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White Paper: Legalize Me Krishna Shastry

San Jose State University HRTM 100W, Section 1 Professor Michael F. Lange April 28, 2011

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Executive Summary The legalization of marijuana is a question of when and not if. Marijuana should be legalized. It will lower crime rates and improve our economy. In 2010, Proposition 19, a bill that wouldve legalized marijuana for recreational use, distribution and taxation, was added to the November ballot. It lost by a small margin while causing much controversy. The reformists believe that it will improve the efficiency of law enforcement while lowering Californias budget deficit by billions of dollars. Oppositionists trust that legalization will increase intoxicated driving accidents, lose federal grants, and create unsafe environments for children. The stakeholders in the situation are plentiful. They range from ordinary people to people of high power in various industries. Marijuana also has a very long history of use starting back in 8,000 B.C. by the Chinese. It wasnt until the 19th century when it was introduced to the United States. From then, it was used as a base in many medicines until its prohibition in the 20th century. During the last decade of the millennium, marijuana was legalized for medicinal use in several states. Marijuana usage and acceptance has proven to be heavily influenced by pop culture and media. Its acceptance is currently at an all-time high which is proven by the results of the November 2010 ballot. Since Prop 19s failure, it is believed that compromise is the only way for its acceptance by oppositionists. If it were legalized, entrepreneurs would capitalize on untouched, highly-lucrative markets while some industries may see a decrease in demand. In conclusion, the legalization will be legally and economically beneficial. In May 2009 ex-California Governor Arnold Schwarzenegger was quoted saying, I think its time for a debate. And I think that we ought to study very carefully what other countries are doing that have legalized marijuana and other drugs, what effect it had on those countries, and are they happy with that decision (Grim, 2011). Similarly, I believe that it is time for a debate;

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however, the studies have been done. This leads me to the decision that marijuana must be legalized for recreational use; the resulting tax revenue will improve the status of our economy, reduce crime rates, and benefit millions of citizens. Current Issue Defined in Depth The issue at hand is whether or not to legalize marijuana for recreational usage in California. In 2010, Proposition 19 was placed on the ballot. It would legalize the possession, production, regulation and taxation of marijuana. The law failed to pass with a 46% to 54% vote (Doherty, 2011, p. 33). According to Brian Doherty of Reason Magazine, reformers are still optimistic. Prop. 19 won a higher vote total (and higher vote percentage) than any previous attempt to legalize pot in the United States! What Theyre Saying: Reformists v. Oppositionists As the battle to legalize marijuana has gained momentum, proponents of the proposition are able to concisely and precisely express their reason about why it should be legalized. The Yes on 19 official website states: Today, hundreds of millions of taxpayer dollars are wasted enforcing the failed prohibition of cannabis (also known as marijuana). Currently, cannabis is easier for kids to get than alcohol. Prohibition has created a violent criminal market run by international drug cartels. Police waste valuable resources targeting non-violent cannabis consumers, while thousands of violent crimes go unsolved. And there is $14 billion in marijuana sales every year in California, but our debt-ridden state sees none of the revenue that

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would come from controlling and taxing it. Cannabis prohibition has failed (About Proposition 19, 2011). Their main point is clear. The prohibition is wasting taxpayer money, diverting valuable resources, and has failed miserably. On the other hand, the opponents of Proposition 19 believe it is a chaotic initiative filled with major flaws that will have severe, unintended consequences for California (No on Proposition 19, 2011). There are four pressing consequences that the opponents express on their official website. 1. Under the influenced driving. They believe that Prop. 19 contained no clear definition of being under the influence and would enable employees and citizens to operate vehicles and heavy machinery while high. 2. The loss of federal grants to companies. No on 19 reasons that federal grants would be lost because, it would place hundreds of employers, including public schools, at risk of violating the Federal Workplace Act of 1988. 3. Advertising marijuana to the youth. If passed, Prop. 19 would allow licensed marijuana dealers to advertise without restriction, near schools, libraries and parks, just like cigarette companies. 4. Cultivation of marijuana in neighborhoods. The following is a direct statement from Yes on 19: Would allow for the growing and processing of marijuana in the front yard or backyard of any residence in any neighborhood in any part of any California community, no matter how close that residence is to, for example, courthouses, police stations, schools or hospitals.

