Parsing
the Cole Memo
The August 28 memo of Asst. A-G Cole stating
the conditions under which the DoJ will refrain from taking action against
state marijuana laws provides the criteria which any new statute must meet,
both in insulating new marijuana laws, but in structuring those laws to protect
their citizens from federal prosecution.
Since several states are now discussing following the lead of Colorado
and Washington in legalizing marijuana on the state level, understanding that
memo is essential for their actions.
This memo will briefly discuss the implementation of those eight
criteria.[1]
The criteria, restated in brief are:
1.
Prevention of access by minors;
2.
Prevention of DUI;
3.
Prevention of participation by organized
criminal gangs and cartels;
4.
Prevention of trafficking of marijuana to
other states;
5.
Prevention of the use of violence and
firearms in marijuana transactions;
6.
No allowance of other controlled substances;
7.
No possession on federal property;
8.
No growth or preparation on federal property.
These
criteria create most, but not all, of the constraints imposed on drafting a new
law. This memo discusses how to comply
with them. However, drafters must change
a mindset acquired through decades of working under a Prohibition scheme. Until now, marijuana has been assumed to be
contraband, legislation permitting its otherwise forbidden possession must be
tightly drawn, and that all those engaged in its commerce are criminals (actual
or potential) and must be under constant supervision. Under the new guidelines, legislators can be
more relaxed. They may assume that those
engaged with marijuana are lawful business people who conduct themselves
accordingly and legislation should be drawn to regulate normal commerce,
setting the borders for that behavior, not strict containment more proper for
controlling nascent criminals.
Access by minors:
Access by minors should be approached on both the demand and supply sides. A minimum age for purchase (I prefer 18
instead of 21, see my earlier “Marijuana and the Young”) combined with requirement
of an ID for purchase should be enough control on demand.
Several techniques are possible on the supply
side. The simplest would be to copy the
cigarette market and ban vending machines and self-service retail displays. Methods of licensing up-chain suppliers and
inventory controls are possible. A
portion of tax revenue could be devoted to science-based drug education. Criminal penalties for sales to minors could
be imposed. The real problem here is
selecting from a broad menu.
A major consideration should be that no
minor should be involved in the criminal justice system for possession or use
of marijuana. DUI and commercial
quantity sales by those over 16 would probably be exceptions to this principle.
DUI: The current DUI
statute will probably pass muster. I,
personally, would like to require the state to research and develop
scientifically verified measurements for impaired driving performance, both
biochemical and behavioral (and I don’t mean just randomly set blood, urine, or
breath levels of metabolites).
Behavioral methods should be based on experimentally derived protocols,
administered through scored checklists and recorded on video. Dash cams are almost universal in patrol cars
now. I would devote a portion of any
marijuana tax and license revenue to the project and stipulate that the new
tests replace current ones in no more than five years.
Criminal gangs and Cartels This
criterion is the most puzzling one. If
the federal standards – CSA, RICO, CCE – are used, the Gulf Cartel and
Harborside dispensaries with thousands of patients and millions in revenue are
indistinguishable. A common sense
definition would suggest three distinguishing characteristics: the criminal organization
regularly engages in crimes other than drug transactions; they deal in drugs
other than marijuana; and they often resort to violence. With that assumption, the best way to satisfy
this condition is to use a moderate licensing scheme from seed to sale.
Licensing should include both the people
engaged in the enterprise and the premises on which marijuana is grown or
propagated. Licensing should be
relatively simple and inexpensive.
Onerous licensing will encourage avoidance and illegal enterprises. Enterprise and employee licensing should
require a criminal background check and proof of state residency. It should include all owners and investors as
well as operators. An argument can be
made that low-level employees need not meet those licensing requirements. Any site on which marijuana is grown or
propagated should be licensed in the name of a licensed operator, and that
license should include the location and size of the property, proof of the
operator’s ownership or lease, and permission for the state to enter and
inspect.
Inventory control, accounting, and reporting
from seed to retail sale should be required.
Hemp licensing should be less stringent. The license should be limited to a specific
location, be accompanied by a purchase agreement to buy all seeds from a
producer whose seeds have been certified to be below a specified THC level by a
recognized independent tester, and grant permission for the state to enter and
collect sample for testing during the growing season. Each year at harvest, the license holder
should have to submit a THC test of the harvested crop.
