Tag Archives: drug reform

What We Don’t Know About the Black Market Workforce and Why it Matters for Successful Regulation of Recreational Cannabis

The danger of making assumptions about who makes up the black market labor force is illuminated by Keith Humphreys’s recent article – “The stereotype of the college-educated pot smoker is wrong.” In the article, Humphreys cites Professor Jonathan Caulkins, who is quoted as saying “Most of the marijuana market is more Wal-Mart than Whole Foods.” Yes, we all know that stereotypes are not often truly representative of the people they are trying to describe. But what was most interesting about the article (aside from the irony that Caulkins used a stereotype about where the poor shop in order to explain a stereotype we have) was the explanation for the college grad-stoner stereotype – that human beings “have a tendency to overestimate the representativeness of their own experience.” Meaning that the people who feed the discussion in our media and political culture (journalists, policy analysts, politicians, etc.) “portray and discuss the world they know, which in fact is a small slice of the U.S. marijuana scene.” Why shouldn’t we make assumptions about who makes up the black market workforce? Because successful regulation of the recreational marijuana market depends on turning the black market green, which requires transitioning the people within the black market to the legitimate market. Admitting there is a lot we don’t know about the black market workforce and their ability to transition to the state-regulated market is the first step in the process of determining what regulations best serve our purported state interests.

First off, it is important to establish that I am defining successful regulation as promoting public safety and preventing diversion of profits to illicit enterprises. Not only are these high priorities for California, these are the priorities of enforcement of the CSA outlined by the Cole Memo. Addressing these priorities serves the interest of the state and is the best option for avoiding the scrutiny of the federal government. From preventing distribution to minors to preventing growing marijuana on public lands, all of these goals are served by transitioning the black market workforce to the state-regulated market. While street level dealers don’t check identification, regulated marijuana storefronts will be required to. Legitimate business will pay taxes and keep financial records, preventing money from marijuana sales from going to criminal enterprises. Passing state regulations that present significant economic barriers and barriers related to criminal records will bar more individuals from participating in the legal market. Will those barred from operating in the legal market continue to operate their businesses illegally?

It is more likely we will have better information on this issue in California after state regulation. There is no good information on the black market workforce because it is not something that people discuss openly. The black market is characterized as such because it takes place in the shadows. It is meant to be a mystery to those on the outside looking in. Recreational marijuana is still illegal in much of the United States, and those on the supply side are unlikely to self-incriminate. If marijuana is legalized in California it is possible there will be more information about the black market because individuals won’t be silent for fear of prosecution. The information that we currently don’t know that would be valuable to this discussion is who it is that makes up the black market workforce and what their skills are, both within and outside of the marijuana industry.

For the purposes of this blog series, I am concerned with individuals currently working with illegal marijuana as their primary vocation, meaning people who do this as their main source of income (which does not necessarily equate to full-time). I am not focusing on the individuals who sell, trim, or grow as supplemental income for two reasons. First, they are less likely to have as large an impact on black market supply, therefore there are less worries about diversion if they continue to operate in the black market. Second, they already have an additional source of income. If they continue to work in the black market because they are barred from working in the state-regulated market, it is not because they are dependent on illegal work as their sole source of income. People who are willing to break the law for additional income should not be the focus of incorporation into the legal market because successful regulation will only work with individuals who follow the rules. There is something inherently different about those who break the law because it is the only way they can make a living or because they are politically or morally opposed to cannabis prohibition and those who break the law for some extra cash.

Now, within the group of people working in the marijuana industry as their primary source of income, there are different specializations, skillsets, and levels of skill. There are those on the production side, ranging from growers with years of experience to those who trim for a season, and then there are those on the distribution side. Within these groups it’s possible to discuss likelihoods and possibilities for transition to a state-regulated market in general terms. But the odds of an individual continuing to work in the black market if barred from entering the legal market depends on their skillset and reasons for working in the black market to begin with.

For those who are doing less-skilled work full-time, whether seasonally or steadily, any barriers may make a legitimate marijuana job not worth pursuing. Maybe even an application process would not be worth the trouble. The full-time grower and cannabis activist is more likely to jump through the hoops of the application process than someone just trying to make a dollar because they are personally invested in the concept of state regulation. This distinction is important when considering how barriers to entry into the recreational market will affect differently situated people in distinct ways. What will skilled growers with criminal records do if they can’t get a job in the newly legal recreational market? What if there are insufficient incentives to transition to the legal market? Odds are, like in Colorado, some growers will continue to operate in the black market.

While there is a lot of discussion about those growing marijuana, what about those selling it? This is the most important group when considering successful regulation as qualified above; dealers are making a lot of the money and are the access point to marijuana for users. It would seem that this group would be the most important to consider incorporating into the legitimate market. But unlike growing marijuana, where the necessary skills don’t change drastically moving from the illicit to legitimate markets, operating a storefront requires additional skillsets that the average dealer probably does not possess, i.e. managing employees and bookkeeping. Will there be a place for dealers or will we be leaving out those who may be the most important to include? If excluded, will they continue to operate in the black market?

