It is a foregone conclusion, less a question of if than when: marijuana will be legalized for recreational use across all 50 states. Three states–Washington, Colorado, and Oregon–have already done so. Medical marijuana is legal in 25 states and the District of Columbia. This fall, five states–including California, a heavily populated pot playground–will vote on measures to legalize the long demonized plant.

Marijuana is less stigmatized in popular culture and society than ever before. Studies of weed–though stymied due to federal classification of marijuana as a Schedule I drug, reserved for the most dangerous substances–have largely hinted at its curative properties. Weed is inevitably headed toward a legal, taxed, regulated market in the vein of tobacco and alcohol. What effects could that have on consumers? What dangers could it cause? How will consumers benefit from marijuana shifting from an unchecked black market to one that is legal and perhaps beholden to powerful interests? Law Street investigates:

The State-Level Model

In a 1932 case, Supreme Court Justice Louis Brandeis famously called states the “laboratories of democracy.” And so far, in the twilight years of marijuana legalization, states are the testing grounds for setting standards and establishing norms. Colorado and Washington were the first states to fully legalize recreational marijuana in 2012. Oregon passed a similar measure last fall. At the Brookings Institute in Washington D.C. last week, the authors of a paper on how special interest groups will shape the legal marijuana landscape presented their findings. They concluded, “the emerging model of state-level regulation provides valuable insulation against interest-group depredations.”

Philip Wallach, a senior fellow at Brookings and co-author of the paper, believes states can act as a bulwark against the potentially self-serving, damaging motivations of special interest groups, and sort through what works and what does not. During a panel discussion that followed the presentation of his paper, Wallach ticked off the benefits of a state-level model versus a federal one. A state model would “[offer] room for experimentation, limit the stakes of any misstep, and spread out the resources of interest groups, preventing them from concentrating their firepower,” he said. Decentralization, according to Wallach and his colleague Jonathan Rauch, co-author of the paper and moderator of last week’s panel, would make for a healthier and more robust legal marijuana market.

But Kathleen Frydl, a history professor at the University of California, Berkeley and author of “The Drug Wars in America, 1940-1973,” questions the ability of the state-level model to act as a decentralizing mechanism. She worries the best practices formed within states would be co-opted by interest groups regardless. Frydl argues that these groups might “then promote those best practices, or what they see as best practices, and the other states kind of fall as dominoes,” without taking statewide “indigenous concerns” into account. Interest groups would be, in effect, “ordering from a legislative menu.”

A member on one of two panels at Brookings last week and a “full-throated advocate” of legalizing marijuana, Frydl also expressed concern over the lack of watchdogs at the state level. But, she conceded, “state taxation is the principle way in which states can regulate marijuana” and regulation is “best maintained by a variety of state experiences.”

Misregulation vs. Overregulation

For Andrew Freedman, the last few years have been a “regulatory honeymoon period.” Freedman is the Director of Marijuana Coordination in Colorado, a role that did not exist until a few years ago. As the “marijuana czar” of the first state to legalize pot, Freedman has dealt firsthand with the trial and error regulatory process of marijuana legalization. He participated in both panels last week and provided insight into how easy it was for Colorado to pass new legislation to shape the rules of its growing marijuana market.

Good regulations are key to a thriving legal marijuana market, he said, but the challenge is “how to draw the line between what is overregulation and what’s running as fast as possible, as smart as possible to create a good guideline later on.” Since Colorado legalized recreational marijuana in 2012, the trailblazing state has tweaked rules and amended the initial legislation in an effort to find a regulatory sweet spot.

Originally, tourists in Colorado were only allowed to purchase seven grams of weed while residents could buy up to 28 grams. Now, both tourists and residents can purchase up to 28 grams. And after a number of incidents involving edibles and children, Colorado is lowering the concentration of THC–the compound in marijuana that has psychological effects–allowed in edibles sold for purchase. That measure will go into effect in October.

