thing jurisdictions will want to think about it designing in some flexibility, especially with respect to taxes. No one knows the best way, and there are a number of different models. Colorado and Washington tax as a function of weight, but you could tax as a function of amount of THC, for instance. The takeaway is that we want to make sure that as we get information, we can incorporate that information in our decision-making about how to tax.

Chronicle: What about eliminating black markets?

Kilmer: You have to think about this over time. No one thinks we're going to eliminate the black market overnight. In both Colorado and Washington, it's been a slow roll-out of the stores, especially in Washington, so you have to look at this over the long run. Also in the long run, prices will fall, and as prices fall, ad valorem taxes based on price will fall, too. That's something else to think about.

Another issue to consider is that we have to remember that depending on where you are in the country, people under 21 will account for 20%-25% of consumption. It will be interesting to see what happens when they catch them, what penalties are imposed on the users and those that supply them. Will it be like the alcohol model or more severe? These are the kinds of issues that can be addressed in new initiatives or legislation.

Chronicle: Where and how does medical marijuana fit into all this?

Kilmer: Good question. It's going to be very interesting to see how this plays out with regard to medical marijuana. In both Colorado and Washington, there were very robust medical markets before legalization. In other jurisdictions, as they write initiatives or bills, will they try to build that in? I don't know what's going to happen.

Chronicle: Where is this all heading? We could have 10 legal states after 2016. Then what?

Kilmer: I guess we'll see how far we get.

The House okays marijuana banking, DC decriminalizes tomorrow, DC expands its medical marijuana program, Miami-Dade taxpayers pay for a particularly heinous killer drug raid, a lot of states did sentencing reforms last year, and more. Let's get to it:

Marijuana Policy

House Votes to Let Banks Take Deposits from Marijuana Businesses. In a historic vote this afternoon, the US House has approved an amendment to the Treasury Department appropriations bill barring the agency from spending any money to punish financial institutions that provide services to marijuana businesses where it is legal. The amendment was sponsored by Reps. Heck (D-WA), Perlmutter (D-CO), Lee (D-CA) and Rohrabacher (R-CA). It passed with bipartisan support.

DC Decriminalization Law Goes Into Effect Tomorrow. As of one minute after midnight, the possession of an ounce or less of marijuana will be decriminalized in the nation's capital. Jail time for pot possession will be replaced with a $25 fine. A Republican-led effort in the House to block it remains alive, but will not stop the law from taking effect -- at least for now. That effort still has to get through the Congress and overcome White House opposition, and that looks like a long-shot at this point.

Grosse Point, Michigan, Initiative to Legalize Up to an Ounce Turns in Signatures. A municipal initiative campaign to legalize the possession of up to an ounce of pot in the Detroit suburb of Grosse Point turned in more than 600 signatures today. The group needs 493 valid voter signatures to qualify for the November ballot. Grosse Point is one of a handful of Michigan towns with similar campaigns this year, including Berkley, Hazel Park, Huntington Woods, Oak Park, and Pleasant Ridge.

Santa Fe, New Mexico, Initiative to Decriminalize Marijuana Possession Turns in Signatures. Progress Now New Mexico and Drug Policy Action (the campaign arm of the Drug Policy Alliance) have submitted more than 7,000 signatures for an initiative that would decriminalize the possession of up to an once of marijuana. They need 5,763 to qualify for the ballot.

Medical Marijuana

DC City Council Approves Medical Marijuana Expansion. The city council Tuesday approved legislation to loosen restrictions on the District's medical marijuana program. The measure replaces a restrictive list of defined illnesses and conditions with a blanket authority for doctors to recommend medical marijuana for "any condition for which treatment with medical marijuana would be beneficial, as determined by the patient's physician."

Michigan Legislature Set to Vote on Medical Marijuana Improvement Measures This Week. Senate Majority Leader Randy Richardville (R) said he expects the Senate to vote this week on a pair of measures to improve the state's medical marijuana program. One would allow localities to govern their own dispensaries; the other would allow the sale of edibles and concentrates.

