Monthly Archives: May 2015

Greedy Lawyers Are Good for the Environment: Controlling the Environmental Effects of Marijuana Cultivation through Private Enforcement

As momentum grows for marijuana legalization, many are worried about the environmental impact of cultivation. Enacting laws to control the manner of marijuana cultivation may protect California’s water and wildlife, but such laws are only effective if they are enforced. The 2014-2015 budget for California earmarked 3.3 million to help prevent destructive marijuana cultivation, (see p. 108-119) but with legalization on the horizon, the market for marijuana could dramatically increase and more funding may be needed. However, the responsibility of combating illegal and destructive cultivation does not have to lie solely with the government. Instead, private individuals can be incentivized to sue those who operate illegal grow sites. Forcing violators to compensate the cost of private enforcement will give a sufficient monetary incentive for private parties, as well as deflect costs and labor away from the government and its agents.

Both the state government and environmental groups are concerned about the environmental damage caused by marijuana cultivation. A study by the California Department of Fish and Wildlife (CDFW) on Humboldt County found that the water demand for cultivation often exceeded stream flow, causing streams to go dry around large scale growing sites. Scott Bauer, an environmental scientist with the CDFW estimates that over 95% of grow sites divert water without an official permit. Furthermore, he points out that growers also clear forest areas to make way for cultivation. In considering these issues, both the CDFW and the Nature Conservancy support an increase in funding for state enforcement to stop and deter harmful cultivation.

While tax revenue from marijuana can be diverted to provide for any increase in the costs of environmental enforcement, groups like the Nature Conservancy are worried that the laws surrounding marijuana legalization will not set aside tax revenue for environmental concerns. Such is the case in Colorado, where there is no tax revenue specifically set aside to manage the environmental hazards of marijuana cultivation. (See pg. 19-29.) Even if marijuana taxes are used to pay for enforcement, the price of marijuana may fall after legalization, to the point where tax revenue is unable to pay for enforcement. This fear of insufficient funding is built upon the idea that public enforcement, rather than private enforcement, is the primary method to carry out state rules and regulations.

Public enforcement is when sanctions against violators are carried out by government agents, either directly or by their consent. This is found in criminal law, where violations of the Penal Code, such as grand theft and murder, are asserted by the police and district attorney. On the other hand, private enforcement is when private persons and organizations are allowed to sanction violators without government initiative. This is often found in tort law where the California Civil Code defines and permits legal actions like negligence and products liability, but it is private parties who bring suit rather than government agents.  Private enforcement would alleviate the issue of government funding, as the cost and labor of enforcement would primarily come from private parties rather the state of California.

While there are environmental tort actions, they are effectively personal injury suits based on exposure to toxic chemicals. These “toxic torts” have been criticized for their lack of effectiveness in reducing environmental harm. Albert C. Lin in his article Beyond Tort: Compensating Victims of Environmental Toxic Injury points out the following faults of environmental tort actions: 1) injury and causation are difficult to prove; 2) environmental harms are often so diffuse that individuals do not have incentive to bring suit; and 3) the aforementioned issues lead to little deterrence, since the risk of liability is low.

Under the Clean Water Act and Clean Air Act, the US government has established provisions that allow for citizen suits based on statutory violations related to water pollutants and air emissions. (33 U.S.C. § 1365; 42 U.S.C. § 7604.) These allow any person to commence a civil action on his own behalf against another who is in violation of a standard or limitation of either act. These citizen suits also require a plaintiff to prove injury and causation, but the sufficiency of proof seems significantly easier to meet compared to toxic torts. (See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 183-85 (2000).) However, since injury and causation are still technically required, the concerns of Mr. Lin are still relevant and there may be risk of underenforcement.

There is another private enforcement option that makes it possible to avoid the issues of injury and causation. Qui tam is a legal concept that allows a private party to sue, despite not being personally harmed by the defendant’s conduct. While citizen suits are brought by persons on their own behalf, qui tam actions are brought by people on the government’s behalf. Essentially, plaintiffs filing a qui tam action are not trying to redress any personal injury, but instead are seeking enforcement of the government’s laws.1 For this reason, qui tam actions bypass the issues of harm and causation.2

Currently, qui tam actions are only allowed in federal “whistleblowing” suits – a common name for actions against federal contractors for defrauding the government.3 For these federal whistleblowing suits, liability is established by statute under 31 U.S.C. section 3729, which defines the actions that would be unlawful. A separate provision in section 3730 allows qui tam actions on behalf of the government.

Controls on marijuana cultivation could be set in a similar way. Statutes could establish legal requirements for cultivation that would encourage best practices, and failing to grow within the requirements would result in liability. For these statutes, a provision for qui tam actions on behalf of the government would also be included.

A plaintiff would only need to show that the defendant had violated a marijuana cultivation statute, making this a far more accessible action than toxic torts or citizen suits, as personal injury and causation would be irrelevant. Allowing qui tam actions would resolve the injury and causation issues, but for there to be adequate enforcement, a private incentive must be created.

Because environmental harm is generally diffuse, halting unlawful cultivation may not be enough incentive by itself, as the cost of litigation may exceed any personal injury. The solution is to create a provision that would allow courts to award the cost of litigation to the prevailing party, to be paid by the opposing party. This is already widely used: provisions for awarding the costs of litigation are available for citizen suits under the Clean Water Act and Clean Air Act, as well as for qui tam actions for federal whistleblower suits.

On top of awarding litigation costs, some monetary incentive must be established to allow plaintiffs to profit from a successful suit. While an award of litigation costs would create a supply of willing lawyers, there also must be an incentive for lay people to hire them and direct their attention to unlawful cultivators.

The federal whistleblower law awards the plaintiff a bounty for a successful suit. (31 U.S.C. § 3730(d).) This bounty consists of a percentage of the monetary damage that the government suffered as a result of the fraud. In the context of marijuana cultivation, a monetary award based on environmental damage would be difficult, as it would bring about the issues of injury and causation. Instead, the statutory requirements for marijuana cultivation could include fines for violators, where the plaintiff would be awarded some percentage. By awarding a portion of the fines to the plaintiff and compensating his attorney, the qui tam action would be adequately incentivized and create a private market for enforcement.

The award of fines and litigation costs can be further modified to encourage efficient and considerate enforcement. For example, the award can be increased or decreased based on the severity of environmental harm, either actual or potential. That way, the more egregious violators are prioritized in the private market. In order to discourage frivolous suits, the award of litigation costs could work similar to the attorney’s fee provision for civil rights actions, where a judge can award attorney’s fees to the prevailing defendant if the suit brought against him was “unreasonable, frivolous, meritless or vexatious.” (Christiansburg Garment Co. v. Equal Employment Opportunity Comm’n, 434 U.S. 412, 421 (1978).)

