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Chronicle AM -- July 18, 2014

Tens of thousands of federal drug prisoners could get out early after the US Sentencing Commission votes to make guideline reductions retroactive, the Ohio Supreme Court moves to cut some crack sentences, FedEx gets indicted for shipping pills for Internet pharmacies (and not taking a deal with the feds), and more. Let's get to it:

Federal Correctional Institution, Englewood, CO. There may soon be room at the inn. (wikimedia.org)
Medical Marijuana

New York Medical Marijuana Business Alliance Formed. Albany-area medical marijuana lobbyists have formed a business alliance to jointly fight for their interests. The group is called the Medical Cannabis Industry Alliance of New York. Members will include growers, advocates, real estate interests, and other businesses associated with medical marijuana.

New Hampshire Advocates to Demonstrate at Statehouse Next Wednesday to Criticize Medical Marijuana Program Delays. Next Wednesday is the one-year anniversary of Gov. Maggie Hassan's signing of the state's medical marijuana bill, but the state's program is beset with needless delays, say advocates, who will gather at the statehouse in Concord next Wednesday to shine a media spotlight on the problem. Click on the link to RSVP.

Northern California Congressman Calls on US Attorney to Go After "Trespass" Marijuana Growers, Not People Complying With State Law. US Rep. Jared Hoffman (D-CA) sent a letter Wednesday to Northern California US Attorney Melinda Haag urging her "to focus prosecutorial and enforcement resources on trespass marijuana growers, not low-level marijuana offenders complying with state law." Hoffman called "trespass" growers "the greatest emerging threat to public safety and environmental health" in Northern California. Click on the link to read the letter in its entirety.

New Synthetic Drugs

Alaska Tries New Tactic in Battle Against Synthetics -- Fining Stores That Sell Them. Gov. Sean Parnell (R) Wednesday signed into law a bill designed to block the retail sale of synthetic drugs by defining them as products with "false or misleading labels" and imposing fines similar to traffic tickets on people who sell or possess them. The move comes after earlier efforts to suppress the new synthetics were undermined by manufacturers who adjusted their recipes to avoid lists of banned synthetics.

Law Enforcement

FedEx Hit With Criminal Indictment for Shipping Internet Pharmacy Drugs. A federal grand jury in San Francisco has indicted FedEx, the world's largest cargo company, on criminal charges of conspiracy to distribute controlled substances and distribution of misbranded drugs. Federal prosecutors are seeking to forfeit and seize at least $820 million in what they say are proceeds from such illegal shipments. Read the indictment here.

Sentencing

US Sentencing Commission Votes Unanimously for Retroactivity in Drug Sentencing, Could Affect 46,000 Federal Prisoners. The United States Sentencing Commission voted unanimously today at a public meeting to apply a reduction in the sentencing guideline levels applicable to most federal drug trafficking offenders retroactively, meaning that many offenders currently in prison could be eligible for reduced sentences beginning November 2015. Unless Congress disapproves the amendment, beginning November 1, 2014, eligible offenders can ask courts to reduce their sentences. Offenders whose requests are granted by the courts can be released no earlier than November 1, 2015. The Commission estimates that more than 46,000 offenders would be eligible to seek sentence reductions in court. These offenders' sentences could be reduced by 25 months on average. Click on the link for more information.

Ohio Supreme Court Rules Crack Defendants Sentenced After New Law to Reduce Disparities Went Into Effect Must Be Resentenced. The state Supreme Court ruled Wednesday that defendants convicted before laws reducing the penalty for possessing crack cocaine went into effect, but sentenced after they went into effect must be resentenced under the new law. The case is State v. Limoli.

International

Australia Drug Use Survey Released. The 2013 National Drug Strategy Household Survey, conducted by the Australian Institute of Health and Welfare, was released Thursday. Cigarette smoking is down, youth drinking is down, and so is the use of heroin, ecstasy, and GHB. The misuse of pharmaceuticals is up, and the use of meth remains steady.

Ending Moratorium, Singapore Executes Two Convicted Drug Dealers. Singapore today hanged two convicted drug dealers, the first executions for drug offenses since it imposed a moratorium on them in 2011. Tang Hai Liang, 36, had been convicted of trafficking 89.55 grams (3.2 ounces) of pure heroin and Foong Chee Peng, 48, had been found guilty of dealing 40.23 grams of the same illegal drug. Both are Singapore citizens. They had chosen not to seek resentencing under a 2012 law that abolished mandatory death sentences in some drug trafficking cases.

FedEx Indicted on Criminal Charges for Shipping Internet Pharmacy Drugs

A federal grand jury in San Francisco has indicted FedEx, the world's largest cargo company, on criminal charges of conspiracy to distribute controlled substances and distribution of misbranded drugs. Federal prosecutors are seeking to forfeit and seize at least $820 million in what they say are proceeds from such illegal shipments.

FedEx truck, Chicago (wikimedia.org)
Read the indictment here.

The move comes after FedEx rejected offers from federal prosecutors to cut a deal. FedEx's chief competitor, UPS, settled a similar case last year by agreeing to pay $40 million after being linked to the shipment of prescription drugs by illegal online pharmacies. Both cases were brought by US Attorney for the Northern District of California Melinda Haag. [Ed: Haag is loathed by the medical marijuana community for action taken against northern California providers.]

