Burgeoning business in states with legal sales sparks momentum for reform

Just two years ago, pot lobbyist Michael Collins was a pariah on Capitol Hill.

Marijuana reform was too much of a risk.

Lawmakers wouldn’t meet with him.

Not anymore.

“I’ve got offices reaching out to me,” said Collins, the deputy director of national affairs at the Drug Policy Alliance, a nonprofit group that supports the legalization of marijuana. “It’s definitely a big change.”

Marijuana-related legislation was on a fast track to nowhere until 2014. That was the year Republicans and Democrats alike approved a measure that kept federal authorities from interfering in states that allowed marijuana use for medical purposes.

Since then, both houses of Congress have seen a flood of similar proposals.

Lobbyists, policy experts and lawmakers who spoke to Roll Call said the trajectory is clear: Congress is leaning toward decriminalizing marijuana at the federal level — and it’s going to happen soon.

That could happen as early as the next Congress, to some time within the next 10 years.

To be sure, there are still many skeptics and stalwart opponents to the idea.

Kevin Sabet, a drug policy adviser in three presidential administrations, including Obama’s, said reform advocates have worked for decades to create the sense that legalization is inevitable.

“They have said it so many times that some of them probably believe it,” he said. “I don’t think that it’s the case at all.”

Sabet is the co-founder of Smart Approaches to Marijuana, an organization that compiles arguments against legalization. He said several high-profile Democrats also have reservations about legalization, including Florida Rep. Debbie Wasserman Schultz and California Sen. Dianne Feinstein.

But members of Congress today face a different political reality. More states are likely to legalize marijuana soon. That will make it harder for other states to keep it out.

Much like the gay marriage movement, the momentum to legalize marijuana is driven by pressure at the state level. Four states and the District of Columbia have legalized the sale of recreational marijuana by a popular vote, and an additional 25 allow medical marijuana or have decriminalized possession, according to the Tax Foundation, a nonprofit tax policy research organization.

That puts the number of states without some form of legalization in the minority.

This fall, nine states are voting on marijuana-related ballot measures, more than ever before. Five of those nine measures, including one in the political bellwether of California, would legalize full recreational use.

The new state laws are a direct challenge to the federal stance on the drug.

Federal law bans the medical use of marijuana and most research. The sale, possession and cultivation of marijuana is a federal crime.

“This is the year that the issue crests,” said Oregon Democratic Rep Earl Blumenauer, a longtime advocate for legalization. “When several or more of these pass, the floodgates will open.”

Pushing pot

Already, legal marijuana has created a burgeoning industry with its accompanying lobbyists and millions of dollars in tax revenue, in spite of confusing and often contradictory state and federal regulations.

For now, marijuana growing and distribution is mostly a mom-and-pop operation. But larger businesses with political clout are ever more likely to get in on the action.

The Takoma Wellness Center, a tightly regulated medical dispensary, is one of a handful of marijuana-related businesses operating in Washington, D.C. It’s among thousands of similar businesses across the nation that are resolutely pushing pot into the American mainstream.

This distinctly herbal-smelling office suite is a few blocks from a soon-to-open Starbucks coffee shop. Clients who have been referred by a doctor and approved by the District’s department of health can browse dozens of strains of locally grown buds with names like Merry N’Berry, a pun on the name of D.C. Mayor Marion Barry, who, as a councilmember, led the decriminalization movement in the District.

Owners Stephanie and Jeffrey Kahn run the business with their son and daughter-in-law. Stephanie is a nurse and former hospital administrator. Jeffrey is a rabbi.

They pointedly follow federal regulations that apply to patient rights, even though the product they sell is technically against federal law.

Banks shy away from businesses like theirs. Unable to get a bank account or accept credit cards, transactions are cash-only. That, Jeffrey Kahn said, makes them feel like “drug traffickers.”

Voters have approved recreational use in the District, but Congress has used appropriations bills to effectively ban general sales. So some competitors have tried providing it as a gift with an unrelated purchase, or in exchange for a “donation.”

“I’m sure it’s the total antithesis of what Congress wanted to do,” Stephanie Kahn said.

Five to six times a day, the Kahns must turn away people from other states.

“They call us and often write tear-provoking emails about their stories and all we can say is we are not permitted by law to serve anyone other than D.C. residents with department of health-issued medical marijuana calls — and that breaks my heart,” Stephanie Kahn said.

A legal disconnect

The disconnect between local and federal regulations is also felt keenly by their clients.

Meredith Bower, 39, was an occasional recreational user until a car accident 10 years ago that almost killed her. Her recovery left her with titanium throughout her body, an amputated lower leg and the chronic sensation that her missing foot is being crushed.

Marijuana helps more than narcotics and has allowed her to cut her opioid use in half, she said. But it is not covered by insurance and costs exponentially more.

Without medical research to guide her, she has relied on trial and error to determine what dosages and strains keep her pain at bay but still allow her to function.

“This is really like the Wild, Wild West right now, and we’re all fumbling through it,” she said.

