The only kind of writing is rewriting.

—Ernest Hemingway

Journalism is the first rough draft of history.

—Philip L. Graham (Publisher, Washington Post)

This book is being released in 2023. The author has made every effort to present the emergence of cannabis legalization, industry, and regulation of it in as accurate a light as possible. This work was taken on with humility, knowing that the dimensions and players at the forefront look nothing like they did a decade ago. The history of cannabis policy in the age of legalization is certain to be rewritten many times. This book is an effort to do what the author does every day as a researcher and consultant to governments: bring in subject matter experts, talk to them, and find out as much as possible about what they know. You will hear many of those voices in the pages that come.

The body of research that we lean on to provide context is, by definition, “too early to tell” in most cases. The final paragraphs of most reports addressing licensing, taxation, public health and safety, therapeutics, and dangers mostly ring the familiar refrain, “more research is needed.” What you will get is an account from those who were there: regulators, smokers, scientists, growers, artists, retailers, those with lived criminal justice experience during the terror that was the war on drugs, law makers and law breakers, innovators, and crude profiteers.

The voters have spoken, and now cannabis is licensed, taxed, and regulated for adult use in 23 states^[1] including the three largest metropolitan areas in the country, Los Angeles, Chicago, and New York, and across their respective states. Medical use of cannabis has been legalized in 40 states and the District of Columbia.^[2] Cannabis is available in legalized states to be bought, grown and commercial use, and packaged and sold like any of other adult use and medicinal products (as age appropriate).

There are thousands of entrants who have made their way into the licensed industry, some in states that are loosely regulated like Oklahoma, and others in states with tight restrictions from state and local authorities, like California or Massachusetts. As of the spring of 2023, wholesale flower and extract prices have collapsed. Tetrahydrocannabinol, or THC, prices have fallen even more given potency changes. Specific figures mentioned in “The Virtues of Bans on High-THC Content Cannabis Products?” are 87 percent drop for flower and 92 percent for extract prices.^[3]

The Drug Enforcement Administration is grappling with a wide variety of derivative products that originate from hemp and are regulated under the 2018 farm bill. There are a number of intoxicating substances beyond traditionally regulated Delta 9 THC that now include Delta 8, THC-O, and THC-P (believed to be thirty times stronger than THC Delta 9) that are found in mostly unregulated products across the country and have fallen out of the purview of the Controlled Substances Act. Hemp is defined as containing less than 0.3 percent THC, To but updated processing methodologies can now extract cannabinoids, then temporarily place them in a “mothers’ milk” concentrated isolate, and then reinject 10 mg of this isolate THC into a 330 mg gummy to produce a now compliant 10 mg dose.

For the regulated cannabis industry, margins have all but disappeared for a large portion of the operators, and the industry fears that in places like California cannabis is facing an “extinction event.” Over 13 percent of California’s retailers failed to make any tax payment by the May 1, 2023, deadline, according to the California Department of Tax and Fee Administration (CDTFA). Those outstanding taxes facing a 50 percent penalty.^[4] Operator interviews from cannabis tax–funded studies indicate that cultivators are getting stiffed by “dirty distros,” distributors that take product and sell it to stores and then slow-, low-, or no-pay the grower. The resulting revenue hit can be enough to sink smaller operators. Interviewed distributors counter this claim adding that some bad actor retailers don’t pay them for the products they sell.^[5] There are message boards on social media in which blacklisted shops and other industry tidbits are discussed between industry insiders.^[6]

Never have we had so much information at our fingertips, at least potentially at our fingertips. The track-and-trace data collected in each licensed state memorializes every transaction; every time a seedling is moved to the vegetative phase room, every time a consumer buys a vape pen. All the testing data that appears on a Certificate of Analysis (COA), indicating cannabinoid and terpene profiles, have been uploaded by the licensees. But most of this information is not shared with consumers or industry, so vapers do not know the terpenoid profile of the pen they are using for sleeplessness, and the small business owner has no idea what market prices and quantities are being sold in their region; unless they can and want to pay for a reputable market analysis data source like New Frontier.

On the other hand, the State of California spent $20 million to support research on the medicinal, economic, illicit markets, labor, and social science dimensions of cannabis as a regulated and taxed product. They recently held a convening of researchers to share preliminary results; a first time convening of well-funded researchers to discuss non-harm related cannabis research.

As a reader and student of cannabis policy, you have selected an important topic of study at an important time. In the times of pandemic, cannabis businesses were considered essential to the State of California. Municipalities were hard hit for tax revenue and jobs, sparking renewed interest for city councils to license new cannabis businesses.

The news around the industry is constantly changing, the regulations shift monthly, and communities grapple with emerging labor, economic, and public health research. Most certainly, the knowledge you gain in the course of study will serve you well, whether are just cannabis policy curious, on your way to further study, or entering the job market.

We’ll address complicated questions like the transition for enforcement officers from drug warriors to stewards of a regulated industry. Traffic officers can no longer use cannabis drug dogs to establish probable cause for an arrest. Municipalities have had to decommission their cannabis drug dogs. Since they were kicked off the K9 unit, someone had to find good homes for those dogs. Not sure these minutiae made it to the benefit-cost analysis pre-legalization, but we as a society must address each of these small pieces.

