CQR Marijuana Industry - Goucher College

marijuana IndustryWill growth continue despite the challenges?

Sales of medical and recreational marijuana totaled

nearly $3 billion last year in what is one of the

nation’s fastest-growing industries. Experts say sales

could reach $35 billion by 2020 if all 50 states and

the District of Columbia legalize the drug. Currently, 23 states and

the District of Columbia sanction medical marijuana, and four of

those states and the District allow both medical and recreational

use. voters in more states are expected to legalize cannabis in

2016. Yet the industry faces big hurdles. Possession or sale of

marijuana remains illegal under federal law, and while the Obama

administration has opted not to enforce the law against users in

states that have legalized pot, the next president could abandon that

policy. what’s more, banks fearful of violating the federal law are

refusing to offer financial services to marijuana entrepreneurs,

making it difficult for them to expand their businesses and meet

soaring public demand. And while legal marijuana is generating

millions in state taxes, critics say the social costs, such as marijuana-

impaired driving, far outweigh the benefits.

A customer shops for recreational marijuana at adispensary in Portland, Ore. Twenty-three states andthe District of Columbia permit medical marijuana,and four of those states plus the District permit

both recreational and medical marijuana.

CQ Researcher • Oct. 16, 2015 • www.cqresearcher.comVolume 25, Number 37 • Pages 865-888

RECIPIENT Of SOCIETY Of PROfESSIONAL JOURNALISTS AwARD fOR

EXCELLENCE � AmERICAN BAR ASSOCIATION SILvER GAvEL AwARD

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THE ISSUES ....................867

BACKGROUND ................873

CHRONOLOGY ................875

CURRENT SITUATION ........880

AT ISSUE........................881

OUTLOOK ......................883

BIBLIOGRAPHY ................886

THE NEXT STEP ..............887

THISREPORT

Published by CQ Press, an Imprint of SAGE Publications, Inc. www.cqresearcher.com

866 CQ Researcher

THE ISSUES

867 • Is legalized marijuanagood for the U.S. economy?• Should medical and recre-ational marijuana have differentregulatory standards?• Is the marijuana industry’seconomic growth sustainable?

BACKGROUND

873 Antiquity to 1900Cannabis and hemp were usedwidely for centuries.

874 Marijuana and the LawCongress began regulatingcannabis in 1906.

877 Path to LegalizationIn 1973 Oregon became thefirst state to reduce penaltiesfor marijuana possession.

CURRENT SITUATION

880 Legal IssuesColorado is a legal battle-ground between the cannabisindustry and those seekingto halt or reverse its growth.

880 Cannabis BusinessDespite marijuana’s legal un-certainties, the industry is be-ginning to attract investors.

882 2016 Electionsmeasures to legalize recre-ational and medical marijuanawill be on the ballot in several states.

OUTLOOK

883 De Facto Legalization?many industry observersthink the federal governmenteventually will allow states toregulate marijuana.

SIDEBARS AND GRAPHICS

868 Medical Marijuana Legalin 23 StatesOnly four states and the Districtof Columbia have legalizedrecreational sales.

869 Marijuana Sales Could Hit$35 BillionRevenue could skyrocket if all50 states plus D.C. legalizecannabis.

872 Majority of AmericansSupport LegalizationSupport for legalizing marijuanahas exceeded opposition since2013.

875 ChronologyKey events since 1840.

876 Cannabis College CultivatesPot ProfessionalsOaksterdam University educates entrepreneurs buthas faced controversy.

878 Hemp Farmers Watchingthe Legal SkiesCrop promises profits, butpolice oppose legalization.

881 At Issue:Should federal laws be enforced where marijuana is legal?

FOR FURTHER RESEARCH

885 For More InformationOrganizations to contact.

886 BibliographySelected sources used.

887 The Next StepAdditional articles.

887 Citing CQ ResearcherSample bibliography formats.

mARIJUANA INDUSTRY

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marijuana Industry

THE ISSUESfrom the outside, the

Seattle Cannabis Co. isnot much to look at —

a squat, asphalt-gray buildingon a gritty street in Seattle’sindustrial SoDo (South ofDowntown) district. Opaquewindows thwart curiouspassersby, and a polite butno-nonsense doorman checksphoto IDs to verify customersare over 21.

Inside, however, the store’sspacious, brightly lit show-room gives customers a glitzy21st-century welcome to thenew world of legal recreationalmarijuana. Glittering displaycases line the walls, showingoff dozens of types of marijuana— maui wowie, Permafrostand Snoop’s Dream amongthem. Upbeat, contemporarymusic murmurs quietly as cus-tomers and sales staff — “bud-tenders” — discuss the effectsproduced by the differentstrains of pot. On the walls,flat-screen televisions advertisethe store’s myriad products —including brownies and other ediblesand concentrates that can be inhaled,eaten, drunk or rubbed onto the skin.

“Typically we get 100 to 150 cus-tomers a day,” says Steven Ode, chiefof operations. “Business is good. we’remeeting payroll and paying our bills.we’re in a good position for the future.The profits aren’t there yet, but theywill come. It just comes with the territoryof breaking into a new industry.”

It’s a very new industry, indeed.washington is one of four states plusthe District of Columbia that have le-galized the recreational use of mari-juana. The nation’s first legal retailstores selling marijuana for recreationaluse opened in Colorado on Jan. 1,

2014, followed by stores in washingtonstate on July 8 of that year. Recreationalsales in Oregon began this past Oct. 1.Alaska and washington, D.C., also havelegalized recreational marijuana, butsales have yet to begin. In addition,23 states and the District have legalizedmarijuana for medicinal use.

marijuana businesses operate in ahazy legal environment. Under the fed-eral Controlled Substances Act, mari-juana is classified along with cocaineand heroin as a Schedule I drug —the most dangerous — and is illegalto grow, possess or sell. The Departmentof Justice (DOJ) announced it will notchallenge state pot laws unless theyconflict with federal priorities — to

prevent distribution to minorsand keep marijuana-generatedrevenue from reaching crim-inals.

But the no-prosecution di-rective only prescribes cur-rent DOJ procedures underthe Obama administration.Since marijuana is illegalunder federal law, investorsand entrepreneurs are waryof getting into the industry,and stores like Ode’s find itdifficult to get banking ser-vices such as checking ac-counts and credit card pro-cessing. “This is a cash-onlybusiness,” Ode says.

Aiding and abetting pro-duction and distribution ofmarijuana remains a felonyunder federal law, wrote JulieAndersen Hill, an associatelaw professor at the Univer-sity of Alabama. “By provid-ing a loan and placing theproceeds in a checking ac-count, the [banking] institu-tion would be conspiring todistribute marijuana,” Hillwrote. “facilitating customers’credit card payments wouldbe aiding and abetting the

distribution of marijuana.” 1

Rep. Earl Blumenauer, an OregonDemocrat who is cosponsoring federallegislation to allow banks to provideservices for legitimate marijuana-relatedenterprises, says he finds the possibilityof federal charges “ludicrous.”

He asks: “If you care about moneylaundering or tax evasion or criminalthreat, what’s the public policy that’sadvanced if legal marijuana businesseshave to accumulate shopping bagsfulof $20 bills to pay their state taxes?It’s dangerous and it’s ill-advised.” 2

But Calvina fay, executive directorof the anti-legalization Drug free Americafoundation, says she is “stunned thatanyone in Congress would seriously

By William Wanlund

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Marijuana proponents call for legalization of pot duringthe annual Hash Bash rally at the University of Michiganin Ann Arbor on April 4, 2015. The marijuana industrycould reach $20 billion a year in sales by 2020 — and$35 billion if all 50 states and Washington, D.C.,

legalize the drug.

868 CQ Researcher

consider” letting banks deal with mar-ijuana enterprises. “Banks are federallyregulated, and marijuana is still illegalat the federal level,” she says. “Regard-less of how anyone feels about mar-ijuana, laws are laws, and we are sup-posed to be a country that respectsthe laws.”

Taylor west, deputy director of theDenver-based National Cannabis In-dustry Association (NCIA), says bankingrestrictions are “not safe, and they createaccounting issues. And, from the reg-ulatory perspective, if you want to beable to keep track of what’s happeningwith these businesses, then you don’twant them operating entirely in cash.[The government doesn’t] force anyother industry to do that.”

However, west says, “I’ve never heardof a situation in which a financial institutionhad actually been prosecuted for dealingwith a state-legal marijuana business.”

federal tax policy is another majorhurdle for the marijuana industry, westsays. “The federal tax code says if youengage in trafficking of a controlledsubstance, you cannot deduct your nor-mal business expenses,” she says. “Thatmeans businesses that cultivate and sellmarijuana legally under state law arepaying taxes roughly on their gross rev-enue rather than their profit, unlike everyother business in the United States.”

Geneva Shaunette, general managerof Alpine wellness, a medical and recre-ational marijuana dispensary in Tel-luride, Colo., says her company paysa “staggering” amount of taxes. “we’resending anywhere from $30,000 to$50,000 to the federal government everymonth” just in payroll and incometaxes, she says. And because the com-pany cannot open a bank account,she adds, “I spend a couple of hoursevery morning counting cash and set-

ting it aside in piles to pay salaries,to pay rent, to pay electric bills.”

Nevertheless, recreational marijuanasales are soaring. from July 8, 2014, toJune 30, 2015, the first full year of le-galization in washington state, retail recre-ational marijuana sales statewide totaledalmost $260 million. 3 Recreational salesin Colorado’s first year (Jan. 1-Dec. 31,2014) totaled $313 million. 4 *

The Arcview Group, a network ofcannabis-industry investors that includesventure capitalists and entrepreneurs, es-timated the industry’s combined 2014retail and wholesale sales (including med-ical marijuana) at $2.7 billion, a 74 percentincrease over 2013, making marijuanathe “fastest-growing industry in America,”according to the group. 5

However, the laws governing med-ical marijuana vary widely from stateto state. Patients must register andobtain physician approval in all states.But while most jurisdictions allow mar-ijuana use only for specific medicalconditions such as glaucoma, Crohn’sdisease and some forms of cancer, inplaces such as California a recommend-ing physician currently can decidewhether marijuana would be a suitabletherapy regardless of the condition. 6

Some states allow dispensaries to sellto eligible patients from other states;others do not. And some jurisdictionsallow qualified patients to grow mari-juana for their own medical use. 7

California’s medical marijuana industry,the nation’s largest, has generally beenregarded as the most loosely regulated,but changes are in store. Legislationsigned by Democratic Gov. Jerry Brownin October 2015 establishes a statemedical marijuana bureau to overseetransportation, distribution and sale ofthe drug. It also requires marijuanafarmers to obtain state licenses and

mARIJUANA INDUSTRY

Alaska

Hawaii

Medical Marijuana Legal in 23 StatesTwenty-three states and the District of Columbia have legalized medical marijuana, but only Alaska, Colorado, Oregon and Wash-ington state, plus the District, allow residents to possess, grow or consume recreational and medical marijuana. D.C. alone bars businesses from selling marijuana for recreational purposes.

N.Y.

Ohio

Texas

Va.

Minn.

Iowa

Mo.

Calif.

Nev.

Ore.

Colo.

Wash.

Idaho

Mont.

Utah

Ariz. N.M.

Wyo.

N.D.

S.D.

Okla. Ark.

La.

Ill.

Miss.

Tenn.

Ga.

Conn.

Mass.

R.I.

MaineVt.

W.Va. N.J.

Del.

Md.

Ala.

Fla.

Wis.

Mich.

Ind.

N.C.

S.C.

N.H.

Kan.Ky.

D.C.

Neb.Pa.

Source: “State Marijuana Laws Map,” Governing, updated June 19, 2015, http://tinyurl.com/lv4r7f3

Marijuana Laws by State(as of June 19, 2015)

Recreational and Medical Marijuana Legal

Medical Marijuana Legal

* Retail sales in Oregon began on Oct. 1, 2015;Alaska’s are expected to begin in 2016. AlthoughWashington, D.C., voters legalized recreationalmarijuana in 2014, Congress has blocked itsimplementation.


establishes procedures to overseephysicians who prescribe the drug.Brown said the new regulations, whichgo into effect in 2018, “will makesure patients have access to medicalmarijuana, while ensuring a robusttracking system.” 8

Oversight of the medical marijuanaindustry in many states is fairly loosecompared to the strict regulations gov-erning state-authorized recreationalmarijuana growers and distributors.Thus, some authorities suspect thatmedical marijuana cultivation facilities,or “grows,” and dispensaries serve ascover for black-market activities. Loop-holes in Colorado’s medical marijuanaregulations “allow people to grow waymore than they could possibly smoke”for medical use, says Sheriff Bill mastersof San miguel County. “Smugglers cometo [the grow], buy a couple hundredpounds and transport it to the blackmarket in other states,” he says. “It’snot the regulated, recreational side ofthe industry that causes the problem.”

