Cannabis for Sale?: California Gears Up for a Vote

Cannabis for Sale?: California Gears Up for a Vote
Left to right: Ann Linder, Jason Despain, and Cari Jeffries, all JD ’17

Enrollment is up at the Marijuana Business Academy in Colorado Springs, Colorado, as it is at Med Grow Cannabis College in Detroit, Michigan, and Oaksterdam University in Oakland, California. These institutions of higher learning are riding a sea change in public opinion about a drug that can still land users in prison, and for which thousands of former users are still doing time. While students are considering careers in the new world of commercial cannabis, lawmakers seem to be flying blind. They are caught between federal law that bans the drug outright, legalized medical cannabis use at odds with the federal ban, and public opinion that has shifted dramatically over just the past five years in support of outright commercial legalization—as is the case in Colorado, Washington, Alaska, Oregon, and Washington, D.C., which all legalized commercial use for the drug via ballot measures.

As supporters of legal commercial cannabis use in California gear up for a ballot initiative in 2016—with as many as five competing initiatives in the works for next year’s election—students at Stanford Law School have been digging into the issue, aiming to inform the discussion before a measure is written and voted on.

“There is some urgency to this conversation because whatever gets put into writing on a ballot will get voted on, and it’s probably going to pass, particularly if the youth vote comes out for the presidential election,” says Robert MacCoun, James and Patricia Kowal Professor of Law at Stanford, who taught the policy practicum to research a California ballot measure last spring. A leading expert in the field, MacCoun thought it important to help voters, reformers, and policymakers to think hard about the details of a new regulatory model for cannabis. “This is going to be a massive industry, so there’s a lot of money at stake. And ballot measures are very hard to change once they are voted on, so it’s in everyone’s interest to consider the issues.”  

The practicum had two clients, Dr. Beau Kilmer, co-director of RAND’s Drug Policy Research Center, and California Assemblymember Rob Bonta, author of a recent bill to impose the first major statewide restrictions on medical marijuana dispensaries and growers (the billion-dollar-a-year industry is now regulated largely by local governments). The nine students participating in the practicum, all law students, formed three teams to explore questions posed by Bonta and his staff on taxation, agency oversight, and labor regulation of cannabis—careful to cast themselves not as advocates for a proposition but policy analysts looking at what would make a good law. The result of their efforts, “Legalizing Marijuana in California: A Review of Policy Considerations,” is the first comprehensive analysis of the regulatory and legal details of cannabis commercialization in California. According to MacCoun, their report was widely circulated and even cited in the final report of California Lieutenant Governor Gavin Newsom’s Blue Ribbon Commission on Marijuana Policy.

And, as the students discovered, establishing a whole new industry is a very complicated task for policymakers at every level of state government.

“Deciding how to regulate an industry underscores everything else. You need to design a system that can address the priorities and concerns of all the players,” says Cari Jeffries, JD ’17, who researched agency regulation options. After looking at what has happened in other states, and evaluating the capacity of existing California agencies to take on the huge task (such as the California Department of Alcoholic Beverage Control, the Board of Equalization, the Department of Food and Agriculture, and the Department of Public Health), she and her colleagues concluded that there are two possible models for regulation: a single integrated agency, which would oversee all elements of marijuana regulation, or a shared responsibility approach with different agencies overseeing the varying regulatory elements for which they were best equipped. But there was a cautionary note. “We did say that if we were to utilize a single integrated agency, we don’t believe there is an existing agency that could fully handle all of the needs of regulating marijuana, because the industry is so complex and involves so many different competing priorities,” says Jeffries. She adds that “for an area as complex as marijuana, there is surprisingly little research on oversight.”

“At first, I thought that this was going to be a paper about what Colorado and Washington have done and how we could analogize,” says Jason Despain, JD ’17, who was part of the team researching the taxation section of the report. “What surprised me was how much we learned from what California had already done with taxation, particularly of gas, which is one of the most successful flexible taxes.”

Ann Linder, JD ’17, and her team explored labor issues, another complex web that includes everything from unionization and organized labor and National Labor Regulation Board authority, and more. They also looked at who should be able to work
in the industry—age and licensing of workers and such. “It isn’t agriculture and it isn’t manufacturing, so we looked at how commercial cannabis would fit into various labor oversight. It falls into a weird, unexplored middle ground,” she says.

Because cannabis is a drug, public safety concerns were also noted in the report. “Taxation is very important not only from a state revenue perspective, but also in terms of influencing what kinds of marijuana people buy and how much they will use,” says MacCoun, who argued for the advantages of taxing on THC potency rather than weight in a recent San Francisco Chronicle op-ed, “Grow Your Own Marijuana Law.”

The students presented their paper at a RAND meeting this past June.

“The report raised all sorts of really interesting issues. One was whether marijuana labor can even be considered agricultural or not. It turns out there are significant legal and regulatory implications for collective bargaining and for overseeing disputes,” says MacCoun. “Another involved agency regulation. A number of people have suggested that the State Board of Equalization handle regulation of cannabis because it handles taxation. The students discovered that the board has given itself a very low grade for how it handled alcohol after prohibition!”

The rigor of the research paid off too.

“The students turned up all sorts of things that my colleagues and I, all of us specialists in this area, hadn’t looked at. That’s one of the reasons that this report has been so widely circulated—it has a wealth of really important information,” says MacCoun.

For Jeffries, the practicum offered a breather from a daunting 1L course load, while also bringing some of what she was learning to life. “This research underscored the issues of federalism we had just studied in Con Law—federalism underpins everything else in marijuana regulation,” she says.

And while the cannabis industry is undergoing a massive shift across the country, the students noted that the experience of the practicum would benefit them as their profession too is changing.

“I came to law school with the notion of the Atticus Finch model of lawyer, standing up for justice in the courtroom. But I’ve come to understand that the practice of law today is so much more—the law today is centered at that intersection of law and policy and politics,” says Jeffries. “It was great to have this experience to understand what it means to be a lawyer in our evolving legal world.”

“I think we all came to the class with open minds and found that the process has opened many more possibilities for us,” says Linder. “As someone who may or may not actually practice law, it was wonderful to see what policy research is like and to learn these skills.” SL