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California Gets Go-Ahead To Vote On Legalization Of Marijuana

Californians are set to decide whether to make recreational marijuana use legal, as other Western states have done, after the California Secretary of State’s office said on Tuesday the issue could be put to voters in the November ballot.

The proposed so-called “Adult Use of Marijuana Act,” which is supported by Lieutenant Governor Gavin Newsom among others, would allow people aged 21 and older to possess as much as an ounce of marijuana for private recreational use and permit personal cultivation of as many as six marijuana plants.

“Today marks a fresh start for California, as we prepare to replace the costly, harmful and ineffective system of prohibition with a safe, legal and responsible adult-use marijuana system that gets it right and completely pays for itself,” initiative spokesman Jason Kinney said in a statement.

The measure would also establish a system to license, regulate and tax sales of marijuana, while allowing city governments to exercise local control over or disallow commercial distribution within their borders.

The initiative required just over 402,000 valid signatures to qualify for the ballot and exceeded that number on Tuesday, the Secretary of State’s office said. Secretary Alex Padilla is slated to certify the initiative on June 30.

Opinion polls show attitudes have shifted more in favor of liberalized marijuana laws since California voters defeated a recreational cannabis initiative in 2010.

California led the way in legalizing marijuana for medical purposes in 1996, with 22 other states and the District of Columbia following suit, although cannabis remains classified as an illegal narcotic under U.S. law.

Voters in four states – Colorado, Washington, Oregon and Alaska – plus the District of Columbia, have gone a step further since 2012 in permitting recreational use for adults. Voters in several more states will consider similar legislation in November as well.

Opponents of liberalized marijuana laws have argued that such measures carry public safety risks and would make pot more accessible to youngsters.

A new survey out last week showed however that marijuana consumption by Colorado high school students has dipped slightly since the state first permitted recreational cannabis use by adults.


(Reporting by Curtis Skinner in San Francisco; Editing by Brendan O’Brien and Simon Cameron-Moore)

Photo: A medical marijuana user smells a jar of marijuana at the medical marijuana farmers market at the California Heritage Market in Los Angeles, California July 11, 2014.  REUTERS/David McNew/File Photo

Ohio Voters Soundly Reject Marijuana Legalization Initiative

By Matt Pearce, Los Angeles Times (TNS)

Ohio voters soundly rejected a marijuana initiative Tuesday that would have legalized recreational and medicinal use of the drug, and would have limited commercial growing to a small group of investors who drafted and promoted the measure.

The initiative was failing 65 percent to 35 percent, with more than three-quarters of precincts reporting.

“Issue 3 has been soundly defeated!” Ohioans Against Marijuana Monopolies crowed on Twitter. “No marijuana monopolies in this state!”

Four other states and the District of Columbia have already legalized the recreational sale of marijuana, which is still a federal crime. Ohio would have been the first state in the Midwest to do so.

But along with opposition from anti-drug groups and state elected officials, Ohio’s unorthodox initiative drew discomfort from some legalization supporters.

“This year’s initiative failed because a greed-driven monopoly plan is wrong for the state of Ohio,” one competing pro-legalization group, Legalize Ohio 2016, said in a statement. “Some activists were let down tonight because they put their faith in a bad plan, but their efforts have brought us a step closer to legalizing marijuana in 2016.”

Opponents alleged that Issue 3 would have effectively set up a monopoly by limiting commercial marijuana growth to 10 preselected plots of land owned by the entrepreneurs behind the measure.

A group of 24 investors backing the measure included former NBA star Oscar Robertson, descendants of President William Howard Taft and former boy-band celebrity Nick Lachey.

The “ResponsibleOhio” legalization campaign was driven by political consultant Ian James, who acknowledged he would profit from the measure.

“The honest and most easy response is: I am going to profit from this,” James told the Center for Public Integrity in June. “If people are upset about me making money, I don’t know what to say other than that that’s part of the American process. To win and make this kind of change for social justice, it does cost a lot of money.”

In a televised concession speech Tuesday night, James called the loss “a bump in the road” and accused state legislators of “refus(ing) to deal with the voters.”

State legislators seeking to derail Issue 3 had presented voters with an “anti-monopoly” initiative, Issue 2, designed to nullify the marijuana initiative and ban special-interest groups from creating constitutional amendments for financial gain.

Both measures appeared on the ballot Tuesday, presenting a potential legal conundrum if each one passed.

Generally, under Ohio law, whichever ballot measure receives more votes prevails.