A new drug that is growing in pop-ularity, known as synthetic marijuana,could represent a challenge for the mar-ijuana industry. The noncannabis product,which contains chemicals and dried plantmaterial, produces psychoactive effectssimilar to those produced by marijuanabut is more dangerous: It can causedeath, seizures, psychotic episodes, heartattacks and strokes. 9 Synthetic marijuanakilled 15 people in the first half of 2015— three times as many as in sameperiod in 2014, according to the Centersfor Disease Control and Prevention. Andphone calls to poison control centersabout synthetic marijuana rose 229 per-cent during the same period. 10

Synthetic marijuana is also cheaperthan marijuana and is readily availableonline and in gas stations, drug para-phernalia shops or tobacco shops, rais-ing questions about whether it couldeat into the profits of those sellingregular marijuana in states where it islegal. marijuana retailers are prohibitedfrom dealing in synthetic marijuana.

However, NCIA’s west says so farsynthetic marijuana has not had “anysignificant impact” on the legal market,nor has it caused an anti-cannabis pub-lic backlash.

Responding to growing interest incommercial marijuana, at least eightbrick-and-mortar colleges and univer-sities, including Harvard, Ohio Stateand vanderbilt, are offering courses invarious aspects of marijuana businessand law. 11 Nonaccredited OaksterdamUniversity in Oakland, Calif., offerscannabis-related courses ranging fromhorticulture to culinary arts to businessmanagement. (See sidebar, p. 876.) Andseveral institutions, including THC Uni-versity and the College of Cannabis,offer online courses.

As marijuana’s economic impactgrows, here are some of the questionsbeing debated:

Is legalized marijuana good forthe U.S. economy?

In february 2014, a month after Col-orado became the first state to legalizerecreational marijuana use, DemocraticGov. John Hickenlooper predicted first-year cannabis sales would generate

$98 million in state sales, excise andother fees and taxes. 12

It didn’t happen. That year, marijuananetted Colorado just $52.6 million intax revenue. 13 Some analysts thoughtthe sales tax made prices for legal mar-ijuana uncompetitive with what buyerscould find on the black market. In Jan-uary 2014, legal marijuana prices werereportedly two to three times higherthan in the underground market. 14 Themarijuana Policy Group, a Denver-basedadvocacy firm that analyzes marijuanapolicies, estimated that only 60 percentof 2014 marijuana purchases in the stateoccurred in legal outlets. 15

Revenues in the first seven monthsof 2015, however, were greater thanall of last year. As of July 31, Coloradohad taken in nearly $73.5 million intaxes and fees. 16 Although that rep-resents only a fraction of Colorado’s$25 billion 2015-16 budget, the revenuesare earmarked for new school con-struction and drug treatment and pre-vention programs. 17 The consumerinformation website Nerdwallet con-cluded that if marijuana were legal na-tionwide, states could collect about$3.1 billion a year in tax revenue. 18

Marijuana Sales Could Hit $35 BillionMedical and recreational cannabis could generate $22 billion in annual revenue by 2020 — and $35 billion if all 50 states and the District of Columbia legalize marijuana sales, according to projec-tions by the industry research firm GreenWave Advisors.

Estimated Revenue for Medical andRecreational Marijuana,in $ billions, 2013-2020

(in $billions)

05

101520253035

$40Estimated Revenue for Medical and

Recreational Marijuana,in $ billions, 2013-2020

)

2025303540

2020*2020201920182017201620152014201305

101520

2020*20202019201820172016201520142013

Medical

Recreational* If all 50 states plus the District of Columbia legalize marijuana sales.

Source: “State of the Emerging Marijuana Industry: Current Trends and Projections,” GreenWave Advisors, October 2014, http://tinyurl.com/lunuajl

870 CQ Researcher

Kevin Sabet, president and CEO ofSmart Approaches to marijuana (SAm),an advocacy group opposed to legal-ization, says such revenue won’t com-pensate for the social costs of legal-ization. The income “is going to bepennies compared to the cost,” he says,such as car accidents resulting frommarijuana-impaired driving and emer-gency room visits for children who eatcannabis-infused brownies and candy. “The

industry is marketing these kinds of prod-ucts and targeting kids,” Sabet says.

The National Cannabis Industry As-sociation’s west replies, “where is theevidence that businesses are targetingchildren? No street dealer is checkingIDs or providing child-proof packagingor carefully labeling products,” she says.“when we take cannabis out of theunderground market and put it behinda legal, regulated counter, we createa safer, more responsible system.”

Legalization supporters say a regu-lated cannabis industry also will boostemployment. Marijuana Business Daily,

an industry publication, estimates thatbetween 46,000 and 60,000 people arein the legal cannabis industry, workingfor growers, retailers, testing labs andmakers of infused (non-smoked) prod-ucts such as edibles, beverages andointments. Sales of ancillary productsand services could increase the totalby 50 percent, the newspaper said. 19

Ancillary businesses include lightingmanufacturers, contractors who build

grower warehouses, and those whoinstall climate control systems and pro-vide soil, additives and nutrients.

In addition, says west, dispensariesneed “software for inventory trackingand point of sale, packaging and spe-cialized services — accounting, attor-neys, branding and market research andhuman resources — pretty much anyservice that a packaged-goods industryor a horticultural industry would need.”

Legalization also can reduce law en-forcement costs, supporters say. A 2005study by Jeffrey miron, then a visitingprofessor of economics at Harvard Uni-

versity, found that legalizing marijuananationwide would save federal, stateand local law enforcement agencies$7.7 billion a year. The savings wouldaccrue, he said, because fewer police,prosecutorial, judicial and correctionalresources would be needed. 20

But David Evans, a lawyer in Pittstown,N.J., and special adviser to the Drug freeAmerica foundation, which opposesmarijuana legalization, says the idea that“you’re going to save all this prison andcourt time” is “a complete falsehood.”People are not in prison “for having acouple of joints in their pocket,” hesays. “The people in prison for possessionare major traffickers.”

People arrested for marijuana haveusually been arrested for somethingmore serious, and had marijuana ontheir person, Evans says. “They’ll pleadguilty to the marijuana charge so theirrecord shows they were found guiltyof marijuana possession, when theirsentence was really only the result ofa plea bargain.”

Rep. Blumenauer of Oregon sayslegal cannabis can greatly benefit theU.S. economy. “If we can have a rationalmarijuana policy, I think we will seein the next 10 years a shift of wellover $100 billion in net savings just togovernment, to say nothing about op-portunities for the private sector,” hesays. “we really don’t know the full ex-tent of what a legal marijuana industrywould be because, by definition, mostof this so far is in the shadows.”

According to Alejandro Hope, di-rector of security policy at the mexicanCompetitive Institute, a mexico Citythink tank, “Approximately 30 percentof [drug] cartels’ export revenues comefrom marijuana. The market is definitelychanging, but cartel adaptation willhappen in years not months,” Hopesaid. “In the long term, mexican mari-juana could be displaced by legal pro-duction in the United States.” 21

Nationwide, marijuana seizures de-creased 21 percent in 2014 — from2.4 million pounds in 2013 to 1.9 million

mARIJUANA INDUSTRY

Rep. Earl Blumenauer, D-Ore., has co-sponsored legislation that would enablebanks to provide services for legitimate marijuana-related enterprises. Becausemarijuana is illegal under federal law, investors and entrepreneurs are wary ofgetting into the industry, and many stores find it difficult to get banking services

such as checking accounts and credit card processing.

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pounds, based on U.S. Customs andBorder Protection figures. 22

Javier Osorio, a professor and crim-inal violence researcher at the JohnJay College of Criminal Justice in NewYork City, said if marijuana were le-galized nationwide, “between 16 and20 percent of mexican drug traffickingincome could be affected.” 23

But Evans, the Drug free Americafoundation adviser, says legalization isn’thurting the cartels. “The mexican cartelsaren’t making a lot of money on mar-ijuana, because it’s big, too bulky totransport, it’s not that pricey and it’s alot harder to distribute,” he says. “They’remore interested in cocaine, heroin, stufflike that. marijuana is grown all overthe U.S., so why bother going to mexicoto get it and running the risk of bringingit across the border?”

Should medical and recreationalmarijuana be regulated differently?

In 1998, washington — the first stateto permit marijuana use for medicalpurposes — applied the gentlest ofregulatory touches: Patients with certainconditions such as cancer, HIv/AIDSor multiple sclerosis could purchasemarijuana with only a doctor’s recom-mendation. Patients could grow up to15 plants and possess up to 24 ouncesof “usable” marijuana. Dispensaries andthe potency and source of the drugwere unregulated.

Seattle lawyer Hilary Bricken says le-galization of medical marijuana stemmedfrom pressure from HIv/AIDS and cancerpatients seeking cheaper, effective al-ternative treatment options. Some studieshave found that marijuana improvesfood intake in HIv patients, relievespain from damaged nerve endings andeases chemotherapy nausea, accordingto the American Cancer Society. 24

“The sentiment behind the earlymedical marijuana laws was that theindustry would be small, it would notbe commercial, and it would not havean impact on the economy or the sur-rounding communities,” Bricken says.

But a few years ago, she says, com-mercialization “came on very strongly,supported by people who read thelaw, saw the loopholes and found away to monetize it.”

Rick Garza, director of the wash-ington State Liquor and Cannabis Board(LCB), which administers state mari-juana laws, said the state’s medical reg-ulations were “looser than anywherein the country,” and the “vast majority”of those using medical marijuana werein fact recreational users. 25

“No one even knows how manyoutlets are selling medical marijuana,”says LCB spokesman Brian Smith.“These guys don’t pay taxes, they’renot registered anywhere, they can justpop up overnight, put a green crosson the door and sell marijuana.”

This year washington’s Legislaturebrought medical marijuana under thestate’s more tightly controlled recre-ational marijuana regime, which re-quires “seed-to-sale” inventory tracking,in which each plant is assigned aunique 16-digit bar code that followsit and its byproducts from harvest tosale. 26 The new regulations, effectivenext July, will also tighten patient el-igibility requirements, establish a state-run medical marijuana patient registryand reduce the amounts patients canpossess. Dispensaries that existed underthe previous laws are being closed.medical marijuana will be available onlyat licensed retail shops endorsed bythe LCB and subject to the same testing,packaging and labeling restrictions thatapply to recreational cannabis. 27

In effect, the new regulations mergethe state’s recreational and medicalmarijuana markets into a single retailindustry. Democratic state Rep. EileenCody, a sponsor of the legislation,said the changes were intended to“make sure . . . we have a medical-marijuana system that fits with recre-ational, is safe and provides the safetymechanisms for our patients that recre-ational enjoys, [and] that everyonehas access.”

However, Republican state Rep. EdOrcutt said he fears the new regulationslimit the medical marijuana industry tothe point that some patients “aren’t goingto be able to get the right form or theright variety for what they need.” 28

Deidre finley, owner of mmJ Uni-verse, a medical marijuana business inBlack Diamond, wash., said her busi-ness will close under the new regu-lations. “They’re making the require-ments on who can get a medical licenseso difficult. I won’t qualify,” she said.finley worries that products neededby some patients may no longer beavailable at recreational stores. 29

medical patients will be exempt fromthe 10 percent retail sales tax paid byrecreational customers, but they willhave to pay the same 37 percent excisetax paid by recreational customers. Suchtaxes could substantially boost wash-ington’s tax revenues. The state’s Eco-nomic and Revenue forecast Council(ERfC) predicts marijuana will generate$115.2 million in fiscal 2016, the firstyear under the new taxation structure,compared with $65 million in 2015, thefirst year of legal recreational sales. Byfiscal 2017, ERfC foresees marijuanatax revenue reaching $256.2 million. 30

But Lauren vazquez, deputy directorof communications for the pro-legalizationmarijuana Policy Project, says the newtaxing plan is unfair. “Drugs prescribedby a physician are not subject to taxes,and neither should medical marijuana,”she says. “many patients already havetrouble paying for their medications,and some use medical marijuana specif-ically because it is less expensive thanother treatments.”

And she adds, “Because medicalmarijuana patients often must use moremarijuana than nonpatients, the most sickwould end up paying the most taxes.”

washington State Liquor andCannabis Board spokesman Smith saysthe new plan is about fair commerce.“Legitimate businesses in the recre-ational industry asked, ‘why am I com-peting with somebody down the street

872 CQ Researcher

who’s playing by different rules?’ Reiningin the existing medical system andbringing it under regulation meanseverybody is following the same rules,”he says.

The National Cannabis Industry As-sociation’s west worries, “what happensto these dispensaries that have beenproviding patients for years? They’rebeing forced out of business without achance to keep serving their patients.”

