MJ News for 05/19/2014


Jul 25, 2008
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(Illinois) Despite new law, pot arrests still likelier than fines

Despite enacting legislation that is supposed to decriminalize carrying small amounts of marijuana, the city of Chicago and state of Illinois continue to have a high number of arrests related to the drug, a new university study has found.

In addition, because different municipalities have different laws and policies, the way the cases are handled is inconsistent and unfair, researchers said.

Arrests for the violation are down, but about 93 percent of misdemeanor marijuana possession violations resulted in arrest in Chicago, according to an analysis conducted by Roosevelt University's Illinois Consortium on Drug Policy.

That means that instead of issuing tickets and fines — considered an easier and more efficient process — police chose to take people to jail, said Kathleen Kane-Willis, the lead author of the study.

The study, which has not yet been published or peer-reviewed, found that the city and state have struggled to actually implement the rules despite having policies for tickets and fines on the books, she said.

"If we really want marijuana reform, we have to have a consistent policy across the state," Kane-Willis said. "Otherwise people end up with different punishments, and the consequences cause more harm. This is not a good way to do policy."

The team of scholars worked from 2012 through early this year examining arrest records and police data and analyzing the laws and ordinances of the state's 102 municipalities to develop their report.

The study comes as many local cities and towns are looking for ways to cut police spending and generate new revenue. Chicago is struggling to decrease shootings, murders and reshape its national image from being a center for violence. The study is also being revealed at a time when there is a national conversation about ways to possibly legalize the popular drug.

In 2012, the Chicago City Council voted to implement a system of ticketing those caught with small amounts of marijuana and fine them rather than arrest them. The measure went into effect in August of that year. At the time, officials said the new law would generate millions of dollars in revenue for the city, while freeing police officers to handle more pressing criminal matters.

The law allows those caught with as much as 15 grams of pot to be ticketed for $250 to $500. Officers are prohibited from ticketing violators caught in parks, near schools or those caught smoking the drug. Police also have to arrest people who have an active arrest warrant or cannot produce valid identification.

Chicago police are making progress implementing the city's cannabis ordinance, said Adam Collins, a spokesman for the department. There were about 5,000 fewer arrests involving low-level marijuana possession in 2013 than there were in 2011, the year before the ordinance was put in place, he said.

"Like any new process, it has taken time to implement the ordinance, and we believe there's certainly much more work to be done on full implementation," he said.

According to Chicago police, the majority of people arrested with marijuana eventually have their cases thrown out of court. But it takes police thousands of hours to make the arrests, fill out paperwork and attend court hearings. The department supports the initiative to ticket rather than arrest, authorities have said.

The arrests are also more of a hassle for violators, who are generally nonviolent, researchers said.

The majority of residents in the state support ticketing people caught with small amounts of marijuana according to polling data released this year, Kane-Willis said.

Punishment for getting caught with pot differs depending on where in Illinois you are, the study found.

For example, those caught in Evanston, Countryside or Champaign with a small amount of marijuana are likely to be ticketed. If they are caught in Chicago, Urbana or Yorkville, they are more likely to be arrested.

The number of marijuana possession arrests has fallen substantially since Chicago's law went into effect, but much work remains, Kane-Willis said.

"(The decrease) is not a win," she said. "I wouldn't give our city or state a passing grade."

Echoing past research, the new study also pointed to Chicago's law as producing one of the nation's highest racial disparities in marijuana-possession arrests.

African-Americans are more than seven times likelier than whites to be arrested for carrying marijuana, even though the drug's use is similar across racial groups, researchers found.

Last year, the American Civil Liberties Union issued a national report that said marijuana possession arrests were nearly eight times likelier among black Illinois residents than among their white counterparts.

The findings in the Roosevelt study mean that residents in some neighborhoods face stiffer punishment and long-term consequences, like joblessness, Kane-Willis said.

"In Chicago there is a two-tiered system where police make the decision on an (offender's) fate, and they mainly decide to arrest," she said. "That's not fair, and it doesn't work to decrease crime."

For Ali Nagib, assistant director of Illinois NORML — the state's chapter of the National Organization for the Reform of Marijuana Laws — studies like Roosevelt's could have an impact not only on police at the local level, but on state legislators as they consider talks to further decriminalize or legalize and regulate the drug.

"We know the public is on our side. We just need to convince the politicians," Nagib said.

Cook County Commissioner John Fritchey, who has been an advocate for examining marijuana legalization in Illinois, agreed, saying the process for change is a slow one.

"I have to believe that somewhere down the road, we're going to look back … and wonder why it took us so long."


Jul 25, 2008
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Feds May Cut Off Water For Legal Marijuana Crops

Some cannabis growers may soon find themselves with a lot less irrigation water if the U.S. government decides to block the use of federal water for state-legal marijuana cultivation.

The U.S. Bureau of Reclamation, which oversees management of federal water resources, "is evaluating how the Controlled Substances Act applies in the context of Reclamation project water being used to facilitate marijuana-related activities,” said Peter Soeth, a spokesman for the bureau. He said the evaluation was begun "at the request of various water districts in the West."

Local water districts in Washington state and Colorado, where recreational marijuana is now legal, contract with federal water projects for supplies. Officials from some of those water districts said they assume the feds are going to turn off the spigots for marijuana growers.

“Certainly every indication we are hearing is that their policy will be that federal water supplies cannot be used to grow marijuana,” said Brian Werner at Northern Colorado Water Conservancy District, which handles approximately one-third of all water for northeastern Colorado and is the Bureau of Reclamation's second-largest user in the number of irrigated acres.