The Cannabis Policy and Society course is designed to improve general knowledge, foster the student’s sense of ethics and cultural diversity, and improve an understanding of policy research as a tool to solving problems in the real world. The primary goal of the course is to enable you to formulate responsible opinions on cannabis legalization, history and culture, industry, regulation, and taxation,^[7] then defend them with good analysis, and understand the logic behind opinions that may differ from yours.^[8]

The four main priorities of this course are that you can 1) develop analytical skills, 2) expand your ability for critical thinking, 3) understand the role of policy, and 4) be able to put cannabis legalization into historic and cultural context. Expanding these fundamentals:

1. Skills: Building foundational skills in assessment and manipulation of positive and negative externalities from licensed cannabis markets. Among these skills will be benefit-cost analysis and rudimentary statistical analysis.
2. Thinking: Critical thinking on drug law enforcement and its disproportionate effect on minority communities.
3. Role of policy: Familiarize students with the study of policy and its role in achieving economic, public safety, and health objectives. Systems analysis of state and local educational and criminal justice institutions and the fight for useful data collection for analysis.
4. Context: Legalization through the lens of cannabis history, discovery, prohibition, research, art, music, and literature.

The class will be rooted in science and serious academic research but will reference media and popular literature and culture to expand on salient themes. We can guarantee the complicated landscape of cannabis production and regulation will shift even during the weeks we are engaged in this classwork. The future versions of many thousands of workers, tens of millions of consumers, you and your families, and countless other groups will be impacted heavily by the cannabis policies, regulations, and traditions we set now.

Our innovation, ethics, research, flexibility, accountability, and focus will define what legal cannabis looks like decades from now in California and around the world.