The job market outside of recreational marijuana could affect an individual’s propensity to continue operating in the black market. Barriers to non-marijuana-related employment might leave some stranded. Work experience, education, and criminal records all affect an individual’s ability to find a job. When a person has been selling or growing marijuana illegally for a living, connections outside that industry might be hard to come by. Additionally, filling out the work experience section of a job application could be tough. Individuals with criminal records are the most likely to be barred from entering any state-regulated market in California, and they are also less likely to find gainful employment elsewhere. We know that communities of color are more likely to shut out by barriers based on criminal records because of disparate enforcement, creating a heightened inability to transition from the black market. We already know criminal records limit job opportunities outside of the marijuana business. It appears as though the one thing we can know for certain is that the communities most injured by the failed war on drugs could continue to be left behind in the new paradigm of state regulation.

Ultimately, every individual in the black market has a unique circumstance. Considering there is so much that is unknown about the makeup of the black market, it is best to operate under the assumption that there are certain ripples and effects of legalization that we can’t plan for. We don’t know if someone is going to continue growing and selling marijuana illegally, turn to selling harder drugs, or go into a different industry, and we don’t know what their motivations will be. If we want successful regulation, we need to turn the black market to the legal market, and frankly we don’t know enough about the existing black market to make sweeping statements about what people will do if they can’t work within the state-regulated system. This is why it is important to build a market that will be as inclusive as possible, without compromising the integrity of state regulation.

While the market needs to be inclusive enough to bring the black market workforce into the fold, there also needs to be the financial incentive for people to want to work in the state-regulated market. In my next post, I will explore the economic barriers to entry to existing marijuana markets with a focus on capital requirements and finding the balance between supply and demand. Specifically, I will be comparing the recreational markets in Colorado and Washington and notable medical marijuana structures in other states, looking ahead at what would be best for California.

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Gambling with Tribal Marijuana

For this post I will look at the application of state criminal jurisdiction to non-tribal members while on tribal lands; first at the jurisdictional framework in general, and then at a brief history of federal Indian gaming regulations to better understand the legal limitations of tribal marijuana cultivation. In my last post I discussed Federal Public Law 280 (PL-280) and the delegation of criminal jurisdiction over tribes and their members to state agencies and courts. State criminal jurisdiction does not apply to tribal lands where the alleged crime is regulated—and not strictly prohibited—by states. This raises the question: Does state criminal jurisdiction under PL-280 extend to the activities of non-members of the tribe while on tribal lands? For example, if a tribe opens a “cannabar” for non-tribe members to purchase and imbibe marijuana while on tribal lands, would the actions of those non-members be within the criminal jurisdiction of California, the U.S., or the tribe? The answer to this question depends on whom we ask. The current U.S. Supreme Court case law and lower court statutory interpretations find that federal criminal jurisdiction (or state criminal jurisdiction in PL-280 states) over non-members extends to their activities on tribal lands. Which, continuing from the earlier example, non-members would be subject to federal or state criminal jurisdiction for acts committed on tribal land, and could be prosecuted for violating the state or federal law by purchasing marijuana for recreational use at a cannabar located on tribal lands. But a group of constitutional theorists argues that these activities are beyond the reach of state, and perhaps even federal, criminal jurisdiction in PL-280 states. What does this jurisdictional quagmire mean for tribes seeking to sell marijuana to non-tribal members for use on tribal lands? Is “casino”-style marijuana consumption and sale possible?

Does PL-280 extend state criminal jurisdiction to activities of non-members while on tribal lands? In Oliphant the U.S. Supreme Court ruled that tribal criminal jurisdiction does not apply to non-members, noting that “[n]on-Indians are not subject to the jurisdiction of Indian courts and cannot be tried in Indian courts on trespass charges. Further, there are no Federal laws which can be invoked against trespassers.”  Mark Oliphant was a non-tribe member residing on the Suquamish reservation in Port Madison, Washington. During the tribe’s annual Chief Seattle Days celebration, Oliphant was arrested by tribal police and charged with assaulting a tribal officer and resisting arrest. He was arraigned before a tribal court, and after bailing out; he filed for a writ of habeas corpus in Ninth Circuit relying on the claim that the Suquamish court did not have criminal jurisdiction over non-members. The Ninth Circuit found in favor of the Suquamish, and Oliphant appealed to the Supreme Court. The Court found that tribal sovereignty is not strictly geographical, and thus the tribal court’s criminal jurisdiction does not automatically extend over non-members while they are present on tribal lands. Rather, non-members are subject to the federal (or in PL-280 states, the state) statute that would apply if the crime had been committed outside of tribal boundaries. The Court did not question the tribe’s power to arrest, and in fact found that the tribal agencies must turn over and “not to shelter or conceal offenders against the laws of the United States, but to deliver them up to the authorities for trial.” It also noted that the basis for this policy was to provide protection for tribal members “from the violences [sic] of the lawless part of our frontier inhabitants,” or to put it another way, to protect the American Indians from non-members entering tribal territory and committing what would be considered crimes by the federal government had it occurred on non-tribal soil. Oliphant further elucidated that tribes have sovereignty over their members, and the right to assert jurisdiction where no Congressional jurisdiction has been asserted (or asserted and then delegated to states via PL-280).

Cohen’s Handbook of Federal Indian Law, the preeminent source for understanding the intricacies of U.S. tribal law, also lends clarity to the convoluted point of tribal jurisdiction over non-members while on tribal lands. Citing Oliphant as authoritative precedent, Cohen’s Handbook notes that even a regulatory PL-280 state law, which would normally not be enforceable in Indian territories, may be enforceable on tribal lands where it “affects non-Indians and survives the Court’s infringement/preemption test.” The test, as explained by the Court in Mescalero Apache Tribe is that “if [the state regulation] interferes or is incompatible with federal and tribal interests reflected in federal law [it is preempted], unless the state interests at stake are sufficient to justify the assertion of state authority.”