LA Medical Marijuana Farmers' Market Hit With Temporary Injunction. A Los Angeles Superior Court judge Tuesday issued a temporary restraining order shutting down a medical marijuana farmers' market that drew thousands when it opened a couple of weeks ago. A hearing on a permanent injunction is set for August 6.

Thousands Sign Petition Supporting Fired University of Arizona Researcher. A petition demanding that the University of Arizona research scientist Dr. Suzanne Sisley be rehired after being fired after she won federal approval to study marijuana for military veterans with post-traumatic stress disorder has received more than 27,000 signatures. Sisley made no bones about blaming conservative Arizona political figures for her firing. Click on the link to read her comments.

Harm Reduction

Ohio Cops Slow to Carry Overdose Reversal Drug. Gov. John Kasich (R) signed a law allowing law enforcement officers to carry and administer the opiate overdose reversal drug naloxone in March, but Ohio police are slow to get with the program. Police in Columbus said they have no plans to carry it "anytime soon," and many rural agencies are also unwilling to do it. About 17 people a week are dying from opiate overdoses in Ohio. Under the new law, the drug is also available to friends, family members, and "others who may be in a position" to assist with reversing overdoses.

Law Enforcement

Miami Agrees to Pay in Death Squad-Style Police Drug Robbery Sting Killings. Miami-Dade taxpayers will shell out $600,000 to the families of three men killed by a Miami-Dade SWAT team during a drug house robbery sting. Four men, including an informant for the police, were gunned down when they appeared on the scene of a home they had been told was stuffed with drugs for them to rob. The informant's family didn't join the settlement; it is pursuing a wrongful death lawsuit in federal court. Police video of the raid shows officers firing dozens of shots into the body of a man already on the ground. It also shows the informant surrendering to police moments before they shot and killed him, too. Prosecutors suspect police officers of misconduct but were unable to develop enough evidence to charge any of them.

Almost All US Wiretaps Are for Suspected Drug Deals. A new Administrative Office of US Courts report reveals that not only did wiretaps hit an all time high last year, but that nearly 90% of them were for drug investigations. Of the 3,576 wiretaps sought by federal law enforcement agencies, 3,115 were for drug investigations.

Sentencing

Vera Institute of Justice Releases Report on 2013 State Sentencing Reforms. The report, Recalibrating Justice: A Review of 2013 State Sentencing and Corrections Trends, finds that 35 states passed at least 85 bills to reform sentencing and corrections last year. The legislation generally focused on reducing prison populations, strengthening community-based corrections, supporting reentry, and creating better research and analysis to drive policy decision-making.

International

Dutch Border Town Cannabis Café Owner Cleared of Most Charges. The owner of the Checkpoint Café in the in the town of Ternuezen near the Belgian border has been cleared of most charges against him by an Amsterdam appeals court. The café was closed in 2007 for violating government rules on soft drug sales, and the owner was found guilty of membership in a criminal organization. But the appeals court ruled that the state had not proven Checkpoint knowingly broke the rules. It was the second such decision in the past month.

The exhibition hall in the Denver Convention Center last week was a wonder to behold. Automated, high-capacity marijuana trimming machines. Industrial strength cannabis oil extraction devices. Marijuana real estate specialists. Marijuana accountants. Marijuana attorneys -- real estate, intellectual property, contracts. Marijuana consultants. Marijuana investment advisers. Point-of-sale marijuana sales tracking systems. Chemical testing companies. Vaporizer sellers. Odor-proof bag producers. Automated rolling machine makers. Anything and everything to do with the business of legal marijuana. All in a high-gloss trade show environment.

It was the National Cannabis Industry Association's (NCIA) Cannabis Business Summit, which brought more than 1,200 registrants to the state capital that for now at least is also the capital of legal marijuana. And it represents a new phase in the evolution of marijuana policy.