Seattle attorney Bricken says medicaland recreational sales can be handledin a single location. “Regulators asked,‘Instead of creating two separate anddistinct systems, with separate and dis-tinct rules, why not create a single hybridmodel?’ ” she says. “You can have medicalin a shop with people who are trainedin giving advice about medical cannabisand its effects. we don’t need to spendthe money or the manpower to havea separate industry, and we can stillhave [product] accountability, traceabilityand quality assurance.”

However, Jazmin Hupp, cofounderand CEO of women Grow, a Denverorganization that promotes the interestsof women in the industry, says medicaland recreational marijuana “are two dis-tinct products for different purposes,and require different levels of expertiseto meet those needs. As long as thosesystems are allowed to exist, [the industrywill] do quite well.”

for now, national pharmacy chainslike CvS and walgreens are eschewingthe medical marijuana business becauseit presents too many obstacles to over-come, said David Yang, an analyst withthe research firm IBISworld. marijuana’sfederal illegality is one stumbling block,said CvS spokeswoman Carolyn Castel,because it would violate the company’sregistration with the Drug EnforcementAdministration (DEA). 31

Is the marijuana industry’sgrowth rate sustainable?

If legislative barriers continue to fall,and cannabis becomes legal for recre-ational and medical use nationwide,

marijuana could be a $35 billion marketby 2020, according to the industry re-search firm Green wave Advisors, whichtracks cannabis sales in the states whererecreational marijuana is legal. 32 Thatis about the same level of retail salesfor the worldwide vitamin and nutri-tional supplement industry. 33

Green wave founder and managingpartner matt Karnes says nationwide le-galization will happen, though not nec-essarily in the next five years. “I can’thandicap the timing, but it’s coming,” hesays. “States have too much riding on itnow — tax revenues, job creation, etc.”

for now, Karnes does not recom-mend that the average investor sinkmoney into the industry because it’stoo complicated. “Everything is state-specific,” he says. for example, “youhave to be a resident of Colorado tomake an equity investment in that state;washington is not as restrictive. It com-plicates investing.”

marijuana’s uncertain legal statusmeans the industry “is navigating un-

charted legal waters,” complicating theindustry’s future, says John Hudak, afellow in governance studies at theBrookings Institution, a washington,D.C., think tank. “They are dealing witha product that is legal in some statesbut still illegal federally.

“And even at the federal level, someparts of the government recognize the[legalization] experiments going on inthe states as valid, and other parts stillconsider [them] illegal,” he continues. So,depending on which agency a marijuanaretailer or grower or investor is dealingwith, they are either considered a criminalenterprise or . . . a state-legal operatingentity. That contradiction makes life forthe industry quite difficult.”

Nevertheless, some investors believein the durability of the industry. InApril, Privateer Holdings, a Seattle-based private equity firm, announcedit had raised $82 million to invest inmarijuana companies worldwide. 34

founders fund, a venture capitalcompany started by PayPal co-founderPeter Thiel, is one of those companies.“This highlights a change that’s goingon in the market,” said Leslie Bocskor,an investment banker and foundingchairman of the Nevada Cannabis In-dustry Association. The cannabis industry“is now in a second wave, where we’reseeing professionals who have had suc-cess in other industries come in.” 35

Others believe the industry will con-tinue to show strength even if the restof the economy is going sour. DerekPeterson, president and CEO of TerraTech, an agricultural technology companyin Irvine, Calif., said, “[In] times of eco-nomic collapse, [cannabis is] a productthat’s quasi-medical and quasi-recreational.It’s going to withstand the market moreso than a company dependent on high-end consumer goods.” 36

However, Shad Ewart, who teachesa course at Anne Arundel CommunityCollege in maryland on entrepreneurialopportunities in the marijuana industry,foresees potential political troubles. “Thebig one is the 2016 presidential election,”

mARIJUANA INDUSTRY

Large Majority Supports Medical Marijuana

Four in five American adults favor legalizing marijuana for medical purposes in their home states, while nearly half support legalization for recreational use.

Source: “Increasing Percentages of Americans are Ready for Legal Marijuana,” The Harris Poll, May 7, 2015, http://tinyurl.com/pm8gts9

Percentage of Americans Who Support Marijuana Legalization

in Their State, 2015

49%

81%

494949%%%

818181%%%

RecreationalMedical


he says. “Some candidates have aggres-sively disagreed with state-level legal-ization and vow to shut the entire in-dustry down if they are elected.”

Bloomberg Intelligence, the researcharm of the Bloomberg financial infor-mation company, has identified 55 pub-licly traded companies whose stocktraded at 10 cents or more per shareas of April 15 and “whose business isbased largely or completely on legalmarijuana.” They include pharmaceuticalcompanies, marijuana growers and tech-nology firms, with combined marketcapitalization — the total value of out-standing shares — of $3 billion. “manyof these companies have experiencedthe pitfalls common to penny stocks:infrequent trading and wild swings inshare price,” Bloomberg wrote. “[They]aren’t for the faint of heart.” 37

Seattle attorney Bricken is skepticalabout marijuana stocks, citing “thevolatility of the marketplace and thenature of the stocks being traded.” mostof the companies whose stocks arebeing traded are in ancillary businesses,she says. “when you look at whatthese people are actually trading on,there’s no real value. There’s no historyof doing business, there’s no rap sheet[performance record] of the CEOs. . . .And when [investors] perform thatscreening, I think they’ll find that mostof the stocks are just not worth it.”

Jon Gettman, who teaches criminaljustice at Shenandoah University inwinchester, va., and management atthe Graduate School of the Universityof maryland University College, sup-ports marijuana legalization. He says“a free and open market” would sortout the questions about the economichealth of the cannabis market.

“Risk . . . is part of the [economic]landscape, especially with new markets,”Gettman says. “A lot of risk derives fromuncertainty, particularly about market sizeand regulatory conditions. These, in turn,create uncertainty about price and, con-sequently, return on investment. On theother hand, such uncertainty . . . is

mitigated by the gradual path the nationis taking to legalize marijuana by way ofstate-by-state reform initiatives.”

Chris walsh, managing editor ofMarijuana Business Daily, says the in-dustry’s growth rate “is definitely sus-tainable, as long as we don’t get somehuge public backlash from major prob-lems with either medical or recreational.If people start getting sick from mari-juana, if [drug-related] crime goes up,if children are harmed, that could causethe industry to stumble.

“But it’s probably impossible to putthe genie back in the bottle,” he continues.“You have states making tens of millionsin tax dollars, and thousands of businessesand people employed. Trying to reelthis industry in and go back in timeprobably wouldn’t work.”

BACKGROUNDEarly Cannabis use

The earliest record of cannabis usecomes from China. fibers from hemp

cord — made from a variety of cannabisclosely related to marijuana — were foundin decorated pottery from 8000 B.C. un-earthed in present-day Taiwan. 38 Unlikemarijuana, hemp contains only 0.3 per-cent tetrahydrocannabinol (THC), thepsychoactive chemical responsible formost of marijuana’s psychoactive effects.(See sidebar, p. 878.)

Cannabis seeds and oil were usedas food in China around 6000 B.C.

A medical marijuana user sniffs a sample at a cannabis farmer’s market held bythe West Coast Collective, a medicinal marijuana dispensary, in Los Angeles onJuly 4, 2014. The medical properties of cannabis have been known for thousands

of years. The first-century Chinese surgeon Hua Tuo reportedly performedpainless surgery using an anesthetic made from cannabis resin and wine.

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And cannabis’ medical properties havebeen known for thousands of years.The first-century surgeon Hua Tuo re-portedly performed painless surgeryusing an anesthetic made from cannabisresin and wine. 39

The plant’s psychoactive propertiesalso were known. A Chinese medicalpharmacopoeia from the first centuryB.C. noted that “to take too much [mar-ijuana] makes people see demons andthrow themselves about like maniacs.But if one takes it over a long periodof time one can communicate with thespirits and one’s own body becomeslight.” In India, a Hindu sacred text, theArtharvaveda, which dates to at least1000 B.C., describes cannabis as an herbthat can “release us from anxiety.” 40

Nomadic Scythians, from present-dayIran, made hemp garments and bathedin the vapor from heated hemp seeds,causing them to “howl like wolves,” re-ported the Greek historian Herodotus. 41

The Scythians brought hemp to northernEurope: An urn found near Berlin, datingto around 500 B.C., contained cannabisresidue. 42

Hemp was cultivated in England be-ginning around A.D. 400; its fibers wereused for rope. The moors, who con-quered Spain in 711, brought with thema technique for making paper from hemp.The first hemp paper mill was constructednear valencia in 1150. In 1215, the magnaCarta, a landmark legal document es-tablishing the rights of English royal sub-jects, was printed on hemp paper, aswas the first Gutenberg Bible, the firstmajor book printed in western Europewith moveable metal type, in 1455. 43

The medicinal qualities of cannabisgained recognition in Europe beginningin the 17th century. Robert Burton’s TheAnatomy of Melancholy, published in1621, recommended using cannabis tocounter depression. The New EnglishDispensatory of 1764 suggested apply-ing hemp roots to the skin for inflam-mation. 44 In the late 19th century,British Queen victoria’s doctor pre-scribed marijuana tea to treat patients’

menstrual cramps, though there is noevidence the queen herself was giventhe drug. 45

In the early 17th century, the Englishturned to their North American coloniesto help feed the growing demand forhemp. In 1619, the virginia Companydirected Jamestown colonists to cultivate100 cannabis plants per household. Thecolonies soon developed their own hempmarket for cloth and rope. In 1639, theGeneral Court of massachusetts requiredevery household to plant hemp seedso “that we might in time have supplyof linen cloth among ourselves.” 46

The United States Pharmacopeia, es-tablished in the 1820s to identify andstandardize medical drugs, listed mari-juana in 1850 as a treatment for conditionsranging from labor pains and nausea torheumatism (the drug remained listeduntil 1942). 47 In 1860, the Ohio Statemedical Society devoted a conferenceto the use of medical marijuana. In theconference report, which included ob-servations by physicians who had pre-scribed or conducted experiments withmarijuana, cannabis committee ChairmanR. R. mcmeens, m.D., called marijuanaa “remarkable and renowned exotic.” 48

During the second half of the 19thcentury, marijuana was widely availablein American pharmacies and generalstores, as were products containingopium and cocaine. In the 1860s, theGunjah wallah Co. began producingcandy from maple sugar and hashish(compressed cannabis resin). for morethan 40 years it was sold over thecounter, listed in Sears, Roebuck & Co.catalogs and advertised in newspapersas a “pleasureable (sic) and harmlessstimulant” and a remedy for a varietyof ailments. 49

Regulating marijuana

The Pure food and Drug Act of 1906,passed in response to concerns over

the safety and purity of food and medicines,was the first U.S. law regulating marijuana.

It banned the interstate transportation ofadulterated or mislabeled food and drugs,including cannabis, and established ad-vertising accuracy standards. The law didnot ban the sale or use of marijuana andother drugs, but the truth-in-labeling re-quirement resulted in many patent med-icines with unproven claims being removedfrom the market. 50

The mexican Revolution of 1910caused large numbers of mexicans toimmigrate to the United States overthe next decade, some bringing mar-ijuana that they smoked recreationally.The use of “tea” quickly caught on inparts of American society, particularlyamong jazz musicians and other en-tertainers. marijuana clubs known as“tea pads” appeared in several majorcities; authorities generally tolerated thembecause marijuana was not illegal, andpatrons were usually well behaved. 51

But marijuana’s association with im-migrants generated a backlash in theUnited States, “tinged perhaps withanti-mexican xenophobia,” wroteStephen Siff, an associate professor ofjournalism at miami University in Ohio.In 1911, massachusetts became the firststate to ban cannabis. Then, between1914 and 1925, Siff wrote, 26 statespassed laws prohibiting the plant, whichpassed with little controversy. 52

In the late 1920s newspapers ownedby publisher william Randolph Hearstlaunched an anti-marijuana campaign,linking marijuana to acts of torture andmurder, although the articles oftenlacked evidentiary details. 53

In 1930, Harry J. Anslinger becamethe first commissioner of the U.S. TreasuryDepartment’s federal Bureau of Narcotics.Initially, he was reluctant to take up theanti-marijuana cause, partly because thedrug was legal under federal law andpartly because he felt his bureau lackedthe personnel for an effective effort.

However, Anslinger came to believethat marijuana was a “killer weed” andin 1933 “began a war against marijuana,”according to researchers at the Uni-

Continued on p. 876


Chronology1840-1911Cannabis enters the Americanmarketplace.

1840Cannabis-based medicines are soldin U.S. drug stores.

1850United States Pharmacopeia listsmarijuana as a remedy for laborpains, nausea and rheumatism.