There are some critics that question whether the federal government acts within the scope of its constitutional powers by delegating inherently federal jurisdiction to states; an issue which has never been addressed by the U.S. Supreme Court in regards to the application of state law to tribal lands.

The lower courts that have addressed this issue have set aside the issue with minimal or circular analysis. In Anderson, James Anderson, a member of the Klamath tribe residing on the Klamath reservation, appealed his conviction of second-degree murder in Oregon state court to the Ninth Circuit. He appealed to the Court on the basis that Oregon state courts did possess criminal jurisdiction in this case as the homicide had occurred on Klamath land, and the defendant is a member of that tribe. The Ninth Circuit did not agree, and found that, “[t]he [Congressional] power over Indians was deemed not so inherently or exclusively federal as to apply beyond the extent to which the federal government has preempted the field, and the federal government could thus withdraw from the field and turn the subject matter back to the states when it chose to do so.” However, the presumption that the states possessed original jurisdiction over tribes, and that the federal government had preempted the state powers on those lands, is unsupported by statute, treaty, or constitutional amendment. Tribes, recognized in the U.S. Constitution as falling under the same umbrella of federalist powers as states and foreign countries, never entered into treaties with state governments to cede jurisdiction, but rather made treaties with the federal government to cede their jurisdiction in a limited manner. As Cohen’s Handbook notes, “[U.S.-Indian t]reaties must be understood as grants of rights from Indian people who reserve all rights not granted.”

The false presumption first promulgated in Anderson was relied on in other cases reviewing the PL-280 for its constitutionality. In Agua Caliente the District Court noted that, “Public Law 280, like other similar laws in recent years, is a withdrawal by Congress from its preemption in this field. It has done so in this case by express grant to the state of authority…to the extent that any further withdrawal by the Federal Government occurs, the sovereignty of the state becomes enlarged to that extent.” Again, there is no existing evidence or support of this presumption, except that this is the relationship between federal powers and state jurisdiction outside of tribal lands. The express purpose of federalism is for federal jurisdiction to extend to “certain enumerated objects only, and leaves to the several States a residuary and inviolable sovereignty over all other objects.” But this only exists where original state jurisdiction would otherwise exist. Keeping in mind that this issue has never been argued before the Supreme Court, it is possible that the Court would find in favor of the federalist principles, and rule that where the federal government has withdrawn from a jurisdiction, the sovereignty of tribes would become enlarged to that extent.

How does this relate to marijuana sales on tribal lands? Which criminal jurisdiction applies on tribal lands matters to non-members seeking to imbibe or purchase marijuana from tribe-operated dispensaries? Under the majority view, it appears that non-members cannot commit acts on tribal lands that are considered crimes in state or federal court. This is due in part to existing statutes and Supreme Court decisions, and seems to be the most largely accepted interpretation of the law. However, a splinter group of theorists among the minority view argues that the federal government cannot delegate its criminal jurisdiction to states. Under one interpretation of the principles of federalism this could mean that where the federal government has withdrawn from the field of criminal jurisdiction (i.e. via attempting to delegate this power to states) that jurisdiction is restored to the tribes. The tribes would have the criminal jurisdiction that would otherwise be granted to the states under PL-280, and could determine whether non-members could purchase or imbibe marijuana on their land. Of course, this is not a view supported by the existing case law, but since the Supreme Court has not addressed the question, it remains an argument to be made.

When first hearing of the interaction between PL-280 and the CSA for tribes, it may seem natural to conclude that the state criminal jurisdictional exception extends to non-members in such a way that “casino”-style marijuana sales (i.e. tribal dispensaries providing marijuana for on-site consumption by non-members) seem inevitable. To better understand why this not the case, an examination of the history of American Indian gaming is necessary. From the outside, it may seem a rather straightforward matter; tribal sovereignty in conjunction with PL-280 allows for casino and gaming in states that do not completely prohibit gaming (i.e. operating a state lottery). However, the power to organize casinos and gaming on reservations is still within the jurisdiction of the federal government. This is because the Federal Indian Gaming Regulatory Act of 1988 (IGRA) re-asserted federal jurisdiction to regulate the conduct of gaming on Indian Lands, established the National Indian Gaming Commission (NIGC), as well as a regulatory structure for Indian gaming in the United States, essentially closing the jurisdictional loophole left open under PL-280 by the Cabazon decision.

Based on Cabazon, which held that in PL-280 states where gaming is a regulated activity and not a prohibited activity (e.g., states with a state-operated lottery), tribal gaming was determined not to fall within the state’s jurisdiction to regulate. The Court further elucidated that only Congress “could effectively place limits on the Indian Gaming industry.” For precedential support, the Court relied on the Mescalero Apache Tribe preemption test mentioned earlier in this post. Within a year of the Cabazon decision, Congress passed the Indian Gaming Regulation Act (IGRA). The stated purpose of the IGRA includes the establishment of Federal Regulatory powers over Indian gaming and a Federal commission to oversee and apply such powers (NIGC). Cohen’s Handbook notes that although the IGRA does not mention PL-280, it operates to supersede state jurisdiction because it is a more recent statute asserting exclusive federal control over violations of Indian gaming. Under the IGRA, tribes are required to enter into compacts with the states in order to participate in Class III gaming, which includes all gaming not covered in Class I and II, specifically anything not closely resembling bingo or “social games solely for prizes of minimal value or traditional forms of Indian gaming engaged in by individuals as a part of, or in connection with, tribal ceremonies.” Tribes retain jurisdiction over Class I and Class II gaming; subject to any “prohibitive” limitations placed by states (very similar to the tribal jurisdiction limitations mandated by PL-280).

