August 28, 2014
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Marijuana legalization: Well-funded advocates soften voters; governments eye tax dollars
Posted on Jan 24, 2014 | by Gregory Tomlin

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EDITOR'S NOTE: Baptist Press, in the second of two in-depth articles, recaps the tide of marijuana legalization in the United States for medical and recreational use. Well-funded advocates have succeeded in swaying public opinion and state legislatures, while both governments and businesses are eyeing revenue bonanzas.

NASHVILLE (BP) -- Hundreds of marijuana smokers lined up outside new state-sanctioned "pot dispensaries" in Colorado Jan. 1, the first day citizens, as well as tourists, could legally buy the drug for recreational use.

More than 30 shops in the state, capitalizing on the new "green rush," netted nearly $1 million during the first day of sales, according to the deputy director of the National Cannabis Industry Association, Betty Aldworth.

Aldworth told CNN "adult use" of marijuana -- meaning use by those legally allowed to buy and possess one ounce of the drug -- will develop into a $208 million industry in the Rocky Mountain state alone. That figure does not include the $250 million in projected sales of "medical marijuana," which proponents claim eliminates nausea associated with chemotherapy, relieves pain and lessens the effects of diseases such as glaucoma and multiple sclerosis.

In 2012, voters in Colorado and Washington became the first to legalize recreational use of marijuana. More than a decade before, both states had enacted laws for use of the drug for medical purposes. In November 2013, Colorado voters authorized excise and sales taxes to "regulate" the state's new marijuana industry.

A spokesman for the Marijuana Policy Project in Denver, which led the campaign to legalize the drug, said Colorado has left "marijuana prohibition behind" and opened the door for a new taxable commodity.

"Adults are using marijuana in every state across the nation," Mason Tvert told the Charlotte Observer. "In Colorado, they will now be purchasing it from legitimate businesses instead of the underground market."

Colorado is "proving to the rest of the world that marijuana can be regulated like alcohol," Tvert said in a previous statement. "It will not be long before voters and lawmakers in other states decide to adopt similar policies."

Follow the money

Advocates for marijuana legalization note that vast amounts of money are in play.

According to CNN, marijuana sales in more than a dozen states should reach $2.3 billion in 2014, up from $1 billion in the previous year. For states, and even the federal government, the amount of potential tax revenue is enough to make states relax laws and the federal government to turn a blind eye in states where medical marijuana and recreational use are already legal.

In fact, the federal government already is taxing the medical marijuana industry, causing some to argue for tax reform and relief for authorized growers and dispensers.

Americans for Tax Reform issued a white paper in conjunction with the National Cannabis Industry Association last September. The paper claims the federal government unfairly targets growers and dispensers under the Internal Revenue Code, Section 208E, enacted to prevent criminal organizations from deducting "business expenses" for enterprises such as drug trafficking.

In a press conference, ATR President Grover Norquist, NCIA President Aaron Smith and Rep. Earl Bluemenauer, D.-Ore., said the federal government essentially forces medical marijuana providers to pay taxes based on gross receipts rather than income, unlike other small businesses.

Such arguments may be preparation for lower taxes on a larger retail industry in the future. The retail appeal of marijuana is one thing groups like the Marijuana Policy Project use in their push to change state laws and public perceptions about the drug.

MPP attempted to be the first organization to air a marijuana commercial at a NASCAR race in 2013. At the Brickyard 400, the "jumbotron" at the speedway was slated to carry an MPP video advertisement about recreational marijuana use. The advertisement said the drug had fewer calories than beer and claimed it was not linked to violence or reckless behavior. Marijuana, the advertisement said, was "less harmful than alcohol and [it is] time to treat it that way."

The video was pulled from the Brickyard 400 lineup because of the objections of a group called Save Our Society from Drugs.

MPP's Tvert said the incident showed "the exact type of hypocrisy that motivated us to run this ad. We wanted to make people think about the absurdity of laws that allow adults to use alcohol but punish them for making the safer choice to use marijuana instead, if that is what they prefer."

According to the National Highway Transportation Safety Administration, marijuana is the second most common substance found in the blood of impaired drivers, fatally injured drivers and auto crash victims. Alcohol is first.

The pulling of the advertisement after it was paid for was only a small setback for the well-funded MPP. Its list of celebrity supporters and advisory board members includes actors Jack Black, Peter Coyote, Susan Sarandon, former Minnesota Gov. Jesse Ventura, comedian Bill Maher and former U.S. Surgeon General Jocelyn Elders, all of whom are committed to ending what MPP calls the "destructive marijuana laws" of the United States.