Washington state’s Roza Irrigation District, which supplies federal water to approximately 72,000 acres in Yakima and Benton counties, has already issued a “precautionary message” to water customers that may be involved in state-legal cannabis growing.

“Local irrigation districts operating federal irrigation projects have recently been advised that under Federal Reclamation Law, it is likely project water cannot be delivered and utilized for purposes that are illegal under federal law,” wrote Roza district manager Scott Revell in letters to the Yakima and Benton county commissioners. “Presumably growing marijuana would fall into this category.”

Both Washington and Colorado legalized marijuana for medical use more than a decade ago. Pot remains illegal under federal law. Reclamation’s Soeth said that the issue of cutting off water supplies for marijuana has never come up before.

A Department of Justice official told HuffPost it has no comment on the water issue. The Bureau of Reclamation is likely to announce a decision this month. “We’re going to work with our water districts once that decision is made,” Soeth said.

Marijuana advocates condemned the possibility of a federal water ban for state-legal crops. Mason Tvert, communications director for Marijuana Policy Project and key backer of Amendment 64, which legalized marijuana for recreational use in Colorado, criticized the hypocrisy of a federal government that would prevent water access to some legal businesses and not others.

“If water is so precious and scarce that it can’t be used for state-legal marijuana cultivation, it shouldn’t be used for brewing and distilling more harmful intoxicating substances like beer and liquor,” Tvert said.

The impact on Washington may be more severe, since the state’s marijuana laws allow for outdoor growing and, according to McClatchy, the Bureau of Reclamation controls the water supply of about two-thirds of the state’s irrigated land. In Colorado, marijuana businesses can grow either indoors or outdoors, but some local jurisdictions like Denver require the outdoor grow to be in a fully enclosed and locked space, like a greenhouse.

Growing in Denver, home to the majority of Colorado marijuana dispensaries, likely wouldn't notice a shortage if the Bureau of Reclamation cuts off federal water.

“Because we are not a federal contractor, we would not be affected,” said Travis Thompson, spokesman for Denver Water, the main water authority for the state’s capital and surrounding suburbs.

But many other regions of the state rely on federal water. In Pueblo, about two hours south of Denver, about 20 percent of regional water is Reclamation-controlled. Although the remaining 80 percent of the region's water is locally controlled, it passes through the Pueblo Dam, operated under Bureau of Reclamation authority.

"Yes, they come through a federal facility, but the federal facility is required to let those water right to pass," Pueblo Board of Water Works executive director Terry Book said to southern Colorado’s NBC-affiliate KOAA.

The St. Charles Mesa Water District, another Pueblo-area water facility, has already imposed a moratorium on supplying water to marijuana businesses until the Bureau of Reclamation settles the issue.

The Bureau of Reclamation said its facilities deliver water to 1.25 million acres of land in Colorado and 1.2 million acres in Washington state. About 1.6 million acre-feet of water is delivered to Colorado’s agricultural sector from Reclamation and about 5 million acre-feet is delivered to agriculture in Washington.

As McClatchy reported last month that there are several viable alternatives to using federal water. Small-scale marijuana-growing operations may be able to use city-controlled water sources, or drill a well. Greenhouse growers are allowed to use up to 5,000 gallons of well water per day under state law. Any use beyond that requires a permit from the state. While some marijuana plants can require an average of six gallons of water per day, growing operations in the state are likely to fall well within that limit.

However, in areas of the state where much of the water is controlled by Bureau of Reclamation contracts, these alternatives aren't as accessible.

The potential water ban has already set off local opposition. The Seattle Times' editorial board urged the Bureau of Reclamation to allow federal water contracts to be used by marijuana farmers.

"The bureau has never had -- nor should it have -- a stake in what crop is planted. That’s a basic tenet of the 1902 National Reclamation Act, which created the bureau and transformed the arid American west," read the May 4 editorial. "Yet the federal government is now threatening to forget that history, because some regulators are queasy about Washington and Colorado’s experimentation with marijuana legalization."

As the Times' board points out, there is some precedent for the Justice Department to stand down on the water issue. Last August, Attorney General Eric Holder told the governors of Washington and Colorado that the DOJ wouldn't intervene in the states' legal pot programs. And earlier this year, federal officials issued guidelines expanding access to financial services for legal marijuana businesses, so long as the business doesn't violate certain legal priorities outlinedby the Justice Department.

"While we appreciate how the Obama administration has made some administrative concessions to the majority of voters who support legalization by issuing banking guidelines and having the Justice Department largely stand out of the way of state implementation, this water issue highlights the urgent need to actually change federal law," Tom Angell, chairman of Marijuana Majority, told The Huffington Post. "There are bills pending in Congress that would solve this and other state-federal marijuana policy discrepancies, but so far the support from elected officials doesn't even come close to matching the support from the public. I expect that gap will shrink with each passing election cycle as politicians start to see just how popular this issue is with voters."


Jul 25, 2008
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Nevada's medical marijuana business at a glance

WHAT IS COMING: Under the law passed by the Nevada Legislature and signed by Gov. Brian Sandoval in 2013, the medical marijuana industry will include up to 66 dispensaries statewide to sell the marijuana and marijuana products. The infrastructure will include indoor grow houses to grow the drug, testing labs to test its potency and kitchens to process the marijuana into various forms such as oils, butter, cookie dough, soda pop, chocolate bars and peanut butter cups.