With the proper statutory framework, a provision for qui tam actions could establish an efficient enforcement method that works around the issues of injury and causation. Along with adequate monetary incentives for attorneys and their clients, it could create a private market of enforcement that would not require significant expenditures by the government. It shows that public enforcement is not the only way to dealing with the environmental problems caused by marijuana cultivation, and private enforcement solutions should not be ignored, but seriously considered for the cash-strapped state of California.

1. Evan Caminker, The Constitutionality of Qui Tam Actions (1989) 99 Yale L.J. 341, 344-45
2. Id.
3. Id. at 342-43

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Green Money: The Basics of Investing in Marijuana

greenleave

It’s not often that an industry with multi-billion dollar growth potential materializes out of thin air. Despite the morality issues, legal risks, and ethical concerns that plague the marijuana industry, investors – big and small – are buzzing about the rise of marijuana. Whether you are an activist, looking for any way to help push the industry forward, or simply have dreams of doubling and tripling your money overnight, here is what you need to know.

Investing in Public Companies

If you are an average person with no in depth marijuana industry insight or business experience, the easiest way for you to get a piece of the marijuana industry is by buying stock. A good place to find marijuana companies that are offering equity to the public is http://marijuanastocks.com/.

The first thing you might notice is that shares in the marijuana industry are not listed on the major exchanges and are instead available over-the-counter (OTC). If you are not familiar with OTC trading (otherwise known as penny stocks), OTC or off-exchange trading is done directly between two parties, without any supervision of an exchange. It is contrasted with exchange trading, which occurs via exchanges. A stock exchange has the benefit of facilitating liquidity, mitigates all credit risk concerning the default of one party in the transaction, provides transparency, and maintains the current market price. In an OTC trade, the price of shares is not necessarily published for the public. There is an inherent danger in this as there is reduced oversight, and therefore increased risk with OTC stocks.

In regard to marijuana stocks, The Financial Industry Regulatory Authority (FINRA) recently warned investors about potential scams associated with marijuana-related stocks. In particular, FINRA warned about the well-known ‘pump-and-dump’ scheme, in which, fraudsters lure investors with aggressive, optimistic — and potentially false and misleading — statements or information designed to create unwarranted demand for shares of a small, thinly traded company with little or no history of financial success (the pump). Once share prices and volumes reach a peak, the con artists behind the scam sell off their shares at a profit, leaving investors with worthless stock (the dump). If you’ve seen the popular movie “The Wolf of Wall Street,” the pump-and-dump scheme is the same method employed by Jordan Belfort and his associates to defraud investors and make millions.

wolfwall

For example, Growlife (PHOT), a large ancillary marijuana company that develops, markets, and deploys horticulture equipment and supplies, had the trading of its shares temporarily suspended by the Securities and Exchange Commission (SEC) in April of 2014. The SEC cited “questions that have been raised about the accuracy and adequacy of information in the marketplace and potentially manipulative transactions” in its shares. The root of Growlife’s problem was that a few unaffiliated investors decided to send fraudulent and misleading ‘blast’ emails through promotional websites and email addresses under their control with the intent of increasing demand for the stock. After several weeks of vigorous promotion, Growlife’s stock price artificially increased from 2.5 cents to 50 cents per share. The shares were then dumped for a profit of $223,000.

growlife

Once the SEC got involved, Growlife fell back down to 2.5 cents a share and now, a year later, is being traded at 2.4 cents a share. Although this occurrence was not completely Growlife’s fault, reduced oversight and regulation of the penny stock market allows for scenarios like this to transpire and are exactly what potential investors in the marijuana market must be wary of.

Investing in Private Companies – Angel Investors

Rarely will you invest thousands (or millions) of dollars into an unknown penny stock and see your money double overnight. If you are looking to make an investment in the marijuana industry with potential for sky-high returns (but also unmeasured risk), you might consider making a private investment.

Sky-high returns are routinely found in one place – heaven – and to get there, a pair of wings, and maybe even a halo, are essential. Enter the angel investor – an individual who provides capital to a business start-up in exchange for convertible debt or ownership equity in a company. Angel investors are usually affluent individuals who buy in to early-stage start-up companies in order to obtain a high return on their investment.

The best angels are experts at spotting emerging markets and utilizing their keen business instinct and knowledge to help young companies find success. If you are interested in this type of investing, a good place to start is a website like AngelList. At AngelList you can sign up, connect with marijuana start-ups, and apply to invest in companies looking for funding.

A more serious angel might consider joining an investor network like The ArcView Group. ArcView is a company that “facilitates the emergence of the legal cannabis industry by connecting investors and visionary entrepreneurs in an effort to meet the expanding and changing needs of responsible cultivators, dispensaries, and customers nationwide.” As a member of ArcView, early stage marijuana companies that are serious about getting funded come to you to pitch their ideas. However, you must be an accredited investor in order to participate, and you can be sure that there are fees associated with becoming a member and making investments. To date, The ArcView Group claims to have funded over 50 companies with over 40 million+ dollars invested.

Venture Capital

When deciding whether to invest in a particular market, a good way to measure the investor safety and security of the industry can be by watching what the big venture capital firms are doing. Similar to angels, Venture Capital (VC) firms also make high-risk high-reward type investments, but usually invest millions (as opposed to thousands) of dollars into earlier stage companies. Venture Capital firms normally have access to a large pool of capital that includes contributions from pension funds, private individuals, and other sources of big money. A key difference between VCs and angels is that VCs normally invest substantial time and money into due diligence (background checks, financial, market, and legal analysis) before they make an investment. When the time finally comes that a reputable VC firm invests in a company, there are usually several compelling justifications underlying why the investment is warranted.

Recently, Founders Fund, an investment firm created by Peter Thiel, joined a Series B round of funding worth $75 million for Privateer Holdings. Privateer, as I discussed in my last post, is a large marijuana-centric private equity fund that is investing millions into large-scale marijuana ventures throughout North America. Founders Fund did not disclose the exact amount of its investment in Privateer, beyond mentioning that their contribution was worth “multi-millions” of dollars.

To date, the investment by Founders Fund is undoubtedly the highest profile investment in the marijuana industry and could be a telltale sign that the time is now to invest in marijuana.

The Payoff

Similar to owning a business in the marijuana industry, finding success at investing in the industry has a lot to do with your own personal tolerance for risk. If you aren’t the risk taking kind, you might stay away from the industry all together and wait until marijuana becomes more nationally accepted. If you really want to play it safe and position yourself for the future of the industry, you might look to big tobacco stocks for safety – one of the most probable industries to expand into marijuana. If you want to test the penny stock market, do your research before you invest and be wary of suspicious stock price movement. If you want to break into the market as an angel investor, learn the business landscape and invest in companies that you truly believe in. Additionally, know that the biggest risk of all is that the federal government could, at any time, decide to pull the plug on the entire marijuana legalization movement. And lastly, remember, the higher the risk, the higher the reward.