But unlike UPS, FedEx refused to settle. And now, it is vowing to fight the charges.

"FedEx is innocent of the charges," the company said in a statement. "We will plead not guilty. We will defend against this attack on the integrity and good name of FedEx and its employees."

In the past, the company has said it wouldn't settle because it doesn't believe it has done anything wrong. FedEx argues that it should not be held responsible for the contents of the tens of millions of packages it ships each year. The company has acknowledged that it has been under grand jury scrutiny for several years.

The grand jury indictment accuses FedEx of knowingly shipping prescription drugs for two different online pharmacy operations, both of which were prosecuted by the Justice Department. It accuses FedEx of ignoring warnings about doing so for years.

"The advent of Internet pharmacies allowed the cheap and easy distribution of massive amounts of illegal prescription drugs to every corner of the United States, while allowing perpetrators to conceal their identities through the anonymity the Internet provides," said US Attorney Haag. "This indictment highlights the importance of holding corporations that knowingly enable illegal activity responsible for their role in aiding criminal behavior."

The charges carry with them a sentence of up to five years probation and fines totaling "twice the gross gains derived from the offense," or $820 million. Because no individuals are named in the indictment, however, it's not clear who or what would be on probation if FedEx is tried and convicted.

San Francisco, CA
United States

Chronicle Interview: Drug Policy Researcher Beau Kilmer [FEATURE]

Beau Kilmer is a senior policy researcher at the RAND Corporation, where he codirects the RAND Drug Policy Research Center. His research lies at the intersection of public health and public safety, with a special emphasis on substance use, illicit markets, crime, and public policy. Some of his current projects include estimating the size of illegal drug markets, assessing the consequences of alternative marijuana policies, measuring the effect of South Dakota's 24/7 Sobriety Program on drunk driving and domestic violence outcomes, and evaluating other innovative programs intended to reduce violence. Kilmer's research has appeared in leading journals such as Addiction, American Journal of Public Health, Journal of Quantitative Criminology, Proceedings of the National Academy of Sciences, and his essays have been published by the BBC, CNN, Los Angeles Times, New York Times, Wall Street Journal, and USA Today. His book on marijuana legalization, "Marijuana Legalization: What Everyone Needs to Know" (co-authored with Jonathan Caulkins, Angela Hawken, and Mark Kleiman) was published by Oxford University Press in 2012. Before earning his doctorate at Harvard University, Kilmer received a Judicial Administration Fellowship that supported his work with the San Francisco Drug Court.

Beau Kilmer (rand.org)
The Chronicle interview took place by phone Wednesday morning.

Drug War Chronicle: What are we learning from marijuana legalization so far in Colorado and Washington, especially about prices, tax rates, and regulatory structures?

Beau Kilmer: With respect to prices, I think it's too soon to make a serious judgment. I would expect them to fall eventually as the number of producers increases and there is more competition. Regarding taxes, there is clearly tax revenue coming in, but not as much as expected, partly because medical marijuana markets don't face the same taxes. These markets are in transition, and there are data lags. It's too early to do cost-benefit analyses, and when the data does start coming in, what happens a year or two from now, good or bad, could be completely different from what happens in five or 10 years.

There are two other things we need to consider in doing a cost-benefit analysis. First, when you hear that factor X or Y has decreased or increased, it's important to ask: Compared to what? People will say that this changed in Colorado, but how did it change or not in other states? This is often outside the capacity of news organizations, but when you hear people making these claims, you need to be asking questions. What about neighboring states? If media organizations did that, it could actually improve the quality of the discussion we're having.

The second thing is, don't forget about alcohol. If people are more likely to use alcohol and marijuana together, you have to worry about driving under the influence. Marijuana impairs you somewhat, alcohol impairs you more, and the interaction between marijuana and alcohol can increase the probability of impairment. On the other hand, if they are economic substitutes, if some heavy alcohol users are moving away from consuming it and consuming more marijuana, that could potentially be a net win for society. There are social costs associated with heavy marijuana use, but the social costs associated with alcohol are much greater -- fatal overdoses, chronic disease, violence. We really need to pay close attention to how legalization influences not only marijuana consumption, but also alcohol consumption. We will be watching this, not only in Colorado and Washington, but also in Uruguay.

Chronicle: How worried do we have to be about marijuana dependence, anyway? Is it any worse for the individual or society than, say, dependence on coffee?

Kilmer: Some people do run into problems. It affects their relationships, their employment, their daily behaviors, and can impose costs on them and some of their intimates. Some of those people may benefit from substance abuse treatment. On the other hand, some users get arrested and diverted into treatment when they don't really need it. Many experts agree that it poses less addictive risk than other drugs, not only in the likelihood of addiction, but also the degree. Having a cannabis use disorder is different from having a heroin use disorder.

When it comes to costs to society, a lot of it comes down to different intangibles. It's hard to quantify consequences, say, in terms of relationships with family members. We reviewed studies that look at marijuana compared to other substances, and when it comes to addiction risk, marijuana seems to be at the bottom of the list. It's not that it's not without costs, but in terms of harms associated with it, there seems to be much more harm associated with cocaine, heroin, or alcohol use disorders.

Chronicle: There are several different legalization models out there -- state monopoly stores vs. private stores, for example. Do you have a favorite model?