In those states where tribes have sought Class III compacting agreements, the state has not granted criminal jurisdiction as a result of the IGRA legislation, rather states have a per se veto power over Indian proposed regulation of such activities, as iterated in
§ 2710(d)(3) of the IGRA:

“Any Indian tribe having jurisdiction over the Indian lands upon which a class III gaming activity is being conducted, or is to be conducted, shall request the State in which such lands are located to enter into negotiations for the purpose of entering into a Tribal-State compact governing the conduct of gaming activities.”

The IGRA included a provision for tribes to file suit in U.S. District Court against states failing to enter into negotiations or that negotiate in bad faith these compacts with tribes. However, in Seminole Tribe the Supreme Court ruled that this provision was not within the constitutional power of the federal government, and that states were immune to suit by tribes under the Eleventh Amendment. Despite the fact that the language of the IGRA seems to be a broad grant of jurisdiction to the District Courts over suits brought by Indian tribes against States that had not consented, the language was held as “insufficient to constitute a clear statement of an intent to abrogate state sovereign immunity.”  Thus, tribal sovereignty was limited by the passage of the IGRA, but state sovereignty (under the Eleventh Amendment) was not.

This is important because there has been some recent discussion of state legislation in Washington essentially re-asserting state jurisdiction over marijuana cultivation or sale on tribal lands. However, any resulting legislation would be open to legal challenge. This is because while the federal government can re-assert federal jurisdiction via federal statute in states where PL-280 applies, such as it did with the IGRA, the principles of federalism do not allow for states to assert their criminal jurisdiction without direct delegation by the federal government. Those states either have criminal jurisdiction over drugs (where that drug has been strictly prohibited) or they don’t (where there is existing regulatory state legislation). In PL-280 optional states, or states that were offered the opportunity to claim state criminal jurisdiction under PL-280, but were not mandated to accept that jurisdiction, such as Washington, Arizona, and Montana, further analysis is necessary to determine whether PL-280 is applicable. Several of these optional states have state constitutional disclaimers that prevent PL-280 from applying (according to the McClanahan decision), and cannot claim criminal jurisdiction until these constitutional disclaimers were nullified. Cohen’s Handbook notes, “[i]f a state has not assumed jurisdiction under Public Law 280, it may not acquire jurisdiction over Indians independent of that Act.”  This is especially true in Washington, which is blocked from fully asserting criminal jurisdiction over tribes by its own constitutional disclaimer, and so would lack PL-280 jurisdiction on two counts; first it would lack jurisdiction under PL-280 because it has not fully assumed that jurisdiction, and secondly, because if PL-280 were to fully apply, the state regulates but does not prohibit marijuana sales and cultivation, and so would not have jurisdiction over the tribes that chose to engage in those activities.

As recently as March of this year, tribes were granted the ability to prosecute non-Indians for certain crimes under Special Domestic Violence Criminal Jurisdiction, including criminal violations of protective orders. While this federal action may partly overturn Oliphant, it is not clear whether this opens the door for greater tribal jurisdiction over crimes committed on reservations. If it did and tribes were able to determine for themselves what recreational drug use was allowed on their lands by non-members, the risk of investing in the marijuana industry would be largely alleviated.

State Registered Cannabis Trademarks: (An) Amoral Dilemma

I called my mother the other day. I figured that, as an adult, it was time we had the talk; I asked her what she thought a trademark was. “It means,” she said, “that nobody else can use the same thing.” Sure, but why would we have laws about that? “Because… oh I don’t know, because somebody cares.” After some discussion, it became clear that my mother had both a normal level of interest in Intellectual Property law and held a common misconception. My mother was under the impression that trademark law is for the benefit of corporations.

Because our government is “for the people,” it follows naturally that trademarks are also for the people. In a previous post I wrote that the government grants exclusive rights if some important public good is served. The exclusive use of a mark is not protected for the sake of business but for the sake of the consumer. This information is invaluable to consumers because it allows us to choose between spending our dollars on local, sustainable, organic, humane farmers and butchers and more affordable alternatives with a glance at a package. Thus, when you go out and purchase some first-rate dance gear the branding lets you know the source. When you’re stuck in the middle of Nowhere, Oklahoma, you can rest assured that your can with the familiar Coca-Cola trademark is still a Coke™ because of trademark law.

A corporation can build goodwill and leverage its reputation to add value to its products. If a consumer knows nothing about watches, it’s possible they may be led to believe a Rolex is a good watch because of Rolex’s reputation. While trademarks may serve a corporation’s financial interest, keep in mind that a bad reputation is equally protected. What we, the people, get out of enforcing marks is clear identification of the source of goods. The quality of that source, or its “branding,” is not part of the deal. There are a number of reasons that the USPTO might deny a trademark, but the “morality clause” is most pertinent to marks related to cannabis.

The Lanham Act, the federal level statutory scheme for trademarks, has a “morality clause.”  In the language of section 1052(a), any mark that is “immoral, deceptive, or scandalous matter” can be denied registration. A deceptive mark clearly undermines the goal of keeping the consumer properly informed as to source. This means marks that misrepresent not only the company name but also geographic source, material composition, or sponsorship of some individual, etc. would be considered deceptive and denied registration.