Jeff Madrak for Drug Law and Policy – Follow us on Twitter @DrugLawPolicy

Licensing High Technology; Cannabis and Corporations

In a recent and excellent blog post, Jeff Madrak, a colleague of mine, addressed the current growth of “Big Marijuana.” The trick is lots of water and sunlight, but mostly it is careful adherence to the law. Cannabis’s legal status is a figurative hydra; ask a question about protecting children and you find yourself having to answer what harms current prohibition has and the long term effects of that regime; ask about taxing cannabis, and then you’re raising questions about specific tax types and similar industry approaches; and so on. Similarly, for every clever business strategy and solution, for every big picture analysis raised by that post, I found myself wondering about the policies served – if such solutions are “good” in more than a business sense, if society should punish or reward these “ganjapreneurs.”

Tackling that hydra is a task that is literally Herculean. This is cold comfort for business people, because business thrives best when the legal framework is well developed: such a framework reduces uncertainty, which reduces risk, and lower risk means greater long term return on investment. I want to address what I found to be a surprising result and a happy coincidence of law: namely the interaction of licensing intellectual property and the legal fiction of the corporate form.

An industry built on cannabis cannot operate on an interstate market without violating federal law and policy. Note the Cole Memo priority of “[p]reventing the diversion of marijuana from states where it is legal under state law in some form to other states” is facially violated even if marijuana is legal in those other states. Interstate commerce is the prerogative of the federal government, so Big Marijuana is restricted to operating on a state by state basis. However, the intangible nature of intellectual property and the economic convenience of the corporate form can provide an avenue between states that is already being explored by some.

The corporate form. It already sounds like a flimsy pretense, a phrase someone might casually drop as a parenthetical at a cocktail party and be met by a collective eye rolling of all within earshot. These days, the idea of the corporate identity is not only much more prevalent in the social dialogue but it is also more akin to an incantation. It is some sort of legal witchcraft, seeming to afford businesses protections traditionally reserved for actual people. I certainly have a degree of initial discomfort with corporate personhood.

Which isn’t to say there are not benefits to allocating personhood to a corporation. Probably the best justification for identifying a corporation as a legal individual is the allocation of liability. For one thing, investors are protected from personal liability, which promotes risk taking and innovation. Additionally, anyone harmed by the activities of a corporation can name this identity as a defendant in a court of law. In fact, a “person” can sue another “person” so long as they have standing. Standing is basically when one person has an injury that another person caused and the courts can give a remedy to, like Apple v. Samsung.

Legal personhood could also be applied to resolving unusual problems, such as an endangered animal being granted personhood via statute, allowing others to sue “someone” on behalf of that animal if that “someone” poses a threat to them or their habitat. While it has been indicated as possible for congress to grant such standing (an extraordinary step, indeed), courts have rejected standing for cetaceans, and declined to address the standing of sea turtles and birds. Not to digress too far into the realm of the Lorax, what is pertinent here is that our legal system defines “person” in a precise and artificial way to enforce certain rights and responsibilities.

Corporate persons generally have residency where they are incorporated. This is another convenience because courts are able to discern what laws apply to that corporation, and corporations are able to determine which state gets their taxes. Cannabis’ current legal hodgepodge makes this particular simplification incredibly useful. A business can very specifically choose a single state and act within those borders in both a literal and transparently legal sense. This distinction not only allows businesses to choose their laws, it also allows businesses to limit the federal illegality of their endeavors.

The California Artisan Cannabis initiative provides that “[a] person who is not a California resident, or not incorporated in California, shall not be qualified for a [cannabis] license.” (emphasis added). So the legal form, in this specific case, allows the legal cannabis market to thrive while limiting the breaking of federal laws, and promotes state self-governance. Finally, it keeps all of the profits and commerce contained within state limits, thus minimizing the effect of state legalization on neighboring states.

This raises the issue of licensing agreements between corporations in different states. Do such agreements subvert the policies and priorities of the individual states and the federal government, or do they, like the corporate form, actually work to preserve what few clear lines exist in the current legal schema? It is most likely that licensing agreements do neither of those things, but they do allow businesses to continue to flourish and to set up strategically for any potential federal-level changes in the legality of cannabis.

Intellectual property comes in various flavors, but is generally understood to refer to the protection of a particular expression of an idea. Intellectual property law is also often under the jurisdiction of the federal government, which, given the apparent contradictions between federal and state law, can lead to some interesting legal dilemmas. Licensing, however, affords private parties simple and interesting solutions to these problems.

Intellectual property is intangible. When you license someone to use it, you transfer legal rights, not an actual object. Normally a sale between a business in one state and a business in another state would be interstate commerce. Does a license to use a particular expression of an idea qualify as a transfer between state lines? Generally, no.

Without getting too silly, intangible properties, like debt, have no real location and so they are not physically transferred from one place to another. This legal technicality is important because the federal government only has jurisdiction over interstate commerce. In U.S. v. Lopez a federal statute barring guns from public schools was deemed unconstitutional and later had to be rewritten to include only those guns that have “moved in or that otherwise affect[] interstate or foreign commerce.”

Often, licensing will have territorial restrictions. With the current legal classification of cannabis, this is not only desirable and probably legally necessary for business, it also serves the voters’ preferences in determining the legality of cannabis for their state. Common intellectual property licensing practices come with various pros and cons.

What is interesting to this discussion is the availability of arbitration and non-assertion clauses, and the antitrust considerations raised by the latter. Arbitration agreements are a way to provide legally binding resolutions to any disputes that arise. They are wonderful because they avoid the public costs of a court, the individual costs of an attorney, and because they are not part of the court system they can be much more efficient, quick, and accessible to the poor. Of course, the flipside is that there are no fairness guarantees, appealing a decision is difficult, one party often has much more bargaining power and influence in the choice of arbiter (you’re probably bound to one with your credit card, your cell phone, your car, and so on), among other concerns. The primary focus of these concerns relates to labor agreements, or the protection of unsuspecting consumers.

I assume these business licenses are conducted by corporations that are legally savvy and cooperative, so many of those concerns are not present. Which is to say, arbitration agreements would largely function to save taxpayer money by keeping inter-business disputes out of the courts. An additional benefit of keeping disputes out of the courts is that courts would not have to weigh in on the divisive political debate over the legality of cannabis, arguably outside the purview of the court since strategy on how to enforce federal law is up to the executive branch.

Similarly a non-assertion agreement is a contract to not sue over certain property right infringements (often as part of a settlement in an infringement claim). This serves much of the previously mentioned arbitration benefits by keeping such controversies out of court but raises different concerns. Patents, specifically, grant a temporary monopoly on an invention and the dangers of monopolies have long been recognized. A non-assertion agreement can lead to a small group of businesses acting as an oligarchy by contract. Further, such an agreement potentially protects invalid patents from being challenged by competitors – certainly not a win for society since we prefer the full use of ideas in the public domain.