Their support, however, pales in comparison to the support offered to the legalization movement by six of the world's billionaires -- five of them Americans dubbed by Business Insider magazine as "the most pot-friendly CEOs."

Among the group are George Soros, chairman of Soros Fund Management and founder of the Open Society Foundations; John Sperling, chairman and CEO of the Apollo Group (University of Phoenix); George Zimmer, recently ousted founder and CEO of Men's Wearhouse; John Mackey, founder and co-CEO of Whole Foods; Richard Branson, CEO of Virgin; and the late Peter Lewis, former CEO of Progressive Insurance.

In spite of such deep pockets, some legalization efforts have failed. Soros and Zimmer, for example, both gave large amounts of money to the failed Proposition 19 marijuana legalization effort in California in 2010.

Soros wrote in The Wall Street Journal in October 2010 that his $1 million contribution to the effort to decriminalize marijuana in California was motivated by his belief that "regulating and taxing marijuana would simultaneously save taxpayers billions of dollars in enforcement and incarceration costs, while providing many billions of dollars in revenue annually."

"It also would reduce the crime, violence and corruption associated with drug markets, and the violations of civil liberties and human rights that occur when large numbers of otherwise law-abiding citizens are subject to arrest. Police could focus on serious crime instead."

Zimmer, according to SF Weekly in San Francisco, provided $2 million to the Proposition 19 fight and millions to other "compassionate use" initiatives. The Proposition 19 initiative failed with California voters by a margin of 54-46 percent.

Peter Lewis, who died in November 2013 at age 80, was the largest financier of marijuana legalization at the time of his death. The National Organization for the Reform of Marijuana Laws (NORML) said Progressive's longtime CEO had provided nearly $40 million in resources for the legalization effort since the 1980s. The Canadian Press pegged the figure at $60 million.

"I don't believe that laws against things that people do regularly, like safe and responsible use of marijuana, make any sense," Lewis told Forbes magazine two years before his death. "Everything that has been done to enforce these laws has had a negative effect, with no results.

"On legalization beyond medical use, we may be some years away, or we may find that we suddenly reach a tipping point, much like the end of alcohol prohibition in the last century," Lewis said. "I'm supporting innovative ideas to move toward a system that would regulate, control and tax marijuana."

It isn't just governments or marijuana growers and distributors which stand to gain winfall profits from marijuana sales. Companies engaged in producing the drug already are proving their profitability, and investors are taking note.

Bloomberg Media has reported that companies such as Hemp, Inc., and Advanced Cannabis Solutions have seen stock increases of nearly 1700 percent.

"You have a feeding frenzy for the birth of a new industry," Bruce Perlowin, CEO of Hemp, Inc., told Bloomberg. "The demand for marijuana is insatiable."

The domino theory

In the November 2013 elections, Illinois became the 20th state to adopt a law allowing the use of "medicinal marijuana." Soon after the state changed its marijuana laws, legalization advocates began talking about recreational use.

In fact, the larger strategy of legalization advocates has taken on the familiar refrain of "compassionate use" followed by the push for full legalization and regulation in virtually every state where marijuana laws have been relaxed. Their efforts may be bearing fruit. Several surveys now suggest a majority of the American people are in favor of making the once-taboo drug as easy to purchase as cigarettes and beer.

In an October 2013 survey, the Gallup Research Group noted, "The movement to legalize marijuana mirrors the relatively recent success of the movement to legalize gay marriage, which voters have also approved now in 14 states."

The movement to legalize pot, however, did not begin recently. On July 24, 1967, an advertisement in the London Times -- later circulated by legalization advocates in America -- encouraged a petition to decriminalize marijuana in the United Kingdom. The advertisement was signed by 60 notable personalities, including the Beatles.

Because America was much more conservative then, with only 12 percent of Americans saying marijuana should be legal in 1969 according to a Gallup survey, the idea of legalization gained little traction. Throughout the 1980s, in spite of multiple "Just Say No" anti-drug campaigns, marijuana use increased, and attitudes toward the drug began to change.

In 1995, the use of medical marijuana was illegal in all 50 states. One by one, the states began to fall.

