8 States Have Legalized Marijuana In 8 Different Ways

[Pages:4]8 States Have Legalized Marijuana In 8 Different Ways

Law360, New York (Nov. 22, 2016)

Let's begin with the big elephant, or donkey as it may be, in the room. California's Proposition 64, the Adult Use of Marijuana Act, passed by 56 percent. While pro-marijuana advocates touted Proposition 64 as having the potential to raise staggering amounts of money through the 15 percent excise tax and 7.5 percent sales tax applied to recreational marijuana sales, a drafting error in the measure has cast a dark shadow of doubt on that conclusion. Without intending to do so, the drafters of Proposition 64 inadvertently repealed the taxes on medical marijuana from now until January 2018, when recreational sales are set to begin. What does this mean for the state? Well, some believe that the lines for medical marijuana cards are about to get very, very long. In addition, there's an argument to be made that those individuals getting in on the tax-free medical marijuana bandwagon won't be keen on jumping to the recreational side of the industry where they would be forced to pay high taxes on the same now-untaxed product. One other issue with the drafting of Proposition 64 revolves around the statement in the Findings and Declaration section that local municipalities may ban marijuana businesses, but only by a vote of the people within a locality. However, in section 26200, which spells out the scope of local control, the requirement of a vote is missing in the actual language of the measure notwithstanding that this requirement was present within a previous draft of the measure. While this may not have the same impacts as the tax revocation issue, it certainly leaves the door open for anyone challenging local efforts to control marijuana and marijuana businesses moving forward on the basis of ambiguity. Let's face it, California has the makings to be one of the largest marijuana markets in the world, so it's important that they get it right by having the legislature fix the tax issue and set up a broad and highly regulated marketplace on day one.

Heading all the way to the other coast, Maine's Question 1, the Marijuana Legalization Act, narrowly passed by approximately 51 percent. While petitions have been filed requesting a recount, as it stands now, Mainers will be able to legally partake beginning in January 2017. Maine's measure is an indirect initiated state statute, so practically speaking, this makes it somewhat easier to make changes to the act in the future. Question 1 legalizes the possession, use or transport of up to 2.5 ounces of marijuana, and the cultivation of up to six flowering plants, 12 immature plants and unlimited seedlings at a residence. The measure further specifies that employers may not refuse to employ "or otherwise penalize" a person who consumes marijuana outside the employer's property. This may actually be the first state to directly address "off-premises" marijuana use, an issue that has caused a firestorm of litigation elsewhere. In another first, the measure establishes marijuana social clubs, a move Denver waited four years to make following passage of Colorado's Amendment 64 that legalized recreational marijuana. Finally, Maine's measure gives its licensing agency nine months to implement major substantive rules and regulations following the effective date of the act, which would be approximately 60 days after the election, given that the recount is unlikely to change the results.

Taking the Downeaster south, Massachusetts' Question 4, which passed by approximately 53.5 percent, is an indirect initiated state statute that legalizes the use, possession, and transport of 1 ounce or less of

marijuana, and up to 5 grams of marijuana concentrate. The measure further legalizes the cultivation of up to six marijuana plants within one's residence, with a cap of 12 plants in any single residence beginning on Dec. 15, 2016. This may not sound like much, but mature marijuana plants are big -- like the size of a human. They take up space and require large amounts of energy and chemicals to grow. Landlords took a hit in the Mass. measure because, unlike other states, their authority to prohibit tenants' use of marijuana was largely eliminated. For example, landlords may ban smoking but not other processes like cultivation of plants, hash oil production or consumption through vaping or edibles. Local governments have the authority to ban marijuana sales altogether, but only if approved by the voters of the municipality. Finally, the state has about a year to get this right, with an implementation deadline of Jan. 1, 2018. But if for some reason the cannabis control commission fails to adopt implementing regulations by then, the state's medical marijuana treatment centers may immediately begin possessing, cultivating, manufacturing and selling marijuana to anyone 21 or older, despite the lack of any actual rules being in place.

Shifting west, oh, Nevada, you always have to be unique. While most marijuana measures clearly and affirmatively separate the sale of marijuana products from anyone in the liquor or tobacco business, Nevada's Question 2 outright requires current medical marijuana businesses and liquor wholesalers to serve as the distribution channel for marijuana products for the first 18 months. After that, the market opens up to anyone, or at least opens up in a way the legislature will have to address when it convenes in February. Nevada's measure also caps the number of marijuana retail sales licenses per county, ranging from 2--80 depending on the county's population.

Pack up the convertible, we're heading south, where Arkansas and Florida both legalized medical marijuana. While Arkansas passed its measure with 53.1 percent of the vote, Florida passed theirs with an astounding 71 percent. To put that in context, Americans' support for gay marriage, the death penalty and belief in climate change are all below that mark. Florida's resounding approval for medical marijuana shocked observers on all sides of the issue as it blew past the state's 60 percent threshold requirement for passage.