But Ohio Secretary of State Jon Husted, who opposed the legalization effort, said if both measures passed the legislators’ anti-monopoly initiative would have prevailed because it would go into effect immediately, while the voter-initiated marijuana measure would take 30 days.

In that case, experts expected the marijuana-initiative supporters to take the matter to court.

The vote for the anti-monopoly initiative was much closer. It was leading, 52 percent to 48 percent, with 76 percent of precincts reporting.

The defeat of the marijuana measure was the first such loss for a recreational legalization initiative since 2012, and the first loss for marijuana advocates more generally since Florida rejected medical marijuana last year, according to John Hudak, a fellow with the Brookings Institute.

“The forces of defeat had more to do with timing, referendum language, demographics, and other ballot initiatives than it did with public opinion on the issue,” Hudak wrote in an instant analysis of the measure’s defeat.

Hudak added that ResponsibleOhio was “never able to consolidate the marijuana reform community inside or outside Ohio, and the ballot measure’s fate was dramatically affected by it.”

In a statement after the vote, Tom Angell of the pro-legalization group the Marijuana Majority called Issue 3 a “flawed measure” that “didn’t represent what voters wanted.

“Tonight’s results — and the choices that inevitably led up to them — are especially sad for Ohioans who use marijuana and will continue to be treated like criminals for no good reason,” Angell wrote.

On Twitter, Angell also scolded the measure’s backers using the hashtag #HowNotToLegalizeMarijuana. In another tweet, he said, “You idiots.”

Issue 3 also aimed to establish a marijuana control commission to regulate growth, distribution and sales in the state.

The measure would have imposed a 15 percent tax on gross revenues of growing operations and a 5 percent tax on gross revenues of retail marijuana stores, plus annual licensing fees.

Fifty-five percent of the taxes would have been distributed to cities and townships and 30 percent to counties for infrastructure and public safety purposes. The remaining 15 percent would have gone to the marijuana commission.

Photo: Ohio would have been the first state in the midwest to legalize marijuana. REUTERS/Rick Wilking

How Evolving Public Attitudes On Marijuana Could Affect The 2016 Presidential Race

By Evan Halper and Kurtis Lee, Tribune Washington Bureau (TNS)

WASHINGTON — Pot is very much on the minds of voters, with millions poised to decide whether to legalize it. That raises a tantalizing question for presidential candidates: Is there political opportunity in the wind?

Some are beginning to believe there is.

The latest sign was the full-throated call last week by Sen. Bernie Sanders to end federal prohibition. With that one move, the candidate for the Democratic presidential nomination plunged into uncharted territory — and, arguably, so did the presidential race.

Never before has a contender with so much to lose so unequivocally suggested that smoking a joint should be viewed the same as drinking a beer, at least in the eyes of the law.

The move was about more than Sanders’ signature straight talk. It could give the Vermont senator a much-needed boost in some primary states, especially in the West.

Some pollsters and strategists are surprised it has taken this long for a leading candidate to promote legalization this forcefully.

“Politicians are terrible at anything new,” said Celinda Lake, a Washington political strategist who has worked on pot initiatives. “They always miss the trends where voters are ahead of them.”

She says voter opinion is shifting on marijuana as rapidly as it did on same-sex marriage, another issue where lawmakers struggled to keep pace with evolving public attitudes.

A new Gallup poll found that 58 percent of voters say marijuana should be legalized, suggesting there is not a lot of risk in embracing it. More important, the pot vote draws a demographic highly coveted by campaign operatives: It’s young, diverse and up for grabs.

But there may be danger in doubling down on the dime bag.

“It can easily be turned against them,” said Kevin Sabet, president of Smart Approaches to Marijuana, an anti-legalization group.

What happens, he asked, when a pro-pot candidate is confronted at a town hall by the parent of a child who had a “psychotic episode” after consuming a pot lollipop? “How do you defend against that?”

The candidates are grappling with legalization at the same time that drug abuse is a prominent issue in the primaries, with a heroin epidemic a key concern of voters in Iowa and New Hampshire, the first two states to hold contests.

Republican contender Carly Fiorina has spoken emotionally about losing her stepdaughter to addiction.

And there is disagreement among strategists about just how rapidly public opinion has shifted in the voting groups that count most in a closely contested election, such as Latinos and older women.

“There are too many battleground states where it is still controversial,” said Anna Greenberg, a Democratic pollster.

Sanders framed his language carefully. “Too many Americans have seen their lives destroyed because they have criminal records as a result of marijuana use,” he said at George Mason University in Virginia on Wednesday. “That’s wrong. That has got to change.”