In conclusion, it appears that the legal technicalities of how corporations exist as entities and the intangible nature of intellectual property actually serves to avoid many of the legal problems surrounding cannabis.   While my initial impression was that corporations could use legal maneuvers to essentially be an interstate cannabis operation, the actuality is that these legal hoops need to be jumped through and actually function as further restrictions on interstate commerce for Big Cannabis.

Additionally it would be wrong to condemn a business for working within the existing legal framework. Furthermore, if they were trying to abuse that framework, courts are equipped to see through manipulations of the corporate form. Through these legal fictions, society is served by confining cannabis commerce to those states that wish to allow it without violating federal law and also potentially without placing unreasonable burdens on the judicial system.

Cannabis Land Use Regulation In the Warm California Sun: Santa Cruz!

Known for its beaches and beach culture, its boardwalk, and all things organic, Santa Cruz County is also a rich example of medical cannabis land use provisions and changes. In addition to its close proximity to San Jose, its similarity in provisions and increased restrictions provide some valuable lessons that can be applied locally. Santa Cruz finds itself struggling with issues of land use on two major fronts: in regulating dispensaries, and, most recently, in the use of its land for cultivation.

On March 9th, 2010, Santa Cruz enacted the ordinance that regulates the use of land by medical cannabis dispensaries within the city limits. Still used today, this ordinance uses regulations that are restrictive at times and relatively permissive at others. As with any other land use ordinance, the first aspect that must be addressed are the zones in which businesses can operate. Section 24.12.1300.1 for example, allows for dispensaries to be located in C-C (Community Commercial), C-T (Thoroughfare Commercial), and I-G (General Industrial) upon receiving a special use permit. This places medical dispensaries in the same category as other businesses like medical or dental offices, plant nurseries and greenhouses, and eating or drinking establishments.

Within these general zoning restrictions, the city then describes more particularized land use regulations. While the state sets the standard distance for medical cannabis dispensaries from places like residences at 1000 feet, Santa Cruz is much more relaxed. It only requires a dispensary demonstrate that it is not at “an intensity of use that is incompatible with the nearby residential use” in the event the dispensary is located within fifty feet of a residence. Unfortunately, the provision does not objectively define “intensity”, or what would be too intense for local residents. The provision also sensibly requires a demonstration of adequate security to insure the safety of the surrounding residences. Also more relaxed than the state recommended guidelines (yet sensible) is requiring the distance from sensitive areas like schools and rehab centers to be six hundred feet instead of one thousand feet. While these are a few provisions that stand out in Santa Cruz’s ordinance, it continues with a standard list of provisions about things like signage and loitering. Interestingly enough, a permit system governs the dispensaries that are to follow this long list of provisions. As of 2010 in this ordinance, the city stated that they would only grant two permits. By the time 2013 to the present comes around,

San Jose is not the only municipality in the South Bay that has recently made some changes to their local land use ordinance. Santa Cruz has also recently adopted a new land use ordinance, chapter 7.126, which they enacted to amend their original local ordinance, chapter 7.124. The ordinance itself recognizes that “the county’s unique geographic and climatic conditions, which includes dense forested areas receiving substantial precipitation, are favorable to cannabis cultivation.” So why is it that Santa Cruz, like the city of San Jose, is choosing to tighten their regulations? Is it because increased regulation is an improvement in itself? Or is there some optimal level of regulation that they hope to achieve? If so, where does San Jose find itself on this spectrum with its new ordinance? To answer these questions, let’s take a look at Santa Cruz’s ordinance.

Santa Cruz made its first amendment to the 2010 medical cannabis land use ordinance in December of 2013 by enacting local ordinance chapter 7.124. The county derived its power to enact this chapter in the same way other municipalities were able to (and by following my series of posts, we can see that San Jose is no exception). As I explained in my prior post, on May 6th, 2013, the California Supreme Court decided a landmark case in the area of local regulation. City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. (hereafter referred to as “Inland Empire”). The decision by the California Supreme Court interpreted Article XI, Section 7 of the California Constitution as saying that the rights afforded to Californians under proposition 215 and SB 420 do not pre-empt local regulatory measures. Article XI, Section 7 of the California Constitution provides local municipalities the policing power to use land as they see fit to maintain public health, safety, and welfare. To achieve these goals, the Inland Empire decision granted local municipalities the right to enact their own regulations up to, and including, an outright ban on medical marijuana within their jurisdiction.

With the Inland Empire decision, Santa Cruz passed chapter 7.124. Chapter 7.124 passed in reaction to the tight regulations set out in the 2010 which bred more transgression than compliance. This ordinance identified “demands placed on law enforcement and administrative resources; neighborhood disruption; the exposure of children to medical marijuana; drug sales to minors and adults; fraud in issuing, obtaining or using medical marijuana recommendations; robberies, burglaries, assaults, drug trafficking and other violent crimes” as unintended social ills that Santa Cruz was experiencing after the enactment of the 2010 regulation. To solve these problems, Santa Cruz seems to have loosened some restrictions by emphasizing the rational approach seen in the 2010 ordinance which looked at intensity of use when dispensaries were within fifty feet of residences. While standing firm on their two permit limit and even setting out a ban on medical cannabis dispensaries, 7.124 set out a number of additional provisions, which, if followed, will allow a dispensary to operate with immunity from the ban. While many of its tenets remain intact, this chapter was only in use for three months before the city felt the need to pass new amendments as chapter 7.126.

Chapter 7.126 was enacted on February 25th, 2014. It did make some minor changes like changing a dispensary’s potential of hours of operations from being able to open at six a.m. instead of seven a.m., and close at nine p.m. instead of seven p.m. It also enacted the increasingly popular provision of requiring patients to be a minimum of twenty-one years old instead of the previous age limit of eighteen. The most significant change, however, was in the way the city rezoned land use in regards to cultivation. Grouping cultivators as a medical cannabis business with the dispensaries (as opposed to some agricultural enterprise), cannabis cultivation businesses were rezoned to “SU (Special Use), TP (Timber Production), CA (Commercial Agriculture), A (Agriculture), AP (Agriculture Preserve) or RA (Residential Agriculture)”. The city chose these zones as ones that define the urban area. While this can be seen as reasonably reducing social ills like exposure to children, neighborhood disruption, and the enforcement that goes along with these ills, the provision also sets out some very difficult provisions to follow once the cultivators have relocated to the city’s outskirts. The grows can be no more than ninety nine plants, but must be located on a parcel no less than one acre, and in residential agriculture zones, no less than five acres.  There are various canopy size requirements depending on the acreage of the growing parcel. Additionally, cultivation businesses must then adhere to Title 16, Environmental and Resource Protection, which then sets out even more regulations. My hope in mentioning this sample of the long list of provisions is that it impresses upon the reader that this original drafting of 7.126 represents a certain degree of regulation. This degree, however, proved to be too great a strain on the legal market.

