State marijuana report draws mixed reviews

Paul Mann
Mad River Union

ARCATA – A rigorous system of oversight and evaluation should be in place before California legalizes, taxes and regulates recreational marijuana consumption, according to the initial report of a state blue ribbon panel.

The notional monitoring system would track the many anticipated impacts of legalization on youth, the economy, tax revenue, public health and public safety.

Although the report issued March 25 is only the first of several planned by the Blue Ribbon Commission on Marijuana Policy, local concern is already emerging that the environmental consequences of legalized marijuana cultivation do not top the panel’s early agenda.

facebook-like-buttonOn the other hand, time is of the essence in establishing a legal and regulatory framework: Californians will likely vote on a 2016 ballot measure to tax, regulate and legalize marijuana for adult recreational consumption.

Chaired by Lieutenant Governor Gavin Newsom, a 2018 Democratic gubernatorial candidate and former mayor of San Francisco, the Blue Ribbon Commission is organizing its research among three policy arenas:

• Protecting the health and well-being of children and adolescents;

• Creating a just and enforceable set of taxes and regulations, and

• Preserving public safety, including road safety.

Humboldt County District Attorney Maggie Fleming is disconcerted by that order of priorities. “It places the environmental consequences of marijuana growing – which are so significant to Humboldt County – in a relatively inconspicuous position under ‘Public Safety,’” she wrote in an email.

Fleming added, “It also is not apparent to me that the [commission’s] Public Safety working group includes anyone with a background in environmental effects. I believe that any effort to address the legalization and regulation of marijuana should give environmental issues careful and explicit consideration, in part by bringing people with relevant expertise to the table.”

The report’s public safety section omits explicit mention of environmental damage, stating only, “Policymakers must consider whether to leave the current criminal penalties for marijuana cultivation and sales in place for those who operate outside the regulatory framework of a new, legal marketplace. Or policymakers could instead set those criminal penalties aside and create new regulatory enforcement mechanisms for those who do not comply with state laws and regulations.”

The environmental omission aside, two Humboldt State University professors who conduct studies on behalf of the school’s Humboldt Institute for Interdisciplinary Marijuana Research called the Blue Ribbon panel’s initial assessment “quite comprehensive.” They also noted that the report was “highly anticipated, given the current chaotic cannabis policy landscape in California.”

Sociology Professor Josh Meisel and Economics Professor Erick Eschker said in a joint email that it is essential “California not reproduce the same implementation problems that became associated with the passage of medical cannabis 20 years earlier,” in 1996.

Newsom’s panel acknowledges this up front, stating, “Most experts agree that California has among the least structured systems of rules and regulations of any state with a medical marijuana law, meaning that for at least some users, a quasi-legal recreational market has existed for some time.”

Eschker and Meisel noted that the 18-month-old commission, which does not make policy but serves as a research source for policy and decision makers, is addressing a full roster of thorny legalization issues.

Of preeminent concern is legalization’s impact on adolescents’ health and safety, which the panel declares firmly are crucial matters irrespective of whether marijuana is legalized.

Scientists consider the potential harm to health and well-being to be extensive and long-lasting. The April report of the National Institute on Drug Abuse warns that one in 11 marijuana users becomes an addict, and that the increasing indulgence in “dabbing” (high concentrations) exacerbates the risks of addiction.

The institute also says frequent marijuana smoking causes the same breathing problems as tobacco smoking. Teens in particular experience anxiety, depression and suicidal thoughts. Ingestion impairs memory and body movement and teenagers who smoke heavily lose problem-solving ability and an average of eight IQ points.

In general, says the institute, heavy users report poorer mental and physical health, more relationship problems and less academic and career success.

Regarding a suitable tax regime, the Blue Ribbon Commission spelled out three options that are under debate.

An ad valorem tax would be based on a percentage of the retail price, a common practice. But it would not address either the strength or the quantity of the marijuana sold. Further, price-based taxes can be fudged, not only by retailers, but also by wholesalers and other taxpayers.

Alternatively, a weight-based tax would yield more stable revenue, but might spur production of unusually high-potency products because sellers would likely want to concentrate as much THC (marijuana’s active ingredient) as possible into each ounce.

Which suggests another approach: tax rates tied to strength. But that invites gaming the system –  manipulating the reported THC content – which is why governments do not tax tobacco’s tar and nicotine content.

Another possibility is adjustable tax rates: setting taxes relatively low at first to drive down the illicit market, then raising them to boost revenues and curb consumption. Or rates could be hiked if the market price dipped below a predetermined level.

Strategically, Sacramento could tax various links in the supply chain, from the initial point of cultivation on through the retail transaction. This flexibility could be used to fashion both incentives and disincentives, whether for cultivation, delivery or sale. “For example, taxes could be used to encourage smaller scale production or to encourage lower-strength products, as is done in alcohol policy.”

In addition, the panel points out, there are divergent implications for rural versus urban populations. “Decisions about [where] in the supply chain to tax marijuana can have dramatic regional implications, for example for rural counties that have a large number of producers as opposed to urban counties with large numbers of consumers.”

However California decides to tax legalized marijuana, evidence to date suggests big dollars will be at stake. The latest report of the Arcview Group, an Oakland-based think tank for marijuana investors and entrepreneurs, projects legal U.S. cannabis markets will soar 32 percent over the next year.

The public can submit comments to the Blue Ribbon Commission on Marijuana Policy at safeandsmartpolicy.com.

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