| This article appeared as a chapter in Drugs and Society: U.S. Public Policy, Jefferson M. Fish, Editor, Rowman & Littlefield Publishers, Lanham, MD, 2005. Copyright Jefferson M. Fish. Included by permission. It addresses "drug legalization" in general, and not marijuana legalization in particular, but many of the concepts and considerations are relevant to cannabis regulation and taxation. |
Legalization: An Introduction
Richard M. Evans, Esq., and Stanley Neustadter, Esq. Thorough outlines of drug policy options inevitably include "legalization," but rarely is that concept examined in any detail. Does "legalization" mean that marijuana will be sold in vending machines, or advertised on TV? That coca will return to cola? That all pharmaceuticals will available over the counter? The purpose of this chapter is to look at how some legislators and writers have glimpsed the particulars of legalization, and to suggest a menu of questions that will have to be confronted if and when legalization comes under serious scrutiny as an alternative to prohibition. Imaginers of drug legalization, like 19th century science fiction writers imagining interplanetary rocketry, have little to go on besides their wisdom and creativity. There is scant literature or data on the subject. They share some basic premises, and not much more. One of those premises is that drug prohibition, and the war of enforcement that has been waged for an entire generation, has failed to protect the public from the problems associated with illegal drugs, and has done a lot more harm than good in the effort. A second is that public support can plausibly emerge for coming to terms with drugs in ways other than with police, prisons and propaganda. If legalizers were to have their way, acquisition, possession and use of the now-illegal drugs by responsible adults would cease to be the business of the state, and thus a person's liberty or property arising from such use would not be put in jeopardy. Within that broad standard lies a menagerie of schemes. Although the criminal and civil justice apparatuses retain a prominent role in protecting the public health and public safety, under “legalization” the government does not intrude upon personal autonomy with regard to drug acquisition or consumption by adults that is not visibly harmful. As the sine qua non of legalization is legal access to drugs for responsible adults, this chapter excludes consideration of “medical marijuana” or “hemp” reforms. These measures and initiatives, worthy though they may be for medical or industrial purposes, and welcome though they may be to anti-prohibitionists, bear little connection to legalization. Exempting small categories of people from the prohibition laws (chemotherapy patients, licensed hemp farmers) has little to do with repealing prohibition entirely and allowing access to most adults. The availability of "medicinal" alcohol during Prohibition (1920-33) did little to abate the ills of the "noble experiment." A variety of policy renderings have been put forward in the name of legalization. Most seems to fit into one of three general categories: decriminalization plans, limitation plans, and regulation and taxation plans. Falling outside this grouping are calls for outright legalization, where drugs would be produced, bought and sold like any ordinary commodity. The most eminent advocate of treating drugs like ordinary goods is Thomas Szasz, M.D., whose prolific and eloquent writings make a strong case for a free market in drugs, free of government involvement. Some reformers speak affectionately of the tomato model, where commerce in and use of drugs would carry a level of government regulation comparable to tomatoes, viz., merely the usual agricultural regulations and pure food rules, and perhaps an ordinary sales tax. If drugs are to be treated under the law like tomatoes, magazines, medicines or toothpaste, it is hardly necessary to conjure a new set of rules about where and to whom they can be sold, or to what extent they may become ingredients in other products, or how they are to be taxed, and if their potency is to be regulated, and in what forms they may be sold. All that is needed is to latch upon the existing commodity which best illustrates the favored approach. Free-market proponents can bring clarity and spirit to the debate over how to legalize drugs by simply filling in the blank: drugs should be as legal as umbrellas, or ____________. Decriminalization
In the context of drugs, the word “decriminalization” entered the popular lexicon during the Seventies, and was used to describe changes to the marijuana laws in eleven states. The changes were modest. Under them, marijuana remained illegal under both state and federal law, and one could still be prosecuted and punished for simple possession of marijuana. The difference was that such possession of a small quantity was no longer an offense under state law for which one could lose one’s liberty (i.e., be arrested) upon being caught. And, typically, such charges did not carry the risk of creating a permanent criminal record. As a result, prosecutions for marijuana were said to resemble prosecutions for speeding or other traffic offenses: a ticket and fine, and possibly a court appearance, but offenders were not arrested on the spot and taken in. When thinking about legalization as a policy alternative to prohibition, such decriminalization represented a mere tinkering with the statutory law, not any major policy change. It was merely a kinder, gentler version of prohibition. A similar result can be achieved by leaving the laws the way the are, and simply enforcing them less stringently than before. In his book, Marijuana: Costs of Abuse, Costs of Control, Mark A.R Kleiman calls this approach “enforcement reduction,” and recommends it as the “best alternative for dealing with the nation’s marijuana problem.” Veterans of the Sixties and Seventies recall a time when marijuana was used widely with minimal concealment, even in states that did not decriminalize. A modicum of discretion was sufficient to retain one’s liberty. Police and the public were tolerant, if not approving, of personal marijuana use. The clearest picture of de facto decriminalization of drugs by enforcement