Nathan Jones, the Baker Institute Alfred C. Glassell III Postdoctoral Fellow in Drug Policy, wraps up our three-part Viewpoints series on regulating legalized marijuana with an outline of an optimal regulatory system.
More from this series:
- “A bold new path: Moving beyond prohibition in Colorado and Washington,” by guest writer Tom Heddleston, Ph.D.
- “What is the best regulatory framework for legalized marijuana?,” by Gary Hale, Baker Institute nonresident fellow in drug policy
The legalization of cannabis — marijuana — in Colorado and Washington has shifted the marijuana debate away from whether or not marijuana policy should change toward what that change should be. Our goal is not to increase marijuana use, but to take control of the supply away from criminals. Prohibition has failed to end marijuana use and has enriched organized crime, along with a host of other negative social consequences. We can imagine a government monopoly in which state-controlled stores would dispense marijuana in a tightly regulated system that would likely curtail marijuana use through the control of advertising, taxation and other regulations. While attractive to some, this arrangement is rarely discussed and is out of sync with the country’s general political tendency toward private enterprise.
Taking this as a starting point, an optimal regulatory system would include the following features:
Self-production
Individuals could grow up to three plants for their personal consumption and give away, though not sell, surplus crop. Self-production has an artisanal quality that changes the nature of use. Having grown up in Northern California in a family that made wine on a small artisanal scale for personal consumption, I developed healthy attitudes toward alcohol. Wine was associated with hard work, including picking grapes, moving heavy boxes, operating the corking machine, and paying careful attention to detail at the various stages of production. In Northern California’s Emerald Triangle — Humboldt, Mendocino, and Trinity counties — cultivation of cannabis has already created an elaborate culture of artisanal production, the focus of which is not getting stoned but personal pride in creating something that is labor intensive and deeply personal.
Even if some personal cultivation is diverted to an unregulated black market, this would have important consequences for shifting the source of production of marijuana from Mexico and thus reducing the role of transnational criminal actors in the market.
Taxation
Sales tax and an excise tax comparable to that on alcohol and tobacco should apply to marijuana dispensaries. A significant portion of the funding should be applied to drug education and to prevention and treatment programs.
21 and over only
A licit market has the advantage of preventing youth access. Drug dealers don’t check IDs but store/dispensary/co-op clerks must or face prosecution. In the annual authoritative Monitoring the Future surveys of adolescent drug use, between 81 and 90 percent of 12th graders have consistently deemed marijuana “fairly easy” or “very easy” to obtain. As Judge James P. Gray, the 2012 Libertarian Party candidate for vice president and a spokesman for Law Enforcement Against Prohibition (LEAP) is fond of pointing out, if we put marijuana vending machines in bathrooms, we could only fail further by 15 percent.
Dispensaries/nonprofit cooperative models
Private is not synonymous with profit. Optimally, I would like to see co-ops dominate this market. University of Phoenix is a for-profit school interested in boosting profits and stock price, while Harvard is a private university with no interest in profit. Sometimes nonprofits do a better job. Co-ops could be run on a nonprofit basis for the personal consumption of their members. Licensing co-ops and dispensaries could also be an important source of revenue for the funding of prevention, treatment and the regulatory agencies needed.
Clear labeling requirements
States should create a regulatory system and apparatus to enforce labeling requirements. Required information could include levels of THC, CBD, and other cannabinoids, as well as information about pesticides and allergens. Labeling could also include accurate health warnings and discouraging public service announcements, as is the case with tobacco.
Loosening restrictions on research
Currently, legal research on marijuana in the United States is essentially limited to showing its negative health consequences. It is thus considered biased and is not taken seriously. Loosening restrictions on testing could provide impressive new data that regulators can utilize to control the market. For example, as policy experts Jonathan P. Caulkins, Angela Hawken, Beau Kilmer and Mark A.R. Kleiman point out in their book “Marijuana Legalization: What Everyone Needs to Know,” the ratio of THC to CBD may have important effects. (This is an excellent and informative book on the subject.) To make use safer, regulators could adopt minimum THC-to-CBD ratio rules. Unfortunately, as the authors point out, more research is needed.
Implementation will take time
Unexpected roadblocks to the implementation of marijuana regulation are bound to arise. Law enforcement culture is inherently biased against regulation of the illicit due to a long history of prohibition and selection bias. When police officers are hired, they must submit to background checks that either eliminate their applications due to past drug use or force them to disclose any past use and take oaths against future use. Thus, marijuana regulation will face scenarios where, through cultural resistance, law enforcement may choose not to play their appropriate role in the legal market. Over time, this problem will erode as the culture shifts — but as it already has, it will continue to create short-term problems.
Banking
The banking system is not open to dispensaries or co-ops. This is due to Treasury Department regulations and rules making dispensaries cash-only businesses. This has the deleterious effect of making them more difficult to monitor. If we want to control these businesses, we should be able to audit them.
Conclusions
Regulation should begin as tight and loosen slowly in conjunction with adjustments to levels of enforcement, to find an equilibrium that minimizes the black market and consumption. Implementation will take decades and begin in a patchwork fashion across jurisdictions. Over time, as optimal plans and regulations are identified, the policy should be re-federalized, i.e. the federal government should adopt national policies that help to alleviate the patchwork nature policies that vary by state and locale.
Special thanks for this piece go to the students of Rice University’s Baker Institute spring 2013 policy course, who once again proved what all good professors know: we learn as much from our students as we teach them.
Nathan Jones is the Alfred C. Glassell III Postdoctoral Fellow in Drug Policy at the Baker Institute. His areas of interest include U.S.-Mexico security issues, illicit networks and cross-border flows.