But Freedman understands the freedom to adjust and establish new norms will likely be short lived. In five years, as a legal framework is established and interest groups consolidate, he sees pushing new regulations as “day to day battles versus big pieces being moved.” A consolidated marijuana industry with increased regulations would create obstacles for new entrants and more hurdles for existing businesses. But according to Alexander Tabarrok, professor of economics at George Mason University and a member of last week’s panel,  stifling regulatory measures and barriers to entry could be a good thing for the marijuana industry. “Capitalism plus an addictive drug—is this really the best combination?” he said, “maybe sometimes efficiency is not the best thing, maybe innovation in all things is not always good.”

Big Marijuana

Like the tobacco and alcohol industries before it, some experts say the marijuana industry is headed down a road of narrow interest groups and concentrated power. Big Marijuana: where rules of the road are set by only a handful of national actors. In their new paper, Wallach and Rauch conclude: “Over time, multiple interests will coalesce and colonize the regulatory process.” But Big Marijuana does not have to be an inherent evil, said John Hudak, who also presented a paper at the Brookings event. “This idea that big is always bad is wrong, and that differently sized is good is also wrong.”

Big Marijuana has its advantages, he said. Powerful actors have more to lose, and thus more incentive to play by the rules. They also have a reputation to uphold, since consumers buy into their brands and care about their actions, forcing them to act with the public’s spending power in mind. Hudak, who wrote a book called “Marijuana: A Short History,” said that big firms will also have the advantage of pairing business acumen with marijuana know-how. “Not every marijuana grower should run a business, and not every businessman should be growing marijuana,” he said.

That business acumen could come with costs, however. Freedman is concerned that as national marijuana brands accrue capital and influence, they will follow in the footsteps of tobacco and alcohol brands that market to underage users and exploit people with abuse problems. “Those who have access to capital know how to do that in a much better way than those who don’t have capital,” Freedman said. He wasn’t the only panelist who expressed caution at the exploitative potential of powerful marijuana companies. Jeff Zinsmeister, vice president of Smart Approaches to Marijuana, opposes legalizing weed because legalization would “inevitably push marijuana into a model that is constantly going to be pushing the limits when it comes to targeting children and heavy users.”

Whatever forces end up governing the legalized marijuana market–a handful of powerful brands and interest groups; a smattering of smaller, statewide actors; or something else entirely–there will be a time in the not so distant future where the entire country recognizes the drug as a legal substance. And like tobacco and alcohol before it, marijuana will pose difficult questions for society, government, and industry to answer.

Alec Siegel

Alec Siegel is a staff writer at Law Street Media. When he’s not working at Law Street he’s either cooking a mediocre tofu dish or enjoying a run in the woods. His passions include: gooey chocolate chips, black coffee, mountains, the Animal Kingdom in general, and John Lennon. Baklava is his achilles heel. Contact Alec at ASiegel@LawStreetMedia.com.

The post Once Marijuana Is Legal, Who Sets the Rules? appeared first on Law Street.

Washington and Colorado approved voter referendums in November 2012 to become the first states in the nation to allow recreational marijuana sales; however, the states have taken different regulatory paths. Colorado started selling recreational marijuana on January 1, 2014, while Washington’s first legal stores opened on July 8, 2014. Regulators in Washington have frequently been in contact with those in Colorado to smooth the implementation process. The infographic below shows a quick breakdown of the two states’ policies, and if you’d like to learn more about what’s going on with these rules read on to the in-depth analysis below.

Who is allowed to buy marijuana?

Colorado and Washington both regulate marijuana similarly to alcohol. Only those aged 21 and older can buy recreational weed. Walk into a store, show your ID, and you can make a purchase. Customers are limited to buying or possessing only one ounce of marijuana at a time. Rarely would anyone buy a full ounce — more commonly marijuana is sold as an eighth of an ounce. Should you need more than an ounce, however, you would not be prohibited from making multiple trips to the store in the same day.

In Colorado, buyers from out of state are limited to buying only one-quarter of an ounce at one time, while there is no restriction on purchases by out-of-state visitors in Washington. Marijuana bought in the state must then be consumed in the state. In Colorado, you can share marijuana with others as long as you don’t receive any cash. In Washington, any purchase of marijuana must be for personal consumption. In both states marijuana transactions often have to be made in cash, since credit cards cannot be used due to federal banking regulations; however, state banks in Colorado moved to set up more local credit unions and issue debit cards that can be used for marijuana purchases.

How much does marijuana cost?

