420: Marijuana’s Trip From Prohibition to Profit

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Transcript

Alyssa Hurst: You're listening to RadioEd...

Lorne Fultonberg: ...a University of Denver Podcast.

Nicole Militello: We're your hosts, Nicole Militello...

Lorne Fultonberg: ...Lorne Fultonberg...

Alyssa Hurst: ...and I'm Alyssa Hurst. This week, a couple of things are looking just a little bit different than usual thanks to COVID-19. The first is this episode of RadioEd. Instead of recording face-to-face in our studio at the University of Denver, I set up in my home office with my laptop propped up on a tower of chairs and boxes and chatted via Zoom with today's expert, Sam Kamin. The second is the annual celebration of 420 here in Colorado, which has typically drawn huge crowds since even before the days of legalization. Back then, folks came together to protest the prohibition of marijuana, and now they come together to celebrate one of the state’s and arguably the country's budding industries. Of course, marijuana is still illegal under federal law, but 11 states have deemed the drug fit for recreational use. Colorado, RadioEd's homebase, was the nation’s legalization guinea pig, and since sale number one, we've learned quite a bit. 

Sam Kamin, a pioneer in the field of marijuana law and a member of the state's original marijuana task force, dialed in to share some successes, remaining challenges, and whether or not he thinks federal legalization might actually be on its way. 

First of all, thank you for coming on today. We really appreciate having you here.

Sam Kamin: My pleasure. Thanks for having me.

Alyssa Hurst: So, dispensaries were deemed by the Colorado governor in the last couple of weeks an essential business. So can you tell me a little bit about why you suspect marijuana was deemed an essential business and what impact it can really have on Colorado's economy?

Sam Kamin: Sure. I mean, yeah, there was that funny few hours there where it looked like the governor was going to close both liquor stores and marijuana stores and, you know, almost immediately the lines formed around the block for both of those and people were not socially distancing, and I think someone very, very quickly got his ear and convinced them that was not the best idea. I think it was the mayor that made that decision initially. And, you know, I think that it's probably been deemed essential for the same reason that alcohol was deemed essential. Not necessarily because it's necessary for life but that it's one of those things that is going to make this time easier for a lot of people. You know, there are certainly downsides to making alcohol and marijuana available during this time, but I think the quick decision was that having a black market reemerge for those businesses was not the best idea in the world.

Alyssa Hurst: So, in having the dispensaries open through all of this, what kind of impact does that have on the local economy?

Sam Kamin: Well, you know, there are a lot of jobs associated with the marijuana business, and this means that those jobs, at least for now, most of them will be pretty secure. I haven't seen good data on whether sales are about where they were beforehand. I'm sure they had a big spike on the day that it looked like they were going to be closed. I saw some alcohol store manager say he wished that the mayor would announce every Friday that he was going to close all the stores, it'd be really good for business. So, you know, I don't know exactly the things our status quo ante with that, but I think it definitely means that at least those people in those businesses that are remaining open are going to not be displaced like some of the others are in Colorado.

Alyssa Hurst: So Colorado was the first state to legalize recreational marijuana. And I kind of want to go back to those early days and get an idea of what some of those initial key concerns were and what Colorado strategy was for tackling those.

Sam Kamin: Sure. So the concern was that marijuana is a drug that's less dangerous on a lot of different metrics than alcohol and that it should be treated no more severely than alcohol is. So Amendment 64, which passed here in 2012, was subtitled a bill to regulate marijuana like alcohol and, you know, I think that had a lot of resonance for a lot of people that, based on their own experience or based on what they were able to understand, it was both less physically addicting and less damaging to people than alcohol and that it's continued prohibition was creating all sorts of problems. So I think those were the principle problems that the amendment was designed to address.

Alyssa Hurst: So Colorado legalized marijuana, as you said, through a constitutional amendment. Other states have taken different routes. What have other states learned from Colorado? Why have they gone different directions with this? What does that look like outside of Colorado?

Sam Kamin: Sure. So we were first, and we have some ideas that have really influenced what happened in a lot of other things. I think principally the seed to sale tracking idea is one that just about every state, I think, has adopted the idea that. You know, a plant is required to be monitored from the time it sprouts fruits to the time it's sold in order to ensure that all the marijuana that's being produced is being sold on the legal, regulated, and taxed marketplace instead of on the black marketplace. 