1906U.S. Pure food and Drug Act regu-lates labeling of products containingcannabis, opiates and other ingre-dients.

1911massachusetts becomes first stateto ban cannabis.

•

1930s-1940sMarijuana and hemp are out-lawed, but hemp gets a wartimereprieve.

1930federal Bureau of Narcotics Com-missioner Harry J. Anslinger linksmarijuana to violence.

1937marihuana Tax Act criminalizesuntaxed possession of marijuanaand effectively ends U.S. hempcultivation.

1942Cannabis is removed from the U.S.Pharmacopoeia, ending recognitionof its medicinal use. . . . Govern-ment encourages hemp production.

1945federal ban on hemp cultivation isrestored.

1950s-1960sFederal government tightensrestrictions on cannabis.

1951Boggs Act sets fines and mandatorysentences for marijuana.

1956Narcotic Control Act further stiffensdrug penalties.

1969Supreme Court finds the 1937marihuana Tax Act violates fifthAmendment protections againstself-incrimination.

•

1970s-1980sFederal government declareswar on drugs while states beginto decriminalize marijuana.

1970federal Comprehensive Drug AbusePrevention and Control Act catego-rizes marijuana among the mostdangerous illegal substances.

1973Oregon decriminalizes marijuanapossession; 10 more states followby the end of the decade.

1976President Gerald R. ford bans federalfunding for research into marijuana’smedical benefits.

1978New mexico legalizes limitedmedical use of marijuana.

1986Anti-Drug Abuse Act institutesmandatory sentences for drugcrimes and raises federal penaltiesfor marijuana possession.

1990s-PresentLegalization gathers steam.

1996Arizona and California voters ap-prove medical use of marijuana;Arizona legislature nullifies theaction in that state a year later.

1998District of Columbia voters approvemedical marijuana use. Congressblocks implementation.

2012voters in Colorado and washingtonstate approve recreational use ofmarijuana by adults.

2013Justice Department announces it willnot challenge state marijuana laws.

2014Recreational marijuana sales beginin Colorado and washington. . . .voters in Alaska, Oregon andwashington, D.C., approve recre-ational use; Congress blocks im-plementation of the D.C. law. . . .federal legislation authorizes in-dustrial hemp production for re-search purposes. . . . Colorado of-ficials face lawsuits challenging thestate’s recreational-use laws.

2015Georgia becomes 23rd state to legalize medical marijuana. . . .Recreational sales begin in Oregon.. . . Ohioans vote on Nov. 3 onan amendment to the state consti-tution that would legalize bothrecreational and medical marijuana.

November 2016Nevada to vote on whether topermit recreational marijuana. In15 other states, legalization advocatesare pushing ballot initiatives thatwould give voters a chance to makerecreational marijuana legal.

876 CQ Researcher

versity of Delaware. “He used the pop-ular press to prey upon the fears ofthe American public, including racialfear and division,” they wrote. By 1937,due largely to Anslinger’s campaign,46 of the then 48 states had passed anti-marijuana laws, the researchers said. 54

Anslinger also drafted the federalmarihuana (sic) Tax Act, enacted by

Congress in 1937. The law effectivelycriminalized possession of marijuanaand hemp, except for those whopaid a $1 excise tax for authorizedmedical and industrial use. (See sidebar,p. 878.) (The tax was not intendedto raise revenue, but “to criminalizemarijuana sales and usage,” accordingto the Tax foundation, a washington,D.C., think tank. 55) violators were

subject to a $2,000 fine and five years’imprisonment. 56

In 1951, however, a Senate investi-gation concluded that, despite existingstate and federal drug laws, “the trafficin narcotics still flourishes,” due largelyto a shortage of enforcement personneland “the comparatively gentle treatmentnarcotics offenders have been receivingat the hands of the courts.” 57 Accord-

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Continued from p. 874

Jeff Gaudette began cultivating cannabis in British Columbiaat age 20, eventually becoming a licensed medical marijuanagrower at 27. Now 37, he runs his own dispensary in

vernon, British Columbia, along with two growing-equipmentstores and a medical marijuana consultancy.

“medical marijuana is my passion,” he says.Despite his extensive experience, Gaudette traveled in April

2014 to Oakland, Calif., to attend four three-month cannabishorticulture and business courses at Oaksterdam University,which is not a conventional accredited university but a tradeschool that teaches students how to grow marijuana and workin the cannabis industry.

“There’s nothing else like it in the world,” he says. “You workwith actual plants in your classroom to feel, touch, see, clip, trim,clone. A textbook is only so good.”

Oaksterdam calls itself “America’s first cannabis college.” 1

founder Richard Lee, a former dispensary owner and activistinspired by a visit to Amsterdam’s community-based CannabisCollege in the Netherlands, taught the school’s first class ongrowing marijuana in 2007. 2 The school’s name is a combinationof Oakland and Amsterdam, where marijuana use is legal andwidespread. 3 (California legalized medical marijuana in 1996.)

Oaksterdam’s curriculum now includes accounting, businesslaw, culinary arts and economics as they apply to cannabis,and its faculty includes lawyers, business owners, nutritionistsand accountants. But its offerings remain controversial becauseof marijuana’s federally illegal status, and the school sufferedfinancial setbacks and staff cuts after federal agents raided itin 2012. 4

Oaksterdam encourages students to pursue opportunities be-yond the basics of growing and dispensing cannabis, such aslab testing of marijuana, producing medicinal oils and lotionsfrom extracts and designing electrical systems and lighting forgrowing operations.

many students arrive with business backgrounds and technicalskills from other professions. “They have a phenomenal skillset that can be applied to the cannabis industry,” says ExecutiveChancellor Dale Sky Jones.

To be admitted, students only have to possess a valid IDshowing they are at least 18 years old and pay tuition, whichranges from $1,195 to $1,495 for a 14-week full-time semesteror $495 to $995 for two- to four-day seminars offered inOakland, Las vegas, washington, D.C., and elsewhere. 5 Inboth the semester and seminar programs, students can enrollfor a “classic” track, which covers the politics, law and economicsof cannabis, among other subjects, or a horticulture-intensivetrack, which covers both indoor and outdoor growing. 6 Nearly25,000 people have completed coursework at Oaksterdam, ac-cording to Jones.

Oaksterdam’s competitors include Humboldt Cannabis Collegein Northern California and Cannabis University and Clover LeafUniversity, both in Denver. Clover Leaf was accredited by theColorado Department of Higher Education in 2013, becomingthe nation’s only accredited cannabis school. 7

Oaksterdam says it may apply for California state accreditationin 2016, according to Aseem Sappal, provost and dean of thefaculty. “Because we’re in the cannabis industry, we would liketo be accredited because it helps with perception,” he says.

Top-ranked horticulture programs at accredited four-year col-leges still do not teach students how to grow cannabis, eventhough recreational marijuana use is legal in four states andthe District of Columbia, and medical marijuana is legal in 23 statesand the District. 8

Oaksterdam has faced federal scrutiny: In 2012, agents fromthe IRS, along with agents from the U.S. marshals Service andDrug Enforcement Administration, raided the school. Authoritiesseized large amounts of marijuana, which remains illegal to sellunder federal law, from a nearby medical marijuana dispensaryoperated by Lee, plus equipment and files from four otherbuildings, including the school, briefly shutting it down. 9

The IRS did not give reasons for the Oaksterdam raid andnever filed charges. The raid took place during a two-yearperiod in which federal agencies closed more than 200 medicaldispensaries in California. 10

School officials said the raid and seizures left Oaksterdam“on life support.” Lee stepped down shortly afterward, saying he

Cannabis College Cultivates Pot ProfessionalsOaksterdam University educates entrepreneurs but has faced controversy.


ingly, Congress passed the NarcoticDrugs Import and Export Act of 1951,known as the Boggs Act after its Housesponsor, Rep. Thomas Hale Boggs Sr.,a Louisiana Democrat. It established amandatory prison sentence of two tofive years and a $2,000 fine for a firstdrug offense. five years later, decidingthat even tougher measures were need-ed, Congress passed the Narcotic Con-

trol Act of 1956, which increased themandatory sentence and raised the fineto up to $20,000. 58

Path to legalization

In 1969 the Supreme Court ruledthat the 1937 marihuana Tax Act

was unconstitutional because it violated

the fifth Amendment protection againstself-incrimination — since paying thetax required acknowledging possessionof marijuana in states where it was il-legal. 59 In 1970 President Richard m.Nixon signed the Comprehensive DrugAbuse and Prevention and ControlAct, which became known as the Con-trolled Substances Act (CSA), namedafter Title II of the new law. 60

had “done [his] duty” and wanted to separate his ongoing legalissues from the university’s future. The school appointed Jonesas his successor. 11

Horticulture industry experts say that while trade schoolslike Oaksterdam address a market niche, the skills required togrow cannabis are not all that different from those needed tocultivate other crops. Graduates of four-year horticulture programswho apply for the limited number of marijuana-growing licensesissued by states to allow growers to legally cultivate cannabismay be more competitive candidates than those from cannabistrade schools, says Craig Regelbrugge, senior vice president ofIndustry Advocacy and Research at AmericanHort, a nationaltrade association for horticulturists.

“The person who is going to succeed [will] be the one whoknows how to succeed in the real world, not necessarily aperson who has a niche academic experience,” Regelbrugge says.

Law schools at Ohio State and vanderbilt universities, amongothers, now offer cannabis-related courses. 12 Jones says she en-visions opportunities to collaborate with colleges in the future.

“I see major universities having full colleges of cannabis,”says Jones. “You have a clear fit within the horticulture programs.It would be treated just like any other crop.”

— Ethan McLeod

1 Oaksterdam University, http://tinyurl.com/nry4hgh.2 Jason motlagh, “where marijuana Gets You Higher Education,” Time, march 28,2011, http://content.time.com/time/nation/article/0,8599,2061398,00.html.3 Rona marech, “medical pot patients flock to ‘Oaksterdam,’ ” San FranciscoChronicle, Aug. 10, 2003, http://tinyurl.com/pm58w3a.4 “Semester Programs,” Oaksterdam University, http://tinyurl.com/ofgm94f.5 “Oaksterdam University Tuition and fees,” Oaksterdam University, http://tinyurl.com/p9kfjd4.6 “Semester Programs,” http://tinyurl.com/n9hvyow; “Horticulture Programs,”http://tinyurl.com/ov34qrm.7 Jackie Salo, “marijuana Legalization 2015: Is It Time for The Cannabis IndustryTo Grow Up And Go To College?” International Business Times, Aug. 16, 2015,http://tinyurl.com/pbvd2up; Homepage, http://tinyurl.com/pnhcyvs.8 “State marijuana Laws map,” Governing, updated June 19, 2015, http://tinyurl.com/lv4r7f3.

9 Lori Preuitt and Christie Smith, “feds Raid Oakland’s Oaksterdam,” NBC BayArea, April 2, 2012, http://tinyurl.com/7v5jztt; also see madeleine Thomas,“After the raid: The financial fallout for Oaksterdam and Oakland’s pot business,”OaklandNorth, April 9, 2013, http://tinyurl.com/oq6xpny.10 Thomas, op. cit.; “feds under Obama appear tougher on medical marijuana,disappointing voters,” fox News, April 27, 2012, http://tinyurl.com/d795c6z.11 Jesse mcKinley, “ ‘4/20’ observance highlights friction between pot supporters,detractors,” The Seattle Times, April 20, 2012, http://tinyurl.com/odxx3t4;Anne-Sophie Braendlin, “Dale Sky Jones to become new head of OaksterdamUniversity,” OaklandNorth, April 17, 2012, http://tinyurl.com/obsskus.12 Collin Blinkley, “Legalized pot gets Ohio State class of its own,” The ColumbusDispatch, march 10, 2015, http://tinyurl.com/qxs783y; “Course Information: marijuanaLaw and Policy,” vanderbilt Law School, undated, http://tinyurl.com/qf9q98c.

Oaksterdam University founder Richard Lee was inspired tostart the Oakland, Calif., school after a visit to Amsterdam’scommunity-based Cannabis College in the Netherlands.