On March 24th of 2015, Santa Cruz revisited and revised chapter 7.126. Tipping their hat to the list of provisions from their previous version of 7.126, the county admits, “the creation of rules contains an inherent assumption that people will follow them. Our experience has been to the contrary when it comes to cannabis cultivation.” The county goes on to cite the known existence of 84 grows at the time the previous chapter was passed, and how that number rose to 139 at the time of this revision. It also cites specific provisions like those requiring certification of cannabis cultivation businesses and how “virtually no one is following those rules, and it has led to questions concerning their import and effectiveness.” Additionally, they notice that having rezoned cultivation businesses to non-urban areas has resulted in environmental damage. Given the proven impracticality of allowing cannabis cultivation businesses in non-urban zones, and zoning restrictions prohibiting their operation in urban areas, the city enacted a ban on the cultivation of cannabis other than personal grows associated with a qualified patient.

The degree to which Santa Cruz was regulating was ineffective. What this county, and others enacting similar to greater degrees of regulation, should consider is the implications of a ban. Creating regulations is like drawing a circle and determining who falls within it, and who is operating outside of it. Santa Cruz increased its regulations on a highly active market by passing chapter 7.124. Naturally, increased regulations will make the circle smaller, creating more who fall outside of it. When people transgress the regulations, it requires the county’s enforcement power. In an attempt to clean up those outside the circle, Santa Cruz responded by passing chapter 7.126, increasing regulations, and making the circle even smaller. With these increased regulations, Santa Cruz found even more operating outside the chapter’s limits, and an increased need to use funds for enforcement. Finding this degree of transgression unacceptable, Santa Cruz responded with a ban. A ban, arguably, is not only a further increase in regulation, it is an absolute. Thus, if the increased regulations led to increased transgression which increased the need for enforcement at a level the county finds unacceptable, then implementing a ban is the wrong direction for the county. Following the trend of their recent history of increased regulation, a ban could create the need for levels of enforcement beyond those which they have already deemed unacceptable. Perhaps the best option for Santa Cruz—and other similarly situated counties—would be to swing in the opposite direction and create looser regulations that businesses could realistically follow without creating attendant social harms.

But What Does it All Mean Man?: It’s High Time for a Solution, and We’ve Been Staring at it the Whole Time.

I’ve spent the better part of a law school semester explaining how much of a disaster virtually everything related to marijuana reform is shaping up to be. We didn’t have clear terms to discuss the issues. We have lawsuits, state borders, and widespread confusion. Wading through it all has given me quite a few headaches. Based on my last posts, it would seem that the only option for a logical system would be to enact comprehensive federal reform of recreational marijuana.

But what if there’s an easier option? One that might clear this whole mess up? One that might actually happen? I think there is: instead of throwing Band-Aid upon Band-Aid on the problem, let’s fix the system we have now. The best way to do this is to have universal medical marijuana with broad criteria at the state level, coupled with doing everything possible to ensure CARERS passes at the federal level. Remember that CARERS changes federal law to mirror state medical regulations. If a state has a medical scheme, everything covered under that scheme is federally legal.

Other authors on this blog have briefly discussed medical marijuana in California. A recap: it’s broad – almost anyone can get a card, and it’s largely unregulated – the state has no agency that deals with marijuana. California’s system is so broad that it is a stretch to call it medical – a whole industry of doctors has sprouted up to get people cards. As I’ve discussed previously, CARERS would encourage states to shift towards a system like California’s. While there may be some problems for other states if CARERS passes, California is in a prime position to capitalize on it.

In the town of North Bonneville, WA, there is a special kind of dispensary called Cannabis Corner. It’s run by the city. Of all the schemes happening across the United States, this one falls most squarely into the realm of State Participation. State Participation is also the one framework that explicitly invokes federal preemption. Cannabis Corner presents an insurmountable issue – without federal action legalizing recreational marijuana, it’s almost assured that Cannabis Corner will get shut down.

But federal recreational legalization is unlikely. Instead, we have CARERS. While it’s not likely that CARERS will pass, it’s certainly possible that it might.

If instead of rolling its medical marijuana into its recreational, Washington did the opposite, and ended up with an entirely medical scheme that nearly anyone could get a prescription to, what might happen?   If CARERS also passes and Cannabis Corner was a medical establishment, Cannabis Corner would become fully legal on a state and federal level.

This simple act would take one of the most, if not the most, pre-empted regulatory schemes and make it legal, clear, and the state prerogative to enact. There is still the issue of different medical schemes resulting in random and unexpected violations for federal law when crossing a border. This could be a big issue on the East Coast, where you can cross 5 states in a manner of hours. But this post is about California’s future, and that problem has some of the fewest implications in California due to its vast size.

California shouldn’t follow Washington state’s footsteps, folding medical marijuana into recreational. Instead, we should do the opposite. Many say this is a somewhat immoral system because many patients have no real medical need. However, this overbroad nature of this system is also a strength – it legally functions as a medical scheme as far as CARERS is concerned, but is broad enough to function as a recreational system for its users. Understanding why this is a good, and possibly the best, course of action requires looking at the issues implicated in both California’s current medical marijuana scheme and those implicated in a recreational scheme. Once we know what the issues are, we can then explore how CARERS and California medical marijuana would fix them.

The other authors of this blog provide a great sample for what these issues are. First, and frequently foremost: What about the Children. While my colleague Clare McKendry has written extensively on this (and I suggest you read her work), for our purposes two things are important: keeping marijuana out of children’s hands, and not ruining their lives if we do find it in their hands. While access is changed in a medical vs. recreational market, the ability to ruin children’s lives by minor possession is a likely constant in both.

Another big issue implicated by any marijuana reform is the environment. Studies by the California Department of Fish and Wildlife show that the way we are growing marijuana in this quasi-legal medical market is deeply flawed and is destroying the wilderness of Northern California. However, the way marijuana is grown now is not inherently tied to medical marijuana. Instead it’s tied to the crop being federally illegal and needing to be hidden.

These aren’t the only issues – there are a whole host of issues implicated by the fact that marijuana is federally illegal. These include the inability to patent, lack of banking for marijuana industries, and the inability to do federal research. Additionally, there is the issue of flexibility. Right now marijuana law is not static. Instead, it’s ambiguous and subject to significant change on both state and federal level. Any successful reform scheme must pay heed of this and attempt to be future proof.

This isn’t an all-encompassing list. Rather, these are some of the more significant issues relating to marijuana reform. My goal here is to examine some key issues that can be used to demonstrate the positive that could be gained by preserving and improving California’s medical marijuana system, instead of shifting to a recreational system.

With that in mind, let’s take a look at how an improved medical market in California can address all these issues, and what steps would actually be needed to “fix” medical marijuana in California. At the end of this we will be able to see that not only is the medical system a possible way forward, but that fixing it wouldn’t take much time, political capital, or money.