WASHOE COUNTY DISPENSARIES: Under state law, 10 dispensaries will be allowed in Washoe County, including Reno and Sparks. Clark County is allowed 40 dispensary licenses under the law.

WHEN: State officials don't expect the dispensaries to be open for business until sometime in the spring of 2015. The key to the delay is that Nevada law stipulates that any medical marijuana sold in Nevada must be grown here. Growing marijuana is usually about a six-month process.

WHO IS ELIGIBLE: Eligibility is determined by a licensed doctor in Nevada after studying the patient's medical records. Applicants must be at least 10 years old. The Nevada law stipulates medical marijuana can be used by patients who suffer from AIDS, cancer, glaucoma, post-traumatic stress disorder and any medical condition or treatment for a medical condition that produces significant weight loss, persistent muscle spasms, seizures, severe nausea or pain. Other conditions are subject to approval by the health division of the state Department of Human Resources. About 5,600 Nevadans currently have medical marijuana cards. That number is expected to increase dramatically once the dispensaries are in business.

OTHER STATES: Medical marijuana is legal in 21 states and the District of Columbia. Yet it is still outlawed by the federal government, which considers it a Schedule One drug, along with heroin, LSD, many narcotics and ecstasy. In August 2013, the federal Justice Department said it would not interfere with individual states' medical marijuana laws as long as they were tightly controlled, were not associated with outlaw drug organizations and did not make the product available to minors without a medical marijuana card.

HOW MUCH IS ALLOWED: Nevada cardholders can possess one ounce of marijuana, three mature plants or four immature plants. Yet once the dispensaries are running, Nevadans with medical marijuana cards will no longer be able to grow their own marijuana, unless the strain they are growing for medical purposes is not found in the dispensaries.

CULTIVATION FACILITIES: Greenhouses for growing medical marijuana are outlawed. All indoor growing facilities must have systems to eliminate the pungent smell of marijuana and must be fully enclosed and guarded. Nevada law states that only enough marijuana to fit the needs of the Nevada system can be cultivated. Some are concerned that law will lead to shortages since Nevada also allows medical marijuana cardholders from other states to purchase the product in Nevada.

TAXES: The state will impose a 2 percent sales tax on all medical marijuana purchases. The school district in the county where the marijuana is purchased will receive 75 percent of that sales tax. The other 25 percent goes to the state. Local governments can charge fees for business licenses, too. Those can cost between $10,000 to $100,000, according to testimony at local government meetings.


Jul 25, 2008
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Marijuana Stock Showdown: GW Pharmaceuticals vs. Medbox

The legal marijuana industry is expected to become one of the fastest-growing industries of all time, as its recreational and medicinal uses are now being widely decriminalized in multiple countries and U.S. states. Investors looking to capture some of this incredible potential growth, however, have few options outside of what amount to risky penny stocks.

GW Pharmaceuticals (NASDAQ: GWPH ) and Medbox (NASDAQOTH: MDBX ) are two exceptions to this general rule, as both companies sport market caps and share prices substantially higher than most of their marijuana peers. With this in mind, let's consider which company offers the more compelling risk-to-reward ratio.

GW Pharmaceuticals uses marijuana-based compounds to develop novel medications

GW Pharmaceuticals is a British biopharma developing cannabis-based medicines for diseases such as drug-resistant childhood epilepsy, Dravet syndrome, Lennox-Gastaut syndrome, and multiple sclerosis spasticity. The company is known mainly for its multiple sclerosis treatment Sativex, which is commercially available in 11 countries. Sativex is in late-stage trials as a potential treatment for pain in patients with advanced forms of cancer, with the FDA granting the drug fast-track status for this indication earlier this year. The company hopes to report top-line data from the trial before the end of 2014.

GW also sees potential in its highly purified cannabinoid known as Epidiolex. The company hopes to develop Epidiolex as a treatment for a host of rare forms of pediatric epilepsy. To date, Epidiolex has been granted orphan drug status and is projected to begin late-stage trials as early as 2015.

Finally, GW has several other cannabinoid-based compounds undergoing clinical trials for a wide range of diseases, including type 2 diabetes and ulcerative colitis. In sum, GW offers perhaps the richest population of clinical candidates based on marijuana derivatives in the industry, making it a stock to watch.

Medbox offers a quick and easy solution to obtaining medical marijuana

Medbox makes vending machines that dispense a variety of medicines, including medical marijuana. This stock has been on one heck of a volatile ride over the past year, hitting a high of $73.90 per share before falling markedly to today's price of $18.47.The problem quite simply was that Medbox became a poster child for momentum stocks, skyrocketing in anticipation of the legalization of marijuana in Colorado and other states. What's important to understand now is that Medbox's current share price is still valued at around 100 times 2013 revenue despite this recent dramatic downturn. Looking ahead, Medbox may require a capital raise after ending 2013 with less than $1 million in cash and cash equivalents. Medbox appears to suffer from a major valuation gap, and it's hard to see a way the company can quickly remedy this problem.

Foolish wrap-up

It's no secret that marijuana stocks have been all the rage this year, with some of these tiny companies exploding higher in a matter of weeks or even days. Nonetheless, we are starting to see Mr. Market come back to his senses somewhat regarding this speculative group of companies, evinced by Medbox's roughly 75% drop from its former high.