In Colorado, shops opened January 1, 2014 and were met with high demand. Initially 136 shops acquired licenses from Colorado’s Marijuana Enforcement Division, but the state has set no official cap on the number of licenses it will issue. The city of Denver, however, has a two-year moratorium on new marijuana businesses. Many other cities, such as Colorado Springs, banned recreational marijuana shops altogether. In the first days of sale, prices for high-quality marijuana rose to more than $300 per ounce. NPR reports that over the weekend of July 4, 2014, prices at a large chain hovered around $85 an ounce. Other estimates show the price per gram in Colorado typically averages $16 to $20.

In Washington, initial sales are likely to lead to product shortages and higher prices. Marijuana can only be purchased in retail shops licensed by the state; however, only 24 shops were licensed for the first day of sales, so owners may initially be inclined to ration. The state set a cap of 334 licenses to be distributed in accordance with population. The Washington State Liquor Control Board still has thousands of applications to sift through. Like Colorado, many municipalities in Washington banned recreational sales of marijuana. In Seattle, with a population of 652,000 and likely the hottest market, only one shop will be open on the first day of sales. Vancouver has two shops and Spokane has three. Growers of marijuana only received their licenses in March, meaning that there has not been enough time to grow a substantial amount of marijuana. Store owners indicate they want to sell for roughly $12 per gram, but the cost per gram could rise to as much as $25. Medical marijuana dispensaries in the state average between $10 and $15 per gram. Watch for more information on the marijuana shortage below:

How much is the state making off sales?

In both states, recreational marijuana is heavily taxed. Colorado buyers face a 15 percent excise tax, 10 percent special sales tax, and a 2.9 percent standard sales tax. Various localities then add additional taxes. Colorado’s amendment dictates that the first $40 million in taxes raised annually by marijuana sales must go toward the state’s public schools. According to USA Today, Colorado collected more than $24 million in marijuana fees and taxes through April 2014. In the fiscal year beginning July 2014, the state expects to make $98 million from marijuana. Tourism also increased, likely in part due to the marijuana law — 2013-2014 was the state’s best ski season to date. Watch an overview of Colorado’s marijuana industry below:

In Washington, an excise tax of 25 percent is levied at three different points in the sale process: from grower to processor, processor to retailer, and retailer to customer. According to USA Today, Washington is expected to collect $190 million from fees and taxes over the next four years.

What restrictions do marijuana shops face?

The two states regulate shops a little differently. Both only allow sales between 8:00am and midnight, and any marijuana sold in the state must be grown in the state. Initially in Colorado, any business wanting to sell recreational marijuana already had to be an existing medical marijuana dispensary. Vendors must be residents of Colorado and undergo a background check. They must apply through the Colorado Department of Revenue’s Marijuana Enforcement Division and typically have to apply for a local license as well. Beginning October 1, 2014, new recreational facilities will be able to apply for licenses. Medical marijuana dispensaries pay a $500 application fee to get a recreational license, while new businesses face a $5,000 application fee. Annual licensing fees can range from $3,750 to $14,000. Colorado also allows companies to vertically integrate by growing, processing, and selling as a single company. Additionally, individuals are allowed to grow up to six plants for personal use.

In contrast, Washington gave medical marijuana dispensaries no edge in the application process over new businesses. The medical marijuana industry was unregulated, so the state created regulations from scratch, including protocol-testing, child-resistant packaging, and shop security systems. Vendors must be residents of the state and are subject to a background check. The law separates producers, growers, and retailers. Businesses face a $250 application fee for a license and a $1,000 annual renewal fee. The state also limits overall marijuana growing to 200 million square feet. Washington does not allow individuals to grow plants themselves.

Are edibles available?

One of the most high-profile issues Colorado faces is how to regulate marijuana edibles, which are often seen as a hassle-free way to consume marijuana. Yet several severe cases illustrated potential dangers of edibles. On March 11, 2014, a college student from Wyoming jumped from a balcony to his death after eating a potent marijuana cookie. In another case, Richard Kirk suffered severe hallucinations after allegedly taking painkillers and eating marijuana-infused candy. The hallucinations led him to shoot and kill his wife. New York Times columnist Maureen Dowd recently chronicled her experience with marijuana edibles to further heighten awareness of the issue. Colorado is aiming to make buyers aware of portion size and THC content, but is still experiencing difficulty regulating edibles and keeping them from the hands of unsuspecting children. The video below explores Colorado’s problems with edibles:

So far Washington has not approved any edible products. Edibles must first be tested and approved, so there will be a bit of a wait before they hit the Washington market.