Starting with the kids, as I mentioned, there are two implications: access and destroying kids lives. Let’s talk about access. I have yet to hear a single person say anything to the effect of “Kids should have easy access to marijuana.” I’m not a betting person, but I would put money on that remaining true. Whatever happens, we need to ensure that kids can’t get marijuana easily.

In terms of kids’ lives being ruined, medical vs. recreational doesn’t change the equation much. It is possible that with changing the laws for either, penalties for youth will be reduced. That’s probably a good idea, but its independent from a medical vs. recreational debate.

Compare the access in a recreational vs. medical market. In a recreational market, buyers would go to the store and likely show their ID to be able to buy marijuana. It would be the same as going to 7-11 to buy beer or cigarettes. Like going to 7-11 for beer, kids will use fake IDs, pay someone else to buy for them, etc. While the staff at the local liquor store might be suspect, there is only so much they can do to prevent kids from getting their product. Enforcing these rules also requires outside money – police conducting liquor store stings isn’t cheap.

In a medical market, someone could still give a kid some of his or her marijuana, but if you need a verifiable prescription with your name on it to purchase marijuana at a dispensary, then you logically decrease the possibility of children being able to sneak a purchase. Enforcement here is easier as well – much of the regulation is baked into the process. Doctors must give prescriptions, and in the cost of the payment for the doctor’s visit is the price needed to cover the independent verification system. Furthermore, we already have this system.

Similarly, the environment is an issue that is constant across both recreational and medical markets. If we were growing recreational marijuana in the same way we grow medical marijuana, it would be just as unsustainable and harmful to the environment. One theory about why marijuana is grown in the mountains is that its quasi-legal nature requires it to be grown far from the prying eyes of government. This theory makes sense at a logical level, and while there isn’t good data to support (or deny) it, I think it is safe to say marijuana’s federal illegality is a significant factor in determining where it’s grown. This is equivalent to people putting stills up in the Appalachian mountains during alcohol prohibition.

So what changes with medical? Medical has a chance to become federally legal. Support for CARERS is growing, with even the president signing on. When you remove the illegality, marijuana is a crop – just like corn or almonds. When it is fully legal, a state can take steps to ensure that it is grown properly without worrying about the federal government stepping in and undoing all their work.

For example, the Mendocino County Sheriff had a program to tag legal grows. Growers who were following all the rules would get zip ties with serial numbers on each of their plants, demonstrating that the plant was legal. However, the DEA decided the sheriff couldn’t do that, and raided many of the zip tied farms. In a federally legal medical market, the state would have the freedom to enact programs like this. A medical market lets the state treat marijuana as any other crop, drag it out of the mountains and ensure that it isn’t killing salmon, dogs, and even bears.

Recreational legal marijuana, on the other hand, would still have federal issues. Even post-CARERS, the DEA could still raid fields, and prevent the state from acting to ensure that best agricultural practices are followed. This would require the state to figure out how to regulate the growing of a federally illegal substance. On the other hand, in a federally legal medical market, marijuana grows can be folded into the existing agriculture regulatory market. Just like almonds.

While the environment and the children are two of the biggest issues, there are a plethora of things that are problematic now, but would become nonissues in a better federally legal medical market.

Colorado is having issues ensuring safe banking for its recreational marijuana market. Marijuana industry players are keeping massive sums of cash on hand, and it’s creating a target for robberies. The challenge to patent strains is a huge issue. Because federal research is illegal under the CSA, figuring out how to do anything with evidence-based practices next to impossible.

However, remember that CARERS says that any act legal in the state under its medical marijuana scheme is federally legal in that state. While we don’t know how it would play out, it seems as if this would solve all three of these issues. Patents of medical strains would be just like any other medicine. Research could be conducted with federal grants. Again, we don’t know what limits would be imposed on a state by courts, but it seems like CARERS with our current scheme would put California in a cleaner, easier to regulate system than Colorado.

But that’s not the best part. What if California decides it wants to change something about its medical marijuana market? CARERS lets California do that in a way where it doesn’t have to worry about the preemption implications. Because CARERS is concerned with the text of the state law, if California changes its state law, the federal law effectively changes to match it. This would allow California the freedom to regulate as it sees fit.

Contrast this to Colorado. If Colorado decides it wants to change its recreational law, even under CARERS, it will continue to violate federal law. That means the DEA could come in at any moment and try and shut the whole thing down. However, with this risk comes reward. Colorado is getting a significant amount of tax from its recreational marijuana. In a fully medical market, California will not get the same amount of tax revenue. But, that tax revenue might be a false hope: Colorado’s marijuana price has fallen, with experts expecting the price to continue to fall further. Without that revenue, the biggest boom from a recreational market disappears, but all the risk remains.

In conclusion, the federal winds are blowing in a way that suggests federal medical marijuana might become legal. Furthermore, there is no indication that recreational marijuana will become federally legal.   California is in a prime position to do next to nothing, and reap all the benefits of a federal act allowing states to legalize medical marijuana. Unlike Colorado, California wouldn’t need to change its laws – it could instantly treat marijuana as any other prescription and crop. So for the kids, the salmon, and the bears, we should think about if recreational is really the best way to go. It looks like a broad medical program might be a more sustainable, cleaner, and easier to regulate system.

What to Expect (and Not Expect) from the THC Breathalyzer

The promise of a marijuana breathalyzer has been widely mentioned in the news, with articles suggesting that this could be the reliable roadside test that officers need. Even proponents of marijuana legalization have expressed enthusiasm over such a product, explaining that a fair test for intoxication would make people less opposed to legalizing marijuana. Typing “THC breathalyzer” into Google results in the auto-complete of “THC breathalyzer stock.” All the players of marijuana legalization seem to be interested: the proponents, the watchdogs, and the investors. The promise of an accurate, non-invasive test for marijuana intoxication is attractive, but a THC breathalyzer may not be the product that delivers.

The product in the spotlight is the THC Breathalyzer by Cannabix Technologies, Inc. Cannabix’s description of the THC Breathalyzer states that its device “would be used to provide detection of THC at the roadside to identify drivers intoxicated by the use of marijuana.” The THC Breathalyzer is still in development, but data on THC breath testing can predict how Cannabix’s device will function. Such data has suggested that the THC Breathalyzer would be able to discover drivers who have recently smoked. However, it would still not be able to discern when someone has used enough to be considered an unsafe driver.

An experiment conducted in 2013 tested the breath of regular and occasional marijuana smokers to determine the length of time that THC could be detected. Taking into account both types of users, the study found that THC is only detectable between thirty minutes and two hours after smoking. (Regular smokers were those who smoked four times or more in a week, and occasional smokers were those who smoked less than two times a week.)