Kilmer: I completely understand why some jurisdictions would try something other than marijuana prohibition. There's a lot I don't like about it, especially the collateral consequences, but I'm not sure what the best alternative regime is. What's best for one jurisdiction may not be best for another. It's not clear that one size fits all. My opinion is that I will pay close attention to what happens in Colorado and Washington and Uruguay and some of these other places and use that information to update my opinions about marijuana policy. I hope other people do the same.

It's important to keep in mind that there is a lot of policy space in between prohibition and what we see in Colorado and Washington. There are a lot of options out there. You could just allow home cultivation, or you could do something like production co-ops or collectives. It will be really interesting to watch Uruguay, which has three routes: grow your own, join a co-op, or go to the pharmacy.

From a public health perspective, a state monopoly makes a lot of sense. It makes it easier to control prices and advertising. There is a lot of research that has looked at the state monopoly model for alcohol, and it tended to be better for public health. This model doesn't get a lot of attention in the United States, but there are other jurisdictions that may want to think about it.

The other potential advantage of starting with a state monopoly, is that it gives you more options. If a jurisdiction later decides it wants to allow commercial business, you can transition to a commercial model. But once you go from prohibition to a commercial model with for-profit firms and lobbyists, it gets a lot harder to put that genie back in the bottle. It gets entrenched. That's something to keep in mind.

The commercialization aspect is something we need to pay close attention to. In Uruguay, there is no advertising. The folks in Colorado and Washington are working hard to develop reasonable restrictions on advertising, but with the First Amendment here, we can't ban it.

Sunset laws may be advisable. There is a lot of uncertainty, and we don't know what the best model might be. You could start with a co-op model, try that for five or 10 years, then make a decision about whether to continue or go in a different direction. There are a lot of options, and we don't necessarily have to treat policy changes as permanent.

Another thing jurisdictions will want to think about it designing in some flexibility, especially with respect to taxes. No one knows the best way, and there are a number of different models. Colorado and Washington tax as a function of weight, but you could tax as a function of amount of THC, for instance. The takeaway is that we want to make sure that as we get information, we can incorporate that information in our decision-making about how to tax.

Chronicle: What about eliminating black markets?

Kilmer: You have to think about this over time. No one thinks we're going to eliminate the black market overnight. In both Colorado and Washington, it's been a slow roll-out of the stores, especially in Washington, so you have to look at this over the long run. Also in the long run, prices will fall, and as prices fall, ad valorem taxes based on price will fall, too. That's something else to think about.

Another issue to consider is that we have to remember that depending on where you are in the country, people under 21 will account for 20%-25% of consumption. It will be interesting to see what happens when they catch them, what penalties are imposed on the users and those that supply them. Will it be like the alcohol model or more severe? These are the kinds of issues that can be addressed in new initiatives or legislation.

Chronicle: Where and how does medical marijuana fit into all this?

Kilmer: Good question. It's going to be very interesting to see how this plays out with regard to medical marijuana. In both Colorado and Washington, there were very robust medical markets before legalization. In other jurisdictions, as they write initiatives or bills, will they try to build that in? I don't know what's going to happen.

Chronicle: Where is this all heading? We could have 10 legal states after 2016. Then what?

Kilmer: I guess we'll see how far we get.

House Votes to Let Banks Take Deposits from Marijuana Businesses

In an historic vote Wednesday, the US House has approved an amendment to the Treasury Department appropriations bill barring the agency from spending any money to punish financial institutions that provide services to marijuana businesses in states where it is legal.

The amendment was sponsored by Reps. Heck (D-WA), Perlmutter (D-CO), Lee (D-CA) and Rohrabacher (R-CA). It passed with bipartisan support.

This is the second time in less than two months that the House has voted to roll back marijuana law enforcement. In May, the House passed an amendment prohibiting the Drug Enforcement Administration (DEA) from undermining state medical marijuana laws and passed two amendments prohibiting the DEA from interfering with state hemp laws.

"Congress is yet again rejecting the failed war on marijuana," said Bill Piper, director of national affairs for the Drug Policy Alliance. "They have read the poll numbers and are doing both what is right and what is politically smart."

Washington, DC
United States

Chronicle AM -- July 16, 2014

The House okays marijuana banking, DC decriminalizes tomorrow, DC expands its medical marijuana program, Miami-Dade taxpayers pay for a particularly heinous killer drug raid, a lot of states did sentencing reforms last year, and more. Let's get to it:

Marijuana businesses could go to the bank under a measure passed by the House today. (Drug Policy Alliance/Sandra Yruel)
Marijuana Policy

House Votes to Let Banks Take Deposits from Marijuana Businesses. In a historic vote this afternoon, the US House has approved an amendment to the Treasury Department appropriations bill barring the agency from spending any money to punish financial institutions that provide services to marijuana businesses where it is legal. The amendment was sponsored by Reps. Heck (D-WA), Perlmutter (D-CO), Lee (D-CA) and Rohrabacher (R-CA). It passed with bipartisan support.

DC Decriminalization Law Goes Into Effect Tomorrow. As of one minute after midnight, the possession of an ounce or less of marijuana will be decriminalized in the nation's capital. Jail time for pot possession will be replaced with a $25 fine. A Republican-led effort in the House to block it remains alive, but will not stop the law from taking effect -- at least for now. That effort still has to get through the Congress and overcome White House opposition, and that looks like a long-shot at this point.