Businesses like the Kahns’ have provided a raft of anecdotes for lawmakers and reform advocates.

Americans spent $5.7 billion on legal medical and recreational marijuana in 2015, up from $4.6 billion the previous year, according to Arcview Market Research. The group projected sales to top $22 billion by 2020.

Tax revenues in states with legal adult use have exceeded estimates. In Colorado, for example, revenues have grown every year since retail sales began in 2014. They are on track to exceed $140 million in 2016 — more than double original estimates of $70 million, according to the Tax Foundation.

Studies have found that painkiller use and abuse has fallen in states with legalized pot.

And polls consistently show that a majority of Americans support legalization: 58 percent said so in a 2015 Gallup poll, up from 36 percent in 2005.

Dana Rohrabacher, a Republican House member from California and a legalization advocate, said such statistics are bound to increase the number of conservatives in Congress voting for reform measures.

Others have been convinced by arguments that Congress should not interfere with democratically approved measures in the states, he and other observers said.

“More Republicans are beginning to understand that, at least on medical marijuana, they are totally out of sync with their constituents,” Rohrabacher said.

Rep. Andy Harris is often described in the media as one of Congress’s biggest foes of legalized pot. But this summer, the Maryland Republican co-sponsored a bill, with Rohrabacher and California Democrat Sam Farr, to facilitate medical research on the drug.

Harris said that he remains a staunch opponent of legalization but believes that conducting more research is “a common-sense approach.”

He said he believes opposition in Congress and the states will increase if research shows that marijuana is not the most effective treatment for most medical conditions.

“We need to take a hard look at whether it’s a good idea to legalize marijuana,” he said. “I’ve taken a look at it, and I’ve realized it’s not worth the risk.”

Sabet, the Obama administration drug policy consultant, said proponents like to focus on the medical argument because that’s an easier sell. In reality, he said, businesses — and the well-financed lobbyists that represent them — are looking for a bigger market that includes recreational users.

“This isn’t about medical marijuana,” he said.  “It’s about money.”

A sea change

Lawmakers in favor of marijuana reform have been proposing bills to that effect since 1995, but never with the expectation that they would accomplish anything beyond forcing their colleagues to put their stance on the controversial issue on the record, Rohrabacher and other members said. Most never made it out of committee.

The medical marijuana legislation first proposed in 2007 by Rohrabacher and former New York Democratic Rep. Maurice D. Hinchey was no different.

That first year, it failed by a vote of 165-262. It failed again the next five years, but every year the number of lawmakers who voted yes inched up.

By 2014, Farr had signed on as a co-sponsor. He was sitting on the House floor, watching the vote tally, when he realized that the medical marijuana amendment to the appropriations bill would pass, he said.

“At first I thought it was all a mistake,” he said. “Did people realize what they were voting on? Was it some other bill?”

The amendment passed 219-189. It remained in the omnibus bill that passed both houses of Congress and was signed into law by President Obama.

The Drug Enforcement Administration ignored the amendment and continued to prosecute patients and providers in California until a federal court ordered it to stop.

The amendment, which must be renewed annually, has passed with increasing support from both Houses every year since then.

It has also been joined by dozens of bills and resolutions addressing other aspects of federal prohibition. Twenty-seven pieces of legislation reference the drug so far this term. That’s the highest number by far for any Congress, going back at least to 1997.

“I think Congress is ready to take more steps,” Farr said. “I think it could break in the next session.”

In the Senate, Republican Rand Paul of Kentucky and Democrats Cory Booker of New Jersey and Kirsten Gillibrand of New York proposed the first marijuana reform bill in 2015. The bill, called the CARERS (Compassionate Access, Research Expansion, and Respect States) Act, now has a bipartisan group of 19 co-sponsors.

That bill would increase federal protections for medical marijuana users in states where it is legal, remove many of the restrictions on medical research on the drug, allow VA doctors to recommend marijuana to patients in states where it is legal, and reform federal banking laws to allow banks to do business with pot providers.

Sen. Charles E. Grassley of Iowa, who has likened marijuana to heroin, has not allowed the bill to have a hearing in the Judiciary Committee.

Both houses of Congress this spring approved amendments to a spending bill that would have allowed Veterans Health Administration doctors to authorize medical marijuana use for patients. The amendment was stripped from the bill in conference.

“We’re now at a stage where there are almost too many pieces of legislation out there,” said Collins, the lobbyist from the Drug Policy Alliance.

John Hudak, who studies marijuana policy at the Brookings Institution, cautioned that recent Congresses have struggled to pass even routine legislation. But he noted that support for legislative changes has grown dramatically, particularly for changes in tax and banking restrictions that have hampered businesses in states where it is legal.

“If you talk to lobbyists, members of Congress, they’ll tell you those issues are the easy sells,” he said. “If legal businesses are going to continue, they have to be able to function properly. Those are two issues we’ll see the first real movement on in the coming years.”

Source: Roll Call