When it comes to scandalous material, an examiner might “know it” simply when they “see it,” in the manner of Justice Stewart’s famous intuitive approach. A morality judgment is treacherous territory, doubly so with the weight of law behind it. It is no surprise that courts have, as the trademark manual of examining procedure puts it, “included immoral matter in the same category as scandalous matter.” Inevitably, scandalousness and immorality judgments will lead to disagreement, and such a subjective standard is not, in my opinion, useful legislative drafting. Retooling the language is probably best, but that is a legislative prerogative, not the purview of lawyers or courts. For a thorough examination of scandalousness and the caprice of the USPTO, I recommend an excellent (and often amusing) journal article by Anne Gilson LaLonde and Jerome Gilson (for those in the know, yes, those Gilsons). Generally, drug-related marks are denied for scandalousness because of the promotion or association with illegal substances under the Controlled Substances Act. There are some cases, like Cocaine Anonymous (note the circled R indicating a registered mark – not “™” which is for unregistered marks) or Marijuana Symposium, where the context specific use is considered within the gamut of federal drug policy. There are ways around USPTO difficulties with trademarking cannabis products, but I think the apparent contradictions in whether a mark is granted or not can be resolved in a different way, without upsetting the status quo.

See, you can also register a trademark at the state level. The Lanham Act, as mentioned, is the federal scheme. Each state has its own version of the Lanham Act that will give statewide trademark protection. Given the patchwork legal status of cannabis in the United States, a state-by-state approach makes a lot of sense. Unfortunately, the statutory language of 47 of those states replicates the morality clause from the Lanham Act verbatim (for a full list check out footnote 3 in the Gilson article). It’s easier to list the outlying states Colorado, Maine, and Wisconsin — than the majority. Of these, Maine comes the closest to a morality clause, denying any mark that “[c]onsists of or comprises language that is obscene, contemptuous, profane or prejudicial… [or i]nappropriately promotes abusive or unlawful activity” (emphasis added). Setting aside Maine’s oddly detailed trademark legislation on potatoes, oils, and sardines, could a mark for a company whose product is cannabis be an “appropriate” promotion of a federally unlawful activity? I think so.

In a state with a morality clause in its trademark statute (like California), is it scandalous to identify a good that is legal in that state but remains illegal under federal law? My answer looks to the late, great, Judge Traynor. In one of his more famous opinions, Reich v. Purcell, Judge Traynor discusses how the “forum must search to find the proper law to apply based upon the interests of the litigants and the involved states.” Judge Traynor was deciding a conflict of laws problem in torts, but his reasoning can be applied here. More succinctly, scandalousness and morality rejections should be based on the weighed interests of the state and federal governments, not a subjective interpretation of those words as applied to a “substantial composite of the general public.”

In a state where cannabis is totally decriminalized, regulated by the state or where the state participates in the market, the public view about offensiveness of a mark is difficult to ascertain.  While some groups will surely find no moral/scandal objection to cannabis marks, other groups may find cannabis use scandalous but consider regulation a better solution than outright prohibition.  Additionally, the minority may still prefer prohibition and retain scandalousness objections to any cannabis related mark. While scandalousness objections to trademark registration perhaps cannot be resolved, there remain amoral public interest considerations.  A given state’s interests and the effects of granting a trademark in that state should be weighed against the interest of the federal government, especially noting that whole supremacy thing. If a state grants cannabis trademarks and, by extension, allows for companies to potentially build goodwill and brand loyalty, will that promote the use of cannabis?  Will branding push companies to cultivate a more positive reputation through higher quality products, or safer products and safer use environments?

Further, while the public’s subjective reasoning cannot be ascertained, the codified policy (in this hypothetical) would be one that does not criminalize cannabis. Examiners and their supervisors could decide trademark eligibility by looking to established interests instead of subjective review of “scandal.” Admittedly, changing from “scandal” to “public interest” analysis sounds like jumping out of the bog and into the mire. I think that however scandalized someone feels (or doesn’t) about the Redskins trademark, he or she can concede that our public interest has long proscribed racism, prioritized eliminating discrimination, and promoted equality. Revoking the Redskins trademark arguably serves those ends. This approach also clears up how the USPTO ultimately granted a trademark to an apparently scandalous mark. An image that may scandalize the public by depicting our nation’s flag as a condom was acceptable because of the goal of characterizing the fight against AIDS as patriotic.

Luckily, the interests of the federal government have been clearly set forth in the somewhat notorious Cole memo. The eight priorities listed in that memo can easily be satisfied while serving state interests. A state can serve its own decriminalization regime without subverting these priorities, which explains how a mark can be “scandalous” on a federal level but not in a particular state. Further, the federal government has an interest in allowing states to establish their own unique priorities and policies. This “laboratory of democracy” that respects the individualized needs of specific regions is part of why we have a federal system in the first place. The real question then becomes whether granting trademarks serves a given state’s interest.

Among many details I have glossed over, there is a third option for trademarking: simple use of a mark in commerce grants common law protections without any registration at all, state or federal. This protection is limited to the geographic region of use and depends on common law, which varies by state. California is geographically large and if the consumer is to develop some sense of cannabis products, simple common law protection is assumed not to suffice because a northern California company could use the same mark as a company elsewhere in the state and potentially confuse consumers in between, especially if the market expands rapidly, as it has in Colorado.

