Marijuana Not A Priority For Obama

Obama States the Obvious

Today, major newspapers are exulting in Obama’s announcement, to be aired by ABC News today, that he doesn’t plan to use federal resources to prosecute recreational marijuana users in states which have just voted to legalize it.

“It does not make sense from a prioritization point of view for us to focus on recreational drug users in a state that has already said that under state law that’s legal,” Obama said.  “At this point (in) Washington and Colorado, you’ve seen the voters speak on this issue. And, as it is, the federal government has a lot to do when it comes to criminal prosecutions.”

Before the statement even officially airs, many commentators are missing the point. These statements reveal no new shift in policy – the federal government has not engaged in widespread arrests of recreational pot users since the late 1930s, after the nation’s first drug czar Harry Anslinger endured massive public outcry over his strict enforcement of cannabis prohibition. More likely, the interview is nothing more than a PR move, designed to buy the president more time while he tries to fix the budget and figure out what on earth he’s going to do about the real elephant in the room: the large-scale cultivators and retailers who want to enter the legal recreational cannabis business, and the state regulators who have been ordered by the people to help them. It is likely that even the president himself doesn’t know what he will do – yet.

To give the curious cannabis activist a better grasp of the choice the chief executive now faces, I have endeavored to provide a summary of the debate raging within the White House right now. All of Obama’s choices are bad.

The Despotic Route

At one point early in the debate, a Cabinet member or staffer may have suggested that Obama take the hardest line possible, to position far to the right of his political opponents to neutralize all criticism that he may be too “soft on crime.” In such a policy, the White House would use the DEA to take over the job of cannabis policing from the state and local cops who will no longer bother to arrest adults in possession of up to an ounce – to essentially nullify the will of the people entirely. As I predicted weeks ago, it is very unlikely that Obama would choose such a course – and with the lifting of prohibitions on small amounts of pot in both states without more than a peep from D.C., it appears that I was right.  Nevertheless, the political calculus behind this option is sufficiently instructive to warrant some examination.

Believe it or not, such a despotic policy would have some advantages; the most attractive of these would be to avoid potential criticism from neighboring states. The lifting of penalties for possessing an ounce of marijuana, although it may not seem like a big deal, could in fact have a significant effect on the availability of the drug across state lines, based on principles of economics. While an ounce may not seem like much, given pot’s high potency to weight ratio, an ounce of high-grade marijuana could easily represent a year’s supply for the occasional recreational smoker (for an excellent analysis of American pot usage rates, see Marijuana Legalization: What Everyone Needs to Know by Caulkins, Hawken, Kilmer, and Kleiman, pp. 16-30).  And drastically different risk profiles for possessing pot between Colorado and Nebraska will lead to drastically divergent prices on either side of the state line, creating significant incentives for Coloradoans to traffic their legal weed to where it’s more difficult to obtain. This arguably makes local pot policy a federal problem, which Republicans in the nation’s heartland could accuse Obama of ignoring.

Nevertheless, the disadvantages of directing federal resources to arrest tens of thousands of citizens for doing something which isn’t criminal under state law far outweigh the advantages; just ask George W. Bush, who chose to discontinue the raids and prosecutions on individual medical marijuana patients in the face of a strong public backlash. While some of the backlash came from a sense of compassion for often seriously ill individuals, no small amount of the public anger also stemmed from constitutional principles: the policing of drug laws has traditionally been left to the states, and federal interference with the people’s will had proven quite unpopular.  Given that legalization initiatives in Washington and Colorado received more votes than Obama did, such a blatant disregard for popular will would be the equivalent of political suicide – especially in Colorado, which has tenuously voted for Obama twice after a streak of Republicanism. The same federalist principles also work to blunt some of the Republican criticism Obama would face for his acquiescence – while many Tea Party activists may personally despise marijuana, they would nevertheless strenuously object to an overreach of federal power.

Choosing Free Love

Many optimistic cannabis advocates have expressed to me their hope that weeks of near-silence from the Justice Department signals tacit acquiescence by Obama – in essence, that he’s given Washington and Colorado the green light.  Yet there is no more reason to believe that Obama will refrain from all federal interference in the legalization experiment than there is to believe that he will shut it completely down.

Still, it must be tempting. Here is a president whom we know to object to the disparate racial outcomes of drug crime sentencing, and with good reason: African Americans are 2.5 times more likely to be arrested for marijuana crimes than the general population.  As Caulkins et al point out (pp. 42-45), some of that disparity can be attributed to environmental factors (i.e., blacks are more likely to purchase marijuana outside than whites), but not all: despite sincere reform efforts, American cannabis laws still reflect prejudice. A completely hands-off approach to Washington and Colorado may result in setting a shining example for other states to follow – a lasting legacy of reduced racism for the country’s first multi-racial president.

Some hope for even more radical change. With the most recent polls suggesting that a majority of Americans favor reform of pot laws, why not seize the moment and end federal prohibition entirely? Obama could order the DEA to reschedule cannabis out of Schedule I to a less restrictive classification, which would effectively end the conflict with the federal government in medical marijuana states. Such a move could harness political will for change and put the president on the winning side of public opinion.