reduction can be seen in Amsterdam. There, “soft drugs” (marijuana and hashish) remain illegal, but are widely tolerated by law enforcement authorities. Cannabis is openly available for purchase in coffee shops. The drug prohibition laws remain on the books, but are not enforced against soft drugs. Among avenues of drug law reform, de facto decriminalization has the distinct advantage of not requiring the complicity of the legislature. Police officers, one recalls from elementary civics, work for the executive branch of government, whose job it is to execute and carry out the laws. All it takes to institute such a policy of reduced enforcement is the will of a single executive—a mayor, governor or president—and the political moxie to carry it off. Decriminalization can be achieved judicially as well. The best example of court-made decriminalization is the 1975 case of Ravin v. State of Alaska, in which the Supreme Court of Alaska, having considered the right to privacy amendment in the Alaska constitution, found "no adequate justifications for the state's intrusion into the citizen's right to privacy by its prohibition of possession of marijuana by an adult for personal consumption in the home," a decision that had the result of removing criminal penalties for the violation of the statutory prohibition laws to the extent declared unconstitutional. Notwithstanding challenges from political fronts, Ravin remains good law in Alaska, ratified and reinforced in 2004 in a case called State of Alaska v. Leo Richardson Crocker , wherein the Alaska Court of Appeals threw out a search warrant that did not establish probable cause that a person possessed a quantity of marijuana beyond the scope constitutionally protected by Ravin. Although decriminalization is frequently mentioned as a preferable alternative to prohibition, a principal problem haunts it as a permanent policy option. The problem is that under decriminalization, as the term is used here, the drug market remains illegal, and underground networks of illegal suppliers and distributors continue to supply the public demand for drugs. With no legal commerce, there are no taxes paid or collected, no FDA-like controls over purity and dosage, and no legal and peaceful remedies for settling industry disputes that inevitably occur. Criminal organizations remain in control of drug production and distribution (except, one speculates, in the case of cannabis, where backyard gardens may well supply most consumers). If the goals of “legalization” are to protect the public safety and public health, prevent abuse, and halt the crime associated with prohibition, decriminalization, whether de jure or de facto, is not an attractive candidate for significant and long term reform, as the war continues against production and supply networks. A secondary problem is that decriminalization fails to address problems arising out of excessive or otherwise inappropriate consumption of drugs. Hence a number of legalization advocates have urged schemes to protect people from drugs by drawing lines in new and different ways. Limitation
The basic idea is that if people’s access to drugs is limited, their problems with drugs are thus limited. Limits can be imposed on the categories of people who are permitted access, on the quantity of drugs, and the circumstances under which they are available. A familiar example of the limitation approach is today’s prescription drug model, where only those holding permits (prescriptions) from physicians are given access, and then only in limited quantities. Some have suggested that access to recreational drugs should be subject to a physician's prescription, but it's dubious whether the medical profession would gladly become arbiters of Saturday nights. Should drug users be licensed, like drivers? The suggestion has been made that in order to use drugs legally, people should take a class and pass an examination, proving to the satisfaction of authorities that they can handle drugs. By granting to qualified individuals a right of legal access to drugs, limitation schemes do not replace the prohibition laws, but instead carve out exceptions to them. For those who do not qualify under the exceptions, the prohibition laws remain in place, with a law enforcement apparatus equipped to come down on drug use and commerce that remains off-limits. Thus limitation plans could not be expected to change significantly the prohibition landscape in terms of illegal drug markets. Unlimited supplies of drugs will remain available illegally for those who do not qualify for legal access, raising serious questions about the point of imposing limits in the first place. Regulation and Taxation
It is the absence of such limits that characterizes regulation and taxation, the principal function of which is to drive out the illegal market by recognizing a legal market with which the illegal market cannot compete. Its essence is that just about any adult can obtain drugs legally—and, if using them responsibly, avoid scrutiny of the police. In other words, if the taxes are paid and the other rules observed, production and distribution of drugs carry no criminal penalties. Current alcohol and tobacco schemes are fairly characterized as regulation and taxation, though neither stands as a compelling model for other drugs. Given the nearly half-million deaths caused annually by alcohol and tobacco, and the close association between violence and alcohol, one cannot argue persuasively that American alcohol and tobacco policies are a total success (although prohibition is rarely proffered as a alternative). Since a regulation and taxation scheme for drugs would likely build on that experience but take a different form, it is not correct to say that where drugs are regulated and taxed, they are treated “just like wine,” or “just like cigarettes.” A variety of bills have been introduced in state legislatures, and several initiatives proposed, having as their aim some sort of regulation and taxation plan for drugs. Typically, they received a polite, if not serious, reception. None has been vigorously scrutinized or debated. Like castles in the sky, they are visions sculpted in exquisite detail, but visions nonetheless. The first drug legalization and taxation schemes