That being said, I think GW Pharmaceuticals is perhaps one of the few "marijuana stocks" worth considering as a long-term investment. The company has an intriguing platform that has been validated by the approval of Sativex as a treatment for multiple sclerosis spasticity and has incoming revenue from sales of the drug. Even so, GW's current valuation doesn't look cheap from a fundamental perspective, with the market clearly baking in some of the future revenue for its clinical candidates. Specifically, GW shares are trading at over 20 times 2013 revenue, making it a pretty expensive stock right now. So while GW still looks like better a pick than Medbox, I would still suggest that you wait until shares fall lower (or the pipeline develops some more) before considering a position.

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Jul 25, 2008
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Vermont to study legalizing pot

Vermont leaders will study the potential impact of legalizing marijuana, including "possible taxing systems" for the drug, and will take a close look at how the Colorado and Washington experiments have gone.

The Associated Press reports that the study, which will be undertaken by the administration of Gov. Peter Shumlin, is due to Vermont lawmakers by January 2015. Shumlin aide Jeb Spaulding told AP writer Dave Gram that it's time to examine marijuana legalization and its potential impact.

"I know that we're going to take it seriously and we'll probably do a pretty thorough study," he said.

Shumlin has said repeatedly he wants to watch what happens in Colorado and Washington before deciding whether legalization is a good idea for Vermont. Spaulding cautioned that January, when his agency's report is due, may be too soon to give a definitive answer.


Jul 25, 2008
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Minnesota clears way to offer medical marijuana

ST. PAUL, Minn. (AP) — It took years, many false starts and a veto of prior legislation, but Minnesota medical marijuana advocates finally succeeded in getting a bill that's on track to become law in a matter of days.

The state Legislature approved it Friday night in separate House and Senate votes that drew Democratic and Republican backing.

Now comes the hard part: setting up a system to administer the drug by July 1, 2015.

"The timeline is very aggressive," said Health Commissioner Ed Ehlinger, whose agency will oversee the program. "This has high visibility. It's controversial. And both sides will be watching."

Other trouble spots could be provisions that might keep some doctors and patients from participating, or make it difficult for companies interested in making or dispensing the drug to make enough money to join the program.

For all that, Ehlinger praised the agreement reached Thursday by House and Senate negotiators. A pediatrician and internal-medicine specialist, Ehlinger likes the requirement that doctors collect data on how the treatments work and submit then to the state Health Department.

"We're going to get some data that no one else has," Ehlinger said. "Other states are reeling because they don't have data. Some people might criticize our program as the most restrictive in the country. But the approach is reasoned to get us where we want to go more safely, and perhaps, more quickly."

Minnesota's legislation makes it the only state to explicitly ban smoking the drug. It also prohibits patient access to plant material. Instead, the drug would be available in oil, pill and vapor form.

Eight medical conditions would qualify for treatment, including cancer, glaucoma and AIDS, with a possible ninth if the health commissioner acts on a House amendment requesting that "intractable pain" be considered. The terminally ill also could qualify.

Patients would receive an identification number if a doctor, a physician assistant or advanced-practice registered nurse certified a qualifying illness existed.

Twenty-one other states and the District of Columbia have legalized marijuana for medical use.

The toughest task for Minnesota will be creating the structure that governs the doctor-patient-Health Department relationship, said Dr. Steve Jenison, who was the first medical director of New Mexico's medical-cannabis program. He served in that role from 2007-10.

"Part of it is going to depend on how well and efficiently the state enrolls people in the program, because that's the market," Jenison said in a phone interview. The New Mexico Health Department doesn't collect patient-treatment data, nor is it responsible for defining marijuana products and their doses, as the Minnesota Health Department would be, Jenison said.

The data collection could affect how many people sign up for the program, said Robert Capecchi, deputy director of state policies for the Washington, D.C.-based Marijuana Policy Project, which advocates legalizing marijuana. He said the reporting requirements will require more of doctors' time, more doctor visits for patients, and because insurance won't cover medical marijuana, more money coming out of patient pockets.

"These restrictions could limit physician participation, which would have a direct effect on how many patients are able to be certified to access marijuana from the points of distribution," Capecchi said.

Sen. Branden Petersen, R-Andover, questioned whether participation in Minnesota's program will be financially viable for manufacturers and distributors. During debate in conference committee, he cited a fiscal note that used Arizona as a model to project Minnesota enrollment at 5,020 people per year. But the fiscal note said Minnesota may fall short of that "because Arizona permits cannabis to be smoked while this legislation does not."

"It just doesn't add up and ultimately it might not end up serving anybody," Petersen said.

Not necessarily, said Capecchi, of the Marijuana Policy Project. The Washington, D.C., program also has a limited population and includes only four qualifying conditions, yet still sustains multiple cultivators and dispensaries.

"I understand that there are vast geographic differences between D.C. and Minnesota, so I think that Sen. Petersen's concerns were and continue to be very valid and it's an issue that should be watched closely moving forward," Capecchi said.


Jul 25, 2008
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Senate Not Likely to Harsh D.C. Marijuana Decriminalization

The District of Columbia’s legislation to decriminalize possession of small amounts of marijuana appears unlikely to face harsh scrutiny in the Senate, where both Republicans and Democrats indicate they are inclined to defer to local officials.

“I kind of think maybe the District should make the decision themselves,” said Sen. John McCain of Arizona, the second-ranking Republican on the Senate Homeland Security and Governmental Affairs Committee. “I may not agree with it, but they have an elected mayor and city council.”

