With the 2016 election less than a year away, signature season is starting in full force for states that have ballot initiatives. Campaigns are underway in several states to get sufficient signatures on initiatives to qualify them for the November 2016 election.
Massachusetts, like a few other states, is looking at competing initiatives. In one corner, you have the cumbersomely named Campaign to Regulate Marijuana Like Alcohol, sponsored by the Marijuana Policy Project. The CMRLA is pushing another regulatory beast that creates multiple varieties of licenses, including a marijuana retail license, marijuana product manufacturing license, and a marijuana cultivation license. The initiative creates a new state regulatory agency (the Cannabis Control Commission) that would run licensing and enforcement. On the consumer level, individuals would be allowed to purchase up to one ounce of marijuana and cultivate up to six plants, with a ten ounce possession maximum in the home. Anyone who has reviewed the cannabis regulatory measures in Washington, Colorado, Oregon, Alaska, or California will see a lot of the same beats. In the other corner, there is the underdog, Bay State Repeal. Bay State Repeal’s proposed initiative doesn’t hit the same beats we consistently see in other states. Instead, it simply legalizes possession and cultivation, creates some new taxes, and says that local municipalities need to regulate marijuana businesses in a way no more restrictive than their regulations of comparable businesses. Bay State Repeal’s initiative doesn’t create a new agency or give substantial new rule-making authority to any existing state agencies. It is certainly the more libertarian initiative.
The Boston Globe editorial board took a look at the two initiatives, and it is advocating for the Bay State Repeal version. If that version passes it would be a tremendous upset. The Marijuana Policy Project is much larger and much better funded than Bay State Repeal, and its regulation-heavy initiatives have done well in other states. One of the draws of Marijuana Policy Project type initiatives is that they focus on really tight cannabis regulations. For people that aren’t otherwise compelled to vote for legalization, the idea of a marijuana regime with high application fees, high taxes, and substantial regulations can be attractive. In Washington in 2012, a lot of the marketing for legalization focused on individuals who did not like marijuana but saw that prohibition just wasn’t working. Bay State Repeal’s angle is different. Its primary argument seems to be that marijuana is fine, so let’s treat it like green beans not alcohol.
The Bay State Repeal side does have some attraction. Our cannabis regulatory and government affairs lawyers have dealt with enough government agencies and licensing schemes in different states to understand just how excruciating it can be to do business in a highly-regulated environment. There are huge costs and significant opportunities for rent-seeking behavior. Middle-men abound, and the people who make the most money seem to be those who figure out the best ways to exploit regulatory loopholes, as opposed to those best at competing on things like price and quality.
That said, we cannot forget that marijuana is still federally illegal, and about the only thing that keeps DEA agents from crashing the state legal marijuana party right now is the August 2013 Cole Memo. The Cole Memo stated in no uncertain terms that DOJ officials would not interfere in states with regulatory systems sufficiently “robust” (both by the letter of the law and in practice) to prevent violations of federal enforcement priorities. Does Bay State Repeal’s initiative have sufficient language to keep the federal government at bay? We do not have a clear answer to that question because no state has yet to pass relatively hands-off legalization. And, by the time Massachusetts passes its new laws, we’ll have new leadership at the DOJ, so the fate of the Cole Memo itself is in question.
We tend not to advocate one way or another on these issues. Marijuana business lawyers like us get more work when the regulatory burden is heavier. That said, we would be fascinated to see how implementation would go with a simpler legalization framework and such legalization would be beneficial for most of our clients. There are clearly a bunch of blank spaces in Bay State Repeal’s initiative that state and local authorities would need to fill in, but at the end of day, it offers legalization without the fear inherent in the regulated structures we see in other states. And the first state that regulates in that way and shows that it works will officially become the market leader in legalization.