But you know, other ideas that we had had not been carried out in a lot of places. So Colorado has what I call sort of a compulsory licensing system. If you meet the criteria, you get a license. So if you can show that you are a Colorado resident, you have a clean criminal history, [and] you have local approval, you can get a license from the state to grow or sell marijuana. In other states, those licenses are rationed sort of in the way taxicab medallions are rationed in New York city: They only have so many, and that makes each of them worth quite a lot. I think there are advantages to both systems, though. I think on balance, our system makes a lot more sense than some of those.

Alyssa Hurst: Gotcha. Are there any benefits to having done it through a constitutional amendment? Is that harder to overturn than it might be for States who have gone like a legislation route?

Sam Kamin: Yeah, I think that's exactly right. I think the principle reason that was done was to make it harder for a legislature or governor who disagreed with the policy to want to do what the voters had asked for.

Alyssa Hurst: So overall, what's your assessment of the job Colorado did? It's been several years now. What does that look like from your perspective, do you think we've done well?

Sam Kamin: I do think we've done well. I mean, I think it depends what you're measuring. You know, on January 1st, 2014, Colorado became the first place anywhere in the world where marijuana was being sold legally in stores in a way that sort of was legal from start to finish. People point to Amsterdam or point to other places, but in Amsterdam, a lot of the marijuana that's sold isn't completely legal. There’s no lawful way to produce it, there's no lawful way to import it, [and] a lot of it is done with a wink and a nod. 

Here, the idea really was if a person wants to comply with regulations from start to finish, is there a way they can do this in a way that is completely compliant with state law? We were the first place anywhere in the world where that happened, so on that level, at least things were a success. Colorado voters asked for this first-in-the-world regulatory system to be put in place and it happened, and it functions, and there was marijuana for sale, and people came and bought it, and the feds didn't shut it down. So, you know, on that level, that most basic level, it worked. 

In terms of policy outcomes, I think there are places we could quibble. A lot of people are going to say that marijuana became too cheap in Colorado, that makes it too accessible to kids, that makes it too attractive to export to other states. But, you know, I think a lot of the worst fears that both opponents and skeptics had for marijuana legalization haven't materialized here.

Alyssa Hurst: So this is still relatively new, and in other states it's way, way newer, it's still completely fresh. So what are some of the kind of marijuana industry frontiers that we still might have to deal with down the line?

Sam Kamin: So there's a bunch of challenges that remain. All of them are based on the fact that marijuana remains illegal at the federal level. That means that banking services are very difficult for people in the industry to access. That means that taxes are paid at something that looks like a 70 or 80% clip. You know, in addition to things like intellectual property being unavailable, people who use marijuana risk losing their job in a lot of places. There are still lots of tensions between state and federal law, so no matter how well regulated it is at the state level, there's only so much that the states can do so long as it remains illegal federally.

Alyssa Hurst: So what does a state gain from doing this?

Sam Kamin: Yeah, so, you know, I get this question a lot, and what I usually tell states or even different countries [is]—I testified in Canada when they were considering legalization there, which they ultimately did—you know, you shouldn't do this to raise money. A lot of people think, ‘Oh, it's going to be this sort of double win. We won't spend money on law enforcement anymore and we'll get all this tax revenue.’ And the truth is that the regulatory regime is pretty expensive and that, in addition, you're still going to have to spend law enforcement dollars. You want to make sure that all the marijuana that's being produced and sold is being produced and sold consistent with the regulations. You need to force all the illegal purveyors and producers into a regulated and taxed marketplace and that requires a fair amount of money. 

So the reason to do it is to undo the negative effects of prohibition. It's true that [alcohol] prohibition in the United States in the 1920s reduced alcohol consumption, but it did so at a really high cost. And that cost in terms of the encouragement of criminal gangs, in terms of contempt for the law, in terms of the disproportionate impact of the laws on certain communities—we see all of that with marijuana prohibition as well. So legalization is a way to ameliorate some of those harms.