Interstate Trafficking: This may be the easiest standard to comply
with. The licensing and inventory
controls outlined above together with a provision criminalizing out of state
sales should be enough. A quantity limit
on individual retail sales (maybe 4 ounces) would also help with this issue.
Violence and firearms: The act of legalization itself will
accomplish this goal (remember the Capone to Budweiser transition?). Perhaps an additional penalty on the use of
firearms in any crime involving the commerce in marijuana could be added, but
that would mainly be symbolic since armed robbery is already a serious felony.
Note
that all three of the above criteria could be met more easily if, as A-G Holder
has suggested, federal banking regulation is modified to allow routine banking
by licit marijuana businesses. A
requirement that all commercial marijuana transaction be bank moderated or by
electronic transfers would both eliminate the targets for robbery and provide
audit trails to insure compliance.
Other controlled substances: This standard primarily calls for
inaction. All indications, including
results in The Netherlands and Portugal, are that separating the markets for
marijuana and hard drugs weakens the sale of hard drugs. The need is to be sure that new legislation
does not, directly or by implication, relax laws controlling other drugs.
Possession on federal property: This
is the most confusing of the Cole criteria for two reasons and the one over
which the states have little control. It
is confusing because of the wide range in types of federal property and because
the evidence shows that no real problem exists.
Property
ranges from the vast tracts managed by the Bureau of Land Management and the
forest service, to National Parks – from Yosemite and Yellowstone to single
buildings in urban centers, to military reservations, to post offices and
courthouses. Is Cole talking about
thousands gathering for Burning Man or a postage stamp buyer who incidentally
has an eighth-ounce in his pocket?
Data
show that, since 2009, the Park Service has issued slightly over 27,000
citations for possession spread over the millions of park visitors. This number is so small as to suggest no
problem exists.
Be
that as it may, state laws can have little or no effect on the issue. It will remain a federal problem.
Production on federal property: The problem of destructive outlaw growers on
federal land will be solved simply by the act of state legalization. Outlaw growers in remote locations cannot
compete with overt legal growers because of their inherent inefficiencies and structurally
higher costs. Competition will quickly
drive them out of business. Further, a
thoroughly, but lightly, regulated legal structure, as outlined above, will
prevent their illegal production from having access to market.
Other
Considerations
In
addition to the Cole criteria, some general considerations arise.
Taxation:
Should any taxes beyond the general sales tax be imposed on marijuana, and if
so, at what levels of the production-distribution-sales chain? Should local governments be allowed to impose
their own taxes? Should any proceeds of
taxes or licensing fees be dedicated to the costs of administering this law, to
education about marijuana, to treatment or rehabilitation of problem users, or
to any other special users? What about
medical users (see below)?
Tax rates (which should be set on percentage
bases, not flat dollar amounts) must be low enough to prevent black markets
from being created by those wanting to profit through tax evasion. Tax considerations must be based on the
realization that marijuana as a legal commodity will sell for prices
significantly lower than as contraband.
A conservative estimate is that it will sell for less than 10% of the
current price.
Medical Users:
Will people using marijuana need any special regulations under a scheme of
general legality? One possibility is
that sales to one bearing a signed recommendation from a licensed health
professional (or an ID based on such recommendation) be exempt from sales tax,
just like other medications are.
Extracts and Derivatives: Do
derivatives like hashish, resin, oils, elixirs, e-cigarette capsules, etc.
require special considerations or limitations? Labelling?
Edibles: Do
food products containing marijuana or derivatives come under normal food
processing and marketing regulation? Do
they need additional regulation?
Hemp: Does the production
of large-scale hemp, which is not psychoactive, need a different, probably less
restrictive, regulatory scheme?
*****
The Cole memorandum actually sets out an
outline for a practical, enforceable marijuana statute. This memo sets out
methods to determine how to make a proposed marijuana statute conform to the
Cole memo and, hopefully, induce federal abstention if it is enacted. Now the states must start to structure the laws
themselves.
[1]
This essay is based on a memorandum I prepared for an informal group drafting a
proposed bill to be presented to the Texas legislature in the 2015 regular
session.
No comments:
Post a Comment