Grosse Point, Michigan, Initiative to Legalize Up to an Ounce Turns in Signatures. A municipal initiative campaign to legalize the possession of up to an ounce of pot in the Detroit suburb of Grosse Point turned in more than 600 signatures today. The group needs 493 valid voter signatures to qualify for the November ballot. Grosse Point is one of a handful of Michigan towns with similar campaigns this year, including Berkley, Hazel Park, Huntington Woods, Oak Park, and Pleasant Ridge.

Santa Fe, New Mexico, Initiative to Decriminalize Marijuana Possession Turns in Signatures. Progress Now New Mexico and Drug Policy Action (the campaign arm of the Drug Policy Alliance) have submitted more than 7,000 signatures for an initiative that would decriminalize the possession of up to an once of marijuana. They need 5,763 to qualify for the ballot.

Medical Marijuana

DC City Council Approves Medical Marijuana Expansion. The city council Tuesday approved legislation to loosen restrictions on the District's medical marijuana program. The measure replaces a restrictive list of defined illnesses and conditions with a blanket authority for doctors to recommend medical marijuana for "any condition for which treatment with medical marijuana would be beneficial, as determined by the patient's physician."

Michigan Legislature Set to Vote on Medical Marijuana Improvement Measures This Week. Senate Majority Leader Randy Richardville (R) said he expects the Senate to vote this week on a pair of measures to improve the state's medical marijuana program. One would allow localities to govern their own dispensaries; the other would allow the sale of edibles and concentrates.

LA Medical Marijuana Farmers' Market Hit With Temporary Injunction. A Los Angeles Superior Court judge Tuesday issued a temporary restraining order shutting down a medical marijuana farmers' market that drew thousands when it opened a couple of weeks ago. A hearing on a permanent injunction is set for August 6.

Thousands Sign Petition Supporting Fired University of Arizona Researcher. A petition demanding that the University of Arizona research scientist Dr. Suzanne Sisley be rehired after being fired after she won federal approval to study marijuana for military veterans with post-traumatic stress disorder has received more than 27,000 signatures. Sisley made no bones about blaming conservative Arizona political figures for her firing. Click on the link to read her comments.

Harm Reduction

Ohio Cops Slow to Carry Overdose Reversal Drug. Gov. John Kasich (R) signed a law allowing law enforcement officers to carry and administer the opiate overdose reversal drug naloxone in March, but Ohio police are slow to get with the program. Police in Columbus said they have no plans to carry it "anytime soon," and many rural agencies are also unwilling to do it. About 17 people a week are dying from opiate overdoses in Ohio. Under the new law, the drug is also available to friends, family members, and "others who may be in a position" to assist with reversing overdoses.

Law Enforcement

Miami Agrees to Pay in Death Squad-Style Police Drug Robbery Sting Killings. Miami-Dade taxpayers will shell out $600,000 to the families of three men killed by a Miami-Dade SWAT team during a drug house robbery sting. Four men, including an informant for the police, were gunned down when they appeared on the scene of a home they had been told was stuffed with drugs for them to rob. The informant's family didn't join the settlement; it is pursuing a wrongful death lawsuit in federal court. Police video of the raid shows officers firing dozens of shots into the body of a man already on the ground. It also shows the informant surrendering to police moments before they shot and killed him, too. Prosecutors suspect police officers of misconduct but were unable to develop enough evidence to charge any of them.

Almost All US Wiretaps Are for Suspected Drug Deals. A new Administrative Office of US Courts report reveals that not only did wiretaps hit an all time high last year, but that nearly 90% of them were for drug investigations. Of the 3,576 wiretaps sought by federal law enforcement agencies, 3,115 were for drug investigations.

Sentencing

Vera Institute of Justice Releases Report on 2013 State Sentencing Reforms. The report, Recalibrating Justice: A Review of 2013 State Sentencing and Corrections Trends, finds that 35 states passed at least 85 bills to reform sentencing and corrections last year. The legislation generally focused on reducing prison populations, strengthening community-based corrections, supporting reentry, and creating better research and analysis to drive policy decision-making.

International

Dutch Border Town Cannabis Café Owner Cleared of Most Charges. The owner of the Checkpoint Café in the in the town of Ternuezen near the Belgian border has been cleared of most charges against him by an Amsterdam appeals court. The café was closed in 2007 for violating government rules on soft drug sales, and the owner was found guilty of membership in a criminal organization. But the appeals court ruled that the state had not proven Checkpoint knowingly broke the rules. It was the second such decision in the past month.

House Votes to Let Banks Take Deposits from Marijuana Businesses

In a historic vote this afternoon, the US House has approved an amendment to the Treasury Department appropriations bill barring the agency from spending any money to punish financial institutions that provide services to marijuana businesses where it is legal.

The amendment was sponsored by Reps. Heck (D-WA), Perlmutter (D-CO), Lee (D-CA) and Rohrabacher (R-CA). It passed with bipartisan support.

This is the second time in less than two months that the House has voted to roll back marijuana law enforcement. In May, the House passed an amendment prohibiting the Drug Enforcement Administration (DEA) from undermining state medical marijuana laws and passed two amendments prohibiting the DEA from interfering with state hemp laws.

“Congress is yet again rejecting the failed war on marijuana,” said Bill Piper, director of national affairs for the Drug Policy Alliance. “They have read the poll numbers and are doing both what is right and what is politically smart.”