Similarly, Sen. Heidi Heitkamp, D-N.D., said she sees her role as a member of Homeland Security and Governmental Affairs as “very, very narrow” when it comes to D.C. Though she didn’t know the specifics of the proposal, she said she thinks “the District is entitled to a whole lot of self-determination.”

“For me to reverse what a city would do … it would have to be something that I desperately disagreed with and believed had either constitutional problems or some very serious fiscal consequences that weren’t sustainable,” Heitkamp told CQ Roll Call.

Even GOP senators that are dubious about decriminalizing dope, such as Sens. Charles E. Grassley of Iowa and Jeff Sessions of Alabama, have not committed to trying to overturn the proposal to make possession of less than an ounce of pot a civil offense with a $25 fine, similar to a parking ticket.

Both are quick to decry marijuana’s effects — Sessions thinks the District would be making a “mistake” — but they remain undecided about whether they would introduce a resolution of disapproval, which would need to be passed by both chambers and signed by the president. There have only been three such resolutions enacted since the District won Home Rule in 1973, and none have been enacted since 1991.

While a House Oversight and Government Reform subcommittee’s recent hearing on the local legislation put the issue on many senators’ radars, there are no plans in the works to convene a similar panel on the District’s bill during its 60-day congressional review period.

In the Senate, it’s Alaska Democrat Mark Begich who holds the gavel on the subcommittee with jurisdiction over the municipal affairs of D.C., the Homeland Security and Governmental Affairs Subcommittee on Emergency Management, Intergovernmental Relations and the District of Columbia. He told CQ Roll Call that no hearing is being planned “at this point.”

Homeland Security and Governmental Affairs Chairman Thomas R. Carper, D-Del., said his views on decriminalization of marijuana are “evolving,” but he does not intend to single out the D.C. bill for scrutiny. Ranking member Tom Coburn, R-Okla., said he had not looked into the proposal yet.

Carper and Begich have co-sponsored legislation to give D.C. budget and legislative autonomy from Congress, and other Democrats on the committee indicated they want to respect the District’s autonomy by not intervening.

“If they want to decriminalize small amounts of marijuana in the District of Columbia, I think the government of the District of Columbia ought to have the right to do that,” said Sen. Claire McCaskill, D-Mo. “I’m not there for decriminalization writ large,” she continued, adding that she thinks marijuana may have medical uses, and the “jury is still out” on Colorado’s experiment with legalization.

Sen. Carl Levin, D-Mich., told CQ Roll Call that he had no problem with decriminalizing small amounts of marijuana “period,” and would probably vote for decriminalization back home in Michigan, “so I don’t have any problem with D.C. doing it.”

Proponents of the decriminalization plan and self-determination for the District say Sen. Rand Paul is the panel member most likely to intervene in District affairs, pointing to his actions in 2012, when he proposed a handful of amendments relating to gun control and abortion laws for a D.C. budget autonomy bill that prompted Senate leaders to pull the proposal.

Drug laws, however, are an area where the libertarian-leaning 2016 hopeful is unlikely to intervene. The Kentucky Republican has introduced legislation to relax federal sentencing laws, and indicated he believes penalties for pot are too harsh.

“You know, it’s interesting; these guys are all about no federalism and state and local control, until they’re not,” McCaskill said.

The D.C. Council and Mayor Vincent Gray also considered decriminalization a matter of social justice. Rather than approaching the pot policy under the guise of marijuana being a safe substance or as a gateway for recreational use, proponents pushed to stop selective policing of pot in the District.

The bill was motivated by an American Civil Liberties Union study showing that Washington, D.C., had the highest per-capita marijuana arrest rate in the nation between 2001 and 2010, and that blacks were eight times more likely to be arrested than whites.

Opponents like Sessions think those efforts might be misguided. The senator looks back proudly at his efforts, alongside President Ronald Reagan, to “create a hostility to drug use” in the early 1980s.

“The result was enormously beneficial to everybody, but particularly young people,” Sessions said, referring to his work as a U.S. attorney. “Use went down substantially and crime went down. Murders today are half what they were in 1980.”

Sessions fears President Barack Obama damaged those efforts with his recent statements that marijuana was not more harmful than alcohol.

“I just don’t think people understand the damage [of] the president’s statement, where he made light of marijuana use,” he said, adding, “but it looks like, you know, there’s momentum around the country.”


Jul 25, 2008
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Alaskans eye potential cannabis industry, but challenges remain

With a vote on marijuana legalization looming in November, Alaskans hoping to invest in the potential new industry gathered at an Alaska Cannabis Institute seminar in downtown Anchorage over the weekend, discussing opportunities and challenges that potential legalization could bring for entrepreneurs.

Roughly 120 people were in attendance for the seminar, organizer Cory Wray said. Saturday's seminar focused on the business and legal aspects of the cannabis industry, and Sunday's focused on horticulture practices. The cost for both days was $420.

Anchorage resident Bruce Schulte said he was "intrigued" by the initiative, and he attended the seminar to see whether it's feasible for him to invest in the industry. Schulte, a commercial pilot, said it was "really refreshing" to attend a seminar where entrepreneurs are coming together to discuss legalization.

"We're talking about cash flows, business models," he said.

As a pilot, Schulte does not use marijuana. But he thinks legalization will open new opportunities to Alaskans. Schulte identifies himself as a conservative, and believes the Republican Party should get behind the initiative. It's about states' rights and personal liberties, Schulte said.

Legalized cannabis, he said, is small business. "It's industry."