Alyssa Hurst: So some folks were against this because they expected that it would make consumption of marijuana go up, especially among kids. They were also concerned about issues like addiction. So I'm curious if any of these things have materialized.

Sam Kamin: You know, again, we have now just a little over six years of legal sales in Colorado, so we only have six data points, so it's still a little early to know. I think that some of the best data that we have comes from the Healthy Kids Colorado Survey, which is a statewide survey that's done with shows that fortunately among young people, the use of marijuana has not gone up or has not gone up in fiscally meaningful ways. I think the data with regard to young adults is probably less positive. There are some indications that people in young adulthood are using marijuana more often, and, you know, I'm not one of these people that thinks that marijuana is a completely benign substance and that there are no harms associated with its use. For me, it's about balancing those harms against the harms of prohibition. And I think that's something that we're going to have to keep an eye on going forward.

Alyssa Hurst: Right, and Colorado also recently decriminalized psilocybin, or magic mushrooms. Do you think that the legalization of marijuana played a role in allowing that to happen? Is that a positive or a negative thing?

Sam Kamin: Yeah, I mean, I think that whether you're a proponent of changes in drug law or an opponent, you can certainly see a pattern, right? We had medical marijuana, then we had adult-use marijuana, then we had psilocybin. I think people will push for the decriminalization of other drugs. I know people who push for the decriminalization of all drugs, the way it was done in Portugal and other places. And, you know, I think legalization regulation, commercial sales, [and] those things work better for some products than others. I don't think anyone is going to advocate for a commercial market for heroin. We've seen wit opiates, how dangerous those products are when they're sold in the legal marketplace and I don't think anyone wants to see that happen.

Alyssa Hurst: So I want to shift gears and talk a little bit about how the legalization of marijuana in Colorado and other states has influenced mass incarceration in the United States, which is obviously a big challenge for us. Has the spread of legal marijuana changed the way mass incarceration operates? Have we seen people get out of prison because of this?

Sam Kamin: Sure, that’s a great question. I think a common misperception is that there are a lot of people sort of rotting away in prison for minor marijuana offenses and I think, you know, by and large, it's really just not true. I didn't mean to attribute that view to you, but you see it even in popular literature, the idea that the war on drugs caused mass incarceration. It certainly contributed to mass incarceration, but it's not the cause of mass incarceration. You know, even if we released all nonviolent people from our prisons and jails, we'd still have around a million people incarcerated. 

So, you know, the role that marijuana plays and that drug enforcement plays is bringing people into the criminal justice system and creating a record for them and making them known to the police. And that obviously has a disproportionate impact on certain communities, communities of color, in a way that sort of has long term effects for those people. It's not that they're in prison, it's that they have criminal convictions which keep them from getting jobs, from getting new employment, from getting certain housing, certain federal benefits, and then may exacerbate later criminal convictions. So of course the war on drugs plays a role in that, but to say that it caused it, I think it's overblown.

Alyssa Hurst: So on, in that same vein, Michelle Alexander, who wrote “The New Jim Crow,” she said in 2014, so two years after Colorado legalized, ‘40 years of impoverished black kids getting prison time for selling weed and their families and future's destroyed, and now white men are planning to get rich doing precisely the same thing.’ So I'm just curious, going off of what we were talking about before, what kind of impact do you think that this has had particularly on communities of color?

Sam Kamin: Yeah, I think that's a really good point. And, you know, the argument is often made that we need to release anybody who was ever convicted of drug dealing because we've legalized drug dealing. You know, that parallel is not perfect. The people who are engaged in the marijuana businesses in places like Colorado are regulated and taxed business people, they are selling only to adults if they're compliant with the law, [and] they are not selling other drugs. And for people who in the past have been convicted under the war on drugs, that's not true. That is not to say that there are no problems with the fact that the new marijuana industry is largely white and the war on drugs disproportionately impacted communities of color. Those things are sort of undeniable. What it means is, as people push for changes in federal and state marijuana laws, that people are now insisting that going along with that is a requirement that social equity and racial equity be a part of that process.

Alyssa Hurst: Sure. So it's something that the industry cares about and is paying attention to and is aware of?