Location: 
Washington, DC
United States

An Industry Emerges: The NCIA Cannabis Business Summit in Denver [FEATURE]

The exhibition hall in the Denver Convention Center last week was a wonder to behold. Automated, high-capacity marijuana trimming machines. Industrial strength cannabis oil extraction devices. Marijuana real estate specialists. Marijuana accountants. Marijuana attorneys -- real estate, intellectual property, contracts. Marijuana consultants. Marijuana investment advisers. Point-of-sale marijuana sales tracking systems. Chemical testing companies. Vaporizer sellers. Odor-proof bag producers. Automated rolling machine makers. Anything and everything to do with the business of legal marijuana. All in a high-gloss trade show environment.

It was the National Cannabis Industry Association's (NCIA) Cannabis Business Summit, which brought more than 1,200 registrants to the state capital that for now at least is also the capital of legal marijuana. And it represents a new phase in the evolution of marijuana policy.

This is not your father's marijuana movement. There were lots of men in dark suits and ties, lots of women in snappy professional attire. A few dreadlocks here and there, but only a few. And nary a tie-dye to be found. There wasn't a whole lot of talk about how "We have to free the weed, man;" although social justice including ending prohibition came. up. There was a whole lot of talk about business opportunities, investment strategies, and how to profit from crumbling pot prohibition, as well as the dangers and pitfalls facing would-be entrepreneurs in an industry still illegal under federal law.

The legal marijuana industry has been bubbling up for awhile now, building from the quasi-legalization that is medical marijuana in Wild West California and the more regulated, but still thriving medical marijuana industry in states like Colorado, Oregon, and Washington. In the past decade or so, the High Times Cannabis Cup has evolved from a November trip to Amsterdam to a virtual traveling circus of all things pot-related. And marijuana trade expos have drawn crowds in the tens of thousands.

But one can reasonably argue that last week's Cannabusiness Summit represents the maturation of marijuana as an All-American business opportunity. With Colorado this week beginning to accept applications from people who don't represent medical marijuana dispensaries (for the first six months of commercial legalization, only operating dispensaries could apply) and Washington state set to see its first retail marijuana operations next week, the era of legal marijuana is truly upon us. And it's likely to continue to expand, with Alaska, Oregon, and Washington, DC, poised to join the ranks of the legalizers after elections later this year.

Talking up the product in the exhibition hall.
The Cannabis Business Summit was, unsurprisingly, mainly about the nuts and bolts of operating a legal marijuana business. It could have been any industrial trade show and conference, except this was about weed. Panels covered topics such as "Grow 101: Cultivation Facility Build-Out and Management Best Practices," "Advanced Cultivation: Scalability, Sustainability, and Growth Management," "Protecting Your Investment: Risk Management and Insurance for the Cannabis Industry," and "International CannaBusiness Opportunities." And that was just session one of day one.

Marijuana is an industry on a roll, and the NCIA can point to its own success as exhibit one.

"We now have over 600 marijuana business members, and that has doubled since January," said NCIA founder and executive director Aaron Smith in a keynote speech. "When Steve Fox and I started the NCIA in 2010, we had 20 members. Investors and entrepreneurs are rushing into this new space."

That, in turn, is allowing NCIA to expand its operations, Smith said.

"We're seeing more experienced business people because they understand what a trade association is," Smith explained. "So we've been able to staff up, we have a full-time DC lobbyist, which is a first for the industry, and we've already contacted every congressional office on the Hill and had sit-down meetings with half the House offices and 30 Senate offices. We're also attending campaign fundraisers on behalf of the NCIA."

Although the conference was all about business, Smith made clear that the NCIA had not forgotten that these business opportunities have come about because of a decades-long movement for social justice and human liberation around marijuana policy.

"We have to acknowledge those who came before us," he told his audience of businesspeople. "Before we were an industry, we were a movement, and we are still a social movement. The growth of this new industry will drive the final nail in the coffin of marijuana prohibition, so that no one is put in a cage for using a beneficial, extremely therapeutic herbal product ever again."

NCIA executive director Aaron Smith gives a keynote address.
The industry has to put its best face forward, Smith said.

"We are still under scrutiny, the world is watching Colorado and Washington, as well as the medical marijuana states, and we have to lead by example," he said. "Be a good neighbor and corporate citizen. Reach out to neighborhood associations and work with them. Contribute to the community. Be a model citizen. Be professional. Don't use marketing you wouldn't want your mother to see."

Smith wasn't the only NCIA officer to warn the industry it needed to watch its step. NCIA deputy director Taylor West had more words of wisdom in a session on marketing and communications.

"This is a cultural movement in the midst of an enormous wave, and we have the opportunity to define an idea on the rise, to be responsible, and to do the education around that," she said. "We are building an industry from scratch, and we have to take this opportunity to make this an industry that's not like every other industry."

That requires some maturity within the industry, the communications specialist said as she displayed tacky advertising images of scantily clad women covered in marijuana buds.