In 1996, California was the first to enact medical marijuana laws. Washington and Oregon followed in 1998; Alaska and Maine in 1999. Other states, including Hawaii in 2000, Nevada and Colorado in 2001, Montana and Vermont in 2004, Rhode Island in 2006, New Mexico in 2007, Michigan in 2008, Arizona and New Jersey in 2010, Delaware in 2011, and Connecticut in 2012 followed. Maryland, Massachusetts and Illinois all passed medical marijuana laws in 2013.

The seemingly effortless adoption of the law in Illinois and other states is the latest signal that public perceptions of the substance once associated with the 1960s drug culture have changed -- perhaps because as many as 38 percent of Americans have tried the drug, according to the 2013 Gallup survey. The Pew Research Center, in a similar survey released April 23, 2013, said as many as 48 percent of its survey group had experimented with marijuana.

Whatever the number of Americans who have used marijuana is, both polls agree that a majority of Americans (Gallup, 58 percent; Pew, 52 percent) now say marijuana should be legalized.

"The survey by the Pew Research Center, conducted March 13-17 among 1,501 adults, finds that young people are the most supportive of marijuana legalization. Fully 65% of Millennials -- born since 1980 and now between 18 and 32 -- favor legalizing the use of marijuana, up from just 36% in 2008. Yet there also has been a striking change in long-term attitudes among older generations, particularly Baby Boomers," the Pew Research Center said.

The findings of the research groups confirm what legalization advocates say about the use of the drug.

The group NORML claims marijuana is the "third most popular recreational drug in America (behind only alcohol and tobacco), and has been used by nearly 100 million Americans. According to government surveys, some 25 million Americans have smoked marijuana in the past year, and more than 14 million do so regularly despite harsh laws against its use."

In most states that have allowed the use of medical marijuana, state laws still prohibit the drug's recreational use, as do federal laws. In those instances, legalization advocates have begun to employ the same domino theory -- applied to the states -- in cities and other local jurisdictions.

In November 2013, voters in Portland, Maine, the state's largest city, legalized the recreational use of marijuana in preparation for a larger statewide initiative by national organizations.

The Lansing State Journal reported in Michigan that the cities of Lansing, Jackson and Ferndale did the same, with voters striking penalties for marijuana possession from the books in 2013. In doing so, they joined other cities such as Ann Arbor, Detroit, Flint and Grand Rapids which had already decriminalized possession of the drug.

Such efforts show no signs of slowing, nor does the flow of money into them. Like same-sex marriage, more states likely will change their laws to accommodate changing ethics.

Conflicting laws

When Illinois enacted a medical marijuana provision, the National Cannabis Industry Association said the law "creates a framework for the licensure of as many as 22 cultivation facilities and 60 dispensing organizations to provide medical marijuana to qualifying patients. Extensive security, license qualification, inventory, and auditing requirements will ensure that medical cannabis produced and sold within the regulated market will be closely controlled and the individuals responsible for it will be held to high standards."

NCIA said in a statement that the program will expire Jan. 1, 2018, "unless it is renewed by the state legislature, allowing Illinois a unique experimental opportunity to implement a responsible and sustainable medical cannabis market."

A "market" for marijuana, however, is what federal law prohibits. In fact, all state marijuana legalization laws have been passed in spite of their direct conflict with federal law. In the same way, local laws decriminalizing marijuana possession often directly conflict with higher state laws.

For instance, possession of the drug without a medical marijuana card mandated by state laws, possession of too much of the drug, or possession of the drug by those under the age of 21 may result in state drug charges. But the same circumstance, regardless of the owner's possession of a medical marijuana prescription card, may result in federal charges. Federal law still classifies marijuana as a "dangerous drug" and imposes stiff penalties for drug possession and trafficking.

The federal government, for instance, began targeting medical marijuana dispensaries and growers in California late in 2012, closing as many as 70 of the sites in the Los Angeles area. Federal authorities in those cases claimed that the medical marijuana producers were making far more money -- in some cases millions more -- than they were allowed to make. All of the state's dispensaries were by law supposed to be nonprofit ventures, according to the Los Angeles Times.

But after Washington and Colorado approved laws establishing state-regulated systems of marijuana cultivation and retail sales in November 2012, the paradigm of marijuana law enforcement changed.

Attorney General Eric Holder issued federal guidance on the matter in a memorandum Aug. 29, 2013.

While Holder said the federal government will still prosecute marijuana-related crimes of "large-scale criminal enterprises, gangs and cartels," the growth of marijuana on public lands, and the distribution of the drug to minors will remain state and local matters where medical marijuana or recreational use laws have been passed.