He said he would take marijuana off the federal government’s list of illegal drugs, leaving states free to regulate it the way they do alcohol and tobacco.

Kentucky Sen. Rand Paul, a Republican, has taken a similar plunge, but the stakes are higher for Sanders, who is far more popular with voters.

Other candidates are fumbling their way forward.

Hillary Rodham Clinton has told small audiences in the pot havens of Oregon and Colorado that marijuana businesses in states where it is legal need relief from federal restrictions that can make it impossible for them to operate.

Yet her campaign refused to accept a donation from the cannabis industry’s trade group, and in the first Democratic debate she took a “wait and see” position.

Some Republicans, including New Jersey Gov. Chris Christie and Ohio Gov. John Kasich, aggressively oppose legalization. Christie, a former federal prosecutor, has taken the hardest line, vowing a crackdown. Other Republicans say they would let states continue experimenting.

“Politicians have been three steps behind the public on this,” said Rep. Earl Blumenauer, D-Ore., a leading legalization proponent in Congress. “The train is already leaving the station. There is huge opportunity. It is going to be on the ballot in swing states.”

The impact on political candidates was unclear when legalization came before voters last year. Alaskans voted to legalize recreational use while also electing a Republican senator, Dan Sullivan, who opposed the move.

Oregonians also voted to legalize, while at the same time re-electing an incumbent governor, Democrat John Kitzhaber, who did not support legalization.

In Florida, Democrats had hoped a popular medical marijuana measure would give them the edge in the 2014 governor’s race. It didn’t. Although 58 percent of voters supported medical marijuana, Republican Rick Scott won the gubernatorial election.

Those bullish on the boost that pot can provide say the landscape will be dramatically different in 2016, a presidential election year, when turnout is expected to be younger and more diverse — and candidates such as Sanders and Paul are not tiptoeing around the issue.

Legalization for recreational use is expected to be on the ballot in Arizona, California, Maine, Massachusetts and Nevada.

The state being watched most now, though, is Ohio. Voters in that battleground state will decide on a legalization measure Tuesday. Candidates will closely monitor the outcome.

“This is the gay marriage issue of the day,” said John Morgan, an Orlando, Fla., trial lawyer, who spent more than $4 million of his own money on the Florida medical pot measure. It fell short of meeting the state’s unusually high threshold of 60 percent for an initiative to pass.

So Morgan is bankrolling another measure for next year.

In late spring, he hosted a fundraiser at his home for Clinton.

“Many of them are not leaders, they’re followers,” he said of politicians. “We saw that on gay marriage and other issues, and now we’ll probably see it on marijuana at some point. At some point they’ll say ‘whatever’ and go along with what’s right.”
(Halper reported from Washington and Lee from Los Angeles.)

Photo: A marijuana leaf is displayed at Canna Pi medical marijuana dispensary in Seattle, Washington, November 27, 2012. REUTERS/Anthony Bolante

All-Cash Marijuana Businesses Push For Change In Banking Law

By Rob Hotakainen, McClatchy Washington Bureau (TNS)

WASHINGTON — At the Cannabis Club Collective in Tacoma, Wash., Brian Caldwell has installed a top-of-the-line alarm system, motion sensors and a safe, hoping to protect the cash he collects from the 200-plus customers who buy marijuana at his store on an average day.

“We pretty much had to make a bank within our walls,” he said.

And at Auntie Dolores, a marijuana edibles shop in Oakland, Calif., Julianna Carella uses pouches to bag her cash at the end of the day, then sticks it in her trunk, feeling nervous as she drives away.

“It’s actually a huge headache to have to deal with all that cash. … It’s horrible,” she said.

While voters in a growing number of states have embraced marijuana in recent years, federal law still prevents pot businesses from using checks and credit cards offered by banks. That means that by law, they can deal only in cash.

Reviving a fight that stalled last year, the all-cash establishments and their allies in Congress are pushing hard again to change the law, convinced that marijuana shops have become inviting targets for thieves.

“Quite literally, you have accountants stuff $50,000 worth of cash in their backpack and walk it to a depository,” said Rep. Denny Heck, D-Wash., a member of the House Financial Services Committee. “This is a recipe for mischief if we don’t solve it.”

There’s a new twist in this year’s debate, with some in the cannabis industry suggesting that foreign banks or American Indian-owned financial institutions could serve as alternative depositories if Congress doesn’t provide a fix.

Many say the situation is bound to worsen as marijuana grows in popularity and markets expand.