Are there other regulations?

Smoking Areas

Both states ban smoking in public places, including in marijuana shops. The bans are enforced similar to open-container laws. In Washington, consuming in public means a fairly light $27 fine. Things can get trickier for tourists trying to find a place to consume. Only 25 percent of hotel rooms in Washington are designated as smoking, and it is unclear if hotels will permit smoking marijuana.

Driving

Driving under the influence of marijuana is illegal in both states. Anyone driving with more than five nanograms of THC per milliliter can be issued a DUI. Tests for THC are not as easy as a breathalyzer, especially since THC can linger in the body long after an initial high. If a driver was suspected of being high, an officer would likely have to drive the individual to the hospital for a blood test to get conclusive results. In Colorado, marijuana was involved in 12.5 percent of DUIs occurring in the first five months of 2014, a statistic that the state has only just begun tracking. Watch a video about DUIs below:

Other Issues

Despite the legality of recreational marijuana in these states, questions linger. Employers can still fire employees for showing up high or for testing positive, even though marijuana is legal. An in-depth look at the issue can be found here. States are also wary of consumers who may go to a number of stores to buy a small amount of marijuana at each and then sell it on the black market. The Justice Department is continuing to work on legal guidance for banks on how to deal with local retail marijuana sales. Despite these issues, the sale of marijuana has been a large success in Colorado, with voters now favoring the law by a 22-point margin after witnessing relatively smooth implementation. Should kinks in these laws be worked out, more states will look to Colorado and Washington when implementing marijuana laws of their own. Colorado has increased its regulation of marijuana since the law was first implemented and has not experienced serious consequences. More regulation of edibles in the future will likely lead other states to follow marijuana policies similar to those of Colorado and Washington.

Resources

Primary

Washington Liquor Control Board:  Fact Sheet

Additional

Time: Everything You Need to Know About Buying Legal Weed

Time: Colorado Kids are Accidentally Ingesting Pot

NPR: Washington State to Start Recreational Pot Sales

The New York Times: Still-Divided Washington Prepares for Start of Recreational Marijuana

Mercury News: Marijuana Legalization in Colorado

USA Today: With Legal Marijuana, Washington Joins Exclusive Club

CNN: 10 Things to Know About Nation’s First Recreational Shops

Denver Post: Colorado Voters Approve New Taxes on Recreational Marijuana

USA Today: Colorado, Washington Differ in Legalizing Marijuana

Brookings: Legal Marijuana: Comparing Washington and Colorado

The New York Times: Don’t Harsh Our Mellow, Dude

New York Magazine: Washington Starts Selling Legal Weed: What You Need to Know

The New York Times: Sales of Recreational Marijuana Begin in Washington State

Denver Post: A Colorado Marijuana Guide: 64 Answers to Commonly Asked Questions

Denver Post: Colorado Recreational Marijuana Industry Begins

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Alexandra Stembaugh is a senior at the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Legal Marijuana Laws: Colorado v. Washington appeared first on Law Street.

Despite some positive results of Colorado’s marijuana legalization, like additional revenue and a decrease in crime, there are issues that require further legislative attention. The main point of dispute is the regulation, or rather lack thereof, of marijuana edibles. THC, the mind-altering ingredient in marijuana, can be converted into a cooking oil and used to make treats including truffles, lollipops, cookies, and basically anything else you can eat.

It is easy to see the appeal after just a glance at the menu in a dispensary, often including selections like macadamia nut cookies and candy bars alongside the more traditional brownies. This appeal, however, does not only apply to legal users over age 21, but to children who unknowingly find these THC-laced goodies lying around.

Why Regulate?