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The emphasis of these four issues was clear. According to No on 19, passage of the measure would compromise public safety, morality, and family friendliness of neighborhoods. Stakeholders As with any widely publicized political/economic movement, the list of stakeholders is never ending. They range from, but are not limited to: ordinary people such as farmers, business owners, soccer-moms and even people of great political power such as the leaders of Wall Street, the Drug Enforcement Agency, and even President Obama. The positions of these groups of people are just as abundant, most of which are politically and economically motivated. Entrepreneur, Richard Lee, is a prime example of a major stakeholder. He not only was the driving proponent of Proposition 19, he is also the founder of Oaksterdam University, the first cannabis focused educational institute (McKinely, 2011). Oaksterdam University was founded in 2007 and has fast spread from a single corner operation to incorporate complementary businesses on several nearby streets, offering medicinal marijuana, coffee, gifts, bike rentals and glass blowing (McKinely, 2011). On the contrary, a major stakeholder opposed to the legalization is CA Beer & Beverage Distributors (CBBD). The CBBD was the first directly competitive industry to publicly donate $10,000 to the oppositionist group Public Safety First (Grim, 2011). Historically, this industry has always viewed illegal substances as a threat to market share. Hence their saying: One night smoking marijuana and watching a movie is a night not spent at the bars (McKinely, 2011).

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The Emergence of Marijuana Unlike many other illegal drugs, cannabis has a deep rooted and colorful history of practical usage and herbal remedies. According to archeologists, the emergence of the usage of cannabis reaches back to 8000 B.C. when the Chinese wove dried hemp into fabric (Legalization, 2011). Hemp is a non-intoxicating form of marijuana and can be made into a very strong substitute to cotton and wool due to its high natural cellulous content (Legalize.org, 2010). The usage of hemp for fabrics still continues to this day; and can be seen advertised in numerous marketplaces around the world. The first time marijuana, not hemp, was used as medication was dated back to 2727 B.C. in China but, it wasnt until the 19th century when western culture started to use marijuana-based medications (Legalization, 2011). Since then, studies have found that marijuana can effectively treat symptoms such as nausea, vomiting, premenstrual syndrome, weight loss, insomnia, and lack of appetite. Relatively speaking, the legal issues associated with the consumption and production of marijuana did not start until recently. Up until 1937, marijuana was sold regularly at newsstands and other similar venues (Passage of the Uniform Narcotic Drug Act, 2011). In 1937, a federal law was enacted that restricted the possession or transfer of marijuana without the purchase of an $100 tax stamp that was not made publicly available (Legalization, 2011). It wasnt until 1969 when the 1937 tax act was overruled by the Supreme Court because it would result in selfincrimination if someone were to follow the law (Legalize.org, 2010). In reality, this did nothing due to the fact that all 50 states had outlawed it. Coincidentally, in 1970, the Controlled Substances Act once again made the possession and cultivation of marijuana illegal on a federal level. In 1972, President Nixon declared a War on Drugs and established the Drug Enforcement Administration (DEA) (Legalization, 2011). The DEA is a federal agency

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responsible for enforcing laws and regulations governing narcotics and controlled substances, with the goal of immobilizing drug trafficking organizations (DEA, 2010). But, to the agencys dismay, the legalization of marijuana, for medicinal use, was only around the corner. In 1996, California became the first state to legalize the medicinal use of the substance (ProCon, 5). This was not only a large step for marijuana advocates; it was a leap for the overall societal acceptance of its medicinal value. To this date, 15 other states have passed similar laws that either legalize the medicinal usage or have decriminalized the possession (ProCon, 6). Marijuanas Trendiness Since the beginning of the battle against cannabis, many political and public trends have arisen. In the early 1930s, the movie Reefer Madness claimed that the consumption of what was then called reefer would cause insanity (Legalization, 2011). Along with this, there were claims that it was a gateway drug to heroin usage (Legalize.org, 2011). These assumptions gave marijuana users the image of being incompetent and aggressive addicts, and dangerous to society. Even though the previous negative connotations arose through the anti-marijuana propaganda, the pro-marijuana movement grew rapidly in the 70s. The percentage of teens that had used marijuana grew to 38.9% in 1978-1979 due to popular youth culture (House Drug Policy, 2011). But because of Nixons War on Drugs movement, teen users declined to 14.4% in 1992. Since 1992, this number has increased to 25.7% in 2001 (House Drug Policy, 2011). The Goal The main goal of the reformists is to legalize the regulation and taxation of marijuana for recreational use by 2012.

