Regulations work: Lessons from California’s experience with medical marijuana

Baker Institute Viewpoints is a regular blog series that presents an array of views on a single issue. In this installment, five Baker Institute fellows and two guest experts will consider whether the United States should legalize marijuana. Each weekday from Sept. 17- Sept. 25, one of the seven writers — whose backgrounds include a biography of evangelist Billy Graham and a 30-year career in the Drug Enforcement Administration (DEA) — will give his or her take on the issue.

Today, the series looks west to California’s medical marijuana laws. Our guest writer is Tom Heddleston, Ph.D., whose dissertation examined the formation and development of the medical marijuana movement in California.

Part of the fiction that keeps cannabis legalization from gaining traction is the idea that legalization would lead to marijuana being sold indiscriminately, unscrupulously, and in some putative scenarios, with the full backing of corporate advertising.  If the powers that be were to loosen prohibition, or even to debate the merits of alternative approaches to marijuana policy, chaos would undoubtedly ensue.  This fiction, however, ignores the fact that prohibition already creates chaos; drug cartels use murder, terror and graft to compete for market share, illicit marijuana growers show no regard for the environment as they focus on their bottom lines, and teenagers purchase marijuana and other illicit drugs from dealers who never check ID. In reality, legalization would not lead toward chaos, it would lead toward sensible regulation and taxation measures that could manage the harmful consequences of marijuana use, while eliminating the problems caused by marijuana prohibition. A practical approach to legalization would use regulation and taxation to balance the needs of communities, local governments and cannabis consumers alike. Luckily, such regulatory schemes already exist, and they can provide models for future policymakers.

California’s medical marijuana law allows local governments to tailor their approach to medical marijuana provision. In the San Francisco Bay Area, cities have taken a proactive approach to dispensary regulation.  Even prior to the passage of Proposition 215 in 1996, city officials in San Francisco and Oakland were supportive of the medical marijuana movement. Through local ballot initiatives, favorable city council resolutions, and sympathetic district attorneys, San Francisco, Oakland and Santa Cruz laid the groundwork for the successful local regulation of medical marijuana providers, which allowed the burgeoning movement to expand to the state level. In Bay Area cities, governments made a bold stand by allowing medical cannabis clubs to open in the mid-1990s. In 2004 and 2005 these groundbreaking cities became the first in the state to institute dispensary regulations.

In Oakland, city leaders instituted regulations to curtail the number of dispensaries operating in the city’s downtown district. In Berkeley, leaders authored dispensary regulations to cap the number of dispensaries at three and insure that they were operating in properly zoned areas of the city.  n San Francisco, city officials made the Department of Public Health the governing body in charge of enforcing regulations, placing a premium on safe handling with regard to edible forms of cannabis medication. In addition to zoning and dispensary numbers, regulations also governed the hours when dispensaries could be open, whether patients could consume medicine on site, and how close dispensaries could be to public schools. Well-regulated dispensaries also provide good jobs with living wages and benefits. By contrast, in Los Angeles, where official inaction created a regulatory vacuum from 2007 through 2011, between 600 to 800 dispensaries opened with little oversight from city government.

A key benefit of the regulation of medical cannabis is the generation of tax revenue for the state of California and for local governments that have instituted local taxes on dispensaries. The State Board of Equalization began to collect state sales tax on medical cannabis sold through dispensaries in 2005. This provision has allowed the state to collect hundreds of millions of dollars in revenue. Oakland became the first city in the state to tax the gross earnings of medical cannabis dispensaries in July 2009 through the passage of Measure F, passed by 80 percent of voters.  Dispensary operators in the city, including Richard Lee of Oaksterdam University, authored Measure F.  Berkeley instituted a city-level tax through city council initiative Measure S, approved by voters in November 2010. Los Angeles followed with Measure M, which levied a city tax on dispensaries, in 2011. In Mendocino County, Sheriff Tom Allman instituted a zip tie program that allowed medical cannabis growers who registered with the county to cultivate up to 100 plants if they paid a fee to zip tie each plant and allowed sheriff’s deputies to check on their compliance with the program. By extending regulations to the realm of cannabis cultivation, local governments can combat the environmental degradation that accompanies the illicit production of cannabis.

The evidence from California demonstrates that dispensary regulations keep dispensary numbers down, insure proper zoning, and provide much needed tax revenue for cash-strapped city governments. Well-designed dispensary regulations can also address patient safety concerns through quality control measures to ensure that patients only consume cannabis devoid of impurities including mold and pesticides. Opponents of dispensaries have frequently cited that dispensaries pose a threat to public safety, yet regulations that require security personnel and cameras can increase public safety.

Regulations can be too restrictive, to the point of being de facto prohibition. Many cities, including San Diego, have passed regulations that are too restrictive to be viable. Unfortunately, a shift in federal policy has led U.S. Attorneys in California to threaten local officials who seek to regulate dispensaries, which hampers the ability of local governments to regulate. Such threats ignore how policymakers use regulations to generate revenue, create jobs, keep cannabis away from minors, and insure that cultivation does not harm the environment.

Tom Heddleston earned his Ph.D. in sociology from the University of California, Santa Cruz in 2012. His dissertation examined the formation and development of the medical marijuana movement in California. Heddleston holds a masters degree in criminology and criminal justice from Florida State University, where he worked at the Journal of Drug Issues. His research interests include drug policy, criminology and social movements. Heddleston has presented his research at both academic and policy conferences. He has written articles that examine medical marijuana patients and the history of marijuana in North America.