How Low Can Pot Prices Go?

Contrary to what many claim, prohibition raises drug prices enormously. Conversely, legalization causes a price collapse, which in addition to increasing drug use also means that ad valorem taxes bring in less money per sale month by month. States that set cannabis taxes as a percent of price are thus not going to get the revenue they expected and indeed could end up subsidizing the marijuana industry out of the public purse.

Details at my latest Washington Post Wonkblog.

Towards Rigorous Assessment of Marijuana-Opioid Substitution Effects

A number of correlational studies have shown that at the individual level, cannabis use is positively associated with opioid use, misuse, and addiction, whereas at the state level, availability is negatively associated with opioid prescriptions and overdose rates. Many people have responded to this ambiguous situation by asserting that the correlations which fit their marijuana politics represent rigorous causal evidence and those that don’t are just correlations, nothing to see here, let’s move on.

Assuming you actually wanted to know the answer about whether cannabis and opioids are substitutes, and saw science as a tool to learn things rather than prop up your ideology, what would be a rigorous way to test the question? Experimental designs are tough to implement because of the ethical issues surrounding introducing people to addictive drugs. However, my colleague Beth Darnall and I lay out a strategy in the current issue of Addiction that doesn’t present this ethical quandary.

Millions of people are taking prescribed opioids long-term and many of them want to reduce their dose or stop taking them entirely. Tapering protocols have been developed to help such people. Critically, a significant number of these people also use cannabis.

This presents an opportunity: Run a randomized clinical trial on such individuals who are interested in tapering opioids and also measure what happens to their cannabis use if their opioid use changes. Beth did this is a small tapering study which didn’t have the power to assess effects rigorously but demonstrated proof of concept (FWIW, three people quit marijuana use, all of whom had also quit opioid use). With support from PCORI she has now launched a much bigger study in which this question can be addressed within a multi-site randomized trial of opioid tapering.

This isn’t the only route to pushing the science in this area. Ziva Cooper at Columbia is doing inventive experiments on the interaction of opioid use, cannabis use, pain, and drug liking. It’s an intriguing area and good science will out, even if only a minority of people are willing to accept the results whatever they are.

Nothing Raises Drug Prices Like Prohibition

Prior to any state legalizing marijuana, economist Jeff Miron estimated that it would cause pot prices to fall by 50%. Legalized pot blew through that estimate in less than 24 months and is still dropping fast.

Illegal drug prices have generally fallen over time as industries become more efficient, and this fact has often been used to assert that prohibition doesn’t raise drug prices. That argument has been destroyed by the real time experiment of legalizing marijuana, as I explain in Washington Post Wonkblog.

Changing my mind on cannabis legalization in Arizona

Since I don’t vote in Arizona (though, as it happens, I was born there) I hadn’t studied the details of the cannabis-legalization proposition which will appear on the ballot there this fall. So when the Sandra Day O’Connor Institute invited me to join a panel discussion, I came in thinking only what I generally think about such measures:

  1. Cannabis ought to be legal. Prohibition has broken down to the point where the harms associated with trying to control an illegal market generating $40 billion a year in criminal revenues greatly exceed the benefits, and there’s no plausible route back to effective prohibition.
  2. We ought to legalize in a way that makes moderate use by adults easy, while discouraging the formation of bad cannabis habits (an increasingly common problem) and use by minors.
  3. Alcohol-style legalization, which is what the ballot propositions generally offer, is a bad way to do that, because a for-profit industry (like the existing illicit industry) will make most of its money selling to heavy daily users rather than casual users, and about half the daily users - by their own self-report - have lost control of their cannabis habits.
  4. There are lots of other, better options.
  5. Even within a for-profit model, there are plenty of ways to encourage temperance, starting with keeping prices high, restricting persuasive marketing, and requiring that sales clerks have training in pharmacology and the prevention of substance use disorders and a professional responsibility to give advice in the interest of their customers, not their employers.
  6. It would therefore be better to handle this through the usual legislative process rather than by initiative.
  7. To make that workable, Congress should act to allow states to legalize (waiving the federal criminal laws that would otherwise apply) if their plans to do so meet rather strict criteria, as determined by the Secretary of HHS and the Attorney General. Those waivers should have to be renewed periodically, in order to hold the states and the industry to the promises made in order to get them.
  8. But since the state and federal legislative processes clearly won’t do what a majority of the voters clearly want them to do, I’d vote for any halfway-reasonable legalization initiative, both to end the arrests sooner rather than later and to nudge the legislators along.

So, going in to the discussion, I was prepared to advise Arizona voters to hold their noses and vote “yes.”  That’s the same advice I’d give voters in California.

But clearly there are some propositions that are so bad, and so hard to fix, that the voters ought to reason the other way: vote “no” to encourage the advocates to come up with something less awful. My conclusion, after participating in the discussion, is that Measure 205 is bad enough to warrant that treatment.

What changed my mind?

Continue reading “Changing my mind on cannabis legalization in Arizona”

Cannabis policy: Walmart phenomenon, Whole Foods debate

Jonathan Caulkins once described the debate over cannabis policy as “a Whole Foods discussion of a Walmart situation.” The graphic below illustrates his point: most of the days of use involve people with a high-school education (the purple band), high-school dropouts (the green band) or people under high-school graduation age (the red band); the people in the discussion mostly have college degrees (the orange band) if not more.

Keith Humpheys reflects on the implications of that situation.