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How? The task at hand is not easy and will require compromise on both sides of the spectrum. The new proposition should include many of the same regulations of Proposition 19 such as: Persons over the age of 21 may possess up to one ounce of marijuana for personal consumption. One may grow marijuana at a private residence in a space of up to 25 square feet for personal use. The local government may authorize the retail sale of up to 1 ounce of marijuana per transaction, and regulate the hours and location of the business. The local government may tax in order to raise revenue or to offset any costs associated with marijuana regulation. Nonetheless, it will definitely have stricter regulations than Prop 19. Some possible changes that could result in the passing of the bill could be: regulations about where one can use, possess, and grow, as well as harsher criminal and civil penalties. Economic Implications The economic implications of the legalization of marijuana are far-reaching. Bruce Watson, a prominent writer for the online journal Daily Finance wrote, With a potential market of millions, decriminalization of marijuana could open the door to a vast, largely-untapped market for smoking paraphernalia, accessories, and other lifestyle accoutrements. The CEO of Vapor Genie -a paraphernalia manufacturer- noted, If marijuana is legalized, we see the potential for significant growth in the smoking products industry. It will create a new market for

Running Head: WHITE PAPER our products (Watson, 2011) Watsons definition of other lifestyle accoutrement markets includes cable television, consumer electronics, and food & beverage companies (particularly ones whose menus include high carbohydrate levels). On a more publicly viewable level, marijuana will be just as prevalent as tobacco and alcohol. One could find it in corner-stores and even Wal-Mart. Just as the citizens of San Jose have seen, marijuana dispensaries may be chartered within blocks of each other fighting (nonviolently) for their share of the lucrative market. In conclusion, the highly controversial topic of the legalization of marijuana is reaching much deeper into our lives politically and economically as time goes by. The growing acceptance of marijuana as a recreational drug has brought much hope to reformists. If it is legalized, it will generate revenue for our wounded economy, lower crime rates, and will benefit millions.

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References About Proposition 19 | yeson19.com. (n.d.). yeson19.com. Retrieved April 7, 2011, from http://yeson19.com/about DEA - definition of DEA by the Free Online Dictionary, Thesaurus and Encyclopedia.. (n.d.). Dictionary, Encyclopedia and Thesaurus - The Free Dictionary. Retrieved April 7, 2011, from http://www.thefreedictionary.com/DEA Grim, Ryan Arnold: Time to Talk About Legalizing Pot. Huffington Post. Retrieved May 5, 2009, from < h t t p : / / w w w . h u f f i n g t o n p o s t . c o m / 2 0 0 9 / 0 5 / 0 5 / a r n o l d - t i m e to-talk-about_n_197244.html>. Doherty, B. (2011). Just a Matter of When?. Reason, 42(9), 32-39. Retrieved from EBSCOhost. Legalize.org. (n.d.). Legalize.org History of Cannabis Prohibition. Legalize.org . Retrieved April 7, 2011, from http://www.legalize.org/history-of-cannabis-prohibition/ Legalization of Marijuana. (n.d.). Legalization of Marijuana, Legal Marijuana, Marijuana Laws. Retrieved April 7, 2011, from http://legalizationofmarijuana.com/history-ofmarijuana-page-2.html

McKinely, Jesse . "The Legalization Chronicles." New York Times. New York Times, 28 Oct. 2009. Web. 27 Apr. 2011. <http://bayarea.blogs.nytimes.com/2009/10/28/thelegalization-chronicles-part-xxi/>. No On Proposition 19. (n.d.). No On Proposition 19. Retrieved April 7, 2011, from http://www.noonproposition19.com/

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Passage of the Uniform Narcotic Drug Act: 1927-1937. (n.d.). DRCNet Online Library of Drug Policy. Retrieved April 7, 2011, from http://www.druglibrary.org/schaffer/Library/studies/vlr/vlr3.html Watson, B. (n.d.). Pot Economics: Who Stands to Profit if Marijuana Is Legalized? DailyFinance. Business News, Stock Quotes, Investment Advice - DailyFinance. Retrieved April 27, 2011, from http://www.dailyfinance.com/2010/04/20/poteconomics-who-stands-to-profit-if-marijuana-is-legalized/