Attendee Lloyd Stanfield said that the conference allowed for transparency and open dialogue of issues surrounding cannabis legalization.

"It's relieving to see it more on the forefront rather than having to talk to somebody behind closed doors," he said.

Stanfield hopes to open a cannabis dispensary in the Matanuska Valley, should voters choose to legalize marijuana.

Alaskans will vote whether to legalize recreational marijuana in the Nov. 4 general election. Alaska's eight-page initiative would legalize recreational marijuana use for adults 21 or older, and tax it at $50 an ounce, but leaves much of the rule-making up to the Alcoholic Beverage Control Board, which would have nine months to write the laws should the initiative pass.

That flexibility is a boon, said speaker Peter Carris, a medical marijuana dispensary owner in Washington and presenter at the seminar.

He said that Washington's law was written as part of the state's initiative before the vote, and now the state is left with a lengthy measure that in some ways hinders entrepreneurs.

"You only get one chance at this," Carris warned the audience.

Challenges of legalization

Many at the conference were optimistic that the initiative will pass. Even if it does, many logistical challenges still exist for the would-be industry.

Cannabis businesses face challenges in complying with federal law, banking, and culture clashes, according to attorney Jay Berneburg. Berneburg represents medical marijuana clients in Washington state and was a speaker during Saturday's session.

"We're living in historic times," Berneburg said of the shifting landscape of cannabis legalization. Becoming part of the nascent cannabis industry is "the most significant act of civil disobedience since the civil rights movement," he said.

One attendee asked how to run a cannabis operation in compliance with federal law.

"You probably won't," Berneburg replied.

Federal law lists cannabis as a schedule 1 narcotic, and while a federal memo in August stated that the U.S. Justice Department won't interfere with state cannabis laws, Berneburg called the memo "basically a non-statement." Thus, risks remain for would-be entrepreneurs.

Berneburg spoke of challenges in Washington from some local municipalities that are looking for ways to reduce access to cannabis -- in particular, Pierce County, which in January threatened to take the state to federal court for the right to keep cannabis businesses out of its unincorporated areas.

One of the biggest issues is working with the banking industry. Banks are wary of becoming involved in a business that could potentially put them on the hook for money laundering, Berneburg said. Small banks and credit unions are generally more receptive to loaning money out to cannabis businesses or taking deposits.

Yet as the industry's potential revenue streams become apparent, "it's going to get easier and easier to do," he said.

In February, the U.S. Justice Department outlined guidance to give banks confidence to accept cannabis industry revenue, but did not grant immunity from prosecution. In Colorado -- where the multimillion-dollar industry had been largely cash-based -- a financial system appears to be taking shape. In early May lawmakers approved a plan that would allow cannabis businesses to pool money into cooperatives.

Brandom Emmett, executive director of the Coalition for Responsible Cannabis Legislation, said his organization ran into resistance just opening a bank account, due to the word "cannabis" being in the organization's title. CRCL hopes to help craft the regulations, should the initiative become law.

Despite the challenges, seminar attendee Stanfield said he is confident he can make it work.

"Being an entrepreneur, you have to be hard-wired to overcome hurdles," he said, adding that there's still plenty of time to develop business plans and find lender opportunities and business partners.

Schulte said that while the challenges are "all huge questions," he's confident that conflicting laws and banking difficulties will change. Should the initiative pass, Schulte believes that's enough time for some of the issues to be resolved.


Jul 25, 2008
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Charlotte's Web medical cannabis soon to be widely available to Colorado children

It's a strain of cannabis thousands are waiting to buy for their children, in hopes it will heal them. Those producing "Charlotte's Web" say the wait will soon be over for nearly a thousand Coloradans.

Some children battling epilepsy have seen a drastic turnaround and reduction of seizures after using Charlotte's Web, an oil made from marijuana plants very low in THC and high in a chemical called cannabidiol, or CBD.

7NEWS got an exclusive tour of the new facility in eastern Colorado where the five brothers who pioneered the medicine have recently expanded their growing operation. Because Charlotte's Web is less than .03 percent THC, they're now able to classify the plants with the state as hemp instead of medical marijuana and grow at a much larger scale. It also opens up the possibility of exporting Charlotte's Web.

"This will be the future of Charlotte's Web," said Jared Stanley. "Same plant, same quality control, same medicine."

Stanley and his brothers haven't been able to grow their plants quickly enough.

"Our national and international wait list climbs by 100, 200 every day," he said. "It's currently around 7,000 to 8,000."

There are currently about 1,000 Coloradans on that list and Stanley said the new facility should get Charlotte's Web to those families by the fall. The hope is that growing the medicine as hemp will eventually take care of the entire waiting list.

7NEWS checked in with the medicine's first patient and namesake, Charlotte Figi, a 7-year-old from Black Forest whose mother says she was close to death due to Dravet Syndrome, a devastating form of pediatric epilepsy.

"We had reached the end of the line for medical options," said Paige Figi. "The quality of life was none. I mean, we were at the point that we were hoping she would die peacefully in her sleep because it was so much suffering. She wasn't there. Charlotte wasn't there anymore."

Figi's husband had heard about the healing qualities of cannabidiol, and though Figi says she doubted it would work, she found the Stanley brothers, who were already experimenting with it.

Figi said at that time, more than two years ago, Charlotte couldn't walk, talk or eat, and was having about 1,200 seizures a month. She said after taking a few drops of Charlotte's Web every day, her daughter saw astounding improvement.