applied only to marijuana. In 1971, a bill was introduced in the New York senate by Senator Franz Leichter, which would set up a Marijuana Control Authority to license and control commerce in cannabis, as commerce in alcohol is presently licensed and regulated, except that advertising would be forbidden. The Leichter bill was introduced regularly during the seventies, and by 1979 had attracted a number of co-sponsors, including Senator Joseph L. Galiber, who in 1989 expanded the scope of the Leichter bill to include all illegal drugs, and proffered a bill which he unambiguously called “A Bill to Make All Illegal Drugs as Legal as Alcohol.” Under the Galiber bill, all “controlled substances” could be sold by licensed doctors or pharmacists under a license issued by the State Controlled Substances Authority, which was granted authority to make all necessary rules for drug production, distribution and sales. A comprehensive cannabis regulation and taxation bill was introduced in Massachusetts in 1981. The Cannabis Revenue and Education Act would regulate commercial production and distribution of cannabis, and impose a tax based on THC content. Half of the net tax proceeds collected went to a Cannabis Education Trust, set up to conduct a public education campaign against marijuana abuse. The only comprehensive bill for the regulation and taxation of cannabis at the federal level was called the Cannabis Revenue Act, drafted in 1982 by a group of lawyers and economists called the National Task Force on Cannabis Regulation. This bill was designed as a federal prototype for the regulation and taxation of commercial activity in marijuana. It designates the U.S. Secretary of the Treasury as the chief regulator, and requires licenses for commercial cultivation, processing and retailing of marijuana. The cultivation and possession of personal-use amounts are allowed, no more than twenty-five plants or five pounds of crude cannabis, and non-commercial transfers. The minimum age for purchase or use is 18. The processors are obliged to accurately label the product to reveal THC content, species and variety, origin, and the identity of the processor, and the label would also display a detailed warning on the side effects and possible consequences of use. In the year following publication of the Cannabis Revenue Act, regulation and taxation bills drawing on the CRA were introduced in the state legislatures of Oregon and Pennsylvania. The Oregon bill restricted retail sales to state-operated stores and earmarked all the revenue to local school districts and local law enforcement. The Pennsylvania bill removed all sanctions from personal cultivation and possession (up to 2.2 lbs.) and subjected the commercial cannabis industry to regulation by the Department of Agriculture, restricting retail sales to state-owned liquor outlets. In the 1990 Session of the Missouri legislature, a bill was introduced by Rep. Elbert Walton, which would license the production, distribution and sale of all drugs. The sales tax was set at a flat rate of 25 percent of retail. Unlike the other regulation and taxation models, the Missouri bill imposed strict limits on where drugs may be used, prohibiting the use of “controlled substances” “in the presence of a minor under the age of eighteen years or outside the confines of a private residence or in a place of public accommodation or conveyance”...in other words, prohibiting drug use in bars, restaurants, offices or cars, and even at home if the kids are around. A novel feature of the Missouri plan is that it expands the conventional definition of cannabis, giving statutory recognition to the species cannabis Americana, a nod to botanists who developed this new domestic species of cannabis as law enforcement focused on border interdiction. Also in 1990 a creative initiative measure was proposed in Oregon, called the Oregon Marijuana Initiative (OMI). Had OMI reached the voters and obtained their approval, an exception would have been carved out of current cannabis prohibition laws, allowing personal use and cultivation, with a certificate from the county health department, available for $50 each with the revenue going to county drug and health programs. In a significant article in the summer, 1992, issue of Daedalus, Ethan Nadelmann suggests what he calls a “right of access” or “mail-order” model. Adults would be able to obtain through the mail “a modest amount of any drug at a reasonable price reflecting production costs and taxes,” while other sales of drugs would remain prohibited under local, state or federal law. In 1993, a Washington (state) grass-roots organization called the Washington Citizens for Drug Policy Reform sponsored an initiative for a new marijuana policy to be known as “regulated tolerance.” Under the WCDPR’s plan, private adults would be able legally to grow and possess up to a “personal use quantity” without sanction by the criminal law, and without having to obtain any license. Cultivating, transporting and selling more than a “personal use quantity” would require a license from a cannabis control authority. Determining a “personal use quantity” is left to the courts. The proposed law prescribed a tax of fifteen dollars per ounce of cannabis “at standard cured moisture content,” to be collected and paid by sellers. The measure permitted the retail sale of “cannabis products made from flowering female tops other than seeds,” which suggests the prospect of a wide variety of products being marketed containing cannabis, from soft drinks to pastries to chewing gum…all subject to regulation by the CCA. This contrasts with the 1982 Cannabis Revenue Act, which legalized the sale of cannabis in its natural form only, specifically prohibiting sales in derivative or constituent forms. In 1997, two “legalization” initiatives were independently promoted in Oregon. The Oregon Drugs Control Amendment would amend the state constitution to require that laws be passed “regulating” controlled substances, and to forbid that such laws “prohibit adult possession of any controlled substance.” The legislature is directed to work out the regulatory details for dealing with a list of issues, which is duplicated here as it provides a useful checklist for any new regulatory scheme.