Critics claim edibles are far too alluring to children. The cardinal concern here is that kids will be tempted by marijuana candy and guzzle it down without knowing what they are eating. According to the New York Times, “so far this year, nine children have ended up at Children’s Hospital Colorado in Aurora after consuming marijuana, six of whom got critically sick. In all of 2013, the hospital treated only eight such cases.” In a recent incident, a seven-year-old girl in Colorado was hospitalized after ingesting a THC edible. While it does appear that the trend of the hospitalization of children who consumed pot has increased, the evidence is not yet conclusive.

What is the key to preventing future events from occurring? Law enforcement officers and manufacturers of marijuana edibles stress time and time again the importance of the role of parents in keeping their kids away from potentially tempting pot candies. “There is a level of discretion and education and, frankly, tenacity on the behalf of parents that has to occur. If you leave pot lying around, kids are going to find it,” said Joe Hodas, a spokesman for the Denver-based Dixie Elixirs edibles.

Another issue noted with marijuana edibles is the difficulty with dosing them properly. To deal with these issues, lawmakers are considering new packaging with more obvious warnings or limiting each package to contain just a single dose. Recreational dispensaries are also implementing safety measures by listing precautions for edible users.

Edible marijuana information sheet via anonymous

Last time I ate a brownie I bought it legally from a recreational marijuana dispensary. The brownie was 90 MG, so I used caution in the portion I ate because I knew that my tolerance was nonexistent. I started feeling the sensation creeping on about 20 or 30 minutes after eating it. My girlfriend, who has had much less experience using marijuana than myself, was trying to argue that it wasn’t working and that we should eat more, but I urged her to be patient because I knew that even the small amount we ate would get us high. We both ate a little more because I figured she could learn firsthand about the appropriate dosage for her. The peak of my high wasn’t attained until two to three hours after consumption. The experience is equally in the mind as well as the entire body, so I recommend not going out or driving and just letting the drug take effect.

-Anonymous Colorado marijuana user

Advocates of further regulation often cite recent incidents in which two individuals died, allegedly due to the over-consumption of THC edibles; however, the roll of edible marijuana in these deaths remains in question. The only instances on record include a man who jumped off a balcony to his death after consuming a cookie laced with the amount of THC in six joints. In the other instance, a man hallucinated and stabbed his wife, but other drugs were more likely the contributing factor leading to his actions.

Whether the marijuana edibles were the true culprit or not, these events and others have led lawmakers to begin tightening the regulatory noose on their THC content, sale, and marketing. Many express concern over the appearance of the labels on edibles as they appear strikingly similar to their non-THC counterparts.

How are Edibles Different?

In short, when THC is digested, the body absorbs it more slowly than when it is smoked, and therefore can cause the user to feel the need to consume far too much. In spite of this, edibles do not cause damage to lungs in the way that smoking can.

According to an anonymous Colorado marijuana user, the experience consuming pot edibles is a juxtaposition of emotion. “There is a simultaneous balance of being completely relaxed and being on the verge of a panic attack, for me.”

Like many other recreational pot users, he generally prefers pot edibles. “Edible marijuana makes me feel like I need to go to sleep right away but my heart rate is also increased because THC is a stimulating drug. The mind altering properties of weed are especially apparent because it takes feelings that I experience and makes me see them from a different perspective, making me physically uncomfortable yet more accepting to new ideas.”

Even supporters of legalization such as Brian Vicente, one of the authors of the amendment that legalized marijuana, say that Colorado needs to pass stricter rules about edible marijuana. He said that the state was racing up a sharp learning curve. “Marijuana was illegal for 80 years. Now it’s legal, and everyone’s just trying to figure out how to approach these new issues.”

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Marisa Mostek (@MarisaJ44) loves globetrotting and writing, so she is living the dream by writing while living abroad in Japan and working as an English teacher. Marisa received her undergraduate degree from the University of Colorado in Boulder and a certificate in journalism from UCLA. Contact Marisa at staff@LawStreetMedia.com.

Featured Image Courtesy of [Janet Hudson via wikipedia]

Marisa Mostek

Marisa Mostek loves globetrotting and writing, so she is living the dream by writing while living abroad in Japan and working as an English teacher. Marisa received her undergraduate degree from the University of Colorado in Boulder and a certificate in journalism from UCLA. Contact Marisa at staff@LawStreetMedia.com.

The post Have Your Pot and Eat it Too: Regulating Edible Marijuana appeared first on Law Street.