Regulating Marijuana Legalization in California: Policy Guide

Introduction: Shifting Views on Marijuana Legalization

In the shifting views about the health effects of marijuana, there is a general trend for states to relax the rules around this substance across the nation. Some states have already lifted the ban against marijuana for recreational purposes. The state of California set the pace in this discussion when it passed what is now popularly known as Proposition 215, allowing possession of small amounts of the substance for medical use (Murphy and Carnevale 2016). Other states have followed suit. The most notable among these are the District of Columbia and six other states, representing about 6% of the national population. They have all allowed possession of marijuana — not for medical use only, but for recreational purposes.

There are several contributing factors to this phenomenon. One of the most significant is that the much-touted war on drugs across the nation has largely failed. The impact of enforcement, widely viewed as disproportionate against low-income communities, and a broader criminal justice reform movement are also influencing factors. Moreover, public opinion has shifted tremendously over the years. Figures show that 58% of the American population currently supports legalization of marijuana — a figure that stood at only 20% a couple of decades ago. California has seen supporters of the legalization agenda increase by six percentage points over the past five years (Baldassare, Bonner, and Lopes 2015).

The changing trends are likely to influence more than twelve other states to seek public opinion on the legalization of the drug. California is likely to present a proposal similar to the Regulate and Tax Adult Use of Marijuana Act on its ballot. If those states succeed in legalizing marijuana, over 60% of the population will be living in areas where the substance is legally consumed. The central challenge that this shift presents is how to effectively legalize an industry that was illegal under state law and remains illegal under federal law.

Jurisdictions that have legalized marijuana should embark on policies that promote public health and that monitor and control production. The argument of this paper is that community leaders and planners must institute effective controls for the production and distribution of marijuana and its products, and must monitor taxation carefully, if they wish to realize the intended policy objectives.

Background and Context

California became the first state in the U.S. to legalize marijuana in 1996 through Proposition 215. The state now has large formal groups of growers, processors, and sellers of the product. The District of Columbia and 23 other states have since followed suit. The recent legalizations in Washington and Colorado were widely seen as experiments whose results others could analyze to determine appropriate courses of action. They were also viewed as efforts pushed by interested organizations, particularly the national movement for marijuana legalization (Murphy and Carnevale 2016). As noted earlier, if all states intending to legalize marijuana do so, over 60% of the population will live in areas where marijuana is legally available. These intended actions can no longer be viewed as mere experiments — there is a clear need to initiate regulatory mechanisms to manage the change.

The federal government faces a dilemma about whether to resist or respect the aspirations of people in the affected states (Hollenhorst 2014). California is already considering whether to subject marijuana to regulatory handling, including voting on the question of recreational use legalization.

California enacted three bills collectively known as the Medical Marijuana Regulation and Safety Act (MMRSA). These laws introduced a new regulatory framework for medical marijuana operating under the Department of Consumer Affairs. The legislation established procedures for tracking the distribution of medical marijuana and involved other departments in testing and regulating the industry. However, these state-level changes are not reflected at the federal level (Baldassare et al. 2015). Marijuana remains illegal under federal law and is categorized as a Schedule I drug with no recognized medical benefits (National Drug Intelligence Center 2011). The Controlled Substances Act prohibits all marijuana-related business activity, including possession, production, and distribution.

Despite this federal prohibition remaining in place, the Obama administration took steps to scale back prosecution of marijuana offenders at the federal level when those individuals had complied with state requirements. The federal government appeared to be gradually acknowledging the intentions of states that had moved to legalize and regulate marijuana. It is possible that future administrations will further shift enforcement policy while leaving the underlying question of federal law unresolved.

Implications of Policy Change

The legalization of marijuana is undoubtedly a major policy change that will affect rates of use and public health. There is little prior research from which to draw lessons (Caulkins et al. 2012). Although studies document the health and social effects of illegal drug use, there is no clear evidence of how a legal market would affect those outcomes. California is entering a period of uncertainty with this policy change, and ongoing monitoring will be essential to report on both intended and unintended consequences and to ensure appropriate adjustments. The shift in marijuana's legal status transcends legality alone — it is a systemic transformation that extends beyond the criminal justice system. Careful planning and proactive monitoring will be required to safeguard the public interest.