Sam Kamin: Absolutely, and I think that when Colorado legalized in 2012, it wasn't all clear that we were going to be allowed to go forward with that regulation. It wasn't all clear that the federal government wasn't going to come in and arrest people. So, you know, the idea that, oh, we're creating this windfall for certain people wasn't really on the radar screen. And the idea of social equity was not at the forefront. It very much is now, and you see a real push, or really a requirement, that if there's going to be a change going forward that social equity has to be a part of that conversation.

Alyssa Hurst: So what do you think has caused that shift?

Sam Kamin: I think what's caused it is the fact that this industry has succeeded [and] the fact that the federal government did not shut it down. I mean, everyone who is involved in the marijuana business risks going to prison for the rest of their lives. This is still a rapidly changing area of law, but as it's gone forward and as we've seen the federal government acquiesced to it, if this is an industry that's going to thrive, it should be more inquisitive.

Alyssa Hurst: So you've talked a little bit about some of the challenges of being a dispensary owner and what getting involved in this business looks like, and I think the perception was after it was legalized that a lot of people came to Colorado, moved here, and thought, ‘Hey, we're going to get rich quick joining this new industry.’ So what are some of the realities of being a dispensary owner in Colorado?

Sam Kamin: I think the degree of regulation is probably something that people are unaware of. Compliance with regulations is expensive and complicated. In addition, you have the licensing fees and the startup costs are quite high. It's very difficult for people to raise capital. You can't get a bank loan [or] a small business loan, the way you can for other kinds of business. So, people think it's like growing lettuce, but you can sell it a hundred dollars a pound. It’s really not.

Alyssa Hurst: Yeah. So we've kind of danced around this topic of legalization at the federal level. I'm curious if you think that that is something that is possible in the foreseeable future?

Sam Kamin: I think it will depend a lot on the presidential election. I mean, Joe Biden was the one presidential candidate on the democratic side who was not an enthusiastic supporter of marijuana legalization, but also I think if the Democrats are in power in the legislatures that are in Congress, it will be an impossible thing for them to not act on.

Alyssa Hurst: That's really interesting. So if it is indeed legalized at the federal level, how does that change what's going on in the state?

Sam Kamin: Well, it will make that conduct legal, it will make it safer for people, [and] it will eliminate problems like banking attacks that I mentioned earlier. But it also raises the specter of having a big marijuana industry that goes along with big tobacco, big alcohol, big pharma, big agriculture. And I think people are really concerned about that. You know, you have this substance, which I agree is less dangerous than alcohol, but still has a potential for abuse. If you're marketing that with a profit motive and without the restrictions that a federal illegality imposes, you have a real risk of some harms.

Alyssa Hurst: Can you talk a little bit about what those harms might look like from big marijuana?

Sam Kamin: Sure. I mean, industries like alcohol and tobacco get 80% of their profits from 20% of their users, right? And they are constantly in the business of making sure that there is a new generation of people who will be using their products and be loyal to their brand. And that means marketing and targeting those people and making sure that they are consistent users and, you know, the problem users, the people who use too much or more than they would like to are the profit centers for these industries. So I think there is a real concern that that will be true with regard to marijuana as well.

Alyssa Hurst: So economically, how would these kinds of local dispensaries that have grown up all over the country, how would they fare if big marijuana became a reality?

Sam Kamin: Sure. So right now you have marijuana being grown under lights in the middle of a big city in Denver. That's not an economical way for it to happen. It happens that way because that's the way it was regulated here that we originally didn't have a greenhouse or outdoor growing, but in a purely legal marketplace, you're going to see marijuana being grown very cheaply and in those places where it grows most economically, whether that's going to be Kentucky and Tennessee or the hills of California or the central valley of California. You're not going to see marijuana being grown by mom and pop stores in the middle of big American cities, and you're gonna see consolidation and price drop. Price drop will make it much easier and much more attractive for young people to get access.

Alyssa Hurst: Interesting. So we've kind of talked about how states have had this piecemeal approach to implementing the legalization of marijuana. Everybody has been able to do it their own way. Has that had any drawbacks? Would it have been better if we had all started at the same time under the same system?