Key Terms

• Ad valorem taxes: By percentage at retail; in proportion to the value of the goods concerned.
• Authorizing (or enabling) statute: Legislation that confers new powers on an entity or permits something that was previously prohibited or not allowed.
• Anxiety: An emotion characterized by feelings of tension, worried thoughts, and physical changes like increased blood pressure; anxiety is considered a future-oriented, long-acting response broadly focused on a diffuse threat, whereas fear is an appropriate, present-oriented, and short-lived response to a clearly identifiable and specific threat.^[9]
• Black market: Name formerly used for what is referred to as illicit markets or unlicensed markets. The term, including the word “black”, has been included in terms are offensive and marginalizing to the Black community and that reoffend connecting dark colors (especially skin) as inherently bad or undesirable.
• California Department of Cannabis Control (DCC): DCC licenses & regulates commercial cannabis activity in California, working with businesses a local governments to develop a safe & equitable market. The DCCs develops progressive cannabis policies with protections for public health, safety & the environment ^[10]
• California Department of Public Health (CA DPH): “Works to protect the public’s health in [California] and helps shape positive health outcomes for individuals, families and communities.”^[11]
• California Department of Tax and Fee Administration (CDTFA): “Administers California’s sales and use, fuel, tobacco, alcohol, and cannabis taxes, as well as a variety of other taxes and fees that fund specific state programs.”^[12]
• Cannabis: Latin name of a genus of plants. Inhaled or ingested forms of the plant can create intoxicating, impaired, or therapeutic effects on the consumer. The flowers are available for licensed sale through medical or adult use frameworks in most states in the United States.
• Cannabis clubs (or co-ops): “A cannabis co-op is a cannabis business that operates cooperatively. Co-ops are based on the idea that the people who either work at, or use, the business are the owners. The owners get the profits, and they get to make decisions about how the business operates.”^[13]
• Cannabis use disorder (CUD): “Some people who use marijuana will develop marijuana use disorder, meaning that they are unable to stop using marijuana even though it’s causing health and social problems in their lives.”^[14]
• Cannabis withdrawal syndrome: “Cannabis withdrawal occurs in approximately half of regular and dependent cannabis users after abrupt cessation or significant reductions in cannabis products that contain Δ⁹‐tetrahydrocannabinol (THC). The most common features of cannabis withdrawal are anxiety, irritability, anger or aggression, disturbed sleep/dreaming, depressed mood and loss of appetite. Less common physical symptoms include chills, headaches, physical tension, sweating and stomach pain.”^[15]
• Cannabidiol (CBD): “Cannabidiol (CBD) is a chemical in the Cannabis sativa plant, also known as cannabis or hemp.”^[16]
• Cannabinoids: “Every chemical substance, regardless of structure or origin, that joins the cannabinoid receptors of the body and brain and that have similar effects to those produced by the Cannabis Sativa plant.”^[17]
• Compliance: “The state of being in accordance with established guidelines or specifications, or the process of becoming so.”^[18]
• Compliance flow (upstream): the concept that compliant cannabis business operators are incentivized to source material from other compliant operators upstream in the supply chain. This depends on the operator’s license having value greater than the perceived impact from the risk of enforcement for buying from unlicensed producers.
• Community benefit: Funds allocated to improve a community in which cannabis businesses are licensed and taxed.
• Comorbidity: Comorbidity occurs when a person has more than one disease or condition at the same time. Conditions described as comorbidities are often chronic or long-term conditions.^[19]
• Concentrates: The concentrated resins from the cannabisplant. The most common types of concentrates are tinctures, capsules, vaporizer cartridges, hash, shatters, and waxes.
• Controlled Substances Act (CSA): Places all substances that were in some manner regulated under existing federal law into one of five schedules. This placement is based on the substance’s medical use, potential for abuse, and safety or dependence liability.^[20]
• Cost of goods sold (280e): The only allowable deduction for a cannabis business when paying federal tax is the cost of the goods sold. From U.S. Code 280e, “Expenditures in connection with the illegal sale of drugs, “No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act).””^[21]
• Cost recovery modeling: Developing a cost estimate of what it would take a jurisdiction to pay for the administration of a cannabis licensing program. These costs include fire, police, environment, finance, and other regulatory costs. This total is used to determine fees and renewals for cannabis business licensees.
• Dabs: Concentrated doses of cannabis extract. These concentrated doses are typically heated on a hot surface until vaporized and subsequently inhaled. Onset is nearly instantaneous.
• Dronabinol: The international nonproprietary name of synthetic THC. Can be extracted from the cannabis plant or produced synthetically.^[22]
• Fees: Money paid for the privilege or right of operating a business to a licensing entity such as a local or state regulatory authority.
• Depression (also called major depressive disorder, or clinical depression): A common but serious mood disorder. It causes severe symptoms that affect how you feel, think, and handle daily activities, such as sleeping, eating, or working.^[23]
• Drug Enforcement Administration (DEA): Enforces the controlled substances laws and regulations of the United States. Regulates controlled pharmaceuticals, coordinates enforcement, analyzes evidence through forensics, supports drug demand reduction and prevention programs.^[24]
• Diagnostic and Statistical Manual of Mental Disorders, fifth edition (DSM 5): The latest edition of the American Psychiatric Association’s professional reference book on mental health and brain-related conditions; the main guide for mental health providers in the United States. The latest version, the DSM-5-TR, was published in 2022.^[25]
• Edibles: Concentrated cannabis is decarboxylated (sometimes called “activated”) through the process of heating and is used to create a variety of ingestible products. Onset depends on individual metabolism and a variety of factors; onset can be from 15 minutes to a few hours.^[26]
• Epidiolex: The brand name of a cannabis extract rich in CBD, which is approved by the FDA for the treatment of epileptic seizures in rare genetic disorders (Dravet Syndrome, Lenox-Gastaut syndrome). Both Sativex and Epidiolex were developed by the British company GW Pharmaceuticals.^[27]
• Hemp: Cannabis sativa cultivars grow specifically for industrial use. Defined as having less than 0.3 percent THC and contains another cannabinoid called cannabidiol (CBD).^[28]
• Illicit market: Unlicensed cannabis businesses operating outside of regulation. Also referred to as untaxed, illegal, or the black market.
• Last mile: Close to the endpoint of a retail transaction. Price markups are most severe in the last mile, and therefore policy measures such as taxation and enforcement can have large impacts at this stage of production.
• Licensing premium: The price that consumers are willing to pay for licensed, taxed, regulated, labeled cannabis products versus their unlicensed counterparts.
• Lottery license allocation: License applicants must achieve a basic qualification to enter and then are put into a pool and their numbers are selected at random.
• Marijuana: Legal term used to refer to the plants that contain more than 0.3 percent tetrahydrocannabinol (THC).
• Medical cannabis: The use of cannabis for therapeutic effect, relief from, or treatment of symptoms.
• Multistate operator (MSO): Businesses operating in more than one state. These are traditionally well-financed business.
• Merit criteria: Qualification criteria for licensing a cannabis business, oftentimes established by localities to narrow down the pool of applicants to more functional or desirable entities.
• Nabilone: The generic name for a synthetic by-product of THC. Cesamet is the brand-name for nabilone sole in the US and Canada.^[29]
• Nabiximols: The generic name of a spray from cannabis extract for the treatment of spasticity in the case of multiple sclerosis; sold in several European countries under the brand name Sativex. It contains the same proportion of CBD and THC.
• Policy window: A theoretical space in which public opinion, political will, and policy options are in alignment to create policy change at an implementation, executive, legislative, popular, or initiative level.
• Post-traumatic stress disorder (PTSD): A mental health condition that’s triggered by a terrifying event—either experiencing it or witnessing it. Symptoms may include flashbacks, nightmares, and severe anxiety, as well as uncontrollable thoughts about the event.^[30]
• Psychosis: Used to describe conditions that affect the mind, when there has been some loss of contact with reality. When someone becomes ill in this way, it is called a psychotic episode. During a period of psychosis, a person’s thoughts and perceptions are disturbed, and the individual may have difficulty understanding what is real and what is not.^[31]
• Opioid crisis: In the late 1990s, pharmaceutical companies reassured the medical community that patients would not become addicted to opioid pain relievers and health care providers began to prescribe them at greater rates. Increased prescription of opioid medications led to widespread misuse of both prescription and non-prescription opioids, and in 2017 the US Department of Health and Human Services declared a public health emergency. From July 2019 to June 2020 over 48,000 deaths were attributed to overdosing on synthetic opiods other than methadone. ^[32]
• Research agenda: The list of research deficits needed to be addressed in order to inform cannabis policy adequately.
• Social equity: Social equity is, as defined by the National Academy of Public Administration, “the fair, just and equitable management of all institutions serving the public directly or by contract; and the fair and equitable distribution of public services, and implementation of public policy; and the commitment to promote fairness, justice and equity in the formation of public policy.”^[33]
• Strain: Strains are different variations of the cannabis plant, similar to many different variations of tomatoes in the garden or at the grocery store.^[34]
• State monopoly: An organization owned by a government that supplies all of a particular product or service, with no competitors, or a situation in which this happens.^[35]
• Terpenes: Aromatic compounds found in many plants, though many people commonly associate them with cannabis because cannabis plants contain high concentrations of them.^[36]
• Titration: Finding and administering the right amount of cannabis that works for a patient or consumer. A typical recommendation from medical professionals is that the user should “start low and go slow.”
• Tetrahydrocannabinol (THC): The primary psychoactive compound found in the plant, or what gives users the feeling of being high.
• Topicals: Concentrated cannabis is decarboxylated (sometimes called “activated”) through the process of heating and is used to create a variety of topically administered products. These products, when used as directed, do not result in psychoactive effects.^[37]
• Vaping: Vaping involves inhaling heated extracts through a vaporizing device. Onset is nearly instantaneous.

Cannabis Is Here. Now What?

Cannabis is here across the nation, to be bought by age-appropriate consumers, to be grown for personal and commercial use, to be packaged and sold like any of several other adult use and medicinal products.