This is not your father's marijuana movement. There were lots of men in dark suits and ties, lots of women in snappy professional attire. A few dreadlocks here and there, but only a few. And nary a tie-dye to be found. There wasn't a whole lot of talk about how "We have to free the weed, man;" although social justice including ending prohibition came. up. There was a whole lot of talk about business opportunities, investment strategies, and how to profit from crumbling pot prohibition, as well as the dangers and pitfalls facing would-be entrepreneurs in an industry still illegal under federal law.

The legal marijuana industry has been bubbling up for awhile now, building from the quasi-legalization that is medical marijuana in Wild West California and the more regulated, but still thriving medical marijuana industry in states like Colorado, Oregon, and Washington. In the past decade or so, the High Times Cannabis Cup has evolved from a November trip to Amsterdam to a virtual traveling circus of all things pot-related. And marijuana trade expos have drawn crowds in the tens of thousands.

But one can reasonably argue that last week's Cannabusiness Summit represents the maturation of marijuana as an All-American business opportunity. With Colorado this week beginning to accept applications from people who don't represent medical marijuana dispensaries (for the first six months of commercial legalization, only operating dispensaries could apply) and Washington state set to see its first retail marijuana operations next week, the era of legal marijuana is truly upon us. And it's likely to continue to expand, with Alaska, Oregon, and Washington, DC, poised to join the ranks of the legalizers after elections later this year.

The Cannabis Business Summit was, unsurprisingly, mainly about the nuts and bolts of operating a legal marijuana business. It could have been any industrial trade show and conference, except this was about weed. Panels covered topics such as "Grow 101: Cultivation Facility Build-Out and Management Best Practices," "Advanced Cultivation: Scalability, Sustainability, and Growth Management," "Protecting Your Investment: Risk Management and Insurance for the Cannabis Industry," and "International CannaBusiness Opportunities." And that was just session one of day one.

Marijuana is an industry on a roll, and the NCIA can point to its own success as exhibit one.

"We now have over 600 marijuana business members, and that has doubled since January," said NCIA founder and executive director Aaron Smith in a keynote speech. "When Steve Fox and I started the NCIA in 2010, we had 20 members. Investors and entrepreneurs are rushing into this new space."

That, in turn, is allowing NCIA to expand its operations, Smith said.

"We're seeing more experienced business people because they understand what a trade association is," Smith explained. "So we've been able to staff up, we have a full-time DC lobbyist, which is a first for the industry, and we've already contacted every congressional office on the Hill and had sit-down meetings with half the House offices and 30 Senate offices. We're also attending campaign fundraisers on behalf of the NCIA."

Although the conference was all about business, Smith made clear that the NCIA had not forgotten that these business opportunities have come about because of a decades-long movement for social justice and human liberation around marijuana policy.

"We have to acknowledge those who came before us," he told his audience of businesspeople. "Before we were an industry, we were a movement, and we are still a social movement. The growth of this new industry will drive the final nail in the coffin of marijuana prohibition, so that no one is put in a cage for using a beneficial, extremely therapeutic herbal product ever again."

The industry has to put its best face forward, Smith said.

"We are still under scrutiny, the world is watching Colorado and Washington, as well as the medical marijuana states, and we have to lead by example," he said. "Be a good neighbor and corporate citizen. Reach out to neighborhood associations and work with them. Contribute to the community. Be a model citizen. Be professional. Don't use marketing you wouldn't want your mother to see."

Smith wasn't the only NCIA officer to warn the industry it needed to watch its step. NCIA deputy director Taylor West had more words of wisdom in a session on marketing and communications.

"This is a cultural movement in the midst of an enormous wave, and we have the opportunity to define an idea on the rise, to be responsible, and to do the education around that," she said. "We are building an industry from scratch, and we have to take this opportunity to make this an industry that's not like every other industry."