These results suggest that the THC Breathalyzer could limit positive results to those who have recently smoked. This offers an alternative to blood testing, where residual THC can still show up days after smoking. However, using marijuana and driving is only a problem when there is a dangerous level of impairment. Having a few sips of wine before driving away from a restaurant is generally not a safety issue. Likewise, a person can smoke a small amount of marijuana before driving and it may not have a significant effect on their driving skills.

The testing device used in the study went beyond a simple positive or negative indication, and could determine a subject’s exact breath THC concentration. While not much is known about Cannabix’s THC Breathalyzer, it may have the same ability. By being able to measure a subject’s THC breath concentration, the breathalyzer has the potential to allow police to separate dangerously intoxicated drivers from those who only have a negligible amount of THC in their system.

However, in order for this to occur, there must be evidence of the relationship between THC breath concentrations and accident risk. At this point, there isn’t any, and the largest US study on THC and crash risk found that there is no increased crash risk for drivers testing positive for THC. Without establishing a correlation between THC breath concentration and accident risk, a THC breath test lacks the ability to independently determine who is a dangerous driver.

Even if we assume that drivers with a certain THC breath concentration are dangerous, this can result in the unfair targeting of regular smokers. Despite abstaining for at least sixteen to twenty hours before testing and smoking the same amount of marijuana, the breath test experiment found that regular smokers had double the amount of THC in their breath compared to occasional smokers. Because of the lengthy period of abstinence, there could not have been any lingering intoxication from prior use, and the increase in THC levels for regular users does not reflect a greater level of intoxication.

Furthermore, while the occasional smokers had no THC found in their breath after an hour, it took two hours for the regular smokers to show no signs of THC in their breath. Essentially, regular smokers had twice the amount of THC in their breath, and it took twice the amount of time for the THC to dissipate. Since the dosage was the same between the occasional and regular smokers, it is likely the level of intoxication was at least similar. However, without knowing the dosage and time of use, sole reliance on the breath test would lead one to believe that the regular users smoked a larger amount, smoked more recently, and were more intoxicated as a result. Over-reliance on breath tests would unfairly target smokers for their amount of use, even when it may have no connection to their level of intoxication while driving. This is especially a concern for patients who have a legitimate medical need for consistent and regular marijuana use.

Even moving on from the shortcomings of a breath test, Cannabix’s product will face a major problem in being as useful and widely adopted as an alcohol breathalyzer. Every state has a statutory .08% blood alcohol concentration limit (BAC). As long as a breathalyzer gives the result of .08% or higher, the police are free to arrest drivers, and the district attorney’s office will be able to prove that they broke the law of driving with a BAC .08% or above. Herein lies the main problem with comparing the THC Breathalyzer to alcohol breathalyzers: there are no laws limiting a certain level of THC breath concentration while driving. So far, states have only used blood THC concentration as their metric. Each state must enact a THC driving limit based on breath concentration, or modify their current law to include THC breath concentration. Otherwise, the THC Breathalyzer will only be a tool for discovering drivers who have recently smoked – nothing more.

This does not mean Cannabix’s product will be useless; it just wont be the next alcohol breathalyzer. The THC Breathalyzer could be used as a companion to other forms of investigation. Police can use it to see if a driver has recently smoked marijuana, and then commence with other tests and observations to figure out the extent of the driver’s intoxication. It will be one of many tools to discover stoned drivers, but with some unique benefits. It will be less invasive than a blood test, easier to use, and it will still have the objectiveness that comes with a chemical test. Furthermore, the short detection window makes it a better candidate for determining recent use than a blood test.

Although Cannabix’s THC Breathalyzer will have a role to play in the changing landscape of marijuana use and enforcement, it will fail to match the utility of alcohol breathalyzers. THC breath tests cannot determine a subject’s accident risk and do not have the same statutory support. If Cannabix and their investors are relying on the THC Breathalyzer to take on the same role as alcohol breathalyzers, they may be quickly disillusioned. On top of positioning and selling their product, they’ll need to deal with legislatures in every state, a task that most would consider a nightmare.

But What Does it All Mean Man?: It’s not Easy Being Non-green – What can a State do to Keep the Green Tide From Its Neighbors at Bay?

Last time, we talked about how Nebraska and Oklahoma (or the NO states) were suing the State of Colorado in an effort to have the federal government help them keep the green tide from Colorado at bay. We also talked about CARERS, which, if Colorado switched to an expansive medical market, would make the NO lawsuit moot.

This time, we will engage in a thought experiment.  For this post, assume that CARERS has passed and medical marijuana is federally legal in any state with any medical-regulation scheme.  Remember, CARERS is only concerned with medical marijuana, not recreational.  What remedies would the NO states have left?  Is this what the future border crossing on I-76 between Colorado and Nebraska would look like? Would a US-Mexico style crossing between states even be legal?

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San Yisidro Port of Entry, Photo Credit Phil Konstantin, Wikipedia

To help, lets consider some fantastical states. We will start with a state based on the subject of this blog – New California.  New California, like California, has very broad medical regulations where almost anyone can get a medical marijuana card.  Recreational use of marijuana is not legal in New California.

Next we have New Georgia. Like New California, New Georgia does not have legal recreational marijuana.  However, it has a very limited legal medical marijuana regulatory scheme.  In New Georgia, only patients with serious medical conditions like Parkinson’s and cancer can get access to CBD oils.

New Colorado has both medicinal and recreational marijuana.  Its medical scheme is nowhere near as broad as New California’s, but many people with a variety of medical conditions can still get a medical marijuana card.  Everyone in New Colorado can get recreational marijuana.

New Washington decided to skip out on medical marijuana and legalized only recreational marijuana. In its desire to quickly join the green wave sweeping the states, New Washington decided to totally decriminalize any production, sale, or possession of marijuana. It has no regulations of any kind.

Finally, we have New Nebraska, a state opposed to any marijuana reform.  New Nebraska wants to keep all marijuana illegal and is rather annoyed about people bringing marijuana from the other four states across its borders.

These five states are located in such a way that each state shares a land border with New California. To further simplify things, each state has reciprocity scheme where if something is legal in two states, both states honor the other state’s authorization.  For example, if a New Georgia medical marijuana client went to New California, they would be able to purchase medical marijuana and vice-versa.

Given the way CARERS is currently structured, the federal government will treat any state with a medical marijuana regulation as having some degree of exemption from federal prohibition (when it comes to medical marijuana).   For our hypothetical, these states are New California, New Georgia, and New Colorado.  In each of these states, CARERS makes many marijuana products federally legal.  In my last article, I touched briefly on the strange situation this might create in a state like Georgia.  Now we are going to go more in-depth and look at the different relationships created amongst these neighboring states.

There are four key relationships: Medically Regulated to Medically Regulated, Medically Regulated to Medically & Recreationally Regulated, Medically Regulated to Recreationally Regulated, and Medically Regulated to Prohibited.