What does it mean to legalize for medical or medicinal use? What does it mean to legalize for adult use or recreational use? In liberalizing cannabis laws, the policy progressions go from prohibition to decriminalization, to medical use, to adult use; with variations within each step. But when states legalize for adult use, medical programs (under current conditions) diminish quickly and become irrelevant to the big picture of the industry. In some cases, medical programs lose half their registered patients in just few years.^[38] After adult use law passed, Oregon patient counts fell 42 percent, Nevada 32 percent, and Colorado 22 percent after state legalization.^[39]

Why? We will explore that. What does medical cannabis even mean? Is cannabis delivered like typical medicines in that a patient comes to a physician with a problem and is diagnosed, given a prescription, and asked to check back in a couple of months? Rarely.

The rollout has been slower than anticipated, but almost anyone, in the City of Los Angeles, for example, has access to licensed cannabis by delivery if not by storefront. The trend is that legacy growers are making the transition to licensed cannabis cultivators. Retail clerks in licensed stores that carry a wide range of tested and labeled products. Both trends most significantly challenged by the persistence of a profitable unlicensed market.

But just because there is legalization doesn’t mean that companies will sprout from nowhere. It takes time to set up state laws, regulatory bodies, local laws, and local departments to oversee licensing and compliance of the new businesses. And then there is the issue of barriers to entry. It is prohibitively expensive to start a business in many areas of California and of the country. Sarah Cross from Green Rush Consulting estimated that starting a legal marijuana business takes at least a quarter of a million dollars in capital alone.^[40]

This text will examine the historical basis for cannabis legalization, and what path was followed to bring us the current policies we have here and across the country?

Compared to What?

In this chapter, we want to understand the inventory and comparison of policy options. We will explore some legalization choices that offer different benefits and costs to society. Public policy is advancing knowledge in the public interest, building foundational skills in assessment, and controlling negative externalities from licensed cannabis markets.

What Is the “Public Interest”?

Whose issues matter more is a question answered through political discourse. When problems arise in society and policy solutions are presented, we always must ask, “Compared to what”? Sometimes maintaining the status quo / doing nothing is the best option. This book will make you critically think about drug laws and the role of law enforcement and the criminal justice system and its disproportionate effect on minority communities.

What Problem?

What is the dynamic tension between public health, personal liberties, and public safety? As the late drug scholar Mark Kleiman observed, you can’t choose not to have a drug problem. Liberalizing policies lead to easier access and usually increases in use and problematic use of drugs.

Cannabis is everywhere. A couple of years before the legal availability of cannabis for adults in California, I asked my UCLA college students how quickly they could get cannabis if they tried. Most of them said they could get it in under an hour. Of course, California had much more liberal medical cannabis availability than most states, but the point still stands. In fact, in a recent survey 85 percent of high school seniors said it would be “easy” for them to acquire cannabis. According to federal surveys, 70 million Americans have used cannabis, and 17 million use it monthly now.^[41]

Prohibitions include heavy taxation and regulation and create perverse incentives that prop up and sustain the conditions for illicit drug markets. These markets fund weapons, force disputes into extrajudicial solutions, cause systemic violence, create dangerous working conditions, subject locals to the threat of violence, expose consumers to untested and unregulated products, and often contribute to terrible environmental degradation.

Even in a state like California that has licensed cannabis grows, illicit operations continue to flourish. In July of 2021, the LA County Sheriff’s office conducted the largest raid on illegal cannabis in state history, seizing more than $1 billion in goods in “373,000 marijuana plants and 33,480 pounds of cannabis flower”^[42]). In soil samples found on abandoned illicit grows in Brush Mountain, chemicals such as brodifacoum and carbamate carbofuran were found lingering in the soil after cultivators had abandoned their cannabis farms at the end of the growing season.^[43]

Risk premiums, the additional margins those who participates in unlicensed business earn, await participants in illicit activity. Workers and owner/operators alike must contend with the threat of enforcement activity and the need to settle disputes with competitors through violence.

A Levitt and Venkatesh study in 2003 estimated that top drug gang operators could earn between $50,000 and $130,000 per year.^[44] The European Financial Action Task force, or FATF, estimated the retail drug sales in the 1980s at $108 billion in the United States and $16.3 billion in Europe, for a total of $124.3 billion. Over half of that was for cannabis at $74.7 billion, with cocaine coming in a distant second at $28.8 billion.^[45] As of 2021, much of the cannabis industry was still in the illicit market, with an estimated size of more than $100 billion each year. By comparison the the legal US cannabis market is expected to reach $41 billion in annual sales by 2026. ^[46]

According to ONDCP estimates, in 2003 the global size of the illicit drug market at the producer level was $12.8 billion, the wholesale level at $94.0 billion, and the retail level at $321.6 billion, indicating that most of the money is handled at the point of sale. The largest market, according to these estimates, is cannabis herb (with a retail market size of $113 billion), followed by cocaine ($71 billion), opiates ($65 billion), and cannabis resin ($29 billion).^[47]

The current political climate in the United States does not favor arrests or prosecutions. We are in a post– war on drugs mentality in most states where you find licensed cannabis manufacturing and access to legal products. There is a decided shift with police and enforcement officers of all levels as they make the transition from “drug warrior” to defender of licensed, regulated, and taxed businesses paying governments to offer them protection.

In this book we familiarize ourselves with the study of policy and its role in achieving both public safety and health objectives. We will perform a regular systems analysis of state and local educational and criminal justice institutions and understand the importance of fighting for useful data collection for analysis.

Finally, we will look at legalization through the lens of cannabis history, discovery, prohibition, research, art, music, and literature. American and global culture has been significantly impacted by the creativity and culture inspired by the cannabis way of life, customs, traditions, heritage, mores, and values.

Cultivation, Growing, Agronomy, and the Markets Built up around Cannabis and Its Derivatives

There are many intersections between cannabis policy and other disciplines. These include business and finance, education, employment, the environment, international law, medicine, politics, public health, public safety, statistics, tax, and technology.