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The CSA removed or reduced mostexisting mandatory drug penalties. But— significantly for the yet-to-emergelegal marijuana industry — it also es-tablished five categories, or schedules,for drugs according to their potentialfor abuse, medical applications and safe-ty. By classifying cannabis (includinghemp) — along with heroin, LSD andothers — as a Schedule I drug, thelaw deemed marijuana as having a “highpotential for abuse” and “no currentlyaccepted medical use.” Thus, the drugbecame illegal to possess or sell. 61

However, some states soon beganto fashion their own approaches to

marijuana. In 1973, Oregon becamethe first to “decriminalize” marijuana(removing or reducing penalties for itspossession or use, although the drugremains illegal), followed by at least11 states in the 1970s. 62

In february 1978, New mexico be-came the first state to legalize the med-icinal use of marijuana, albeit in alimited way. After lopsided votes forapproval in both houses of the Leg-islature, then-Gov. Jerry Apodaca signedthe Controlled Substances TherapeuticResearch Act. It permitted cancer patientswhose chemotherapy caused nauseaand vomiting to smoke marijuana or

ingest tetrahydrocannabinol (THC, thechemical responsible for most of marijuana’spsychoactive effects) through a programadministered by the state Health and En-vironment Department and conducted bythe University of New mexico. 63 Theprogram required approval by the DEA,food and Drug Administration and Na-tional Institute on Drug Abuse, and pa-tients needed physician approval to par-ticipate. 64

Despite apparent clinical success, thestate Legislature halted funding for theprogram in 1986 due to opposition fromfederal drug agencies. (New mexico rele-galized medical marijuana in 2007. 65)

mARIJUANA INDUSTRY

Like most farmers, Andrew Graves of winchester, Ky., keeps anervous eye on the weather. “we’ve sunk thousands of dollarsper acre” into the crop, says Graves. “Suppose there’s a freak

August hailstorm? I’ve got my rear end in the wind out there.”That’s because Graves, CEO of Atalo Holdings, an agribusiness

company, cannot obtain federally subsidized crop insurance forhis hemp plants, a variety of cannabis and a close relative ofmarijuana.

Smoking hemp does not produce a high — it contains lessthan 0.3 percent of the psychoactive chemical tetrahydrocannabinol(THC) compared to about 15 percent in marijuana. But because ofhemp’s kinship to cannabis, the Controlled Substances Act of 1970banned hemp and marijuana cultivation without a DEA permit, sohemp is not covered under the federal crop insurance program.

Graves can grow hemp legally because Kentucky is one of13 states that within the past year have legalized industrialhemp cultivation, authorized by the 2014 farm bill to conductresearch on hemp’s commercial potential. 1

Atalo, which has a state hemp research permit, contractswith 30 farmers in Kentucky who this year will harvest 200 to300 acres of hemp, producing about 1,000 pounds of seed peracre. The seeds will be processed into oil, hemp nuts andprotein powder for commercial sale under the farm bill’s com-mercial research provision.

The nonpartisan Congressional Research Service (CRS), whichconducts policy studies for Congress, estimated that “the globalmarket for hemp consists of more than 25,000 products,” muchof it produced in Europe, Canada and China, where cultivationis legal.

Hemp fibers are used in fabrics and textiles, paper, carpeting,home furnishings, auto parts and construction and insulationmaterials, among other products. Hurd — the hemp stalk’s

elastic, woody core — is used to make such goods as animalbedding and paper. Hemp seed and oilcake are used in arange of foods and beverages and can be a protein source,while oil from crushed hemp seed is an ingredient in body-care products and nutritional supplements, according to CRS. 2

“The United States is the world’s largest market for hempproducts,” says Eric Steenstra, executive director of the HempIndustries Association (HIA). The group estimated the 2014 U.S.retail market for hemp products at $620 million, most of itimported. Under U.S. Customs and Border Protection regulations,hemp products such as cosmetics, clothing and food can beimported if they do not contain THC. 3

Steenstra says the current restrictions on U.S. hemp productionmeans “American farmers are being denied an opportunity to participate”in a market with “tremendous potential,” while Canadian, Europeanand Chinese farmers are free to grow and export the crop.

Pending federal legislation would change hemp’s legal statusand brighten its commercial outlook. The Industrial Hempfarming Act of 2015 defines industrial hemp as containing nomore than 0.3 percent of THC, excludes it from the definitionof marijuana under the Controlled Substances Act and authorizesstates to regulate its growing and processing. 4

Sen. Ron wyden, an Oregon Democrat who cosponsored themeasure in the Senate, emphasized hemp’s economic potential.“Allowing farmers throughout our nation to cultivate industrial hempand benefit from its many uses will boost our economy and bringmuch-needed jobs to the agriculture industry,” he said. 5

But the Drug Enforcement Administration (DEA) has expressedconcerns about industrial hemp’s legalization. “first,” the DEA saidin 2013, “it is impossible to distinguish a marijuana plant containing0.3% or less of THC from a marijuana plant containing higherTHC levels without scientific analysis . . . [and] there would be

Hemp farmers watching the Legal SkiesCrop promises profits, but police oppose legalization.


In 1991, San francisco voters, with80 percent in favor, approved Propo-sition P, which called on Californiastate legislators to legalize marijuanause for medical purposes. 66 In 1994and again in 1995, the Legislature ap-proved such measures, but both timesRepublican Gov. Pete wilson vetoedthe legislation.

In 1996, however, supported by a$2.5 million promotional effort, Cali-fornia voters approved, with 56 percentof the vote, Proposition 215. The Com-passionate Use Act, which was notsubject to gubernatorial veto, protectedfrom prosecution anyone who grew,

used or possessed marijuana for abroad range of medical purposes alongwith the physicians who recommendedit. The presidential administrations ofBill Clinton (1993-2001) and Georgew. Bush (2001-09) staunchly opposedProposition 215, but it survived legalchallenges. 67

By this September, 23 states andwashington, D.C., had enacted lawspermitting at least some use of medicalcannabis. 68 In addition, 15 states allowthe use of certain cannabis extracts, suchas the non-psychoactive cannabidiol, orCBD, for qualified patients. 69

Colorado, which legalized medical mar-

ijuana in 2000, became the first state alsoto permit its sale for recreational use: OnNov. 6, 2012, voters approved a consti-tutional amendment allowing those 21 orolder to “consume or possess limitedamounts of marijuana” and providing forcultivation, manufacturing, testing and retailsales. 70 Sales began Jan. 1, 2014. 71 wash-ington state, where voters approved recre-ational marijuana use in 2012, began retailsales July 8, 2014. 72

voters in Oregon, Alaska and wash-ington, D.C., legalized recreational mar-ijuana in November 2014. (In D.C., res-idents may now grow and possessmarijuana and consume it in private.

no way to establish probable cause to obtain a search warrantwithout first entering the [cultivation site] to collect samples. Second,even if all the marijuana plants contained 0.3 percent or lessTHC . . . it is very easy and inexpensive to convert low-grademarijuana into high-grade hashish oil.” 6 The DEA said in 2014that its policy on industrial hemp was “under review.”

Hemp had a bumpy legal history over the past century. ItsU.S. production was drastically curtailed by the 1937 marihuanaTax Act, which classified both hemp and marijuana as narcotics.But hemp was suddenly back in demand when fighting inworld war II’s Pacific Theater cut off supplies from the Philippinesof “manila hemp,” needed for naval cordage, fire hoses andparachute webbing. 7 The government subsidized hemp cultivation,boosting production from about 1 million pounds before thewar to more than 150 million in 1943.

As the war wound down production declined, dropping to3 million pounds by 1948, with no recorded production afterthe late 1950s, due largely to “increasing public anti-drug sen-timent,” according to CRS. 8

But Graves, who says he is the “seventh generation of hempfarmers, same family growing on the same land,” is optimistic.So far, Atalo’s operations are limited to processing hemp seeds,but Graves hopes to expand into fiber processing once thecompany’s revenue stream from the seeds allows the acquisitionof the necessary equipment.

“we’re having success, but it’s hard to measure,” Graves says.“I see unlimited possibility for [hemp] in the next 10 years; it alldepends on how quickly we can ramp up and have our ownseed available, how fast our seed technology can be put in place.

“But these are all good problems to have. It’s a lot of fun.”

— William Wanlund

1 “State Industrial Hemp Statutes,” National Association of State Legislatures,march 26, 2015, http://tinyurl.com/opt8xzy.2 Renée Johnson, “Hemp as an Agricultural Commodity,” CongressionalResearch Service, feb. 2, 2015, http://tinyurl.com/pa8nm6b.3 “Importing hemp products into the U.S.,” U.S. Customs and Border ProtectionQ&A, http://tinyurl.com/qaa9b52.4 “Industrial Hemp farming Act of 2015,” U.S. Senate bill S.134, http://tinyurl.com/os42dx2. Companion legislation, H.R. 525, was introduced in theHouse of Representatives.5 Press release, “Senators Introduce Bipartisan Bill to Roll Back Hemp Restrictions,”Sen. Ron wyden, Jan. 8, 2015, http://tinyurl.com/oz553oq.6 “Hemp Talking Points,” U.S. Drug Enforcement Administration, June 2013,http://tinyurl.com/p2mdl2k.7 “Hemp for victory” film, transcript, U.S. Department of Agriculture, 1942,http://tinyurl.com/nrru3de.8 Johnson, op. cit.

Hemp plants are grown in hoop houses by CBDrx, agrower in Pueblo, Colo. The nonpartisan CongressionalResearch Service estimates “the global market for hemp

consists of more than 25,000 products.”

Getty Im

ages/The Denver Post/Brent Lew

is

880 CQ Researcher

mARIJUANA INDUSTRY

However, Congress, which reviews thecity’s laws and has authority over itsbudget, has blocked recreational saleof the drug. 73)

CURRENTSITUATIONlegal issues

Colorado, as the nation’s leader inlegalizing recreational use, is now

a legal battleground between thecannabis industry and those who wouldhalt, restrict or even reverse its growth.The future of the legal marijuana in-dustry could hinge on the outcomeof several suits challenging a state’sright to enact a law that conflicts withfederal law.

In a case pending before the U.S.Supreme Court, Nebraska and Okla-homa, which do not allow recreationalmarijuana use, have asked the justicesto invalidate Colorado’s legalization.Colorado marijuana crosses into Ne-braska and Oklahoma, the lawsuit ar-gues, straining their police and judicialresources and undermining their ownmarijuana-control efforts. 74

“If our law gets killed, the blackmarket will be back and the Sinaloans[a mexican drug cartel] will be backin business,” says Colorado Sheriff mas-ters. “I think the other states need topass some reasonable legislation, andthat way they’ll torpedo this problem.”

In a case filed in Colorado federaldistrict court in march, six Coloradosheriffs are suing to strike down Col-orado’s marijuana statutes, saying thediscrepancy between federal and statelaws causes the sheriffs to violate theiroath of office, which requires them touphold both state and federal laws.Six plaintiffs from neighboring Kansasand Nebraska joined the suit on the

grounds that Colorado’s marijuana lawsplaced extra stress on their law en-forcement resources, causing them “di-rect and significant harm.” 75

But masters says the right to possessand sell marijuana “is part of the Coloradoconstitution. I’m bound to uphold theconstitution, and I have to protect thoseconstitutional rights.” The high court hasnot yet agreed to hear the case.

And the Safe Streets Alliance, a wash-ington, D.C.-based organization op-posed to marijuana legalization, hasfiled two suits in Colorado federal dis-trict court claiming that Colorado’s le-galization violates the U.S. Constitution’s“supremacy clause,” which holds thatfederal law supersedes state law. 76

The court has not yet ruled on whetherit will hear the cases.

The disparity between state and fed-eral laws creates “a very awkward prob-lem,” says Stuart Taylor, a washington,D.C-area journalist and author and anonresident senior fellow at the Brook-ings Institution think tank. “The conflictbetween federal and state law meansthat any state that legalizes [marijuana]is in violation of federal law,” Taylor says.“It looks like a form of lawlessness.

“The feds don’t have nearly enoughpeople in the DEA or related positionsto enforce federal law rigorously every-where all the time,” he says. “If theytake down the [state-] regulated mari-juana businesses, it leaves the entire[illegal] market much harder to controland more likely to lead to all the prob-lems that the federal law is designedto prevent — transport across statelines, distribution to minors, stuff withdangerous concentrations of THC —all the things the state regulations aredesigned to prevent.”

Cannabis Business

Despite marijuana’s legal uncertainties,the industry is beginning to attract

big money. Kris Krane, a co-founder andmanaging partner of 4front Advisors, a

cannabis industry consulting firm inPhoenix, says startup costs vary fromstate to state but can be daunting.

In New York, which legalized med-ical marijuana in 2014 and awardedits first business licenses on July 31,2015, “groups were spending on av-erage a million and a half dollars orso just to get through the licensingprocess,” says Krane. Getting the busi-ness up and running, he says, couldcost “upwards of $25 or $30 million.”

That’s partly because in New York,a dispensary must grow and processthe marijuana it sells. And each licensee— the state has granted five so far —must operate four dispensaries. 77

“There are only going to be 20 storesin a state of 20 million people,” Kranesays. “The capacity . . . to meet demandhas to be really large.”

Although New York is “a bit of anoutlier,” Krane says, “it’s hard to startan operation in any state for under amillion dollars.”