Today, she said Charlotte is down to four or fewer nocturnal seizures a month, and can walk, play and speak.

"It's been amazing to hear her talking and interacting with me," Figi said. "I can't even put into words what that means to me."

There have been many more success stories and about 250 families who've re-located to Colorado from other states, just so their kids can have access to the medicine.

Amy Brooks-Kayal, the chief of Pediatric Neurology at Children's Hospital Colorado, said Charlotte's Web comes up in conversations every day at her clinic, but she has big concerns about the lack of research.

"You really need good studies to understand what the risks associated might be-- either short-term risks in term of effects on liver or blood count, and longer term risks in terms of memory and learning, which we know marijuana products can affect," said Brooks-Kayal.

And she said there's another big issue, not mentioned in most media reports. She said of the 60 child patients at her hospital to try the medicine, only about a fourth have seen improvement.

"We've seen many children that haven't had any effect from Charlotte's Web or any other marijuana derivatives on their seizures. And some children have seen a worsening effect, severe enough to require them to be hospitalized," she said.

Stanley acknowledges the treatment doesn't work for everyone, but said those numbers are misleading because hospitals are more likely to see patients who don't have success.

"Is there more to know? Absolutely. Are a group of brothers growing it in a field going to figure it all out? No, but a community around that will," Stanley said. "Is it OK to know that there's something we don't quite understand about why this is working? I hope that's OK."

He said he believes he and his brothers have only scratched the surface of what marijuana can do to treat sickness, and showed 7News new strains they've started breeding.

"The results came back astounding," he said.

The long-term research on medical marijuana doctors and neurologists want to see doesn't exist primarily because marijuana has long been illegal at the federal level. But last week, Colorado legislators approved a bill that will provide up to $10 million to study the health impacts of medical cannabis. That money comes from fees and will eventually provide unprecedented research.

Parents and supporters of Charlotte's Web have created a non-profit called Realm of Caring to work with families.


Jul 25, 2008
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DEA Chief Dials Back Drug War Bluster After Talk With Holder

Drug Enforcement Administrator Michele Leonhart and her boss, Attorney General Eric Holder, appear locked in a bureaucratic staring match over the Obama administration's attempt to reform the way the federal government approaches criminal justice and punishment.

For Holder and for President Barack Obama, sentencing reform has become a critical, second-term legacy item, as they aim to bend the arc of incarceration policy away from a federal system well practiced at imprisoning drug offenders for as long as possible. But those efforts are colliding with institutional resistance from law enforcement officials with a single-minded focus and, perhaps, turf to defend.

The high-level shift toward easing punishment for drug offenders, backed by public opinion, raises the question of whether any DEA chief who could win the support of rank and file agents would be willing to carry out White House reforms. So far, Leonhart appears uninterested, at best.

She publicly distanced herself from Obama's remarks about marijuana's relative harmlessness. She griped about the Justice Department's failure to try to block marijuana legalization in Colorado and Washington state. She clings to a comically outdated view of drugs, refusing to acknowledge a difference between pot and crack cocaine. And this week, her agency picked a fight with Kentucky over the state's purchase of industrial hemp seeds to begin a newly legalized agricultural test.

For now, it's sentencing reform that raises the biggest questions. Leonhart's remarks before the Senate Judiciary Committee last month about mandatory minimum sentences caused people in top echelons of the Justice Department to ask whether she was on board with her bosses on sentencing reform, sources familiar with the tensions told The Huffington Post.

Leonhart was responding to Sen. Chuck Grassley (R-Iowa), who asked about the importance of mandatory minimums. Some law enforcement groups oppose the Smarter Sentencing Act, a bipartisan bill that would roll back the length of certain mandatory minimum prison terms. Leonhart emphasized the importance of mandatory minimums, leaving the impression she opposed changes to the current sentencing structure, which gives federal prosecutors huge leverage over defendants.

Justice Department concerns about Leonhart were heightened when, after her testimony, a DEA spokeswoman would not say whether Leonhart endorsed changes mandatory minimums, telling The Huffington Post that the DEA administrator's testimony would "have to speak for itself."

The concerns led to a conversation between Holder and Leonhart, according to a person familiar with the discussion. Leonhart told her boss there had been a misunderstanding.

The DEA sent The Huffington Post a follow-up statement a week after the first, expressing Leonhart's public support for reforms made by Holder that rolled back the deployment of harsh mandatory minimum sentences against certain drug offenders.

"The Administrator believes mandatory minimums in general can be an important tool in DEA investigations, but she supports the Attorney General’s sentencing reform initiative to ensure those sentences are imposed appropriately," the DEA said in the new statement.

Julie Stewart, president of Families Against Mandatory Minimums, applauded Leonhart for what appeared to be shift in tone, and said the Smarter Sentencing Act would help make sure sentences were administered appropriately. "We commend Administrator Leonhart for acknowledging the need to appropriately sentence federal drug defendants," Stewart said in a statement. "The Smarter Sentencing Act not only creates those appropriate sentences, it also saves taxpayers billions and allows for investment in programs proven to make our communities safer."

But Leonhart's new statement left much unclear. Asked specifically if Leonhart would be open to legislation that would reduce the length of mandatory minimum sentences, such as the Smarter Sentencing Act that Holder backs, a DEA spokeswoman referred questions to the Justice Department.

Leonhart, who has been a part of the DEA bureaucracy since 1980, was reined in earlier this year after she blasted Obama before a crowd of sheriffs at an event closed to reporters. Leonhart distanced herself from the president's recent comments about marijuana's relative harmlessness. She was later told such comments were inappropriate -- even at an event closed to the media, according to a person familiar with the discussions.