History/Background

One of the amazing things about how quickly cannabis policy is changing is that it took thousands of years or incremental changes to get to where we are today. This place we find ourselves is what is referred to as a “policy window,” which can occur when historical and economic factors and politics all come into alignment and surge in a direction with power and speed. This is a time when events are very difficult to predict. It seems a future equilibrium of stability is more likely than it is now.

To understand where we are today, we must look back—way back to get a sense of how ingrained this substance has been in societies over the millenia. The longest reigning female pharaoh in Egyptian history, Queen Hatshepsut (known as the female falcon), was known to use cannabis ground with honey for menstrual cramps and even used it during childbirth.^[48]

Jann Gumbiner looked at the long history of cannabis and its intersection with ancient emperor, Shen-Nung (c. 2700 BC), who was known as the father of Chinese medicine. Shen-Nung was a good farmer and concerned about his suffering subjects, so he looked to plants for cures. According to legend, Shen-Nung tried poisons and their antidotes on himself and then compiled the medical encyclopedia called Pen Ts’ao. He lists hundreds of drugs derived from nature, including the plant cannabis “ma.”^[49] The plant’s use first spread through Asia, Europe, and finally to the Americas after colonization.

Cannabis as hemp was a very important crop in the early days of the establishment of the United States. In the early settlement of Jamestown and others, hemp production was ordered by English rulers and enforced by the governors of the day.^[50] The production of cannabis, for hemp, was encouraged by the government to make rope, sails, and clothing.^[51]

Sir William Brooke O’Shaughnessy, a doctor from Ireland, while studying the cannabis plant in India in the early 1800s, took note of the medicinal properties of cannabis.^[52] Within a hundred years, pharmacists advertised cannabis as a cure for coughs, fever, asthma, diabetes, and sexually transmitted diseases.^[53] Following a cholera outbreak in 1930, doctors found that cannabis extracts could be beneficial in lessening stomach pains and vomiting in patients sick with the disease.^[54]

Early in the 1900s, cannabis was included in several state bans prohibiting unregulated “poisons,” including opioids and hashish. Criminalization of cannabis was embedded deeper through the strengthening of the poison laws (1906–1938). States like California outlawed marijuana in 1913 following an influx of immigrants such as Mexicans and Hindus, who were labeled as marijuana users. Due to its popularity with these groups, there was a fear that they would share these habits with their White counterparts.^[55]

Fleeing the Mexican Revolution (1910–1920), immigrants to the United States introduced the recreational practice of smoking marijuana to Americans.^[56] Many of the Mexican immigrants who entered the United States brought with them the use of marijuana for recreational activities.^[57]

Though the plant referred to as “cannabis” was generally considered a safe medicinal plant, Mexican “marihuana” was labeled as extremely dangerous. Cannabis began to be referred to as “marihuana” throughout popular media, changing public perception of it in the process and confusing the public. With fears of violence and corruption, public perception around the plant began to change. In Texas, police officers propagated the myth that cannabis people intoxicated by the substance were “bloodthirsty.”^[58]

Large-scale unemployment and social unrest during the Depression increased fear of Mexican immigrants and the “evil weed.”^[59]By 1931, 29 states had outlawed cannabis. In California, officials and new outlets labeled marijuana as a menace and a danger that was threatening Mexico.^[60]

Other bans included the International Opium Convention (1925),^[61] Uniform State Narcotic Drug Act (1925–1932),^[62]and the establishment the US Federal Bureau of Narcotics (1930).^[63]

It also became associated with the predominantly African American jazz culture.^[64] Anti-cannabis sentiment at the time appeared to lean more toward racist paranoia than actual data science. The Bureau of Narcotics published an official statement in 1935 that said “police officials in cities of those states where cannabis is most widely used estimate that fifty percent of the violent crimes committed in districts occupied by Mexicans, Spaniards, Latin-Americans, Greeks or Negros may be traced to this evil.”^[65]

There was a considerable amount of propaganda produced at the time on the dangers of cannabis use; iconic; films like Reefer Madness (1936) and Assassin of Youth (1937) were offered, with narratives parroted by H.F. Anslinger and other government narcotics prohibitionists.

The federal government’s first effort to prohibit the widespread use of cannabis was in 1937, with the introduction of the Marijuana Tax Act.^[66] The draconian tax authorized by the act essentially outlawed marijuana by requiring a high tax for usage of the substance. Failure to pay could lead to a fine of $2,000 or imprisonment.^[67][68] Notable enmity to these prohibitionist shifts came from the American Medical Association which was publicly opposed to the Marijuana Tax Act, which effectively took cannabis away from doctors by imposing massive taxes on the drug, over $2,500 per ounce in today’s dollars.

The first arrest from the new federal law came days after passage. On October 5, 1937, Moses Baca was arrested by Denver Police for violating the Act. In the Denver neighborhood of Five Points, police searched through Baca’s belongings during a routine drunk and disorderly arrest.^[69] While rummaging through his goods, police found a quarter of an ounce of marijuana in one of his drawers in his room.

Seven years later, a (1944) report prepared by the New York Academy of Medicine by the La Guardia Committee determined that cannabis does not lead to addiction, distribution was not under control of any “single organized group,” its use did not lead to heroin or cocaine addiction, it was not the determining factor in the commission of major crimes or “juvenile delinquency,” and it was not widespread among school children.^[70] Harry Anslinger, the first commissioner of the Federal Bureau of Narcotics, disputed the research and went on the offensive against the publicity of the La Guardia report.