"In jurisdictions that have enacted laws legalizing marijuana in some form and that have also implemented strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale, and possession of marijuana, conduct in compliance with those laws and regulations is less likely to threaten the federal priorities set forth above," Holder wrote in his guidance statement.

Medicinal value?

When former Progressive CEO Peter Lewis died, he left marijuana advocacy groups fearful that the money supporting legalization efforts would dry up. He also left them without a high-profile example of how medical marijuana supposedly helps the infirm.

Lewis said he tried marijuana as a pain reliever for the first time at age 39 following the amputation of his leg below the knee. Lewis often championed the drug, but even doctors in states where initiatives have passed are not settled on the issue.

A Hartford Courant story in May 2013, following the state's passage of a medical marijuana law, contained a statement from the Connecticut State Medical Society's president. Dr. Michael Krinsky said doctors are asked to be scientific and use "evidence-based medicine."

"On the other hand, we're being legislated to by people who don't practice medicine, telling us this [smoking marijuana to treat symptoms] is fine to do, based on rather flimsy evidence."

It is doubtful that more evidence will be forthcoming in the near future. A single 2010 report from the Center for Medicinal Cannabis Research at the University of California-San Diego resulted from nearly a decade of research and $9 million spent by the state.

In that report, the first extensive trial in the United States, marijuana was said to reduce muscle spasms associated with multiple sclerosis and pain associated with brain illnesses and injuries. Study director Igor Grant, a psychiatrist who directs the center, said at a press conference, "There is good evidence now that cannabinoids may be either an adjunct or a first-line treatment."

A group of 20 doctors in Arkansas disagreed when medical marijuana was on that state's ballot in October 2012. CBS reported that members of the Physician Coalition Against Medical Marijuana called into question marijuana's viability for medical purposes.

"It is an inferior medicine compared to other choices," said Dr. David Smith, a pain relief specialist with the group. "The so called 'medical marijuana' is not a scientifically validated way to relieve pain or suffering. Addictive drugs must be carefully regulated and controlled by our FDA, the DEA and trained pharmacists."

Smith said the pill Marinol, which has a pure form of the psychoactive substance in marijuana, THC, is already available for use. The Arkansas medical marijuana initiative failed 51.4-48.6 percent.

The group ProCon.org, a nonprofit group that keeps track of government studies worldwide, claims 105 studies on medical marijuana have been conducted worldwide, mostly in Europe and Canada, between 1990-2012. The group rates each study as pro, con or "not clearly pro or con." Of the 105 studies ProCon.org has monitored, it rated 41 "pro" or in favor of the use of medical marijuana. Of the remaining 64 studies, 33 were "con" and 31 were "not clearly pro or con."

Coming soon

With scientific studies on the medical value of marijuana inconclusive, the debate will likely continue as more states address its use legislatively.

Legalization advocacy groups currently are working in states such as South Dakota, Minnesota, Wisconsin, Missouri, Mississippi, Alabama, Tennessee, North Carolina, Pennsylvania, New York and New Hampshire to bring the issue before voters.

In October 2013, California's second-highest elected official, Lt. Gov. Gavin Newsom (who defied state law and authorized gay marriage while mayor of San Francisco), said recreational marijuana should be legal in the Golden State. Newsom and legalization advocates are poised to re-introduce a statewide referendum to legalize the drug, according to Gallup.

In Iowa, according to the Sioux City Journal, the state legislature is being pushed to consider legalization of medical marijuana in 2014. And The Miami Herald reported that 82 percent of those surveyed in a poll from Quinnipiac University favor medical marijuana legalization in Florida. Some 48 percent of Floridians support outright legalization of the drug. Medical marijuana could be a ballot issue there in 2014.

The Marijuana Policy Project also issued a statement that it will target 10 more states for further "reform" by 2017.

"MPP is currently supporting a petition drive led by Alaska activists to place an initiative on the August 2014 ballot, and it will work to pass initiatives in Arizona, California, Maine, and Nevada in the 2016 election. The organization is participating in lobbying and grassroots organizing efforts to pass bills in the Hawaii, Maryland, New Hampshire, Rhode Island, and Vermont state legislatures by 2017."

Since all of the states mentioned by MPP already have medical marijuana statutes, recreational use is the only goal the group has left to achieve.
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Gregory Tomlin is a writer based in Fort Worth, Texas. Get Baptist Press headlines and breaking news on Twitter (@BaptistPress), Facebook (Facebook.com/BaptistPress) and in your email (baptistpress.com/SubscribeBP.asp).
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