Leonhart has publicly complained about the Justice Department's failure to sue Washington and Colorado for legalizing and regulating marijuana, telling a House committee last month it was "a legal decision, not a law enforcement decision." (Holder, on the other hand, has called the federal position on state marijuana laws a "law enforcement decision.")

Leonhart criticized the administration for taking so long to decide what to do about states legalizing marijuana, saying there was "a lot of confusion in that 296 days while they were reviewing it and deciding how to proceed." When Rep. Andy Harris (R-Md.) asked last month how federal officials were going to keep marijuana out of the hands of children, Leonhart suggested it would be "a good question for the attorney general."

Leonhart refused to acknowledge any difference between crack and marijuana. Holder said he's open to working with Congress to reschedule marijuana to remove it from the same category as heroin, and said he's "cautiously optimistic" about legalization in Washington and Colorado. Leonhart claimed drug cartels are behind legal marijuana businesses and warned of the impact of legalization on dogs.

Leonhart's mixed message on mandatory minimum sentences, at a time when bipartisan consensus is forming in Congress to roll back harsh punishments for some crimes, is drawing greater concern.

The federal criminal justice system uses the threat of a guaranteed stiff sentence in the event of a conviction as a tool to force lower-level defendants to plead guilty in exchange for a lighter prison term. The changes made by Holder last year were intended to allow lower-level offenders to avoid harsh mandatory minimum sentences, and he's now trying to codify sentencing reforms into law.

"A lot of federal prosecutors were used to just charging a mandatory minimum and using that as leverage to get people to cooperate with us, plead guilty, and move on to the next case, and it will not be as easy for us to do that," Tim Heaphy, the U.S. Attorney for the Western District of Virginia, said in a recent interview. "But the federal sanction is still tremendously powerful, and even if it is not a mandatory or if it is a lesser mandatory and the numbers come down and [The Smarter Sentencing Act] passes, you're still going to have plenty of leverage to get people to cooperate up the chain of drug organizations."

Still, many in the law enforcement community oppose any legislation that may change the current mandatory minimum sentencing structure. An online survey of more than 650 self-selected assistant U.S. attorneys found that just 15 percent supported the Smarter Sentencing Act, with more than 60 percent opposed. A group of former Justice Department and DEA officials -- who, in their words, "served in the war on drugs" and "on the front lines of justice" -- signed a letter to Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) this week expressing concerns about slashing the length of mandatory minimums.

The DEA's standoff with Kentucky over non-intoxicating hemp shows how unyielding the agency can be, even when laws change. Hemp, sometimes known as marijuana's sober cousin, can now be legally grown for research purposes, thanks to this year's farm bill. Yet the DEA this week seized industrial hemp seeds intended to launch Kentucky's legal growing of hemp, used in products ranging from textiles to cosmetics. McConnell, who helped write the law that lifted the ban on hemp production, called the seed seizure "an outrage."

Leonhart went so far as to tell sheriffs earlier this year that a hemp flag flying over the U.S. Capitol last July 4 marked the lowest point in her career.

In the history of American government bureaucracy, there are precious few examples of agencies ceding ground, even as their mandates change. The Rural Electrification Administration survived into the 1990s, for instance, before its name was changed to the Rural Utilities Service.

Perhaps the most significant example of an agency putting itself out of business is the Civil Aeronautics Board. Led in the 1970s by economist Alfred Kahn, a dogged advocate of deregulation, the agency oversaw the unleashing of the airline industry that led to its own demise. Founded in 1938, the Civil Aeronautics Board folded 1984.

The DEA, whatever the value of its ultimate mission, is widely credited as a highly functioning agency, with an impressive array of confidential informants, the ability to trace complex financial transactions and a history of successfully placing undercover operatives deep inside closed groups of militants.

Drug policy expert Mark Kleiman, a professor of public policy at UCLA, has in the past opposed recommendations to dissolve the DEA and split up its functions. But that resistance may no longer be an option, he said.

"The DEA is full of skilled and aggressive agents, especially in the management of undercover operations. As a result, and also as a result of the insanely severe sentences under federal drug laws, an agency less than a third of the size of the FBI accounts for about half of all federal prisoners," Kleiman told HuffPost. "The question is whether that sort of aggressive enforcement of the drug laws is what we need. It's not at all clear that locking up more drug dealers leads to less drug abuse, and the DEA has not been a leader in shaping drug law enforcement to reduce violence and disorder."

The impulse of the DEA to defend its turf is understandable, he said, but should be discounted.

"Any DEA administrator feels an organizational imperative to support the existing drug laws and sentencing structure, even when doing so means opposing the purposes of the attorney general and the president, as we see currently," Kleiman said. "So I'd be inclined to reconsider my former opposition to merging the DEA" and perhaps the Bureau of Alcohol, Tobacco, Firearms and Explosives, into the FBI. "That would allow the combined agency to turn the skills and aggression of today's DEA agents against gun traffickers, cigarette smugglers, and purveyors of political violence."

Doing so would give the FBI a much-needed boost in its flagging effort to investigate and prosecute financial crimes. As former Sen. Ted Kaufman (D-Del.) recently noted, an inspector general report found that the FBI ranked complex financial crimes as "the lowest of the six ranked criminal threats." Mortgage fraud was "the lowest subcategory threat" listed in that category.