In 1951 the Tax Act was bolstered by the Boggs Act. Introduced by Louisiana Congressmen Hale Boggs, this act established mandatory sentences for drug offenses. While Boggs was originally aimed at hard drugs, cannabis was later added.^[71]

Beginning the in 1960s, the counterculture “hippie” movement was born on college campuses largely in opposition to U.S. involvement in the Vietnam War. The cannabis plant was seen as a significant symbol of the movement. Rather than being concerned with the usual features of capitalism, such as work, money, and possessions, these individuals found joy in escaping the contemporary world.^[72] The iconic music festival Woodstock epitomized this counterculture. According to an Associated Press report about the festival, “Six wells were dug to accommodate the crowd, but the weed was in better supply than water.” ^[73]. The massive hippie crowd of 400,000 enjoyed 33 acts with little to no violence. Despite concerns by government officials, the event was overwhelmingly peaceful. ^[74]

There was even a brief period when the plant was legal at the federal level. In 1969, the Supreme Court made a ruling regarding the Leary v. United States case, which found the 1937 legislation to be in violation of the Fifth Amendment and therefore unconstitutional.^[75]

The following is the concluding statement of the Shafer Report:

The criminal law is too harsh a tool to apply to personal possession even in the effort to discourage use. It implies an overwhelming indictment of the behavior which we believe is not appropriate. The actual and potential harm of use of the drug is not great enough to justify intrusion by the criminal law into private behavior, a step which our society takes only with the greatest reluctance. Therefore, the Commission recommends the possession of marijuana for personal use no longer be an offence, and the casual distribution of small amounts of marijuana for no renumeration, or insignificant renumeration no longer be an offense.^[76]

This period of legality ended when newly elected President Nixon identified drug abuse as “a serious national threat” and initiated Operation Intercept in late 1969, shutting down the border to restrict the entrance of cannabis into the United States from Mexico. Next up was the Controlled Substances Act of 1970, which prohibited the manufacture, importation, possession, use, and distribution of cannabis. Subsequently, the drug was placed in schedule 1 as a substance with high potential for abuse, no currently accepted medical use, and lack of accepted safety for use of the drug. The substance’s placement on the schedule I list was supposed to be temporary pending federal review. That review included input by the Shafer Commission, which found that marijuana was not a danger to an individual or society.^[77]

In 1971 Nixon officially declared a “war on drugs,” identifying drug abuse as “public enemy No. 1.” Shortly thereafter he created the Drug Enforcement Administration, or DEA, to coordinate the efforts of all the other agencies.^[78] The agency started with 1,470 special agents and a budget of less than $75 million.^[79]Today, it has grown to 5,000 agents and a budget of $2.03 billion.

The United States Controlled Substances Act, or CSA, itself has often been blamed as being the spark that led to the war on drugs but just made existing policies consistent with the Single Convention on Narcotic Drugs from 1961. The CSA got rid of certain mandatory minimum sentences and provided resources for treatment and research.^[80]Between 1973 and 1977, 11 states decriminalized marijuana possession.

In 1976, President Jimmy Carter was elected on a platform that included decriminalizing cannabis and ending federal penalties for possession. He turned back the tide of anti-cannabis enforcement at the federal level.^[81] He was famously quoted as saying,

Penalties against possession of a drug should not be more damaging to an individual than the use of the drug itself; and where they are they should be changed. Nowhere is this more clear than in the laws against possession of marijuana in private for personal use. . . . Therefore, I support legislation amending Federal law to eliminate all Federal criminal penalties for the possession of up to one ounce of marijuana.^[82]

Despite all the anti-drug rhetoric and escalation of enforcement resources, in the 70s and 80s several buyers’ cooperatives, compassionate cannabis programs, and early medical cannabis laws took hold. New Mexico was the first state to establish medical cannabis laws in 1978, and by 1982 that number had grown to thirty. These laws were not backed by the establishment of licensing and taxation schemes, and under pressure of federal enforcement collapsed until all the programs expired or were repealed.^[83]

In 1984, President Ronald Reagan, signed the Comprehensive Crime Control Act of 1984. It levied penalties toward possession of cannabis, and with the help of Congress through the Sentencing Reform Act, established mandatory minimum sentences procedures for civil asset forfeiture.^[84] In 1982 Nancy Reagan first uttered the words “just say no” while responding to an Oakland schoolgirl who had asked what she should do if offered drugs.^[85]

In 1986, Congress passed the Anti-Drug Abuse Act, creating mandatory minimum prison sentences for specified drug offenses. In 1989, the proportion of Americans who viewed drugs as the number-one issue facing the country was 64 percent, up from just 2–6 percent in 1985.^[86]

The results of these changes in policy and perception were astonishing. In 1980, there were fifty thousand people incarcerated for nonviolent drug offenses. That number would explode to over four hundred thousand by 1997.^[87]

The war on drugs was rapid in its destruction of communities of color. In 1970 there were about 600 per 100,000 people incarcerated in Black communities, sailing to 1,808 in 2000. In Latino communities, the incarceration rate soared from 208 per 100,000 people to 615 per 100,000. In stark contrast, for White people, the rate only jumped from 203 per 100,000 people to 242 per 100,000.^[88]

In 1990 cannabis arrests began to skyrocket, from 300,000 to a high of almost 900,000 in 2008. The war on drugs was a major driving force in the creation of mass incarceration in the US. In 1980 there were approximately a half million Americans behind bars. By the year 2000, that number was over two million.^[89]

By the late 1990s the State of California and Washington, DC, had memorialized medical cannabis into law, and the 2000s saw nonmedical, recognized as adult-use or recreational, regulation and taxation formalized via ballot initiatives.

We will look at the growth of medical and adult-use cannabis in much greater detail in coming chapters. One landmark worth noting is December 2020, when in a historic vote, the United Nations (UN) recognized the medicinal value of cannabis.^[90] This is a major pivot from over sixty years of establishing international law with the purpose of prohibiting the manufacture, sale, and consumption of illicit drugs. The Single Convention on Narcotic Drugs in 1961 had aimed to “combat drug abuse by coordinated international action.”^[91]

The 1988 UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances had included provisions against money laundering and provided for international cooperation for the “extradition of drug traffickers, controlled deliveries and transfer of proceedings.”^[92]

We are certainly in a new era. Cannabis Policy in the Age of Legalization intends to unpack many of the policy issues and changing political landscapes that are generating new markets, regulations, and consumer patterns. More than that, the book is meant to be an exercise in policy thinking, and we will look at the issues with a desire for a deeper understanding by way of the tools  of public policy research.