Sam Kamin: Yeah, I think the way we see that most is with the interstate transit of marijuana. It is financially viable for people who live in Oklahoma or Nebraska to drive to Colorado, buy marijuana lawfully from a store here, and then illegally take it back and sell it in Oklahoma and Nebraska, where recreational marijuana is prohibited. And however well we regulate it here in Colorado, that's always going to be true, right? 

I like to quote a friend of mine: they say that our legalization is upsetting their prohibition [but] it's really their prohibition that's upsetting our legalization, right? As long as we don't agree across the border, we're going to have cross-border sales be lucrative. Even if there's legalization at the federal level, states may continue to prohibit marijuana. You know, we saw dry counties long after prohibition went away. We may see dry states even after the federal government legalizes.

Alyssa Hurst: So we kind of know about some of the things that have come out around the legalization of marijuana related to the economy and related to jobs and that sort of thing. But what are some of the things people don't think of that have been spurred by this? Have there been different medical outcomes or more research, these sorts of things?

Sam Kamin: You know, it's still hard to do good, quality research on the medical benefits of marijuana while it remains illegal. The federal government has relaxed some of those regulations, but while it remains a Schedule One substance, it's quite difficult to do robust medical testing on marijuana. So I can't say that our knowledge about its medicinal benefits has really risen that much since legalization has happened in the States. You know, most of the research that's done on marijuana is being done overseas [in] Israel and England and other countries where it's easier to do. So, while we are increasing our knowledge about it, we are not increasing our knowledge in a way that's likely of itself to lead to a change in federal policy.

Alyssa Hurst: Are there other areas where the fact that it's still illegal on the federal level is holding us back?

Sam Kamin: Yeah, I talk a lot about the, what I call the collateral consequences of federal illegality. So, you know, Illinois was the most recent state to legalize. And just before legalization happened in Illinois, the Chicago Housing Authority sent out a notice that says, you know, even though this is going to be legal in the state of Illinois, you can't have it in subsidized housing in the city of Chicago. And the reason was [due to] the federal funding of that program, and they were worried they would lose their federal funding if they permitted marijuana to be used in public housing. I mentioned employment: Parental rights can be put at risk if someone is either working in that industry or using marijuana whether recreationally or medically. You know, everything from real estate to employment, as I mentioned, to insurance, to bankruptcy, all of these things are impacted by the fact that, in the eyes of federal law enforcement officials, all marijuana conduct in every state remains illegal.

Alyssa Hurst: So without a doubt that federal legalization would make a massive impact for many people.

Sam Kamin: It would. And you know, no one that I'm aware of who is a compliance state licensee has been prosecuted by the federal government. So the real risk now is not people going to prison, but these other, what I call collateral consequences.

Alyssa Hurst: Absolutely. So on a slightly lighter note, I'm seeing marijuana factoring into the public imagination in a whole new way. It's much more accepted. BarkBox is putting out a 420 box with a little bong plush toy for dogs and that sort of thing. So how has the cultural situation for marijuana changed?

Sam Kamin: I mean, people react in different ways to this, but people have talked about people coming out of the marijuana closet, right? And, you know, the idea is that views about homosexuality really changed when more people came out and people realized that their aunt or uncle or dentist or doctor or lawyer was a gay person and that those people were no different from anyone else. There's been a real, I don't know whether it's a push or just a sort of evolution, of people being more open about their marijuana use. You know, you certainly see it on the commercial side, but I think that it is sort of becoming more accepted. Just people willing to say, ‘Oh, you know, we have to keep the marijuana stores open because that's just as much a part of life in quarantine as being able to have a glass of wine.’

Alyssa Hurst: Right. I guess that kind of perfectly depicts what's happening, the fact that the governor of Colorado decided that marijuana was an essential industry.

Sam Kamin: Yeah, I think you're right. 

Alyssa Hurst: To learn more about Colorado's Amendment 64 or Sam Kamin's work, visit our show notes at du.edu/RadioEd. James Swearingen arranged our theme music. Tamara Chapman is our managing editor. Lorne Fultonberg contributed research for today's episode. And I'm Alyssa Hurst, RadioEd's executive producer, today's sound engineer, and host. This is RadioEd.