"Responsible branding is important," West noted. "Don't screw it up for everybody. We don't have a rock-solid foundation, and we're still very vulnerable from a public opinion and policy standpoint. Don't market to children and don't market like children," she said. "We're like the wine industry or craft beers or wellness. No one is ever drunk in a wine commercial. And," she said, pointing to the tacky ads, "don't alienate half the population."

fundraiser for the Florida medical marijuana initiative, at the Vicente-Sederberg law firm following the summit
There are many issues facing the nascent marijuana industry, but both the conference agenda and the talk in the corridors made it clear that the federal tax issue takes center stage. Under current federal law, marijuana remains illegal, and that means marijuana businesses cannot take standard business tax deductions under an Internal Revenue Service (IRS) provision known as 280E.

"This law must be changed, and this law can be changed. If Obama won't do it, we will do it for them," said marijuana tax attorney Henry Wykowski before heading deep into the weeds in a discussion of the intricacies of dealing with 280E.

"There is legislation to address this," said NCIA Capitol Hill lobbyist Mike Correia, pointing to Rep. Earl Blumenauer's (D-OR) House Resolution 2240, the Small Business Tax Equity Act of 2013.

But it's unlikely to go anywhere anytime time soon, Correia said. The congressional bill tracking service GovTrack.us agrees, giving the bill zero percent chance of passage this session.

"This is sitting in Ways and Means," Correia explained. "It's a Democratic bill in a Republican-controlled House, and the committee chairman is not a fan."

There is one back-door possibility for moving the bill, though, the lobbyist said.

"Every few years, the Congress addresses aspiring tax breaks," he noted. "They usually pass it in the middle of the night when no one is watching. I hope to have 280E provisions inserted into a bigger tax bill, but we need to get Republicans to support it. The Ways and Means members are not from marijuana-friendly states, so it's hard to get traction, but next year, Paul Ryan (R-WI) will be chair, and he could be more responsive."

The nascent marijuana industry has other issues, of course, but the Denver conference was a strong signal that the marijuana movement is indeed mutating into a marijuana industry. The power of American entrepreneurialism is very strong, and it looks like it's about to run right over the remnants of marijuana prohibition.

But the industry needs to remember that while we now have legal marijuana in two states, there are still 48 states to go. For people in Alabama or South Dakota or Utah, for example, the issue is not how much money you can make selling marijuana (or marijuana-related products or services), but the criminal -- and other -- consequences of getting caught with even small amounts. If the industry is indeed the movement, it needs to be putting its money where its mouth is to finish the work that remains to be done.

Denver, CO
United States

Filmmaker Eugene Jarecki Talks Drug Reform [FEATURE]

In a conference call Monday morning, filmmaker Eugene Jarecki discussed the impact of his award-winning drug war documentary The House I Live In and where we go from here in the fight to end the drug war and mass incarceration.

Eugene Jarcecki (wikimedia.org)
The call was the second in a series of discussions planned and organized by the Drug Policy Alliance as part of its campaign to deepen and broaden the drug reform movement. The first discussion featured Michelle Alexander, author of The New Jim Crow. Hear that conversation here.

Jarecki won the Sundance Film Festival grand jury prize for The House I Live In in 2012. The film made a shattering case against the drug war. Since its release, it has been used as a primer in faith institutions, schools and community-based organizations across the nation.

The drug reform landscape has been undergoing tectonic shifts in the two years since The House I Live In was released. It is possible, Jarecki said, that his film has played a role in shifting public opinion.

"One of the great lies that pervades the public imagination is the Hollywood lie that its movies don't shape the violence in this country," he said. "For Hollywood to pretend that movies have no role in shaping behavior is laughable. There are books that start revolutions. While Hollywood should bristle at the notion that movies create violence -- the violence comes in a society where we don't have health service and the roots of unwantedness can lead to violent behavior -- movies do shape public activity," he said.

"My movie is shaping public activity, and I am reminded by friends that this matters," the filmmaker continued. "A lot of young people will look at Michelle Alexander and say 'I want to be like that,' and that kind of example is extremely precious."

The recognition that the film would be an instrument of social change even influenced the title, Jarecki said.

"The making and handling of the film as a tool for public change and discussion" was important, he said. "We called it House over sexier titles, such as Kill the Poor or just Ghetto. I couldn't get it in a church or prison with a title like Kill the Poor. We had to choose a softer title; we weren't just thinking about the most poetic title, but really, how do we make sure this thing has legs where people all across the country can use it? We didn't want to alienate groups on the ground, and I wanted to make sure there were many groups on the ground doing this important work."

It worked. The film is now standard viewing in all the prisons in at least 11 states, and in New York, a viewing serves as an alternate punishment for juvenile offenders. And, Jarecki said, churches have been a key partner in getting the message out.

"We've found churches very welcoming, in large part because of our partnership with the Samuel Dewitt Proctor Conference," he said. "They've helped get churches across the country seeing the film, and it stretches far beyond the black church community. It's been very useful and robust. We also live stream the showings themselves to other churches. When we broadcast out of Shiloh Baptist Church, 180 other congregations also watched it."

But while Jarecki intended the film to serve polemic purposes, even he was surprised at the rapidity of the changes coming in the drug policy realm.

"The most significant surprise has been seeing the entire climate of the war on drugs change in the public imagination," he said. "When we started out, it was impossible to imagine any systemic shifts from the top. We see that the entrenched bureaucracies and corrupt interests are never open to negotiation, but the combination of the moral bankruptcy of the war on drugs and its economic bankruptcy -- 45 million drug arrests over 40 years, and what do we have to show for it? -- the catastrophic cycle of waste without achieving goals, unifies the left and the right like no other issue. The left sees a monster that preys on human rights for profit, and the right sees a bloated government program."