Benefit-cost analyses, decision trees, study design, qualitative interviews, data collection and analysis, peer review, non-biased research, and policy action, as well as many other staples of the profession, will find their way into this important discussion. As a student of cannabis policy, regardless of your level of experience, the author welcomes you to challenge these ideas and make arguments and discoveries of your own. You needn’t agree with this text or with the ideas of your instructors. Cannabis policy is rife with contradictions, opposing viewpoints, emotional and ethical quandaries. Questioning the words, pre-suppositions, and biases on the page in front of you, always is probably the most important lesson you could take away from the study of cannabis policy.

Current Cannabis Policy

Cannabis is available to adults over the age of 21 without a recommendation in a third of US states, and twice that number of states have legalized medical cannabis. American support for legalization nearly doubled  from 2000 to 2019.^[93]

This support is across generations and spans both political parties, though there are significant gaps. In a 2019 Pew study, 55 percent of Republican respondents said marijuana should be made legal—a far cry from the 78 percent of Democrats who said the same. The same study indicated that both men and women were about two-thirds in favor.

Whites, Blacks, and Hispanics all respond at about two-thirds in favor. The results are consistent across educational levels as well. The only demographic in the study that were not in favor of legalization was the silent generation, who at the time of the survey was between the ages of 74 and 91.^[94]

What Is Legalization of the Plant and Derivatives?

In 2012, Washington and Colorado were first to legalize adult-use cannabis. Since then, 16 states, including population centers like California, Illinois, and New York have followed in their footsteps. A total of 36 states now permit medical use.^[95] Still other states and localities remain in some state of decriminalization only or still have stuck with some version of prohibition.

Public policy is about advancing knowledge in the public interest. Cannabis policy, in states and communities that have legalized, creates the framework within which individuals manufacture, buy, sell, regulate, and tax it. This structure creates a system for open transactions, money flow, regulation, formal legal petition and protection and of greater transparency.

Track-and-trace seed-to-sale platforms, combined with camera, documentation, and GPS requirements; document the whereabouts of the product, how much is spent, and where these activities took place. Packaging and labeling on products now resemble what you would find on any other item in a grocery store or in a nutraceutical shop. Even with this normalization of the industry and regulatory side, municipal and state, licensing has been confusing and slow—even by government standards. This has frustrated the unlicensed operator’s conversion to and the new entrants into the fully licensed and taxed markets. .

The federal government position remains essentially as it has since 1970 when the Nixon administration with the CSA established a unified legal framework to regulate certain drugs that are deemed to pose a risk of abuse and dependence.^[98] Cannabis falls under the schedule I list, substances described as having all the following findings:^[99]

1. The drug or other substance has a high potential for abuse.
2. The drug or other substance has no currently accepted medical use in treatment in the United States.
3. There is a lack of accepted safety for use of the drug or other substance under medical supervision.

Some examples of substances listed in schedule I are heroin, lysergic acid diethylamide (LSD), marijuana (cannabis), peyote, and methylenedioxymethamphetamine (ecstasy).^[100] Schedule II drugs are categorized by the DEA, meaning they have a high potential for abuse and have an accepted medical use for treatment in the United States. Examples are cocaine, methamphetamine, and oxycodone.^[101]

After nearly fifty years of battling both the supply and demand for illicit drugs remain prevalent. In a 2015 survey, about 80 percent of 12th graders reported cannabis as being fairly or very easy to get. Accessibility was much lower for cocaine, crack, heroin, and methamphetamine, with 15 to 30 percent of people saying it would be easy to get.^[102]

Ways to Think about Legalization

There are a wide range of legalization outcomes that states and localities can chose. Very few of these policies have made their way into mainstream legalization. Cannabis does not necessarily need to be made available through the same system of licensing, distribution, and advertisement that alcohol and tobacco do. Despite great improvements in alcohol and tobacco public health outcomes in recent decades they both still remain remarkably destructive. It is still uncertain what the future public health implications of mainstream marketed destigmatized cannabis would be, but there may be some lessons on what not to do from these other intoxicants.

Tobacco kills over four hundred thousand Americans each year and remands millions to years of painful and debilitating illnesses like emphysema, cancer, heart disease, and COPD. Cigarettes do not cause the same social damage that alcohol does. Except for a smoker in withdrawal, the behavioral toxicity is minimal.

Compare that to the behavior of someone impaired from alcohol consumption. Aggression, impaired judgment, and lack of inhibition are hallmarks of heavy alcohol use, which in turn is correlated with domestic violence and bodily harm caused by driving under the influence.^[103] Nationwide more than 10,000 people die each year in traffic accidents when alcohol was a contributing factor. In 2021, over thirteen thousand people died in alcohol-impaired driving traffic deaths — a 14% increase from the year before.^[104]

The 1998 National Institute on Alcohol and Alcoholism’s report “An Analysis of National Data on the Prevalence of Alcohol Involvement in Crime” reported that “two-thirds of victims who suffered violence by an intimate (a current or former spouse, boyfriend, or girlfriend) reported that alcohol had been a factor.” And that “Based on victim reports, on average each year about 183,000 rapes and sexual assaults involve alcohol use by the offender, as do just over 197,000 robberies, about 661,000 aggravated assaults, and nearly 1.7 million simple assaults.”^[105]

Alcohol kills 140,000 Americans from excessive alcohol use alone and impairs millions with conditions ranging from high blood pressure, heart disease, liver disease, and digestive problems. The relatively destructive public health and public safety outcomes allowed or created by existing regulations are proof enough that alternatives for cannabis legalization would be worth exploring. Alcohol is responsible for a quarter of all traffic-related death in the United States. A liter of spirits is a lethal dose.