Lets start with Medically Regulated to Medically Regulated.  Here, we will look exclusively at New California and New Georgia.   Remember that New Georgia is limited to CBD Oil, while New California will give a card to practically anyone who wants one.  CARERS states “(b) Compliance With State Law.—Notwithstanding any other provision of law, the provisions of this title relating to marihuana shall not apply to any person acting in compliance with State law relating to the production, possession, distribution, dispensation, administration, laboratory testing, or delivery of medical marihuana.”

Both New California and New Georgia will receive some benefit from this, but to varying degrees.  In New California, where anything goes, pretty much everything will be federally legal.  This results in a clear rule without many places for hiccups in enforcement – the feds will have no authority.  New Georgia will have marijuana legalized to the extent that the state has, which creates major enforcement issues. While possession for use might be simple, consider production.  If New Georgia has a complex regulatory framework for the process of CBD oil production, simply violating one scintilla of state law will result in violating the CARERS exemption. This could result in federal criminal charges for acts that might be mere license violations at the state level.

Let’s turn to the border between New California and New Georgia.  CARERS suggests that so long as you follow state rules, you are exempt from federal marijuana law.  This leads to the question – can you then take marijuana that is legal in both states across the state border?  The answer seems to be yes.  At no point during the drive from New California to New Georgia does the marijuana become illegal.

Except it’s not that simple.  While CBD oils would be federally legal to transport across the border, a cloned plant wouldn’t be. Will state and federal agencies at the border have to police for plants, but not oil?  That sounds like a mess.

Unfortunately, New California to New Georgia isn’t the messiest border.  That title belongs to New California and New Colorado, or Medically Regulated to Medically & Recreationally Regulated.  In addition to having all the complexities regarding the nuanced differences in their medical schemes, New Colorado also has legalized recreational marijuana.  The exact same product bought for medical purposes in New California could be federally illegal if bought for recreational purposes in New Colorado.

This would be impossible to police.  Even in a world without the Fourth Amendment – one where police searched each car on a state border—it would be impossible for the police to distinguish what was bought for a recreational purpose and what was bought for a medical purpose.  In fact, a New California resident could buy their medical marijuana of choice in New California, drive it to New Colorado and have it be totally legal.  However, when coming back, if they purchased the exact same product at a recreational store in New Colorado, the New California resident would violate federal law.

I want to take a moment to appreciate the implications of marijuana being federally legal in a state with an international border.  This may be even more complex. This is a fascinating topic, is governed by treaties, and warrants further research and discussion.  We won’t be doing that in this post.

Our last two borders are the simplest.  Despite appearing on opposite spectrums of liberalization of marijuana policy, CARERS treats New Washington the same as New Nebraska.  As neither state has medical regulation, CARERS doesn’t change much.  Any New California medical marijuana will become federally illegal the second it crosses into New Nebraska or New Washington.  New Washington recreational marijuana would always be illegal, and so would be federally illegal in both states.

Finally, let’s consider our prohibitionist holdout state, New Nebraska.  While New California and New Colorado might decide not to enforce the laws broken at their borders by the nuanced differences in their laws, New Nebraska wants none of the green tide spilling into its border.  So what can New Nebraska do to keep it at bay?

There are some legal principles at work here: state borders are different than international borders, and Article 1 § 8 of the U.S. Constitution states that commerce between states is a federal matter. A state can’t decide to outlaw a widely used type of truck on its roads in an effort discourage to truckers from driving through the state. A state’s power to police its border is not limitless – if the state’s actions are found to be too large of a burden on interstate commerce, they can be overturned.

Let’s consider what possible options New Nebraska might have to keep illegal marijuana from flowing across their border with New California.  A drastic (and illegal) solution would be to close the border.  Another solution would be to create a regulatory scheme for medical marijuana, but if that were a viable option, New Nebraska would not be concerned with the green tide.

Realistic options involve some kind of increased border presence.  This will come at great cost to the state, but there is some precedent for it.  California has established a series of border stations to keep agricultural pests and diseases out of the state. This is what California’s system currently looks like:

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Current California State Run Border Protection Stations. CA Dept. Food & Ag.

Just as California has border stations along its highway connections with other states, New Nebraska could create stations like this at its border.

This plan raises two questions: Who would pay for these stations and does New Nebraska have any authority to search for marijuana at its border?

At first, it’s almost certain that New Nebraska would have to pay for increased border security.   However, they could ask the federal government for reimbursement, or sue New California or New Colorado for money damages equal to the cost of increased enforcement.  There is no precedent for this, because there is no precedent for something becoming federally illegal simply by crossing a border.  This is distinct from something like a radar detector – which is a legal article of interstate commerce, but illegal in some states.  At no point does a radar detector become federally illegal by crossing a border.

The closest analogue is environmental lawsuits between states.  Back in 1906, Missouri sued Illinois for polluting tributaries of the Mississippi River and contaminating its drinking water. The court noted that congress had not prohibited Illinois’s actions – making the distinction between New California’s 100% legal scheme and New Washington’s 100% illegal scheme nonexistent.  While this lawsuit was dismissed because Missouri was dumping similar pollutants into the river as Illinois, it outlines a possible format that a state could seek to apply for the cost of setting up increased enforcement to keep the green tide at bay. A plaintiff would need to show that the harm was stemming from the defendant and the increased damage to the plaintiff state was caused by the defendant’s action.

But would these enforcement stations have any legal ground to search everyone’s cars?  Surely California’s border stations can ask you if you are transporting produce into the state, but asking is very different than searching. The Fourth Amendment prohibits unreasonable searches and seizures without warrant or probable cause. In Indianapolis v. Edmonds, the US Supreme Court found that it violated the Fourth Amendment for the City of Indianapolis to conduct drug interdiction checkpoints.  The bottom line seems to be: police can’t search without probable cause.

However, there is a legal principle that our international borders are different in regard to the Fourth Amendment.  In effect, the Fourth Amendment is weaker in San Diego than in Denver. Could this principle apply to a state border? The fact is, we don’t know.

There’s another wrinkle in this: the odor of marijuana is frequently used as probable cause for a search. This might change in on the New California side of the border, but not on the New Nebraska side.  New Nebraska could probably pull over everyone committing any vehicle code violation at the border and take a deep breath as they approached the driver’s side window, but not much more.  It’s hard to imagine that this would be effective.

Where does that leave us? Marijuana reform is currently a mess.  CARERS would do little to alleviate that, but would substantially change the landscape.  A state in a post-CARERS world might have no effective challenge to stop the green tide emanating from its neighboring states.  Certainty, this is not sustainable – either all the states will have to accept marijuana within their borders, or something different will have to be done federally.  However, even if all the states enact a medical reform, unless each reform is identical, marijuana will still drift into grey areas of legality, especially on state borders. Next time, we will talk about how that might work, and look specifically at the future of medical marijuana in California.