Curiously, the amendment provides that “In no case shall the State of Oregon ever make a net profit from the manufacture or sale of controlled substances.” Making such a profit, on the other hand, is a chief objective another Oregon initiative, called the Oregon Cannabis Tax Act, proffered by an organization called the Campaign for the Restoration and Regulation of Hemp. In a lengthy preface, the Act traces the history and benefits of industrial, medical and recreational cannabis, and the failings of its prohibition. The existing Oregon Liquor Control Commission is re-named the Oregon Intoxicant Control Commission, and assigned authority to regulate, by licensing, the cultivation and processing of cannabis. Licensed cultivators sell their crop only to the Commission. After processing, it is sold in OICC stores at such price as will “generate profits for revenue to be applied to the purposes [of the statute] and to minimize incentives to purchase cannabis elsewhere, to purchase cannabis for resale or for removal to other states.” Industrial hemp falls outside the definition of “cannabis,” and its regulation is beyond the jurisdiction of the Commission. The initiative goes on to specify the disposition of “profits” from the issuance of licenses and sale of cannabis. After administrative and enforcement costs, 90% goes to the general fund, 8% to the Department of Human Resources “to fund various drug abuse treatment programs on demand,” 1% “to create and fund an agricultural state committee for the promotion of Oregon hemp fiber, protein and oil crops and associated industries,” and 1% to “to the state’s school districts, appropriated by enrollment, to fund a drug education program.” Uniquely among cannabis legalization proposals, the initiative goes on to lay out the essential elements of an acceptable curriculum for young people. Rejecting prohibitionist doctrine, which has traditionally dominated drug education, the proposal instead requires that the curriculum
In the past decade, legislatures have stood mute as to drug policy reform, yielding to the popular initiative process, in those states where it is allowed, to effectuate changes in the drug laws. Of the 40 or so initiatives that have reached, or nearly reached, the ballot, most have been devoted to medical marijuana. One, however, would repeal state laws on marijuana and impose a regulation and taxation scheme. The ambitious 2000 Alaska Ballot Measure 5 would have removed penalties for possession, cultivation, distribution, and sale of any amount of marijuana, including hemp, for consumers over 18, grant amnesty to prior marijuana law offenders, and establish an advisory panel to grant restitution to people previously imprisoned for marijuana crimes. It failed by a vote of 40-60. A measure on the 2004 ballot in Oakland, California, would direct the city to accommodate the establishment of a taxed and regulated marijuana market, and to lobby the state and federal governments to allow it to occur. BASIC POLICY ISSUES TO BE CONTEMPLATED
BY LEGALIZATION DRAFTERS What are "drugs"? When a policymaker undertakes to craft a scheme called legalization, the threshold issue is determining what drugs, exactly, are to be legalized. At first glance, the question seems simple, even simplistic. One need merely consult the federal Controlled Substances Act or its counterpart in the states. In these prohibition laws, one will find listed, in exquisite detail, the chemical compounds for the “control” of which the war is being waged. Might it follow, then, that the answer as to what we mean by “drugs,” when we speak of legalizing them, is right there? It sounds plausible at first. After all, illegal drugs are what we see on the 11:00 news; you don’t hear about shootouts between beer distributors. But if the CSA definition is employed, and “illegal drugs are made legal,” laws are thereby changed as to a huge multitude of chemical compounds. The notion of prescription drugs will cease to exist. Lest advocates of legalization be wrongly accused of going too far, it is incumbent upon them to specify which drugs exactly are to be excised from the list of “controlled substances,” and regulated, if at all, in ways not involving criminal or civil sanctions for adults using them responsibly. Most of the regulation and taxation plans described in this chapter relate only to marijuana. If only marijuana is in issue, then the problem of defining “drugs” can be left for another day, as marijuana is easily severable from other illegal drugs, economically, culturally, and pharmaceutically. If the intent, however, is to legalize more drugs than marijuana, but not all those on the prohibited list, then it becomes necessary to draw and explain new lines between the legal and the illegal. Shall we legalize heroin, but not cocaine? Amphetamines, but not barbiturates? When that problem is solved—i.e., determining what drugs, exactly, are to be legalized—another emerges: what happens to those drugs remaining on the prohibited list? Will they fall into the wrong hands, cause harm to abusers, carry risks of contamination and adulteration, and threaten the public safety by perpetuating a violent and criminal production and distribution system? To protect the public from those harms, will we continue to wage domestic war, but with fewer drugs as targets? Let us ask the question, “What are drugs?” a different way: What drugs threaten public health and safety to the extent that the state is justified in imposing restraints and controls? The destructive ones, naturally, but they are already legal! Indeed, opponents of drug legalization often cite the failures of alcohol and tobacco legalization as examples of why drugs should not be legalized. They have a point. When drugs are legalized, the mistakes of alcohol and tobacco policy—aggressive marketing, for example—must be carefully scrutinized. In terms of morbidity, toxicity, and social disruption, alcohol and tobacco dwarf illegal drugs. If drug policy reform is about measures aimed at protecting us from such destruction, then a posteriori a broader definition of “drugs” is in order. The broader definition of “drugs” is well established, though rarely invoked when talking "drug policy." When Congress created the U.S. Food and Drug Administration, it declared that drugs are articles “(other than food) intended to affect the structure or any function of the body.” The most prominent drug education program puts it more colloquially to fifth graders: “any substance other than a food that affects the body or the way it works.” Alcohol, nicotine, caffeine, laxatives and headache remedies are all thus drugs. If the point of the drug laws is to protect public health and safety and curb abuse, perhaps a more promising approach lies in urging public cognizance of the broader definition, fixing in the public psyche a new, larger category of substances deserving of serious national concern. Substances in this category will be treated differently: they will not be commercially available to young people; they will be taxed at a level at least to pay for the harm they cause; people who use them irresponsibly will get in trouble; children will learn to avoid problems with them; laws will protect consumers from impurities. What do we call this larger category? Several years ago, in a small town in Massachusetts, a school committee charged with reviewing the local drug education curriculum used the term “TAOS,” an acronym for tobacco, alcohol and other substances. The committee wrote:
The committee called it “the ubiquity of drugs: they seem to be everywhere.” Any drug education curriculum that pretended otherwise was defective.