Policymakers, you would think, have good reason to be concerned about introducing another intoxicant like cannabis into the public market. Not necessarily. Cannabis is not tobacco, nor is it alcohol. You do not get the same behavioral toxicity or increased risk of violence with cannabis as you do with alcohol. But heavy users do have a higher risk of psychosis and paranoia, and these are risk factors for violence.

Some would say we can take comfort in the fact that many states are reporting that prevalence of use had remained flat in states that have legalized. This is not necessarily true. The amount a small subset consumes is increasing quickly.

Between 2006 and 2017 we saw a more than doubling of the number of cannabis users, from 3 to 8 million, who reported using on a daily or near-daily basis (DND). That’s one in five cannabis users, compared to one in fifteen who report to using alcohol daily.^[106] In theory, alcohol users and cannabis users may not be the same population profiles. I know of no studies on the subject, but the current cannabis-using population may have greater representation by consumers that have much of their identity wrapped up in the cannabis culture; like the hobbyist, artisanal, risk-tolerant, hyper-interested individuals compared to your traditional casual alcohol consumer. The demographics of cannabis consumers in ten or fifteen years, with newly arriving cannabis-curious middle Americans may get, for lack of a better term, watered down by less intense consumers who could take it or leave it on any given day.  Cannabis consumer demographics could look more like that of the broad constituency that have had alcohol available in a thousand forms everywhere anytime for centuries in western countries. For now, it is up to state and local policymakers to take evidence-based steps to prevent problem cannabis use. Most concerning is the increase in high frequency use.

“Since 1975, the Monitoring the Future study has annually surveyed substance use behaviors and attitudes among a nationally representative sample of teens. A longitudinal panel study component of MTF conducts follow-up surveys on a subset of these participants to track their drug use through adulthood. Participants self-report their drug use behaviors across three primary time periods – lifetime, past year (12 months), and past month (30 days). The MTF study is conducted by scientists at the University of Michigan’s Institute for Social Research, Ann Arbor, and is funded by NIDA, part of the National Institutes of Health.”^[107]

From the “Marijuana and hallucinogen use among young adults reached all time-high in 2021” report on the NIH National Institute on Drug Abuse site:

Marijuana Use: Past-year, past-month, and daily marijuana use (use on 20 or more occasions in the past 30 days) reached the highest levels ever recorded since these trends were first monitored in 1988. The proportion of young adults who reported past-year marijuana use reached 43% in 2021, a significant increase from 34% five years ago (2016) and 29% 10 years ago (2011).

Marijuana use in the past month was reported by 29 percent of young adults in 2021, compared to 21 percent in 2016 and 17 percent in 2011. Daily marijuana use also significantly increased during these time periods, from 11 percent of young adults in 2021 compared to 8 percent in 2016 and 6 percent in 2011. Results from Office of Cannabis Science & Surveillance’s research^[108] indicate the following:

• Significant increases in past 12-month use over time, from 22 percent to 27 percent
• Growth rates of 39 percent and 15 percent for females & males, respectively
• Stratified for past 12-month cannabis use by age.
  • Highest growth rate in 35-44-year-olds
• Daily/almost daily (DAD) use (5+ days/week) increased from 5% in 2018 to 7% in 2020, then plateaued (all respondents)
  • 20–24 and 25–34-year-olds more likely to use daily/almost daily (DAD)
• Product types used in past 12-months, among consumers (2018-2022)
  • Dried flower use is down from 82% to 65%
  • Edibles are up from 41% to 53%
  • Vape pens are up from 16% to 33%
  • Concentrates (wax, shatter) is down from 19% to 12%
  • Hash/kief is down from 26% to 18%%
  • Beverages are up from 4% to 19%
• Males are more likely to consume dried flower, hash, and concentrates.
• Females are more likely to consume edibles, oils for oral use and topicals.
• Was an increased perceived risk of eating cannabis initially, then declined.
• Was an increased perception of risk for vaping cannabis, then plateaued.
• Significant increase in legal purchasing of cannabis for non-medical purposes.
• Price, safe supply, and quality were top factors influencing sourcing.
• Safe supply and quality decreased over five years.
• Price as factor increased 13% to 30% and proximity to retailer up from 3% to 7%
• Males prioritize price, product quality and potency.
• Females prioritize safe supply and trustworthiness.

Lessons from alcohol and tobacco regulation could be adapted into policies that protect public health. The UCLA Evaluation Report study by researcher Howard Padwa^[109]and his team from 2022 indicates that the following may be helpful tools in the public health response to increasing heavy cannabis use:

1. Requiring health warnings on cannabis products
2. Informing vulnerable groups about the risks of cannabis use
3. Limiting cannabis marketing and product diversification
4. Taking steps to avoid the emergence of profit-driven cannabis markets that are likely to promote use.

Some of this can be addressed through the education, prevention, intervention, and treatment funded by Proposition 64.^[110]Greater increases in frequent use have been among adults, so bringing these services to adults may pay dividends.

If the problem is heavy use, one school of thought would say we should turn to the tried-and-true method of controlling heavy use of intoxicants: taxes. Tobacco sin taxes have proven that increasing taxes is an effective way of reducing consumption. Studies revealed that for every 10 percent increase in cigarette prices, overall consumption fell by 3–5 percent.^[111]Several states are considering THC potency taxes to counter the overuse of stronger cannabis products. This is in alignment with alcohol taxes, which tax by the proof-gallon in most states. Potency taxes also stabilize tax revenue and guard against price drops typical with an ad valorem percentage of retail-based taxes.