That requires some maturity within the industry, the communications specialist said as she displayed tacky advertising images of scantily clad women covered in marijuana buds.

"Responsible branding is important," West noted. "Don't screw it up for everybody. We don't have a rock-solid foundation, and we're still very vulnerable from a public opinion and policy standpoint. Don't market to children and don't market like children," she said. "We're like the wine industry or craft beers or wellness. No one is ever drunk in a wine commercial. And," she said, pointing to the tacky ads, "don't alienate half the population."

There are many issues facing the nascent marijuana industry, but both the conference agenda and the talk in the corridors made it clear that the federal tax issue takes center stage. Under current federal law, marijuana remains illegal, and that means marijuana businesses cannot take standard business tax deductions under an Internal Revenue Service (IRS) provision known as 280E.

"This law must be changed, and this law can be changed. If Obama won't do it, we will do it for them," said marijuana tax attorney Henry Wykowski before heading deep into the weeds in a discussion of the intricacies of dealing with 280E.

"There is legislation to address this," said NCIA Capitol Hill lobbyist Mike Correia, pointing to Rep. Earl Blumenauer's (D-OR) House Resolution 2240, the Small Business Tax Equity Act of 2013.

But it's unlikely to go anywhere anytime time soon, Correia said. The congressional bill tracking service GovTrack.us agrees, giving the bill zero percent chance of passage this session.

"This is sitting in Ways and Means," Correia explained. "It's a Democratic bill in a Republican-controlled House, and the committee chairman is not a fan."

There is one back-door possibility for moving the bill, though, the lobbyist said.

"Every few years, the Congress addresses aspiring tax breaks," he noted. "They usually pass it in the middle of the night when no one is watching. I hope to have 280E provisions inserted into a bigger tax bill, but we need to get Republicans to support it. The Ways and Means members are not from marijuana-friendly states, so it's hard to get traction, but next year, Paul Ryan (R-WI) will be chair, and he could be more responsive."

The nascent marijuana industry has other issues, of course, but the Denver conference was a strong signal that the marijuana movement is indeed mutating into a marijuana industry. The power of American entrepreneurialism is very strong, and it looks like it's about to run right over the remnants of marijuana prohibition.

But the industry needs to remember that while we now have legal marijuana in two states, there are still 48 states to go. For people in Alabama or South Dakota or Utah, for example, the issue is not how much money you can make selling marijuana (or marijuana-related products or services), but the criminal -- and other -- consequences of getting caught with even small amounts. If the industry is indeed the movement, it needs to be putting its money where its mouth is to finish the work that remains to be done.

Jamaica will decriminalize pot possession and Bermuda is thinking about it, legalization initiatives in Alaska and Oregon get big bucks donations, medical marijuana reform is moving in the DC city council, and more. Let's get to it:

MPP Gives Alaska Initiative Campaign Big Cash Contribution. The Marijuana Policy Project, which is backing the Alaska legalization initiative, has just kicked in another $140,000. That's the second largest contribution to the campaign yet (the biggest, also from MPP, was $210,000), and pushes its total contributions to over half a million dollars. The organized opposition -- Big Marijuana, Big Mistake, Vote No on 2 -- has, on the other hand, raised only $31,000, most of it in a single donation by an Alaska Native village corporation.

Peter Lewis Family Gives Oregon Initiative Campaign Big Cash Contribution. A PAC controlled by heirs of Progressive Insurance founder and drug reform funder Peter Lewis has donated $250,000 to the New Approach Oregon legalization initiative. Lewis had donated $96,000 before his death last fall, and there were fears his death could end his reform largesse, but his family is carrying on. The group has raised more than $900,000 overall.

