The Pot Thickens

November 15, 2004

Dean Kuipers, LA City Beat

If President George W. Bush's squeaky reelection is supposed to be a mandate on conservative moral values, how do you explain that 17 out of 20 pro-marijuana initiatives on ballots nationwide were approved?

For instance, look at Montana: Energized evangelical voters in this pro-Bush state led a charge that amended their state constitution to make gay marriage illegal, but they also approved of medical marijuana by a massive 62 to 38 percent. The churches obviously didn't mobilize against pot like White House Drug Czar John Walters urged them to do. In fact, this election may be the breakthrough on marijuana legalization in general: Conservatives nationwide came out in favor of pot as medicine.

Most notable was Alaska's losing proposal to make all marijuana legal, and to tax and regulate it like alcohol or tobacco. It was almost sure to lose, as was Oregon's marijuana dispensary proposal, but both powered the initiation far forward. A study by Boreal Economic Research & Analysis in Fairbanks powered the initiative, estimating that marijuana prohibition costs the state more than $28 million a year, but the state could generate $10-12 million annually if marijuana were taxed like alcohol and tobacco, for a possible budget gain of $40 million. That was persuasive to 43 percent of voters there, and the legislature has to debate it now for the first time.

'We're actually going to see that debate happening in at least Alaska and Nevada, but maybe also Vermont,' says Rob Kampia, executive director of the Marijuana Policy Project. 'So next year's going to be a new high water mark.'

Were any of these proposals on the ballot November 2 breaking new ground?

Rob Kampia: The Montana initiative on medical marijuana is very similar to the nine states that already have medical marijuana laws, so it is now the 10th. Oregon is one of the nine states that has a medical marijuana law. The initiative allowed nonprofit dispensaries to sell medical marijuana to patients. No state has actually authorized a system where patients can go into a pharmacy-like establishment. If the Oregon measure had passed, then that would be the first state to allow the sale of marijuana in any context. There has never been a proposal like the one in Oregon. It's cutting edge.

Alaska's was bold.

The Alaska initiative was a slightly more conservative version of the radical initiative that failed in 2000, 41 to 59 percent. The new one would remove penalties for adults aged 21 and older who want to use marijuana for any reason. And it would tax and regulate it like tobacco and alcohol. And it also maintains penalties for selling marijuana to kids, driving under the influence, and smoking marijuana in public. The one from four years ago had the age at 18 instead of 21; it would have granted amnesty and restitution to marijuana offenders.

Is this the first time they would actually impose this kind of tax and regulation system since the original 1937 tax act?

Yeah, no system has ever been in place in this country, even before marijuana was outlawed in 1937. This vote was the fifth vote on a broad-based marijuana measure in the history of the country. The first failed in California in the early-'70s. The second failed in Oregon in 1986. The third failed in Alaska in 2000. The fourth failed in Nevada in 2002. And this is the fifth now.

What if it were to pass? Would users wake up the next day and find pot taxed out of reach?

The marijuana would have to be cheaper or people would just buy it from the criminal market. The tax revenues would be a substantial fraction of the state budget. Taxing and regulating marijuana would have basically allowed Alaskans to a) not raise taxes, and b) not dip into the permanent fund. So anyone who cares about money should vote for this, but of course a lot of people vote against these initiatives for what they consider to be moral reasons.

Seems like that would solve a problem in a lot of states, like California, where it's the number one cash crop, and Kentucky, and West Virginia ....

Oh, it sure would. Analysis on the national level shows that the tax revenues on the regulated marijuana market would be analogous to the tax revenues from tobacco and alcohol. They're all in about the $12 billion range. The war on marijuana nationally costs the taxpayers $12 billion, so if you actually ended the war and regulated, it would be a $24 billion turnaround, state, federal, and local revenues combined.

Any possibility that, like medical marijuana, this kind of overt broad taxation and regulation regime would subject people to federal prosecution?

In theory, the feds can arrest people for medical marijuana in the nine states now, and in theory the feds could arrest people for recreational marijuana use in Alaska if the initiative had passed. It's the same dynamic. In reality, the feds won't be arresting people for personal use and personal possession.

In California they've been all over the medical marijuana dispensaries.

As you've seen in California, the feds go after a couple dispensaries but leave most of them alone, and it really kind of depends on how big they are, how politically savvy the people running it are, etc. The feds kind of just pick and choose. The same thing would happen in Alaska. The feds might go to one of two to try to make a point and scare the rest, but ultimately the American entrepreneurial spirit will prevail.

What happens since it lost?

Alaska courts have ruled that the possession and use of up to four ounces of marijuana by adults 21 and older in the privacy of their home is legal. The statewide Alaska court of appeals reaffirmed this in August 2003. Pretty radical. It should have been on the front page of every newspaper. But where are these adults going to buy it? They either have to buy it from drug dealers or from regulated establishments, which benefits the taxpayers. In the losing scenario, we still have to go to the legislature to make sure that they don't screw around with the court victory.

In Nevada in 2002, Drug Czar John Walters used a lot of federal money to defeat that broad legalization initiative. Did that happen this time?

Yes. The feds used taxpayer money to campaign against us in all three of our initiative states, cruising around the state, flying around, staying in hotels, and holding news conferences.

And what kind of effect did that have?

The thing that mattered in Nevada was the fact that the drug czar has a budget of about $200 million a year to spend on so-called anti-drug advertising. He ran anti-marijuana ads that scared the people about marijuana. They showed teenagers running over a little girl on a bicycle, and a teenager smoking pot and shooting his friend, and another teenager getting pregnant after smoking pot, and on and on. The debate ultimately devolved into whether or not the instances of marijuana DUI would increase under a marijuana regulatory scheme.

They didn't do these ad buys this time?

It appears not. We've been giving them a hard time in Congress, because Congress has to actually appropriate this money every year. We've had two appropriations cycles where we've been lobbying and talking to members of Congress. I'm just hypothesizing here. I'm quite pleased that they're not running their stupid ads. They have much more money than we do.

House Speaker Dennis Hastert said billionaire hedge fund manager George Soros made his money through drug dealers because he backed some of these initiatives. Has that hurt funding for you guys at all?

That's a good question. The answer is no. The lies from Hastert and others have not affected that one iota, nor will it affect it in the future. When federal officials lie about these guys, that only emboldens them. Ultimately, it reduces Hastert's credibility and it might give us a little boost. There were no anti-marijuana proposals on any ballots, so we didn't lose one inch of ground.



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