Some predict large companies, par-ticularly in the tobacco industry, willenter the cannabis market. Researchersfrom the University of California, Sanfrancisco, and finland’s University ofHelsinki reviewed archived tobacco in-dustry documents which revealed thatsince 1970 three multinational companies— Philip morris, Brown & williamson,and RJ Reynolds — have all consideredmanufacturing cigarettes containingcannabis. “The documents demonstratethe tobacco industry’s willingness andpreparedness to enter legalized mari-juana markets, which the companiesbelieved to have a large sales potential,”the researchers said. 78

Spokespersons for Altria Group,which manufactures Philip morris cig-arettes and other tobacco products,and Reynolds American (Camel, Pallmall and other brands), say their com-panies are not planning to enter thecommercial marijuana market. “mari-juana remains illegal under federal law,and Altria’s companies have no plans

Continued on p. 882

no


At Issue:Should federal laws be enforced where marijuana is legal?yes

yesdavid G. Evans, ESQ.SPECIAL ADVISOR, DRUG FREE AMERICA FOUNDATION

WRittEn fOR CQ RESEARCHER, OCtOBER 2015

f ederal law should be enforced. The marijuana industrywants to make big profits from selling marijuana, justlike the large tobacco companies do from tobacco, so they argue that marijuana legalization is a “states’ rights”

issue. States should be allowed to set national drug policy,they argue.

However, the U.S. Supreme Court has repeatedly held thatthis is a federal issue because marijuana crosses state lines andthus is part of interstate commerce, which is governed by fed-eral law. Because what is done in one state when it comes tomarijuana spills over into other states, Congress must establishnationwide marijuana laws.

marijuana is illegal under the federal Controlled SubstancesAct (CSA), which is Title II of the Comprehensive Drug AbusePrevention and Control Act of 1970. The CSA categorizes mari-juana as a Schedule I drug — among the most dangerous ofillegal substances. Congress enacted the law in order to con-solidate drug laws into a comprehensive statute and tostrengthen law enforcement tools against illegal drug trafficking.Currently, Nebraska and Oklahoma are suing Colorado to en-force the CSA because marijuana from Colorado is cominginto their states, and they do not want it.

States that have commercialized marijuana are havingbuyer’s remorse. Thousands of young people are becomingaddicted. for example, in Colorado impaired driving, youthmarijuana use and addiction, adult marijuana use and marijuana-related emergency room admissions are all up substantially.This costs the state money.

But our country is not helpless. The marijuana commer-cialization epidemic is imposed on us by criminal acts thatproduce an abundant supply of inexpensive marijuana. Stop-ping these criminal acts by enforcing federal law will stopthe epidemic.

Before President Obama was elected, our nation confronteddrug use with effective public health measures emphasizingeducation, prevention and treatment as well as programs toreduce production and to interdict the drugs. It worked. Despitewhat the marijuana advocates claim, drug use went down.The Obama administration does not enforce the federal law.Drug use is now up, especially marijuana.

The Obama administration has allowed commercialized mari-juana to spread drug use on an ever-widening scale, undermin-ing prevention and treatment. Now the big marijuana industryflourishes and is spreading addiction throughout America.

Protect our children and enforce the law.no

Paul aRmEntanODEPUTY DIRECTOR, NORML (NATIONALORGANIZATION FOR THE REFORM OFMARIJUANA LAWS); CO-AUTHOR, maRijuanais safER: sO Why aRE WE dRivinGPEOPlE tO dRink?

WRittEn fOR CQ RESEARCHER, OCtOBER 2015

n ever in modern history has greater public supportexisted for ending our nation’s nearly century-longexperiment with marijuana prohibition and replacing

it with a taxed and regulated adult marketplace. Twenty-threestates and washington, D.C., now permit the medicinal use ofcannabis. four of these states, and washington, D.C., also per-mit marijuana for recreational use by adults. federal officialsshould not stand in the way of these policies.

The ongoing enforcement of cannabis prohibition financiallyburdens taxpayers, encroaches upon civil liberties, engendersdisrespect for the law, impedes legitimate scientific researchinto the plant’s therapeutic properties and disproportionatelyaffects young people and communities of color.

federal lawmakers should cease ceding control of the mari-juana market to untaxed criminal enterprises and allow statesto pursue alternative regulatory policies. A pragmatic regulatoryframework that allows for the legal, licensed, commercial pro-duction and sale of cannabis to adults — coupled with a legalenvironment that fosters open, honest parent-child dialogue aboutcannabis’ potential harms — best reduces the risks associatedwith the plant’s use or abuse.

According to a recent Pew Research Center poll, 60 percent ofAmericans believe the government “should not enforce federalmarijuana laws in states that allow use.” Surveys from early pri-mary states, including Iowa, New Hampshire and South Carolina,report even greater voter sentiment in favor of this position.

Neither science nor public opinion supports the federal gov-ernment’s contention that marijuana should be a Schedule I con-trolled substance — a classification that equates the plant’s abusepotential to that of heroin and ignores its therapeutic utility.

fortunately, America’s federalist system does not mandatestates to be beholden to this intellectually and morally bank-rupt policy. The 10th Amendment to the Constitution providesthat all “powers not delegated to the United States by theConstitution, nor prohibited by it to the States, are reserved tothe States respectively, or to the people.” Indeed, SupremeCourt Justice Louis Brandeis (1916-1939) famously opined, “[A]state may, if its citizens choose, serve as a laboratory; and trynovel social and economic experiments without risk to therest of the country.” Today, many states are doing just that.

Public sentiment and common sense are driving necessaryand long overdue changes in state-level marijuana policies.America’s longstanding federalist principles demand that wepermit these policies to evolve free from federal interference.

882 CQ Researcher

to sell marijuana-based products,” saysAltria spokesman Jeff Caldwell.

But some legalization advocates areskeptical. “my concern is the marlboro-ization or Budweiser-ization of mari-juana,” said Ethan Nadelmann, executivedirector of the pro-legalization DrugPolicy Alliance. “That’s not what I’mfighting for.” 79

Shenandoah University’s Gettmansays, “Certainly, the tobacco industryknows how to take a plant, turn itinto cigarettes and sell it to people.”But there are many differences betweenmarijuana and tobacco, he says. forinstance, modern cigarettes contain “allsorts of additives and flavors,” while“I can go out in my backyard, growa marijuana plant, dry the flowers andsmoke that product, and be quite happywith it.”

The ease of producing marijuanaplants means the market will be verycompetitive, he says. “The idea of sixor seven firms collectively controllingthe entire industry — that’s going tobe hard to do.”

Retailer Ode of the Seattle CannabisCo. isn’t bothered either way. “I don’tanticipate that big tobacco moving inwould have a huge advantage,” he says.“But if they offered a good product ata good price, I’d love to have them inthe store.”

2016 Elections

The outcome of upcoming electionscould determine whether the legal

marijuana market continues its robustgrowth — or whether the market mayalready have peaked.

Ohioans vote Nov. 3 on an amend-ment to the state constitution thatwould legalize both recreational andmedical marijuana. If it succeeds, itwould mark the first time a state willhave legalized recreational marijuanawithout first establishing a medicalmarijuana program. 80

In 15 states legalization advocates areorganizing petitions to put initiatives onnext year’s ballot on whether recreationaluse of marijuana should be legal. As ofSeptember, only Nevada had put thequestion on the 2016 ballot. 81 But le-galization advocates are confident morestates will vote on the issue in November2016, and that at least five may chooseto end prohibition. Journalist Philip Smithwrote that public opinion surveys in Ari-zona, California, massachusetts, michiganand Nevada show a majority of thosepolled favoring legalization, and in 2013a survey in maine had a pro-legalizationplurality of 48 percent to 39 percent. 82

Paul Armentano, deputy director ofthe pro-legalization National Organizationfor the Reform of marijuana Laws(NORmL), says if California votes to le-galize recreational marijuana next year,“It would be regulating and legalizingthe largest market in the country forcannabis production, use and sale.” 83

In addition, he says, “California oftensets a trend for the rest of the countryand for national politics and voter sen-timent in general,” so passage of legal-ization or regulation in California “wouldbe a harbinger of national changes inthe fairly immediate future.”

A march poll by the Public PolicyInstitute of California showed 55 percentof likely California voters support le-galization, but Republican political con-sultant Rob Stutzman said, “I don’t thinkit’s a slam dunk to pass. There’s a lotof opposition to it. There will be a lotof concern about unintended conse-quences.” 84

Bipartisan measures are pending inCongress that would affect the futureof the industry. In the Senate, the CARERSAct, sponsored by Sen. Cory Booker,D-N.J., would downgrade marijuanafrom a Schedule I to a Schedule IIdrug, acknowledging that it has an ac-cepted “medical use” or a “medical usewith severe restrictions.” 85 It wouldend enforcement of federal marijuanalaws in jurisdictions where it is legaland allow banks to provide services

to legitimate marijuana-related busi-nesses. 86 A companion bill, introducedby Reps. Steve Cohen, D-Tenn., andDon Young, R-Alaska, has bipartisanco-sponsorship in the House.

GovTrack.us, which follows legislationthrough Congress, has given the billsalmost no chance of passage duringthis Congress. michael Correia, directorof government relations for the NationalCannabis Industry Association, says mem-bers of Congress represent their ownstate interests, and if legalization is nothappening in their state, it’s harder forthem to get involved. But as more stateslegalize recreational use of the drug, hesays, it will get on the “radar screens”of more members of Congress.

However, congressional approval isnot required to reschedule marijuanaunder the CSA. If the administrationwanted to push for rescheduling, theattorney general, in conjunction withthe DEA and the Department of Healthand Human Services, could change thedrug’s schedule or even remove it fromCSA scheduling altogether. However, the“notoriously cumbersome procedure”would require “months if not years offormal hearings,” said vanderbilt Uni-versity law professor Robert mikos, andit would not affect the laws in stateswhere marijuana is still illegal. 87

Nationwide, a Harris poll in mayfound that 81 percent of Americanadults favor legalizing medical marijuanain their home states, while 49 percentsupport legalizing it for recreationaluse. 88 (See graphic, p. 872.)

As for the 2016 presidential election,Rep. Blumenauer says, “I don’t thinkthere’s any question” but that marijuanalegalization will be a factor. “This is . . .being considered across the country, andwhen you get into the home stretch ofthe 2016 election, it’s not going to besomething that [candidates] will be ableto ignore,” he says. “They’re either goingto be for it or against it, or they’re goingto look like they’re waffling.”

But Sabet of Smart Approaches tomarijuana says legalizing marijuana “is

mARIJUANA INDUSTRY

Continued from p. 880


“one of those issues candidates don’twant to talk about. I think they’re onthe fence about where they want togo,” but they are also aware of publicopinion on the issue.

Hudak at Brookings said legalizationwill “absolutely” be an issue in 2016because “states are very blatantly vio-lating federal law, and it is an absolutepresidential consideration about whatto do about this. It’s an issue that can-didates won’t be able to be silent about.

“But the question is not just aboutmarijuana,” Hudak continues. “It is aboutpublic policy experimentation; states’ rights;small business; medical marijuana andhealth care; privacy; and access to med-icine. A 2016 candidate’s views on mar-ijuana are part of a broader public policyworldview or set of values that really re-veals who that candidate is.”

OUTLOOKde facto legalization?

when asked about the future ofthe marijuana industry, walsh of

Marijuana Business Daily throws uphis hands. “Trying to figure out whatthe industry is going to look like insix months or so is very difficult,” hesays. “five years is almost impossible,and 10 years is another generation.”

within five years, he says, the federalgovernment could decide to let thestates decide the issue on their own.“The feds will say, ‘we’re just going toleave it up to you guys’ ” in the states.

walsh’s prediction echoes that ofmany industry observers: that de factolegalization is on the way. It’s not aquestion of if but when, they say, andit will resemble the end of alcohol pro-hibition. “The federal government didnot legalize alcohol,” NORmL’s Armen-tano says. “The feds simply got out ofthe way and left the states free to pursue

alternatives to the prohibition of alcohol.The states developed distinct policieson how alcohol was consumed andsold, and to some degree those policiesreflected the cultural mores specific tothose states.”

A similar patchwork of laws couldemerge for the regulation of cannabis, hesays, “a substance that is arguably far morepolitically charged than alcohol ever was.”

But Alan Shinn, executive directorof the Coalition for a Drug-free Hawaii,said, “I don’t think that legalization isinevitable. . . . There’s other alternativesto legalization. we should really betaking a public health approach to this,especially with our youth.” 89

Sabet of Smart Approaches to mar-ijuana says he fears “the commercial-ization impact” of marijuana legalization.“I’m really concerned with what I call‘Big Tobacco 2.0.’ we have to be verycareful about whether we want to rollout the red carpet for another industry,one that makes big money off of theheavy user.”