Although education is not a perfect proxy for income, the fact that 85% of pot is consumed by people who didn’t graduate college makes clear that marijuana is mainly consumed by people in working-class and poor neighborhoods, not in the kinds of places that economists, attorneys, policy analysts, journalists, physicians and politicians tend to live. A major challenge therefore for the legitimacy of marijuana policy is to ensure that people outside the college educated bubble gain more voice in the ongoing political debate.

Continue reading “Cannabis policy: Walmart phenomenon, Whole Foods debate”

Smart legalization in Mexico?

The Mexican Secretario de Gobernación (roughly, interior minister), Miguel Ángel Osorio Chong, gave a fascinating talk as part of the formal national debate over cannabis policy that followed the Supreme Court decision affirming a personal right to consume the drug.

The striking  thing about the speech was its recognition that both prohibition and commercialization have unwanted consequences, and its hint that Mexico might be alert to the possibility of finding an approach to avoid both sets of dangers.

Of course no one who has been doing drug policy for more than about twenty minutes is ever truly optimistic that a government will find something intelligent to do when there are so many unintelligent alternatives, but watch that space.

The official Spanish text of the speech is below; unofficial English translation here.


Continue reading “Smart legalization in Mexico?”

The marijuana movement and the marijuana lobby

Reactions to the “Responsible Ohio” cannabis-legalization initiative have a lot to tell us about the changing politics of the marijuana question. No much of what they have to tell us is encouraging.

Cannabis policy change in the United States has been driven, until now, by people whose interest in the matter was primarily non-commercial: pot smokers yearning to toke free, culture warriors of the (cultural) left, libertarians, criminal justice reformers concerned about arrest and incarceration, and people who think that it’s bad policy to criminalize the behavior of tens of millions of people unless there’s a stronger reason to do so than the risks of cannabis create.

Not that economic interests have been entirely absent; Dennis Peron was in the business of selling “medical marijuana” when he spearheaded Proposition 215. But Peron was also a righteous stoner; there’s no reason to doubt the sincerity of his expressed opinion that “all marijuana use is medical.” But the main funders of the recent initiatives, and of the big marijuana-legalization groups, have been ideologically-driven billionaires such as George Soros and the late Peter Lewis.  (How old am I? Why, I’m s-o-o-o-o-o-o old that I remember when billionaires weren’t a branch of government.) And the people doing the work have been, for the most part, true believers rather than hired hacks.

That has begun to change. Americans for Safe Access has morphed from an advocacy group for medical-marijuana patients to, in effect, a trade association of medical-marijuana growers and sellers. The National Cannabis Industries Association has taken things even further, hiring a Washington lobbyist who might have been provided by Central Casting: about as far, culturally, from a typical NORML or MPP activist as it’s possible to imagine.

Inevitably, then, the marijuana movement has begun to give way to the marijuana lobby. To be sure, I’ve had my share of clashes with movement folks, and I haven’t always been impressed with their policy acumen or their standards of argument, but I’ve never seen any reason to doubt that they’re advocating the public interest as they perceive it. The people now being hired by the guys in suits doing cannabis-business stock promotions play by different rules. I expect them to have about the same ethical standards as lobbyists for the alcohol, tobacco, pharmaceutical, food, and fossil-fuels industries: that is, I expect them to be utterly willing to sacrifice human health and welfare on the altar of the operating statement, just like those folks at VW who decided it would be a cute idea to poison the air just a little bit to goose the performance of their diesel-driven cars. Continue reading “The marijuana movement and the marijuana lobby”

Legalized Pot in California: No Gold Rush, No Cash Cow

There’s no way I will associate myself as a parent first, and as a public servant second, with something that is loosely drafted, that is looking to capitalize on the next California Gold Rush.
Lt. Gov Gavin Newsom

Our Blue Ribbon Commission on Marijuana Policy released our final report today (link here). The report is not an argument for or against legalization but a discussion of what the policy consideration should be if in fact California’s voters choose to legalize recreational marijuana. Gavin’s quote hits one of the key themes of the report, which is that protection of public health is more important than money generation (whether that money is corporate profits or state tax revenues). In America, public health only has a shot against big money if regulations are strong and the oversight process allows public input rather than being a cat’s paw of industry (As Oregon unfortunately has and Ohio might also adopt).

Relatedly, we advocate ongoing policy flexibility rather than a ballot initiative that sets everything in stone up front. The experience of other legalizing states shows that some anticipated problems don’t in fact occur whereas other things go unexpectedly pear-shaped. Because none of us can see the future with complete accuracy, any marijuana regulatory process will have to be dynamic and evolutionary in response.

The Hows of Marijuana Legalization

weed Americans have expended tremendous energy debating the why/why not question of marijuana legalization. In contrast, little attention has been given to the hows of marijuana legalization, e.g., would a legal industry be for-profit or non-profit? How and at what level would it be taxed? How would it be regulated? The hows matter enormously. Indeed, once they are spelled out, some people who think they are against marijuana legalization realize that they could support it, and some people who think they are for marijuana legalization realize that they don’t want it after all.

The California Blue Ribbon Commission on Marijuana Policy was set up by the Northern California ACLU to dig into the hows of marijuana legalization. The Commission is not itself going to write a marijuana legalization ballot initiative nor is it going to oppose or endorse any that are written by others. Rather, we are a mix of a think tank and a public education enterprise, encouraging the public to consider carefully what marijuana legalization might look like if it were adopted in California. Everyone is welcome to attend the public events of the Commission as well as to send in their thoughts directly through our website.

My fellow commissioner Professor W. David Ball and I were recently on KQED Forum to discuss the Blue Ribbon Commission’s work. Listening to the broadcast will give you a flavor of the issues with which Californians will have to grapple as they consider the 2016 marijuana legalization ballot initiative(s).