The Arkansas measure gives three different state agencies -- one of which, the Medical Marijuana Commission, is yet to be created -- until March of 2017 to promulgate rules establishing its patient registry system. The measure further establishes a patient-caregiver model for distribution, which must be closely monitored and enforced to prevent the proliferation of the grey and black markets. This issue, among many others, will need to be addressed by the legislature when it convenes in January, and given the legislature's ability to change, and even reverse, certain aspects of the amendment with a two-thirds vote so long as they are "consistent" with the amendment itself, observers need pay heed to the vetoproof Republican House and Senate. The legislature may not, however, change any sections authorizing use and possession or the number of dispensaries and cultivation facilities that may be established, so those big pieces remain safe.

Similar to Arkansas, Florida also has a ridiculously short six-month timeline for implementation. Amendment 2 also establishes a patient-caregiver system for distribution and gives a very robust level of authority to the Department of Health. Florida's 60-day legislative session will run March through May of 2017 and the final day of the session is nearly identical to the deadline for the Department of Health to have its rulemaking up and running. The No. 1 financial backer of Florida's medical marijuana measure was John Morgan, of the Morgan & Morgan personal injury law firm, which is headquartered in Orlando and arguably the state's largest injury firm. It should come as no surprise, then, that the Florida measure specifically includes standing and a cause of action for any person in possession of a marijuana

certification from their physician to sue the Florida Department of Health should the rulemaking fail to be in place by May.

Heading north to Big Sky Country, Montana's Medical Marijuana Initiative, also known as I-182, passed by nearly 58 percent. This initiative sought to eliminate certain revisions made to Montana's Medical Marijuana law, originally passed in 2004, by Senate Bill 423 in 2012. SB 423 repealed the Medical Marijuana Act passed by the voters and replaced it with the Montana Marijuana Act, limiting the number of patients for each provider to three, requiring doctors who provide marijuana certifications to 25 or more patients per year be referred to the state's board of medical examiners, and authorizing unannounced inspections by law enforcement. The legality of SB 423 was challenged in court, and only became effective in August 2016. Nonetheless, this effectively shut down the state's medical marijuana program. Portions of I-182 went into effect immediately, while others become effective June 30, 2017.

Moving one state east, North Dakota's Medical Marijuana Legalization Initiative, Measure 5, is an initiated state statute that passed by 63.7 percent. Measure 5 provides for "compassion centers" that may dispense up to 3 ounces of marijuana in any 14-day period to a qualifying patient or caregiver. The measure also allows for the cultivation of up to eight plants if the qualifying patient's home is more than 40 miles from the nearest compassionate care center. So in practicality, if the state declines to set up a regulatory framework, the entire state would be a de facto personal cultivation center with high risks for trafficking marijuana into the grey and black markets. Needless to say, the state needs to act quickly.

Turning back to where it all began, since Colorado passed its first marijuana-permissive law in 2000, it has not permitted the public consumption of marijuana in marijuana bars, or "social clubs" as they are commonly called. That changed last week when Denver voters passed Initiative 300 with 53 percent of the vote. The measure calls for a four-year pilot program where all Denver businesses, from bars and cafes to yoga studios and nail salons, could seek a permit to create marijuana "consumption areas." This will create a "bring your own pot" environment where the product must be purchased from a licensed marijuana business or cultivated in a personal residence and transported to a place where marijuana users can gather together and socialize. Denver's Department of Excise and Licenses is now tasked with developing rules and regulations for the system and has 60 days from election day to create a permit system. The big question yet to be addressed is whether the passage of Initiative 300 violates Amendment 64's prohibition on the open and public use of marijuana. Litigation on this issue is likely so stay tuned to Colorado -- Marijuana's Main Street, USA.

Even though Colorado passed its recreational marijuana amendment in 2012, and its medical marijuana amendment in 2000, the state has constantly revised and revamped the rules applicable to the two schemes -- to the tune of 135 pieces of marijuana-related legislation in the last five years. Just as Justice Brandeis famously announced, states truly are laboratories of democracy. Colorado's experiment has shown that rules and regulations must constantly be tweaked in order to respond to unforeseen situations. Colorado's careful collection of data from a variety of stakeholders has better equipped it to carefully adjust these rules and regulations where needed. While many states have watched this process carefully, others have ignored many of the lessons learned in the Centennial State as reflected in the drafts of their own marijuana measures. For those states rushing implementation of their marijuana laws, don't say Colorado didn't try to warn you.

Last, and certainly not least, let's head to Washington, D.C., for an update on the federal law. President Obama's non-enforcement stance on marijuana has been widely ridiculed by some conservatives as irresponsible while others have simply said it is a states' rights issue and they should be given due

deference on the issue. With the recent announcement that Sen. Jeff Sessions (R-AL) will be Presidentelect Trump's attorney general, the marijuana industry has to be concerned. Sen. Sessions has long been on the record trumpeting the benefits of the Reagan-era "Just Say No" campaign and is strongly antimarijuana and has called Obama's non-enforcement decisions "beyond comprehension." The real key, though, is President-elect Trump, who has said he has no issue with medical marijuana and defers to the states on recreational. If he directs his new attorney general to focus on immigration issues, there's a good chance marijuana could fly under the radar for a while. But, if at some point the decision is made to enforce federal drug laws in states that have legalized it, it's a safe bet everyone will end up in the Supreme Court--and hopefully by then, there will no longer be a vacancy.

Melissa Kuipers Blake is a senior policy advisor and counsel at Brownstein Hyatt Farber Schreck LLP in Denver. Gina L. Tincher is an associate at the Denver office.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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