As the industry grows, observerssay, the structure of the marijuana busi-ness will evolve. “You will see verylarge growers with very large brands— equivalent to the Budweisers or theCoors of the world,” predicts Ewart ofAnne Arundel Community College. “Butyou will also see the craft growers,like the craft brewers, out there pro-ducing unique strains with differenttastes and different effects.”

If the ban on interstate transportationis ended, it could also shake up theindustry’s structure, says Green wave’sKarnes. “There will be mass consolida-tion or extinction of the cultivators,” hepredicts. “The proven leaders amongthe cultivators will likely be taken overby tobacco companies or food and bev-erage conglomerates. On the retail sidewe’ll likely see some branding occur,where some of the products will bedistributed all over the country on anational level — and quite probablyinternational as well — just like thereare various types of alcohol available.”

Rep. Blumenauer predicts that withinthe next two decades, marijuana “willbe legal in most states.” The federalgovernment will have rescheduled ordelisted marijuana, which will be taxedand regulated, he adds, and “there willbe a very strong regime to protect ourchildren. within 20 years, marijuana isgoing to be an accepted part of ourlandscape.”

Notes

1 Julie Andersen Hill, “Banks, marijuana, andfederalism,” Case Western Reserve Law Review,vol. 65, Issue 3, 2015, http://tinyurl.com/q2uwc4v.2 “H.R.2076 — marijuana Businesses Access toBanking Act of 2015,” http://tinyurl.com/oz6atwz.3 “weekly Report,” washington State Liquorand Cannabis Board, Sept. 23, 2015, http://tinyurl.com/qjq4egx.4 Christopher Ingraham, “Colorado’s legal weedmarket: $700 million in sales last year, $1 billionby 2016,” The Washington Post, feb. 12, 2015,http://tinyurl.com/ojawekq.5 Troy Dayton, “Letter from the Publisher,”Executive Summary, The State of Legal marijuanamarkets,” 3rd ed., Arcview market Research, Arcview Group, 2015, http://tinyurl.com/mwcu5d4.6 Bailey Rahn, “Qualifying Conditions for med-ical marijuana by State,” Leafly, July 7, 2015,http://tinyurl.com/nlzsgat.7 “State medical marijuana Laws,” National Con-ference of State Legislatures, Sept. 14, 2015,http://tinyurl.com/nfoy2gr.8 Jessica Calefati, “Brown OKs state rules formedical marijuana,” San Jose Mercury News,Oct. 9, 2015, http://tinyurl.com/ofx4q4x.9 Jessica Zimmer, “The Dangers of Syntheticmarijuana,” The Fix, Sept. 24, 2014, http://tinyurl.com/naqdqrc. Also see “Drug facts: K2/Spice (“Synthetic marijuana”), National Instituteon Drug Abuse, December 2012, http://tinyurl.com/nmptcg2.10 Amy Kraft, “Big increase in deaths, poi-sonings from synthetic marijuana, CBS News,June 11, 2015, http://tinyurl.com/q9lfghy.11 “marijuana Courses Being Offered at CollegesAcross the Country,” fox News, feb. 16, 2015,http://tinyurl.com/ovbtwbv.12 Kristen wyatt, “Governor: Colorado potmarket exceeds tax hopes,” The Associated

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Press, The Denver Post, feb. 19, 2014, http://tinyurl.com/mfu9y4r.13 “marijuana Taxes, Licenses, and fees Trans-fers and Distribution,” Colorado Departmentof Revenue, february 2015, http://tinyurl.com/nrp2qrk.14 Jacob Sullum, “Yes, Legal Pot Does Cost moreThan Black-market Pot (for Now At Least),”Forbes, Jan. 6, 2014, http://tinyurl.com/k5bkp5u.15 Robert w. wood, “$21.5 million In marijuanaTaxes Just went Up In Smoke,” Forbes, Sept. 2,2014, http://tinyurl.com/oy4epnf.16 Ricardo Baca, “Colorado pot sales spikein July, set recreational and medical records,”The Cannabist, Sept. 11, 2015, http://tinyurl.com/p5sqqp2.17 John frank, “Gov. Hickenlooper signs 2015-16 Colorado budget,” The Denver Post, April 25,2015, http://tinyurl.com/pmcfzlo.18 Divya Raghavan, “Cannabis Cash: How muchmoney Could Your State make from marijuanaLegalization?” NerdWallet, Aug. 27, 2015, http://tinyurl.com/nb3fnjb.19 Excerpts, Marijuana Business Daily Factbook2015, April 2015, http://tinyurl.com/q3ryjr2.20 Jeffrey A. miron, “The Budgetary Implicationsof marijuana Prohibition,” marijuana PolicyProject, June 2005, http://tinyurl.com/lvyk6nq.21 Rafa fernandez De Castro, “How mexicandrug cartels are reacting to marijuana legal-ization in the U.S.,” Fusion, march 23, 2015,http://tinyurl.com/o75cekn.22 “United States Border Patrol Sector Profile— fiscal Year 2014,” U.S. Border Patrol, un-dated, accessed Oct. 9, 2015, http://tinyurl.com/p9vlfu6; “United States Border Patrol Sec-tor Profile — fiscal 2013,” http://tinyurl.com/nmphqny.23 De Castro, op. cit.24 “marijuana and Cancer,” American CancerSociety, undated, accessed Oct. 9, 2015, http://tinyurl.com/pvz8euw.25 Anna Callaghan, “why washington state isextinguishing medical marijuana,” Mashable,may 6, 2015, http://tinyurl.com/p2ceyvk.26 “Traceability System,” washington State

Liquor and Cannabis Board, 2015, http://tinyurl.com/p5d3tl9.27 “medical marijuana — what’s New?” wash-ington State Department of Health, undated, ac-cessed, Oct. 9, 2015, http://tinyurl.com/o2ga4rm.28 Rachel LaCorte, “House moves to reconcilemedical, recreational pot industries,” The As-sociated Press, The Seattle Times, April 10, 2015,http://tinyurl.com/pl5xlu3.29 Summer meza, “King County warns medicalmarijuana shops: Shut down or else,” SeattlePost-Intelligencer, July 8, 2015, http://tinyurl.com/nzmue8m.30 “ERfC Estimates, may 2015,” Economic andRevenue forecast Council, State of washington,may 2015.31 Shannon Pettypiece and Sonali Basak, “Potfirms Gain as CvS, walgreen Competition aPipe Dream,” Bloomberg Business, may 13, 2014,http://tinyurl.com/otvjpho.32 Kathleen Burke, “marijuana could be a $35billion market by 2020,” marketwatch, July 15,2015, http://tinyurl.com/nm9cg2d.33 “vitamin, Nutritional Supplement & OtherHealth-Related Product manufacturing IndustryProfile,” first Research, July 27, 2015, http://tinyurl.com/pn8sodg.34 “Privateer Holdings Closes $75 million fund-ing Round,” press release, Privateer Holdings,April 7, 2015, http://tinyurl.com/obq3w36.35 Jonathan Shieber, “New funding for Pri-vateer Highlights marijuana’s massive marketIn The U.S.,” TechCrunch.com, Jan. 8, 2015,http://tinyurl.com/nrleczj.36 Kathleen Burke, “Amid the stock marketvolatility, turn to the stability of the marijuanamarket,” marketwatch, Aug. 30, 2015, http://tinyurl.com/qc256yl.37 “for These 55 marijuana Companies, EveryDay is 4/20,” Bloomberg Business, http://tinyurl.com/nkhtvbb.38 “Cannabis in the Ancient world,” marijuana— The first Twelve Thousand Years, SchafferLibrary of Drug Policy, http://tinyurl.com/d2rw6fu.39 Ibid.40 Richard Rudgley, “Cannabis,” The Encyclopedia

of Psychoactive Substances (1998), http://tinyurl.com/pezvdv5.41 G. C. macaulay (trans.), “The History ofHerodotus, vol. 1 (Chapter 4),” http://tinyurl.com/pcl9jjw.42 Erowid, “Cannabis Timeline,” The vaultsof Erowid, http://tinyurl.com/nks392k.43 “12 Things You Didn’t Know about Hemp,”The 420 Times, Issue 35, http://tinyurl.com/nhkwtgw.44 Lester Grinspoon, m.D., “whither Americanmedical marijuana,” RX Marijuana, 2000,http://tinyurl.com/qhzdncs.45 Kristina Aikens, “victorian women on Drugs,Part 1: Queen victoria,” Points: The Blog of theAlcohol and Drugs Historical Society, April 4,2012, http://tinyurl.com/prkz6bu.46 “Hemp Since The Beginning Of Time,”Global Hemp, Jan. 1, 2001, http://tinyurl.com/cyrbgth.47 “History of marijuana — Early marijuanaUse,” Narconon, http://tinyurl.com/2cr8qxo.48 R. R. mcmeens, m.D., “Report of the OhioState medical Committee on Cannabis Indica,”June 12-14, 1860, http://tinyurl.com/q3mg4w2.49 “Hasheesh Candy” advertisement, marijuanaDoctors.com, http://tinyurl.com/nnjc62k.50 Adrienne Lerner, “Pure food and Drug Actof 1906,” Gale Global Issues in Context,http://tinyurl.com/pme3bvv.51 “History of marijuana — Early marijuanaUse,” op. cit.52 Stephen Siff, “The Illegalization of marijuana:A Brief History,” ORIGINS: Current Events inHistorical Perspective, vol. 7, No. 8, may 2014,http://tinyurl.com/qa5f8sd.53 michael mills, “A smear campaign: a historyof the US’ relationship with cannabis,” The NewEconomy, march 27, 2015, http://tinyurl.com/poy5ag5. for an example, see Annie Laurie,“mother sacrifices children, home, reputation fordope,” San Francisco Examiner, feb. 27, 1930,http://tinyurl.com/olrauqv.54 Lana D. Harrison, michael Backenheimerand James A. Inciardi, “History of drug legislation,”Centrum voor Drugsonderzoek, Universiteit vanAmsterdam, 1995, http://tinyurl.com/pckg4ws.55 Joseph Henchman, “Colorado Debates mar-ijuana Tax; would Be first Genuine Revenue-Raising Tax on Illegal Drug,” Tax foundation,Nov. 15, 2012, http://tinyurl.com/nvw3ve3.56 “marijuana Tax Act Law & Legal Definition,”USLegal.com, undated, accessed Oct. 9, 2015,http://tinyurl.com/oljcatm.57 “Kefauver Committee final Report Aug. 31,1951,” U.S. Senate Special Committee to In-vestigate Organized Crime in Interstate Com-

about the authorBill Wanlund is a freelance writer in the Washington, D.C.,area. He is a former Foreign Service officer, with service inEurope, Asia, Africa and South America. He holds a journalismdegree from The George Washington University and has writtenfor CQ Researcher on abortion and intelligence reform.


merce, undated, accessed Oct. 9, 2015,http://tinyurl.com/nberfzt.58 Rufus King, “The Drug Hang Up, America’sfifty-Year folly,” The Schaffer Library of DrugPolicy, undated, accessed Oct. 9, 2015, http://tinyurl.com/pl3pksf.59 Leary v. United States, U.S. Supreme Court,may 19, 1969, http://tinyurl.com/on4llue.60 Harrison et al., op. cit.61 “Drug Schedules,” Drug Enforcement Admin-istration, http://tinyurl.com/pgfjqhw.62 Emilee mooney Scott, “marijuana Decrim-inalization,” Connecticut General AssemblyOffice of Legislative Research, may 5, 2010,http://tinyurl.com/ohk2c8m.63 “who are Lynn and Erin?” minerva CannaGroup Inc., undated, accessed Oct. 9, 2015,http://tinyurl.com/o6td3cz.64 “The Lynn Pierson Therapeutic ResearchProgram,” New mexico Health and Environ-ment Department, march 1983, http://tinyurl.com/8y4x7zk.65 “New mexico Legalizes medical marijuana,”ProCon.org, Aug. 31, 2007, http://tinyurl.com/qyry8rf.66 “Proposition P,” San francisco ballot initiative,November 1991, http://tinyurl.com/o8klcrp.67 Y. Lu, “medical marijuana Policy in theUnited States,” Huntington’s Outreach Programfor Education, Stanford University, may 15, 2012,http://tinyurl.com/ovew6bj.68 “State medical marijuana Laws,” op. cit.; alsosee Aaron C. Davis, “Budget bill outlaws potsales in D.C. for 2 years,” The WashingtonPost, June 11, 2015, http://tinyurl.com/ozant9o.69 “medical marijuana,” National Organizationfor the Reform of marijuana Laws, http://tinyurl.com/7wd2uam.70 “Use and Regulation of marijuana,” proposedAmendment 64 to Colorado state Constitution,November 2012, http://tinyurl.com/na22gz2.71 John Ingold, “world’s first legal recreationalmarijuana sales begin in Colorado,” The DenverPost, Jan. 1, 2014, http://tinyurl.com/kjt6pqn.72 Kirk Johnson, “Sales of Recreational marijuanaBegin in washington State,” The New York Times,July 8, 2014, http://tinyurl.com/op455mt.73 Brianna Gurciullo and Karen mawdsley,“marijuana law creates confusion but findsgrowing acceptance in District,” The WashingtonPost, Aug. 9, 2015, http://tinyurl.com/p63dzgo.74 “States of Nebraska and Oklahoma, Plaintiffs,vs. State of Colorado, Defendant,” motion tothe U.S. Supreme Court, December 2014,http://tinyurl.com/plsaapz.75 “Justin E. Smith et al., v. John w. Hicken-looper,” U.S. District Court for the District of