If a company cannot build goodwill with its brand it can only really market objectively measurable characteristics like potency and price, not quality. Research indicates that price increases discourage kids from using cannabis more than adults. Granting trademarks would allow corporations to more fully leverage their brand, which would increase pricing of their products – and might decrease potential youth possession and use (which would assuredly remain illegal, just as it is for tobacco or alcohol). There are, of course, risks associated with allowing marks that may be targeted at or appealing to children. An interest analysis supports denial of those types of marks as well, since protecting children is an established interest of both the states and the federal government.

California’s interest might best be served with a model like that of wine, where users of cannabis can pay top dollar for some renowned brand rather than merely finding the cheapest and strongest “high” on the market. Trademark granting should not be based on ambiguous ideas like moral and scandal but on the purposes behind trademarks, which rest on the interests of the individual consumers and states involved.

Why Tribes Don’t Need Your Permission

Late last year the U.S. Department of Justice made an announcement that American Indian tribes may grow and sell marijuana on tribal land so long as they adhere to the federal conditions required of states that have legalized marijuana, and with the consultation of the local U.S. Attorney’s office. As a result of the announcement many tribes, including the Pomo and the Red Lake Band, are seeking to implement a regulatory framework that would adhere to those federal conditions. Others have voiced concern that the vague wording of the DOJ memo will leave tribes vulnerable to prosecution on the federal, state or county level. But what if California tribes did not need the permission of the federal government to cultivate marijuana without the threat of criminal prosecution?

The United States Supreme Court has recognized an exemption for tribal lands from the application of state law. For example, in Washington v. Confederated Tribes of Colville Indian Reservation the Court held that “tribal sovereignty is dependent on, and subordinate to, only the Federal Government, not the States.” However, where Congress has delegated this power to states, state law would be enforceable on tribal land.

Under Public Law 280, the federal government delegated criminal law enforcement to California and a handful of other states, making the state penal code enforceable on tribal land. This rule is subject to one caveat: if the state generally permits the conduct at issue, subject to regulation, it must be classified as a civil or regulatory charge, rather than criminal, and thus PL-280 would not authorize its enforcement on an Indian reservation. Furthermore, the definition of generally permitted conduct is extensive. The Supreme Court held in California v. Cabazon Band of Mission Indians that “even to the extent that the State and county seek to regulate short of prohibition, the laws are preempted” from application on tribal land. One possible conclusion is that by regulating marijuana, even for medical purposes, California has preempted state or county marijuana laws from applying to tribes.

Tribal law still applies, of course. And some tribes have strict anti-drug policies, which may be enforced by tribal police on those lands. However, those tribes that are within the borders of a state with PL-280 in effect would be able to independently determine how to regulate marijuana without the need to invoke the protection of the recent memo. What this means is that for tribes seeking to benefit from the restrictive nature of the marijuana market the fear of criminal prosecution can be at least somewhat alleviated (however, this blog post does not constitute legal advice; anyone seeking to take action must consult with a licensed attorney).

In my next post I will be considering whether PL-280 would also allow for “casino-style” recreational marijuana use, or the use by non-tribal members while on tribal lands, and if so, whether what the ramifications of such use would be.

Are High Drivers High Risk?

at-checkpoint

The danger of driving under the influence of alcohol (DUI) has been solidified for some time. The development of DUI laws and enforcement has been grounded in scientific research about crash risks and the effects of alcohol are easy to measure. However, driving under the influence of marijuana (DUIM1) presents an entirely different issue. It may not be wise to assume that similar laws, tests, and enforcement methods should apply. If there is anything to take away from the body of DUI policy, it is that it was developed to decrease accidents rather than indirectly prohibit alcohol. If marijuana is to be legalized, there is likely to be an increased level of enforcement to prevent the dangers of DUIM. However, such enforcement is only necessary if these dangers actually do exist.

DUIM is a criminal offense in California and will continue to be even if marijuana is legalized.2 A California roadside survey conducted in 2012 found that 7.4% of drivers tested positive for some amount of THC, a psychoactive component found in marijuana. To put that into perspective, 7.3% of drivers tested positive for alcohol. Although the occurrence of intoxicated drivers may be almost identical for alcohol and marijuana, the similarities quickly diverge when it comes to the crash risk these drivers present. DUIM after legalization is only an issue if high drivers actually present a danger to themselves and society.

The National Highway Traffic Safety Administration (NHTSA) recently released the results of a study that was “the largest and most comprehensive study to address alcohol and drug crash risk in the United States.” This study was conducted in 2012 over a 20-month period in Virginia and tested thousands of drivers using blood, urine, and saliva for the presence of THC. The NHTSA took care to match characteristics of control drivers with those of crash-involved drivers as closely as possible. These characteristics included age, gender, ethnicity, and alcohol use. When the variables of age, gender, ethnicity, and alcohol use were not accounted for, the results showed an increase in crash risk for those who tested positive for THC. However, when the analysis accounted for these variables, the correlation vanished – the NHTSA study did not find an increased crash risk associated with THC use. In contrast, drivers at a .08% blood alcohol level (the legal limit in every state) had about four times the chance of crashing.

The NHTSA study is the first large-scale study of its kind conducted in the United States, and so it stands to be the best indicator of an actual, observable crash risk for DUIM in California. The study found no increased risk, and it calls into question whether increased enforcement is actually necessary. This leads one to wonder how these results are even possible. Marijuana is a psychoactive drug, and an analysis of numerous studies (Sewell) “concluded that marijuana causes impairment in every performance area that can reasonably be connected with safe driving of a vehicle, such as tracking, motor coordination, visual functions, and particularly complex tasks that require divided attention[.]” Despite these effects, the Sewell analysis found that most marijuana intoxicated drivers show only small impairments on actual road tests while more experienced marijuana users showed almost no functional impairment.