Legalizing drugs is about coming to terms with troublesome realities, and one of those realities is the insufficiency of our vocabulary. As the legalization debate develops, one awaits the emergence of a new term to embrace the broader meaning, giving broader swath to the benefits of reform. Once the threshold question of defining "drugs" has been overcome, policymakers confront a myriad of others. The following paragraphs identify additional areas of concern to any legislator seriously contemplating introducing a bill to legalize drugs. As will become obvious, any number of these areas, while theoretically distinct, overlap to one degree or another with one or more other issue areas. Though posed here purely as matter of policy, it deserves to be kept in mind that ultimately, it will be politics, not policy considerations, that drives the ultimate of resolution of these issues. Allocation of federal/state prerogatives
Both levels of government have been legislating in the drug control field for decades, and both levels will certainly want to have a voice in whatever scheme replaces current prohibition. It would seem that there are two polar possibilities. The federal government could enact simple repealers of all federal penal drug statutes, and declare the states free to do as they pleased with the issue. The key practical drawback here is that this will inevitably result in at least some, possibly many, "dry" states. This can have consequences that some consider undesirable: citizens of bordering states flocking to buy in the "wet" states. Both Amsterdam and Zurich have experienced this phenomenon. Closer to home, so did New York State when its minimum drinking age remained 18 long after all neighboring states had raised the minimum age to 21; Louisiana has a similar problem today. State-by-state disparities tend to create pressure on wet states to become dry or on low-minimum-age states to become high-minimum-age states. A parallel problem might emerge intrastate: certain counties might want to remain dry or might choose to set disparate minimum age limits. The other extreme would be to grant the federal government exclusive authority to define and administer the new drug control regime, completely preempting state prerogatives. While this has the virtue of ensuring clarity and nationwide uniformity, it eliminates the value of having different states devise creative or experimental local methods of deploying and operating a drug control system. Certainly, states could decide unilaterally to cede responsibility for drug prohibition enforcement to federal authorities, as New York State did in 1923 when alcohol was the prohibited drug. As one of only a handful of states that did not enact, or repealed, its own prohibition laws, New York escaped the violent crime that is associated with the era of Prohibition, and that is why the enforcement authorities, in movies of the era, are called the "feds." Cession would be a simple maneuver for states that want to keep drugs illegal, but avoid the costs of enforcement. If a state simply repealed its marijuana laws, for example, replacing them with nothing, marijuana would remain illegal, albeit only under federal law, and the enforcement burden would thus be shifted to the feds exclusively. Of course, legalization, as contemplated by this chapter, would not be accomplished. The more sensible approach to real legalization would seem to reside with a workable middle ground: federal legislation would repeal federal penal drug statutes and would erect a federal regulatory scheme that would allow the states reasonable flexibility in administrative and regulatory detail, but with strong monetary incentives to toe the federal line. In other words, the country's core drug policy would be determined at the national level, and states that adopted policies that were designed or that tended to undermine or frustrate overall federal regulatory policy would suffer fiscal penalties. Setting the level of taxation
Should different substances be taxed differently? What level of taxation can be maintained without driving the final sales price so high that black markets would be encouraged? This latter question has received scant econometric attention, but sorely needs it. The various bills mentioned above seem to just pluck numbers from the air, but tax rates must be determined only after serious analysis. An equally thorny problem is reckoning the base cost of cultivating or manufacturing the substances. Because the "crime tariff" (the premium over base cost that the criminal charges for the risk of producing and trafficking in illegal substances) is responsible for most of the retail street price of drugs under the current prohibitionist system, it is difficult to project the true base cost in a free market solely from current price patterns. Moreover, manufacture or cultivation, wholesaling, and retailing would involve significant personnel and regulatory compliance costs whose dimensions must also be estimated. Without those projections it is difficult to project a sensible retail sales price, without which no tax rate can be rationally calculated. Figuring retail prices and tax rates is further complicated by another factor: with cultivation/manufacture open and legal, small-plot farming and garage lab production will disappear and be replaced by economies of technology and scale. In the longer run this will have the inevitable effect of dramatically reducing the base unit product cost, which will in turn affect taxation policy. For example, an ounce of marijuana whose wholesale cost is $20 in the first year of legalization may well cost only $1 in year five. To the extent the tax rate is based on wholesale product cost, revenues would diminish as production efficiencies