So far, voters in Washington, Colorado, Oregon and Alaska have approved the use of marijuana for recreational purposes, while 23 states allow it for medical reasons. And California voters, who in 1996 made the Golden State the first to back medical marijuana, are expected to decide a ballot initiative on recreational pot in 2016.

“You’re talking about cash businesses that are in the hundreds of millions and approaching billions of dollars in state markets,” said Leslie Bocskor, founder of Electrum Partners, a marijuana consulting firm in Las Vegas. “And that’s just frightening from a community’s safety perspective.”

The issue is gaining some traction on Capitol Hill. Last week, seven senators — including Patty Murray, D-Wash., and presidential candidate Rand Paul, R-Ky., introduced a bill that would allow state-sanctioned marijuana businesses to use banking services without prosecution.

While Paul has been busy courting legalization backers as part of his presidential campaign, it was the first time that Murray has lent her name to a pro-marijuana bill since joining the Senate in 1993.

“Patty is real emblematic of the momentum that’s been building,” said Heck, one of 27 House members backing a bill called the Marijuana Businesses Access to Banking Act of 2015. “She’s been pretty deliberative about getting there but, to her great credit, she did.”

Murray said in a statement that she wanted to give “much-needed clarity and security” to banks, credit unions and marijuana businesses.

Bocskor said many investors are eager to capitalize on marijuana companies if they can be made confident that their investments will be safe. His company is exploring alternatives, including the use of foreign banks — he noted, for example, that pot establishments in the marijuana haven of Amsterdam already accept credit cards. And he said it’s possible that outside firms could sign agreements to operate banks on Indian reservations, taking advantage of their tribal sovereignty.

“We believe there are advantages in it,” said Bocskor. “We would like to see Native Americans be able to use banking as another method to bring a little more economic development to the tribal lands. That can happen, but it’s a pretty heavy lift.”

Scott Jarvis, director of Washington state’s Department of Financial Institutions, questioned whether such a system would work, saying tribes would still end up “with a whole bunch of money that they have to get somehow to the real world system.”

The possibility of tribal involvement surfaced in February at a marijuana conference at the Tulalip reservation in Washington state. It came only months after the U.S. Justice Department said it would not prosecute tribes that wanted to regulate marijuana for recreational use if they did a good job policing themselves.

“It doesn’t surprise me that they’re looking at it,” Jarvis said. “There are major banks that supply services to the casinos but won’t touch the marijuana. They might get very nervous. …. It’s not a clear path down the highway.”

Robert Odawi Porter, former president of the Seneca Nation of New York and one of the conference organizers, said most tribes are still in the early stages of deciding whether they want to enter the pot industry at all. He predicted that any decisions on banking would follow, coming “pretty far down the road.”

“It’s certainly true that tribes can establish their own regulatory systems, but the challenge is the degree to which you have to interact with and integrate with the commercial banking system in the U.S.,” Porter said.

Caldwell, who has operated his business in Tacoma since 2011, said he’d be open to the possibility of banking with tribes.

“Some of the tribes have done a great job of managing cash with casinos and everything else — they’ve obviously got the experience for it,” he said.

For now, Caldwell said, he has one small bank account that he uses carefully to avoid getting “flagged.” He has 10 employees and draws from 200 to 300 customers per day, with 85 percent to 90 percent of his business done in cash.

“We’ve learned to deal with it,” Caldwell said. “You never have all your cash in one spot.” He’s hoping that Congress will approve Heck’s bill, which he said could even open the door for bank loans. “Oh, my gosh, I would be doing cartwheels.”

The Obama administration last year advised U.S. attorneys in states where the sale of marijuana is legal not to prosecute banks that allow pot stores to open accounts and accept credit card payments.

U.S. Treasury Department officials say that dozens of banks and credit unions across the country changed course and now do business with pot establishments. But most remain skittish, fearing the rules could easily change with a new administration in 2017.

Carella, who has run her Oakland shop since 2008, said her bank account was seized and she lost $8,000 last year when bank officials discovered they were doing business with a marijuana company.

Carella, who has 18 employees, said she sells products laced with marijuana to roughly 250 dispensaries in California, with 75 percent of them paying in cash. She said the administration’s promises have had little effect in persuading banks to do business with California operators.

“We cannot get a bank account,” she said. “It’s not the first time the Obama administration has given us false hopes.”

In Washington state, Jarvis said that nearly a dozen state-chartered banks and credit unions are now working with marijuana businesses.

“They’re pretty quiet about it,” he said. “Nobody wants to be known as a marijuana bank.”

Photo: Marijuana businesses aren’t allowed to deal with banks, but advocates want that to change. Rambling Dream via Flickr