The study attributes these results to evidence that marijuana intoxicated drivers are are able to compensate for the effects of their intoxication. For example, they will drive slower, increase their distance from cars, and try to overtake less. On the other hand, alcohol intoxicated drivers will underestimate their impairment, and will even drive more aggressively compared to sober drivers. A year after the Sewell analysis, a study was completed that seems to agree with their findings. In 2010, a double-blind, placebo-controlled study of 21 heavy cannabis users was conducted, rating each individual’s performance on tasks that tested their ability to track, make quick decisions, multitask, and react to a stop. This study found that marijuana generally did not affect task performance, concluding that “heavy cannabis users develop tolerance to the impairing effects of THC on neurocognitive task performance.”

These studies help explain the surprising results of the NHTSA study, and together, they show that DUIM may not be the public safety hazard that it is often thought to be. However, there are concerns that legalization will change the landscape of marijuana use, causing both an overall increase in DUIM related crashes, along with an increased crash risk by creating new users who are unable to successfully compensate for their intoxication. This concern is not without merit, but it cannot be expressed with certainty either.

The DMV has found that out of fourteen states that have allowed access to medical marijuana, three of them showed an increase in DUIM crash rates from the time of access to 2009. California was one of these states, showing an increase in 2.1 percentage points for fatal crashes where a driver tested positive for marijuana intoxication. This may seem insignificant, but it was a 196% increase. However, this uptick occurred in 2004 when medical marijuana was initially decriminalized, and there was no significant growth for 6 years after. From these results, the DMV suggested that medical marijuana is simply providing more access to a stable population of patients rather than creating new users. If the effect of legalization is to follow the same pattern, it will not create an explosion of new, inexperienced users, but it will increase access for experienced users, the ones who have shown the ability to drive safely in experiments and studies.

More importantly, if the goal of DUIM policy is to reduce crash risk, an increase in the total number of DUIM related crashes does not show that there is an increased risk of crashing. The DMV study explicitly states that determining the crash risk of DUIM was neither the intent nor purpose of the study. Accident totals were not adjusted for the increased use of marijuana in states where medical marijuana was allowed. Greater access to marijuana increases the number of people who are intoxicated, and when those people get into accidents, there is an increase in accidents involving marijuana intoxicated drivers. Confused? Here is an analogy: If there is greater access to yellow shirts, then an increase in accidents involving drivers in yellow shirts is likely to occur (provided that people want to wear yellow shirts). It does not follow that wearing a yellow shirt causes accidents, and similarly, the DMV results establish nothing about the actual risk of crashing.

The NHTSA study, on the other hand, was purposefully designed to discover such risk, and it found that drivers intoxicated on marijuana do not have a heightened risk of accidents compared to sober drivers. If the goal of DUIM policy is to reduce accidents, there must be a heightened risk to reduce. Even if marijuana is legalized, it cannot be assumed that an increased crash risk will come along with it.

It would be a shame to make the trek through all this technical, scientific data for it to merely be an academic exercise. But it unfortunately is. Questioning the necessity of increased enforcement will likely be nothing but a philosophical pursuit. It is almost assured there will be an increased focus on DUIM enforcement whether it is useful or not. In reaction to marijuana legalization, Colorado and Seattle have enacted new DUIM laws, funded training programs for their officers, and instituted new field tests for discovering marijuana intoxicated drivers. While California still awaits legalization, counties such as Los Angeles have already taken similar steps in officer training and field-testing. With legalization comes enforcement, and the state will have to design policy and procedure to prevent DUIM in a fair and just way. Many of us will also have to find a way to forget that our tax dollars are being spent on a problem that may not exist.

1. I choose to use the term DUIM here instead of using the more common term of driving under the influence of drugs (DUID). DUID is often the term used for marijuana intoxicated driving under the California Penal Code. This is because the pertinent section of the code does not distinguish between drug types other than alcohol, so all non-alcohol intoxication can be referred to as DUID. For this reason, I choose to use DUIM in order to specify that I am only talking about marijuana intoxication and not the countless other drugs that DUID can refer to.
2. California Penal Code section 23152(e)

Diversion from the Black Market Also Involves People, not just Plants

Much of the focus in the coverage of state regulated marijuana has been on the plants, the product, and the money. Michelle Alexander, Associate Professor of law at Ohio State University and renowned author, has illuminated the irony of a movement where whites are now looking to marijuana with dollar signs while communities of color still suffer the consequences of the failed war on drugs. “Here are white men poised to run big marijuana businesses, dreaming of cashing in big—big money, big businesses selling weed—after 40 years of impoverished black kids getting prison time for selling weed, and their families and futures destroyed. Now, white men are planning to get rich doing precisely the same thing?” This highlights the importance of focusing on the people, especially those communities who have been affected most, in the rehabilitation of California’s relationship with marijuana.