increase. Some, but by no means all, of these problems can be simplified or eliminated if the new drug commerce is operated as a government monopoly. There would be no taxes as such, just "profits" represented by the balance remaining after the state has paid all expenses of cultivation, manufacture, processing, and retailing. Even after these calculations are made, other questions remain. Who decides what the tax rates should be, the legislature or the regulatory agency? In most jurisdictions, if not all, tax policy may be set only by elected officials, yet regulators are more likely to have a keener grasp of commerce itself, and could make wiser, speedier taxation decisions out of public view. If the new drug scheme is a concurrent state/federal one, how should tax revenues be divided? How should the likely competition between state and federal governments for the lion's share of the tax dollar be managed? In any event, should revenues, whether at the federal or local level, be specifically earmarked for, say, drug treatment and education? For reduction in local income or property or sales taxes? For local law enforcement? For government's expenses in administering the new drug scheme? For the general treasury? In any event, should legalization proponents announce an estimate of how much revenue might reasonably be generated by the new regime? Legislating the details
How much of the regulatory scheme (i.e., label warning language, sale unit for each drug, time/place sale and use restrictions) should be detailed in the legislation? Is it wiser to leave that to the regulatory body that these bills envisage and create? Does that dampen criticism or invite it? To what extent will the politicians, other public figures, defenders of prohibition, and the public insist that the details be spelled out in advance? Politicians might well prefer to pass the buck on those details to the regulatory agency, while others might want to know all the details in advance. To what extent should any new drug legislation expressly answer harsh questions such as, "Will an airline pilot be able to go down to the local store and buy crack?" Liability waivers
Holding manufacturers and sellers harmless from any product liability claims to users is a feature of some of these bills. But what about manufacturer/retailer liability to third parties harmed by users under the influence of legally purchased substances? Is the alcohol/gun model appropriate for liability to the nonusing third party? Degree of government involvement in legalized
market
Although the analogies are gross and imperfect, the other legalized "sin" markets--alcohol and gambling--provide convenient comparisons. In terms of government involvement, should the new drug scheme resemble, for example, state lotteries or licensed casinos? Lotteries are run virtually entirely by state agencies staffed by state employees; though some peripheral functions are contracted out (e.g., manufacturing the machines that print out the tickets; paying retailers a tiny commission on each ticket sold), the whole system is operated by government functionaries as a monopoly. There is no tax on each sale of lottery ticket: the government simply keeps the balance of revenue after administrative costs are paid. Casinos, however, are typically overseen by a state regulatory agency. The actual casino operations themselves, though tightly monitored by the regulators, are entirely managed by licensed private hands, staffed wholly by private enterprise. The state realizes revenues by taxing casino proceeds. With respect to the drug market, should the government cultivate, process, and sell the product, and keep what is left after covering those costs? Should it leave the cultivation and processing to licensed private operators who will then sell it (at what price? Free market or fixed?) to the government, which will then operate as the wholesale/retailer? Many states operate the liquor market in this fashion. Or should the government leave the whole enterprise in private hands, with its involvement limited to licensing/regulatory matters? Should the government/private mix be different for different substances? Should these decisions be made at the national or local level? Intense government involvement, particularly in the retail phases of the drug market, would be politically attractive to civil service unions but they might also end up to be more costly enterprises, requiring ever-increasing higher total retail prices to support, creating the risk that underpricing and unregulated black markets would eventually emerge. Even if persuasive government involvement translated into greater government revenues, many might find it unseemly for the government to be in the actual business of importing, cultivating, processing, and retailing substances that once were completely illegal and thought by many to be immoral as well. Prescription Drugs
Some prescription drugs--for example, valium, barbiturates, opiate-based pain-killers--are commonly abused through both overprescription and black market availability. Should these drugs be available without prescription under the new scheme? What is the nature of the intersection between the new recreational drug scheme and federal regulation of prescription medication, substances originally designed for the treatment of medical conditions but that have been put to recreational use as well? Designer Drugs
New substances work their way into use from time to time. How does the new regime deal with this phenomenon? Home Growers