A feedback policy that compares expectations with outcomes is highly desirable (Simeone et al. 2005). Such feedback mechanisms should incorporate scientific and detailed evaluation processes. Systems must also be evaluated and descriptive reports generated. Currently, very little information exists regarding recreational marijuana use. A troubling fact is that no process evaluation mechanisms have been instituted in any of the states where the legal change has taken effect. Washington is the only state that included both process and outcome evaluations in its enabling legislation. The state recently released a preliminary report outlining plans for outcome evaluation (Darnell 2015). These efforts reflect sound governance and suggest that the marijuana regulatory experiment can generate important information for the benefit of both residents and policymakers elsewhere (Wallach 2015).

California should follow Washington's lead. The adoption of a governance framework as part of MMRSA was a positive step, but more is needed. There remains a need to collect comprehensive data and make it available for analysis. One key decision is whether to establish parallel legal statutes for medical and recreational marijuana use or to create a unified system. Separation would risk making the medical marijuana category attractive to recreational users seeking lower prices — a problem already visible in Colorado, which separates medical from recreational sales and where over 40% of tax revenue comes from the medical category (Murphy and Carnevale 2016). The implication is clear: there are individuals exploiting the medical channel for recreational purposes, because medical marijuana costs less.

For California, a unitary regulatory system for both medical and recreational marijuana is recommended. Authorities should evaluate whether limited exceptions for medical marijuana use are warranted. A unified system is less complex and easier to enforce (Alexander and Wiggins 2014). There are few examples in which California regulates products under separate legal regimes based on intended use. A unitary system would support a transparent, restrictive approach that can be modified as evidence accumulates.

References

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Baldassare, Mark, Dean Bonner, and Lunna Lopes. 2015. Californians' Attitudes Toward Marijuana Legalization (April). Public Policy Institute of California.

Caulkins, Jonathan, Angela Hawken, Beau Kilmer, and Mark Kleiman. 2012. Marijuana Legalization: What Everyone Needs to Know. Oxford University Press.

Caulkins, Jonathan, Angela Hawken, Beau Kilmer, and Mark Kleiman. 2015. The Marijuana Legalization Debate: Insights from Vermont. RAND.

Darnell, A. J. 2015. I-502 Evaluation Plan and Preliminary Report on Implementation. Washington State Institute for Public Policy.

Drug Enforcement Administration. 2014. 2014 National Drug Threat Assessment Summary. Available from https://www.dea.gov/resource-center/dir-ndta-unclass.pdf

Fischer, B., V. Jeffries, W. Hall, R. Room, E. Goldner, and J. Rehm. 2011. "Lower Risk Cannabis Use Guidelines: A Narrative Review of Evidence and Recommendations." Canadian Journal of Public Health 102: 324–327.

Fischer, B., S. Kuganesan, and R. Room. 2014. "Medical Marijuana Programs: Implications for Cannabis Control Policy — Observations from Canada." International Journal of Drug Policy, in press.

Gravelle, Jane, and Sean Lowry. 2014. Federal Proposal to Tax Marijuana: An Economic Analysis. Congressional Research Service (November 13).

Hollenhorst, Kali F. 2014. "Planning Effectively for Legalized Recreational Marijuana." PhD diss., [University].

Murphy, Patrick, and John Carnevale. 2016. Regulating Marijuana in California. Public Policy Institute of California.

National Drug Intelligence Center. 2011. The Economic Impact of Illicit Drug Use on American Society. Retrieved from https://www.justice.gov/archive/ndic/pubs44/44731/44731p.pdf

Oglesby, Pat. 2015. "Supplemental Thoughts About Revenue from Marijuana in Vermont" (January 16). Available at SSRN: https://ssrn.com/abstract=2551029

Simeone, Ronald, John Carnevale, and Annie Millar. 2005. "A Systems Approach to Performance-Based Management: The National Drug Control Strategy." Public Administration Review 65 (2): 191–202.

Wallach, Philip. 2014. Washington's Marijuana Legalization Grows Knowledge, Not Just Pot: A Report on the State's Strategy to Assess Reform. The Brookings Institution.