The policies of the war on drugs are now vulnerable, Jarecki said.

"Community groups see how it brings unfairness to communities and ravages society, so now, Washington is trying to appeal to the public by being more sensible," he argued. "This policy is vulnerable. While we've joined forces with the Drug Policy Alliance and other organizations to fight at the ground level, we're also seeing shreds of leadership from Obama, Holder, and Rand Paul. This is a moment of enormous vitality for us."

With a few exceptions, as mentioned just above, "the political class is isolated and orphaned as supporting something that doesn't make any sense," Jarecki said. "I thought I was choosing a very tough enemy, but it doesn't seem like much of a worthy adversary. The gross expenditures are hard to defend, they don't have the national security card to play anymore, the drug war has worn itself thin. 'Just Say No' and 'This is Your Brain on Drugs' hasn't worked. Instead, people just see family members with damaged lives."

It's not just in the realm of marijuana policy that the landscape is shifting in a favorable direction. The issue of the racial disparity in the drug war is also gaining traction.

"The condition of understanding the black American crisis of the drug war has moved light years in the last two years," Jarecki said. "Black folks are bizarrely and disproportionately targeted by the drug war, and that's become a common discussion. It's not a rare thing."

Still shot from The House I Live In
That understanding is extending to an acknowledgement that the war on drugs has been a brutal attack on the gains of the civil rights era, Jarecki argued.

"In the black American story, there is an argument to be made that the new Jim Crow established with the war on drugs was the final nail in the coffin of the civil rights movement," he said. "Black people are worse off economically than before the civil rights movement, and this critical viewpoint has become more widely understood."

But it's not just race. The unspeakable word in American political discourse -- class -- plays a role as well, Jarecki suggested.

"We've seen a shift from a drug war that could be described as predominantly racist to one that also has elements of class in it," he argued. "Poor whites, Latinos, women -- those are the growth areas for the war on drugs now. But let's not forget that black America is still essentially the leading link. We haven't shifted the drug war from race to class; it has diversified, it preserves its racism, but has seized market share by broadening into other class populations."

Racism and the war on drugs are only a part of a much larger problem, the filmmaker argued.

"We have to invite the country to begin seriously asking itself what kind of country it wants to be," he said. "What we are really looking at is a society that has bought into the notion that we can entrust the public good to private gain. We have industrial complexes that grip American policymaking in almost every sphere of public life, and the prison industrial complex is one of them. It is simply a crass illustration that you can feed a human being into the machine, and out comes dollar signs. This is a country without compassion, a town without pity."

And while change will come from the top, it will be impelled only by pressure from the bottom up, he said.

"Change comes from groups working together, and you start going down that road by getting out and starting walking," Jarecki advised. "It's an illusion to think we're supposed to be rescued by the government."

We have to do it ourselves.

Chronicle AM -- June 13, 2014

Jamaica will decriminalize pot possession and Bermuda is thinking about it, legalization initiatives in Alaska and Oregon get big bucks donations, medical marijuana reform is moving in the DC city council, and more. Let's get to it:

MPP Gives Alaska Initiative Campaign Big Cash Contribution. The Marijuana Policy Project, which is backing the Alaska legalization initiative, has just kicked in another $140,000. That's the second largest contribution to the campaign yet (the biggest, also from MPP, was $210,000), and pushes its total contributions to over half a million dollars. The organized opposition -- Big Marijuana, Big Mistake, Vote No on 2 -- has, on the other hand, raised only $31,000, most of it in a single donation by an Alaska Native village corporation.

Peter Lewis Family Gives Oregon Initiative Campaign Big Cash Contribution. A PAC controlled by heirs of Progressive Insurance founder and drug reform funder Peter Lewis has donated $250,000 to the New Approach Oregon legalization initiative. Lewis had donated $96,000 before his death last fall, and there were fears his death could end his reform largesse, but his family is carrying on. The group has raised more than $900,000 overall.

SurveyUSA Oregon Poll Has 51% for Legalization. A new SurveyUSA poll in Oregon has 51% supporting marijuana legalization, with 41% opposed, and 8% undecided. The poll comes as three legalization initiatives are in the final weeks of signature-gathering to put the issue on the November ballot. Initiative organizers are not going to breathe easy with numbers like these, though; the conventional wisdom is that initiatives want to be polling at 60% or above before the campaign begins in earnest. Click on the link for demographic and methodological details.

Medical Marijuana

DC Council Moves Toward Approving Expanded Medical Marijuana Access. The District of Columbia city council moved ahead yesterday with plans to expand access to medical marijuana. In a joint session of the Health and Judiciary and Public Safety committees, the council gave preliminary approval to two bills. Bill 20-766, cosponsored by every member of the council, would repeal the qualifying conditions list and allow physicians to recommend marijuana to any patient they think marijuana would benefit. Bill 20-678, will increase the number of plants a cultivation center could possess from 95 to 500, better ensuring that patient need is met.

Feds Warn Casinos to Not Take Bets Made With Marijuana Money. Federal regulators addressing a banking secrecy conference in Las Vegas yesterday warned casinos they can't accept bets from people working in the marijuana industry unless the casinos undertake rigorous background checks and allow the federal government to monitor the bets. That's because casinos are subject to the same financial reporting requirements as financial institutions. It's a lengthy report; click on the link to read it all.