Of particular importance to pot aficionados, but theoretically a more general, if less widespread, phenomenon with other drugs as well, are the consumers who grow their own. It is worth noting that current alcohol regulations allow individuals to brew limited quantities of their own beer and wine. How about cooking up your own personal-use pile of Quaaludes or speed? What about growing your own coca leaves to chew yourself? To make into cocaine for your own use? What about buying cocaine through legal retail outlets and rendering it down to crack for your own use? This in turn suggests other questions: Does it make sense to legalize/regulate coca leaves but not cocaine, cocaine but not crack, opium poppies but not heroin or morphine? Licensing Users
Inevitably there will be calls from skeptics and die-hard warriors who say no legalization scheme should even be contemplated unless it requires that users be licensed, the argument being that if we require licenses for the recreational use of cars and guns, why not for drugs? Along the same lines, there may be calls to have retailers keep records of purchasers (perhaps through the issuance of drug ID cards) and amounts sold to each one. Are these wise ideas? If not, how are they be countered? May the same goals be achieved by measures less onerous to privacy and civil liberties concerns? Parent-child Drug Transfers
Current law has an expansive definition of "sale" of drugs, and forbids not only typical cash-and-carry transactions, but gratuitous transfers--gifts--as well. All legalization bills would lift penal sanctions on adults for licensed sales, and for gratuitous transfers between adults, but would retain penal sanctions, often harsh ones, against transfers to those underage. Yet parents might well want to introduce their teenage offspring to some drugs both to remove the "forbidden fruit" attraction of drug use (if Mom and Dad do this, how cool could it be?) and to teach responsible use. This, of course, is what many families do today with respect to introducing their children to alcohol, even though, under current alcohol regulations, it is illegal. Should the new legislation deal with this explicitly? Should this particular dog be left to sleep, like parent-child alcohol transfers? Currently-incarcerated drug offenders
How will the new scheme affect them? Not at all, unless the legislation says otherwise. This was a problem when alcohol prohibition was repealed by constitutional amendment (as opposed to ordinary legislative enactment), and where the number of inmates affected was, compared to current drug inmate populations, insignificant. A number of options suggest themselves: (1) a direct and immediate legislative commutation of all drug sentences; (2) a complete legislative commutation combined with some sort of limited parole supervision depending upon the severity of the sentence; (3) a staggered legislative commutation depending upon the severity of the sentence either with or without parole supervision; (4) a case-by-case approach, requiring each defendant to petition the sentencing judge, with legislation providing guidelines to judges, with right of appeal. A parallel issue involves remissions of forfeitures obtained under the former laws. Drug testing
Does a legalization scheme call for a different approach to drug testing? Does it warrant testing a broader--or narrower--segment of society on a routine basis? Only on a probable-cause basis? Should the criteria change from mere presence of drugs in the system to impairment of function? Nonpenal sanctions for drug users
This issue is analytically distinct, but closely related to the drug-testing issue noted above. Both issues are likely to be resolved on the basis of whether, and in what manner, the public perceives that drug use will significantly increase after legalization. Many proponents of legalization argue that even if overall usage increases, the drugs available will be safer and, more important, less potent. The theory is that the "iron law of drug prohibition"--that criminal laws virtually guarantee that smugglers will market only the most compact shipments of the most potent substances--will no longer operate in a regulated market, and that most drug users, given the choice, would normally opt for milder forms of drugs, preferring a cocktail-like buzz to a blottoed binge. Even if the future ultimately bears out the truth of these plausible theories, the public's perception of legalization's likely harvest might well be quite different. Citizens might well seek comfort in knowing that the law contains other measures--nonpenal in nature--that would act to deter drug use. The possibilities are endless. Eligibility for all sorts of public benefits (welfare, housing, veterans, Social Security, medicare, unemployment insurance, driving and occupational licenses) might be denied on the basis of a failed mandatory drug test or on other proof of drug use.. Assuming that the Constitution would impose some limits on the denial of public benefits solely on the basis of using a legal substance, it is not at all clear what would prevent, for example, a legislature from making drug use a ground for divorce or a factor in awarding child custody. Moreover, the Constitution is unlikely to provide protection from purely private sanctions, like allowing a landlord to evict a tenant for drug use. If measures such as these become part of the legalized drug landscape--plausible so long as opprobrium towards drugs remains at current levels--reformers whose anti-prohibitionism is driven largely by libertarian sentiments might find the drug peace scarcely more attractive than the drug war; the brawny arm of the penal law would be replaced by the slithery tentacles of insidiously intrusive "civil" sanctions. Conclusion
