For Future Federal Drug Policy, Look to California

The problems associated with legalizing marijuana are seen on a much bigger scale in the state.
April 2018
Heidi Carney speaks with her husband, Justin Menees, while their daughter, Lexi, 8, sells Girl Scout Cookies outside a marijuana dispensary in Phoenix on Friday, Feb. 21, 2014. (AP Photo/Terry Tang)
Donald F. Kettl
By Donald F. Kettl  |  Columnist
Former dean of the School of Public Policy at the University of Maryland, and a nonresident senior fellow at the Volcker Alliance and the Brookings Institution

One Girl Scout in California came up with an ingenious plan to sell cookies this year. She set up shop outside a San Diego marijuana dispensary and peddled 312 boxes of cookies in just six hours.

She had some help from the dispensary. The store posted a photo on Instagram of the Girl Scout proudly wearing Samoa glasses -- and then tagged it #tagalong. The cleverness of the whole scheme rattled some parents, but a spokeswoman for Girl Scouts USA said that it was up to local councils to decide how the cookie campaign would be run. The Girl Scouts’ national office was handing off the job of ruling on the appropriateness of selling cookies outside a pot shop -- just as California was seizing the national agenda on recreational marijuana policy.

It’s hard to overestimate just how much national dust California kicked up when it launched statewide recreational marijuana sales back on Jan. 1. In Berkeley, Mayor Jesse Arreguin came to a ribbon-cutting at a city dispensary. Analysts projected that the state was on its way to a $5 billion (or more) legalized cannabis industry.

Legalized by California standards, that is, and by the standards of a few other states. Eight states plus the District of Columbia have now legalized marijuana for recreational use. Twenty-two others have legalized it for medical treatment. The federal government, however, still outlaws the purchase, possession or use of marijuana for any purpose. And Attorney General Jeff Sessions has rescinded the Obama-era policy of turning a blind eye to individuals who light up in states where marijuana is legal. Sessions insists that U.S. attorneys enforce federal laws as written.

In practice, however, federal prosecutors still have to decide how much energy to spend chasing down pot smokers in the states where marijuana use is legal. In one of those states, Colorado, U.S. Attorney Bob Troyer has said his office would focus on “identifying and prosecuting those who create the greatest safety threats to our communities around the state,” a subtle jab at Sessions’ announcement. Most U.S. attorneys say they have bigger crimes to investigate than the use of marijuana -- and better trial strategies than attempting to convince jurors to convict marijuana users on federal charges who were complying with state law.

That has led to a feud between Sessions and Colorado’s junior U.S. senator, Republican Cory Gardner. Gardner says that Sessions, in his confirmation hearings, pledged that the Justice Department would not focus on marijuana enforcement. When Sessions reversed that position, Gardner put a hold on White House nominees for unfilled Justice posts, and vowed not to allow confirmation votes on any of them in the Senate until Sessions promised not to pursue his marijuana policy change. Gardner has a reputation as a law-and-order Republican, but he has no interest in bucking his Colorado constituents, 55 percent of whom voted in 2012 to legalize the recreational use of marijuana.

Since legal sales of cannabis began in Colorado, the state has seen a growth in the number of businesses supplying dispensaries with armored cars, security cameras and big safes. Because marijuana remains illegal under federal law, and because most banks operate under federal regulations, it is hard for dispensaries to open checking accounts or take credit cards. In the eyes of federal regulators, marijuana money is drug money, and legalized pot dealers worry the feds might seize on traceable payments to shut them down. So they stick with cash. But no one wants to attract robbers with piles of hundred-dollar bills in the back room, or risk getting hijacked while driving cash around in the trunk of a car. Hence the safes and other precautions.

California faces the same problem on a much bigger scale. Whereas Colorado’s cannabis industry took in about $1.5 billion last year, California is trying to figure out what to do with $5 billion in marijuana cash sloshing around in the state economy. California’s state treasurer and attorney general are studying whether the state could charter its own bank to process marijuana transactions, avoiding the credit card and check problem.

What happens in California is worth watching closely. For decades, from the introduction of catalytic converters in automobiles to its cap-and-trade program for reducing air pollution, the nation’s most populous state has brought about changes in national policy just on the strength and scale of its own initiatives. If there is to be a reworking of federal drug policy, there’s a good chance that it will start in Sacramento. In that case, Girl Scout cookie sales might never be the same, should young entrepreneurs discover that business is better in front of dispensaries than at supermarket doors.