Sentencing

Fair Sentencing Act Gets Another Cosponsor. Add Rep. David Joyce (R-OH) to the list of cosponsors of the federal Fair Sentencing Act of 2013. He signed on yesterday. That makes 24 Democrats and 14 Republicans. The bill is before the House Judiciary Committee. Clicking on the link will take you to the bill.

Law Enforcement

Virginia Sheriff's Office Makes Mass Drug Bust… Again… and Again. The Amherst County Sheriff's Office announced yesterday that a county grand jury had indicted 68 people on drug charges after a months-long investigation by the department. It's the third mass bust since 2010's Operation Silent Night and 2012's Operation Avalanche. The sheriff's office seems to understand--at least on some level--the futility of such operations: "It stops these folks from selling drugs [but] as soon as you remove these folks, someone else takes their place. It's a never-ending cycle we're working on," a spokesman said.

International

Jamaica Will Decriminalize Marijuana Possession. Jamaica will decriminalize the possession of small amounts of marijuana, the government announced yesterday. It will also allow possession for some medical and scientific purposes. And it will allow possession for religious purposes. Justice Minister Mark Golding said that the cabinet is supporting a proposal to decriminalize the possession of to two ounces of the ganja. Under the proposal, those caught with marijuana could be subjected to fines, but not criminal charges.

Bermuda's Attorney General Says Government Should Consider Marijuana Decriminalization. As the Bermudan government mulls marijuana reform, new Attorney General Trevor Moniz has come out for decriminalization. Moniz would prefer "a system where if you get caught with a small amount of marijuana, you don't go to court and you wouldn't have any criminal record," he said. "In New York and the UK., they have a caution only for a first offence, which may need to be broadened. I'm in favor of small steps, incremental steps, rather than a big leap," he added.

Barcelona Bans New Cannabis Clubs for a Year. Citing a proliferation of private cannabis clubs and a lack of regulation, the Barcelona city council announced today it was instituting a moratorium on new clubs for one year. The crackdown comes just days after a club was closed for illegal sales. The clubs allow members to grow and consume their own cannabis, but they aren't supposed to sell the stuff to outsiders. The clubs have been attracting cannabis tourists from around the world.

Conflict in Turkish Municipality Tied to Marijuana Crop. Three weeks of violent protests in the municipality of Lice in Diyarbakir Province, where Kurds predominate, are linked to the looming marijuana harvest, some of the profits from which are destined for the Kurdistan Workers Party (PKK), according to this report. Violent incidents have been ongoing since demonstrators attacked a security forces outpost with homemade bombs and Molotov cocktails, and soldiers opened fire, killing the nephew of a "notorious trafficker."

Obama Administration Announces Banking Guidelines for Marijuana Business

The Obama administration Thursday afternoon announced new guidelines that will allow financial institutions to provide services to marijuana businesses in states where it is legal. The guidelines will apply to both medical marijuana and legal marijuana states.

Some 20 states and the District of Columbia allow for medical marijuana, while two states, Colorado and Washington, have legalized marijuana commerce for adults.

Banks and other financial institutions have been increasingly unwilling to deal with marijuana-related businesses for fear of breaking federal laws. That has led to an untenable situation where marijuana businesses are forced to deal in large amounts of cash.

The guidelines were issued by the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) in concert with the Department of Justice. Deputy Attorney General James Cole is also issuing supplemental guidance to prosecutors on how to decide whether to prosecute federal money laundering and Banking Secrecy Act violations related to legal marijuana commerce.

In a joint statement, the two departments said the guidelines will provide "greater financial transparency" in an industry where the federal government is concerned about diversion and the encroachment of organized crime. The guidelines envision financial institutions helping law enforcement with "information that is particularly valuable" by filing regular reports that can provide insight into the industry's contours.

The issuance of the guidelines is the next step in the administration's de facto acceptance of legal marijuana and medical marijuana. Last August, the Justice Department announced it would not seek to undermine state marijuana laws and issued guidance to prosecutors (the "Cole memo") telling them to lay off unless businesses or individuals were violating a set of enforcement priorities, such as diverting marijuana outside the state or making money for organized crime.

Ethan Nadelmann, head of the Drug Policy Alliance, pronounced it a good thing.

"It appears that the Obama administration is trying to provide as much protection as possible for the marijuana industry, given the constraints of federal law," he said. "The assurances the administration have provided appear fairly substantial and will hopefully prove sufficient so that banks will feel safe doing business with the marijuana industry. I have to say I'm impressed by how the White House is trying to make this work, especially given the inability of Congress to do anything constructive in this area."

So did Steph Sherer, head of the medical marijuana advocacy group Americans for Safe Access, although she called for a more comprehensive federal response.

"We have been pushing the federal government for years to make these commonsense concessions and we're pleased that the Obama Administration is finally doing so. At the same time, a piecemeal approach to medical marijuana policy is shortsighted and is an issue that deserves a comprehensive public health solution," she said.

"We will certainly be working with banks, credit unions, and credit card companies to ensure proper implementation of this federal guidance," continued Sherer. "Removing the risks of operating as an 'all-cash' business cannot be overstated, but we will also continue to put pressure on the Obama Administration to wrap these types of discrete practices into a more comprehensive medical marijuana policy."

Washington, DC
United States

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