Colorado, march 5, 2015, http://tinyurl.com/qzo5wlb.76 “Our Lawsuit to Block the Legalization ofmarijuana,” Safe Streets Alliance, undated, ac-cessed Oct. 9, 2015, http://tinyurl.com/oh7xwpw.77 Jesse mcKinley, “New York State Awards 5medical marijuana Licenses,” The New York Times,July 31, 2015, http://tinyurl.com/otpnyn4.78 Rachel Ann Barry, Heikki Hilamo and Stan-ton A. Glantz, “waiting for the Opportunemoment: The Tobacco Industry and marijuanaLegalization,” The Milbank Quarterly, vol. 92,No. 2, 2014, pp. 207-242, http://tinyurl.com/kmsq4sz.79 Tony Dokoupil, “vice wars: Tobacco, Alcoholand the Rise of Big marijuana,” NBC News,Nov. 29, 2014, http://tinyurl.com/lbcxsxu.80 Aaron Smith, “Ohio to vote on marijuanalegalization,” CNN, Aug. 13, 2015, http://tinyurl.com/oyvcceb.81 “marijuana on the ballot,” Ballotpedia.com,2015, http://tinyurl.com/ooxv6aa.82 Philip Smith, “An Overview Of The 2016marijuana Legalization Initiatives,” The WeedBlog, July 31, 2015, http://tinyurl.com/ofwmod7.83 “CA NORmL Analysis finds marijuana Le-galization Could Yield California $1.5-$2.5 Bil-

lion Per Year,” CA NORmL, undated, accessedOct. 9, 2015, http://tinyurl.com/dcbghx.84 Alison vekshin, “marijuana Legalization AcrossU.S. may Hinge on 2016 California vote,”Bloomberg,April 13, 2015, http://tinyurl.com/nz2b478.85 “Title 21 United States Code, ControlledSubstances Act, Subchapter I — Control andEnforcement,” U.S. Department of Justice, DrugEnforcement Administration, http://tinyurl.com/3eqg7sk.86 The Senate bill is S.683, “CompassionateAccess, Research Expansion, and Respect StatesAct of 2015,” U.S. Senate, undated, accessedOct. 9, 2015, http://tinyurl.com/nhozocb.87 Robert mikos, “Can President Obama single-handedly legalize marijuana?” Marijuana Law,Policy & Reform, Jan. 21, 2014, http://tinyurl.com/p6glbcv.88 “Increasing Percentages of Americans areReady for Legal marijuana,” The Harris Poll,may 7, 2015, http://tinyurl.com/pm8gts9.89 Brianna Gurciullo, Karen mawdsley andKatie Campbell, “Pro-legalization groups pre-pare for marijuana measures in 2016,” NewEngland Center for Investigative Reporting,Aug. 16, 2015, http://tinyurl.com/qdtfmgg.

FOR MORE INFORMATIONhemp industries association, P.O. Box 575, Summerland, CA 93067; 707-874-3648; www.thehia.org/. Promotes development of a hemp industry.

marijuana Policy Project, P.O. Box 77492, washington, DC 20013; 202-462-5747;www.mpp.org/about/. Lobbies for marijuana decriminalization and legalization.

national Cannabis industries association, 1410 Grant St., B-301, Denver, CO80203; 888-683-5650; www.thecannabisindustry.org/. Trade association for the legalcannabis industry.

nORml (national Organization for the Reform of marijuana laws), 1100 H St.,N.w., Suite 830, washington, DC 20005; 202-483-5500; http://norml.org/. Advocatesfor marijuana legalization.

Office of national drug Control Policy, The white House, 1600 PennsylvaniaAve., N.w., washington, DC 20500; 202-456-1111; www.whitehouse.gov/ondcp. Ad-vises the president on drug-control issues and coordinates drug-control activitiesacross the federal government.

Partnership for drug-free kids (formerly Partnership for a drug-free america),352 Park Ave. S., No. 901, New York, NY 10010; 212-922-1560; www.drugfree.org/.Seeks to reduce teen substance abuse and support families affected by addiction.

smart approaches to marijuana, San Diego and washington, D.C.; https://learnaboutsam.org/. Advocates for policies to reduce marijuana use.

Women Grow, Denver and Oakland, Calif.; http://womengrow.com/. Promotesgreater acceptance of women in the marijuana industry.

FOR MORE INFORMATION

886 CQ Researcher

Selected Sources

BibliographyBooks

Barcott, Bruce, Weed the People: The Future of LegalMarijuana in America, time Books, 2015.A nonfiction writer discusses marijuana’s evolution from the

shadows of criminality to a serious economic presence witha powerful impact on law and culture.

Clements, kenneth W., and Xueyan Zhao, Economicsand Marijuana: Consumption, Pricing and Legalisation,Cambridge university Press, 2014.Two Australian economists analyze marijuana price and

consumption patterns and apply the data to the legalizationdebate.

fine, doug, Too High to Fail: Cannabis and the NewGreen Economic Revolution, Gotham Books, 2012.An investigative reporter describes legal marijuana’s potential

to transform the American economy.

newton, david E., Marijuana: A Reference Handbook,aBC-CliO, 2012.A science and business writer sets out the economic, legal

and social arguments surrounding marijuana legalization, plac-ing them in an historical context.

Articles

Bomboy, scott, “interest picks up in legal marijuana asconstitutional issue,” national Constitution Center blog,april 16, 2015, http://tinyurl.com/p7xsaog.The editor-in-chief of the National Constitution Center in

Philadelphia, a museum established by Congress, examinesthe conflict between state laws that legalize marijuana andfederal law that criminalizes it.

Geiger, keri, jesse hamilton, and Elizabeth dexheimer,“does anybody Want $3 Billion in Cash from Pot sales?Big Banks say no, thanks,” Bloomberg, may 12, 2015,http://tinyurl.com/ohsb6ox.Journalists from a financial news service investigate the

legal complications banks face in dealing with the marijuanaindustry.

hudak, john, “marijuana: the gateway to the 2016 presidentialrace,” Brookings institution, blog posting, march 4, 2015,http://tinyurl.com/mpwbcwg.A fellow in governance studies at a washington think tank

argues that marijuana policy is an issue that political candidatescan no longer ignore.

hughes, trevor, “Patchwork of pot rules hampers marijuanabusiness expansion,” USA Today, june 17, 2015, http://tinyurl.com/paggqzq.

State-by-state differences in the regulation of legal marijuanamake it difficult for the industry to expand, the newspaperreports.

nitti, tony, “ninth Circuit: legal Or not, marijuana facilityCannot deduct its Expenses,”Forbes, july 10, 2015, http://tinyurl.com/nghvf5m.The business magazine examines the federal tax situation

faced by a legal cannabis enterprise.

Olson, Becky, “Chart of the Week: marijuana stock volatilityunderscores uncertainty, industry’s Challenges,”MarijuanaBusiness Daily, july 20, 2015, http://tinyurl.com/nvrzq39.A marijuana industry analyst discusses obstacles facing those

who would invest in the industry.

sides, hampton, “high science,” National Geographic,june 2015, http://tinyurl.com/khvdzjo.An historian and writer examines marijuana’s chemistry, its

effects on the body and the outlook for medicinal use ofthe drug.

Reports and Studies

adler, jonathan h., “marijuana, federal Power, and thestates,” Case Western Reserve Law Review, vol. 65, issue3, 2015, http://tinyurl.com/nprmbja.The director of the Center for Business Law & Regulation

at Case western Reserve University School of Law discussesoptions available to the federal government when its lawscollide with those of the states.

johnson, Renée, “hemp as an agricultural Commodity,”Congressional Research service, feb. 2, 2015, http://tinyurl.com/pa8nm6b.An agricultural specialist discusses the history and potential

of hemp as an agricultural commodity in the context offederal legislation.

light, miles, et al., “market size and demand for marijuanain Colorado,”the marijuana Policy Group, march 25, 2014,http://tinyurl.com/pfu5mjz.A study by an independent research organization for the

Colorado Department of Revenue provides consumption andeconomic estimates to help state policymakers design a regulatoryframework for the fledgling industry.

Phillips, Richard, “issues with taxing marijuana at thestate level,”the institute on taxation and Economic Policy,may 2015, http://tinyurl.com/ov5vaem.A senior tax policy analyst examines issues surrounding the

design and implementation of taxes on marijuana at the stateand local levels and explains how states can raise revenuewhile mitigating the negative effects of the drug’s use.


Federal Law

del Castillo, michael, “Gillibrand: states should get marijuanaindependence from Washington,”New York Business Journal,sept. 21, 2015, http://tinyurl.com/pko4g5b.New York Democratic Sen. Kirsten Gillibrand has proposed

legislation to allow states to legalize medical marijuana.

johnson, alan, “Ohio bankers oppose marijuana-legalizationplan because of conflicts with federal laws,”The ColumbusDispatch, Oct. 1, 2015, http://tinyurl.com/noz2zqq.A trade association representing Ohio bankers opposes a

ballot initiative to legalize recreational and medical marijuanain the state, saying banks that work with marijuana businesseswould be in violation of federal law.

Wyatt, kristen, “marijuana opponents using racketeeringlaw to fight industry,”the associated Press, july 13, 2015,http://tinyurl.com/nqyqakn.A washington, D.C.-based anti-marijuana group has sued marijuana

businesses, citing violations of federal anti-racketeering laws.

Jobs

friedman, Gordon, “Oregon cannabis workers unionize,”Statesman Journal, Oct. 5, 2015, http://tinyurl.com/qz2fpe5.many cannabis industry workers in Oregon are joining one

of the nation’s largest commercial and retail employee unionsto protect themselves from being punished for selling productsthat violate federal law.

johnson, Carla k., “aP Exclusive: legal marijuana stirshope in illinois town,”the associated Press, Oct. 3, 2015,http://tinyurl.com/o7curne.Residents of a rural Illinois community that is home to the

state’s first legal marijuana production facility say the warehousehas provided new revenue for the town.

moore, daniel, “as marijuana attitudes ease, workplacedrug testing companies brace for fight,”Pittsburgh Post-Gazette, july 12, 2015, http://tinyurl.com/ps5qu69.Drug testing companies worry that marijuana legalization

in some states threatens their viability as more businesseschoose to not require drug testing for employees.

Regulatory Standards

hartley, Eric, “Pot dispensaries, growers seek lab testingchange,” Las Vegas Review-Journal, Oct. 5, 2015, http://tinyurl.com/odkebpu.A group representing Nevada’s medical marijuana dispensaries

says state-required lab safety testing raises patients’ cost ofmedical marijuana, but the state argues the cost of testingis too insignificant to affect prices.

helms, matt, “drive-through pot shops in detroit worryduggan, others,” Detroit Free Press, sept. 14, 2015,http://tinyurl.com/o2hy4cl.The Detroit City Council is exploring new ways to regulate

the city’s medical marijuana shops, some of which now offerdrive-through sales that some consider unsafe.

Taxes

Barro, josh, “marijuana taxes Won’t save state Budgets,”The New York Times, april 9, 2015, http://tinyurl.com/ouy2d2y.Policymakers in Colorado overestimated the fiscal benefits

of marijuana taxes, since much of the marijuana marketremains unregulated, according to the state’s director of mar-ijuana coordination.

Borchardt, jackie, “legal marijuana could generate $293million in tax revenue, less than marijuana supporters’projection,” Cleveland.com, Oct. 6, 2015, http://tinyurl.com/nse8e99.Ohio’s projected tax revenue from the marijuana industry

would be lower than estimated if the state legalizes marijuana,but the industry would still generate much-needed statefunding, according to a pro-legalization political action com-mittee.

Wolff-mann, Ethan, “Colorado on Pace to nearly doubleRevenue from marijuana tax,”Cnn money, sept. 22, 2015,http://tinyurl.com/oauadoq.Colorado took in $76 million in tax revenue from legal

marijuana sales in 2014, and the state’s industry is expectedto grow as more people try legal cannabis.

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