Legalization means more than changing laws. In the long run, it means trying to accomplish the same goals as prohibition--protecting public health and safety, curbing abuse, especially among the young, and eliminating the crime and violence associated with illicit drug trafficking. In the short run, legalization means changing the way we think about drugs. When drugs are legal, there will be little confusing of drug use with drug abuse, or confusing the harm done by drugs with the harm done by drug prohibition. Teachers and parents will recognize that educating young people to avoid problems with drugs is more than infusing them, for now, with fear and scorn. Consumers will understand that the legal status of a drug has little to do with the drug’s safety. Drug-related crime will be distinguished from prohibition-related crime. Legalization confers upon citizens both the benefits and burdens of personal autonomy. Drug users will face less risk to their health and their liberty, but will be held accountable for their conduct affecting others. A major challenge to the architects of legalization will be to devise a system that imposes on consumers a profound sense of responsibility for the consequences of their drug use. When talk is of legalizing drugs, identifying what is meant by “legalizing” and what is meant by “drugs” is a modest but necessary first step before attention is turned to how best to do it. Unlike the “bogus ideal” deprecated by Justice Oliver Wendell Holmes, what it means to legalize drugs must not “dwell in generalities and shirk the details.” Endnotes
Szasz, Thomas, Our Right To Drugs, The Case for a Free Market, Praeger, New York, Westport, London, 1992 The eleven states that decriminalized marijuana statutorily are Alaska, Oregon, California, Minnesota, Colorado, Nebraska, Mississippi, Ohio, North Carolina, New York and Maine. Kleiman, Mark A.R., Marijuana: Costs of Abuse, Costs of Control, Greenwood Press, New York, 1989, p. 182 According to FBI Uniform Crime Statistics, arrests for marijuana have risen from 10 per 100,000 population in 1965 to 226 per 100,000 population in 2002. State of Alaska v. Leo Richardson Crocker, Court of Appeals No. A-8462, August 27, 2004 Senate Bill No. 4944, February 16, 1971, 1971-72 session; Senate No. 3980, Assembly No. 6025, March 15, 1979, 1979-80 session S. 1918, 1989-90 Regular Session of the New York Senate House No. 1737, 1981 Session The Regulation and Taxation of Cannabis Commerce, Report of the National Task Force on Cannabis Regulation, December 1982. Co-author Evans was chairman of the Task Force. Senate No. 497, 1983 Regular Session Commonwealth of Pennsylvania, The Pennsylvania Marijuana Cultivation Control Act of 1983, introduced by Sen. T. Milton Street State of Missouri, House Bill No. 1820, 85th General Assembly Nadelmann, Ethan A., “Thinking Seriously About Alternatives to Drug Prohibition,” Daedalus, Volume 121:3 Summer 1992, p. 113 Initiative Measure 595 (1993, Section 10(1) The Oregon Drugs Control Amendment, Section 1 (1997) Op. cit., Section 3 Op. cit., Section 6 Oregon Cannabis Tax Act, Section 474.055. Op, cit., Section 474.055(d) 21 U.S.C. 801 et seq. 21 U.S.C 321 (g) (1) DARE Officer Training Manual, 1984, p. 93, revised 1994 Grinspoon, Lester, M.D., “The Harmfulness Tax: a proposal for the regulation and taxation of drugs,” North Carolina Journal of International Law and Commercial Regulation, Vol. 15, No. 3, June 1990. Report of the Committee to Review the Tobacco, Alcohol and Other Substance (TAOS) Curriculum, Ashfield-Plainfield (Massachusetts) Regional School District, Sanderson Academy School Council, June 6, 1994, p. 6, Op. cit., p. 7 In fact, the federal government has already used this carrot-and-stick approach in the drug policy arena with considerable effect. The Federal Drug Offenders Driving Privileges Act provided that states that decline to enact legislation stripping drivers' licenses from people convicted of drug offenses will have their matching federal highway funds cut off [See 23 U.S.C. {104(a)(2)}]. Virtually all states got the message and enacted the requisite legislation. See, e.g., Caputo & Ostrom, Potential Tax Revenu from a Regulated Marijuana Market: A Meaningful Revenue Source, 54 Am.J. Econ. & Sociol. 475 (1994); Garber, Potential Tax Revenues from a Regulatory Marketing Scheme for Marijuana, 10 J. Psyched. Drugs 217. Extrapolating from alcohol and tobacco tax experience and from available statistics on marijuana usage patterns, the authors derive a broad estimate of the range of tax revenues that might be generated through a legalized marijuana market. However, the authors have no particular legalization model in mind, and do not propose any particular tax structure or tax rate. They tacitly assume that the government will be operating (not just licensing others to do so) the entire marijuana industry, from cultivation to processing to retailing, and seem to equate "taxes" with "profits." Yet the tax issues do not exist in a vacuum, and can be confronted or resolved only within the framework of specific legalization models. Cost-benefit and cost-effectiveness analyses have been marshaled by drug policy debaters, but not always sagely because there are so many variables. For trenchant examination of the problem, wee Warner, Legalizing Drugs: Lessons From (and About) Economics, 69 Milbank Quarterly 641-662 (1991). Another apt contrast would be between race tracks (entirely in licensed private hands) and off-track betting parlors and lotteries (operated wholly by government employees). For a comprehensive review of the law in all jurisdictions, see People v. Starling, 85 N.Y.2d 509, 650 N.E.2d 387 (1985). See generally, United States v. Chambers, 291 U.S. 217, 233 (1934); Note, The Status of Liquor Crimes and Forfeitures Following Repeal, 2 Geo. Wash. L. Rev. 395 (1934); Annotation at 89 A.L.R. 1514 (1935). Letter to Harry Drinker, quoted in Family Portrait, by Catherine Drinker Bowen, Little, Brown & Company, Boston, 1970 |