No matter how you view marijuana reform, any chance of a successful rehabilitation of California’s drug policy must focus on people. Some see marijuana reform as a civil rights issue, citing the failed war on drugs and overcrowding of prisons as evidence that change is needed. If you view reform as a civil rights issue, how do you reconcile that belief with a system where the people who have been the most adversely affected by the war on drugs are now precluded from taking part in the state-regulated market? Others see drug use as something that isn’t going to change, so the government might as well collect additional tax revenue. If you are part of the group who sees dollar signs from tax revenue, the success of taxation depends on a shift from the black market to the legitimate market. This would depend on those currently operating in the shadows being able to operate, or get hired by, legitimate businesses. Regardless of the policy goal, the most important aspect of rehabilitating California’s relationship with marijuana is the shift from the black market to the legal market, which includes the people.

Black market marijuana is grown and sold by a black market labor force. What happens to that labor force when marijuana is legalized? The Cannabist recently published an article on black market growers in Colorado’s state regulated market. Titled “A divided weed world: Black market growers and legit industry jobs,” the article addresses the problems of merging the black market and the legitimate marijuana trade. First, there are the legal hurdles to overcome. If a person has a certain criminal record, he or she legally cannot receive a business license. Those looking for employment at a cannabusinesses must be of good moral character, meaning any criminal history will be considered. Additionally, black market growers aren’t financially incentivized to enter a legal market, where they will take a significant pay cut if they can even get a job. The competition for work is high and most available jobs are entry-level, paying $10 per hour.

Additionally, the legitimate marijuana business is wary about including those who previously operated in the shadows. Being “in any way connected to black market growers (or any type of crime) is the kiss of death in this business.” Not only is it a legal issue, legitimate marijuana businesses are split on the benefit of including black market growers in their operations. Some business owners cited applicable knowledge and experience as the positives of a black market background, but applicants are “better off never mentioning he or she has experience growing and selling their own.” Even in the absence of a criminal record, there is a “stigma that comes with being a black market grower.” There is the concern about bad habits that would be carried over and the sometimes-rocky transition of going from being your own boss to integrating into an already established and functioning business.

While the Cannabist article explored some the problems faced by a small segment of the black market in Colorado, it provides a lens with which to view the broader problem of integration into the legal market in California. Not only will there be growers needing to transition to the legitimate market, there will be trimmers, processors, and dealers. Street level dealers and trimmers do not have the same level of specialized skill and knowledge as growers. Dealers may arguably have more of a tendency to flout laws, for example by selling to minors. Each different area of employment will bring to light different problems and policy considerations.

There is also the criminal history of black market workers to consider. A criminal record makes it difficult to find any gainful employment, but this will be exacerbated in the legitimate marijuana market by regulations that exclude the justice involved from receiving licenses or being hired. The effect of criminal records for both licensing and employment purposes will have a greater impact on communities of color in California, where Latinos are arrested at higher rates than whites, and Blacks are arrested at an even higher rate. While there will be disparate impacts from barriers based on criminal history in California, there are also race-neutral reasons for excluding the justice-involved in the state regulated market that require consideration. For example, it would be reasonable to refuse a business license to an individual convicted of financial crimes to prevent money laundering. Also, because legitimate marijuana is still a cash-only business, barring convicted tax evaders or embezzlers would be sensible policy.

Furthermore, economic requirements, wages, and competition will be a contributing factor to keeping black market workers from turning legit. The licensing structure and any vertical integration requirements could prevent individuals from opening their own businesses. Like in Colorado, those making money in the black market will not be incentivized to transition to the legal market at a significant pay cut, where their wages will also be taxed. In California, where we have one of the nation’s highest wealth gaps and where Black and Latino communities have much higher poverty rates than whites, economic barriers also adversely affect communities of color. This reinforces Michelle Alexander’s point that those with the money and the privilege will be the people profiting off of marijuana reform.

My future posts for the Drug Law and Policy Blog will delve into the barriers to entry into the future state-regulated market for black market workers in California, with a focus on policy that will best serve to bring them into the fold. Ultimately, there is a general lack of information in about the black market in California, including the racial make up of the labor force, so there are questions that will go unanswered. This fact remains true – without transitioning the black market workforce to the legitimate market, marijuana reform will not succeed in the way we hope. Stay tuned for more information as I wade through the murky waters of black market industries and the ever-evolving arena of state-regulated marijuana.

The Champagne of Cannabis Should Not File for Bankruptcy

Humboldt(1)

Humboldt County is the Champagne of Cannabis. Ask anyone in the marijuana industry where the best “weed” in the country is grown and he or she will reply Humboldt or the “Emerald Triangle.” While this northern California region prides itself on its reputation, praise alone won’t pay the bills. The county is predicted to lose 25% of its economy with the legalization of recreational use in California. Some may interpret this as the intended demise of the illegal market. After enduring the departure of the timber and fishing industries, however, Humboldt already one of California’s poorest counties, does not have the economic elasticity to bounce back from another failed market. Humboldt is savvy to the tides of change, though, and local interests groups are advocating for better policy reform to preserve their beloved region and its famous cash crop. My blog series will focus on the lessons learned from Humboldt County’s long history with cannabis reform and why the state should follow the lead of local interest groups and residents who are dedicated to an environmentally sustainable, safe and economically profitable cannabis industry.

My name is Keri Gross and I am a JD candidate at Santa Clara Law School. I majored in Ethic Studies, Spanish and Biology at Humboldt State University. I’d like to think I represent both the outside the box thinking one would expect from innovative Silicon Valley as well as a collaborative social justice approach to critical problem solving. I came to law school after working with teen moms and adjudicated youth through Planned Parenthood’s community health education program. Inspired by this work I am now branching into criminal law, health law and policy reform. My goal is to make my legal work accessible, engaging, impactful and reliable.