SurveyUSA Oregon Poll Has 51% for Legalization. A new SurveyUSA poll in Oregon has 51% supporting marijuana legalization, with 41% opposed, and 8% undecided. The poll comes as three legalization initiatives are in the final weeks of signature-gathering to put the issue on the November ballot. Initiative organizers are not going to breathe easy with numbers like these, though; the conventional wisdom is that initiatives want to be polling at 60% or above before the campaign begins in earnest. Click on the link for demographic and methodological details.

Medical Marijuana

DC Council Moves Toward Approving Expanded Medical Marijuana Access. The District of Columbia city council moved ahead yesterday with plans to expand access to medical marijuana. In a joint session of the Health and Judiciary and Public Safety committees, the council gave preliminary approval to two bills. Bill 20-766, cosponsored by every member of the council, would repeal the qualifying conditions list and allow physicians to recommend marijuana to any patient they think marijuana would benefit. Bill 20-678, will increase the number of plants a cultivation center could possess from 95 to 500, better ensuring that patient need is met.

Feds Warn Casinos to Not Take Bets Made With Marijuana Money. Federal regulators addressing a banking secrecy conference in Las Vegas yesterday warned casinos they can't accept bets from people working in the marijuana industry unless the casinos undertake rigorous background checks and allow the federal government to monitor the bets. That's because casinos are subject to the same financial reporting requirements as financial institutions. It's a lengthy report; click on the link to read it all.

Sentencing

Fair Sentencing Act Gets Another Cosponsor. Add Rep. David Joyce (R-OH) to the list of cosponsors of the federal Fair Sentencing Act of 2013. He signed on yesterday. That makes 24 Democrats and 14 Republicans. The bill is before the House Judiciary Committee. Clicking on the link will take you to the bill.

Law Enforcement

Virginia Sheriff's Office Makes Mass Drug Bust… Again… and Again. The Amherst County Sheriff's Office announced yesterday that a county grand jury had indicted 68 people on drug charges after a months-long investigation by the department. It's the third mass bust since 2010's Operation Silent Night and 2012's Operation Avalanche. The sheriff's office seems to understand--at least on some level--the futility of such operations: "It stops these folks from selling drugs [but] as soon as you remove these folks, someone else takes their place. It's a never-ending cycle we're working on," a spokesman said.

International

Jamaica Will Decriminalize Marijuana Possession. Jamaica will decriminalize the possession of small amounts of marijuana, the government announced yesterday. It will also allow possession for some medical and scientific purposes. And it will allow possession for religious purposes. Justice Minister Mark Golding said that the cabinet is supporting a proposal to decriminalize the possession of to two ounces of the ganja. Under the proposal, those caught with marijuana could be subjected to fines, but not criminal charges.

Bermuda's Attorney General Says Government Should Consider Marijuana Decriminalization. As the Bermudan government mulls marijuana reform, new Attorney General Trevor Moniz has come out for decriminalization. Moniz would prefer "a system where if you get caught with a small amount of marijuana, you don't go to court and you wouldn't have any criminal record," he said. "In New York and the UK., they have a caution only for a first offence, which may need to be broadened. I'm in favor of small steps, incremental steps, rather than a big leap," he added.

Barcelona Bans New Cannabis Clubs for a Year. Citing a proliferation of private cannabis clubs and a lack of regulation, the Barcelona city council announced today it was instituting a moratorium on new clubs for one year. The crackdown comes just days after a club was closed for illegal sales. The clubs allow members to grow and consume their own cannabis, but they aren't supposed to sell the stuff to outsiders. The clubs have been attracting cannabis tourists from around the world.

Conflict in Turkish Municipality Tied to Marijuana Crop. Three weeks of violent protests in the municipality of Lice in Diyarbakir Province, where Kurds predominate, are linked to the looming marijuana harvest, some of the profits from which are destined for the Kurdistan Workers Party (PKK), according to this report. Violent incidents have been ongoing since demonstrators attacked a security forces outpost with homemade bombs and Molotov cocktails, and soldiers opened fire, killing the nephew of a "notorious trafficker."