But such moves would have serious downsides. The politics of pot, rife with cultural and political divisions since the tumultuous 1960s, remain bitterly divisive; any politician who proposes liberalization of cannabis laws risks becoming saddled with labels borne out of a long history of ingroup/outgroup dynamics and which can rapidly drain a leader’s store of political capital. Given Obama’s susceptibility to an even older tradition of racial stereotyping which associates cannabis use with African Americans, any kind of green light to relaxed marijuana laws will cost the president dearly.

Many Middle Courses

So Obama has to compromise. But which of many possible compromises will he choose? Each comes at a cost.

Allow personal use but prosecute growers and traffickers.

The primary advantage of this strategy would be to keep street prices of marijuana somewhat inflated, which arguably reduces public access to the drug. But this advantage is limited: marijuana is already easy to obtain in the majority of the country, especially among high school students. The other advantage is that it would allow Obama to present himself as “tough on crime” – in this case, pot.

The disadvantages of this course are significant. Voters in Washington and Colorado resoundingly approved legal cultivation and distribution by wide margins, and 63% of Americans believe that the federal government should refrain from interference in what is obviously the will of the people. While this policy would allow some incremental change, there will be no avoiding the perception of Obama as a democracy-subverting autocrat. Colorado, where Democrats have a tenuous toehold, could easily revert to the Republicans. Such a policy would also greatly restrict the kinds of quality control – potency testing and pesticide screening, for example – which have provided significant public health benefits in states which allow regulated dispensaries. And aggressive policy toward “recreational” pot distribution would only encourage users to claim more “medical” need or simply return to street dealers to get their drugs. This option would grant Obama some political cover, but yield few substantial benefits.

Allow cultivation and distribution but only for nonprofit purposes.

The greatest appeal of this option is its apparent balancing of interests: while voters in Washington and Colorado get to see their initiatives enacted largely as intended, some of the worst effects of free-for-all legalization would be avoided.

What are those effects? Experts agree that one of the most significant risks of full-scale pot legalization would be the strong financial incentive for-profit companies would have to generate a loyal base of dependent users.  Tobacco companies make much more money off addicts than they do off social smokers. Booze companies profit much more off of alcoholics than they do off busy parents who have a glass of wine with dinner. Cannabis is less addictive than either of these drugs, but nevertheless millions of Americans meet the criteria for marijuana dependence; presumably, concentrated lobbying and marketing efforts by for-profit pot companies would have the net effect of increasing that number.

In response to this concern, Washington’s Initiative 502 bans advertising for cannabis products – but it is unknown whether the courts will strike down this provision based on a first amendment challenge. Current jurisprudence suggests that this is a nontrivial risk: the Supreme Court ruled in favor of the Westboro Baptist Church by a vote of 8 to 1.  Selective enforcement of federal cannabis law against for-profit companies would solve the same problem without raising issues of free speech.

Still, the choice is unappealing. Allowing even nonprofit pot farms to openly operate will subject Obama to charges that he wants to encourage drug use.

Allow some cultivation and distribution but raid operations located in hostile jurisdictions.

This option has the appeal of minimizing the subversion of voter will, but it’s far from a perfect compromise.  Under such a plan, Obama could instruct his US Attorneys to go light on enforcement in, say, Seattle or Denver while freely offering enforcement assistance in more rural counties where support for legalization is more tepid.  In theory, such a course would allow residents of pot-friendly jurisdictions to enjoy their freedoms (and lower state taxes) while residents of unfriendly jurisdictions would have a friend in Washington, D.C. to help them plug the enforcement gap at no extra charge.  Also in theory, such a policy would create effective “buffer zones” between major metropolitan areas where weed would be plentiful and neighboring states – like Nebraska or Idaho – which would prefer to avoid a flood of drugs across their borders.

Reality would be more complicated. While such a policy may result in avoiding a large political backlash, success is far from assured; the wide availability gap between places like Denver and rural Kansas would create strong financial incentives for enterprising Coloradoans to risk federal prison for a quick buck. Since marijuana is a fungible commodity, an increase of supply in one part of the country will inevitably affect prices in other parts of the country despite strenuous enforcement. The only question is how much.

Shift enforcement from the DEA to the IRS.

This may be the least bad of all of the president’s options, and it may be employed in conjunction with other policies. Thus, it is the only compromise position which I can predict with any confidence: most likely, Obama will continue or even expand his previous policy of using the IRS as an anti-drug enforcement arm.

Politically, it’s a relatively safe move: simply a matter of deftly applying preexisting statutory authority to create a taxation double standard. Whereas any other kind of small business may deduct ordinary operating expenses – rent, utilities, etc. – on their tax return, Internal Revenue Code Section 280E forbids such deductions for “traffickers in controlled substances.” Obama has continued the Bush policy of using 280E to send dispensaries tax bills which many can’t afford to pay – forcing them out of business.

With slight adjustment, this could be a very advantageous policy. By easing off the enforcement pedal just a little bit, Obama could use 280E as an effective tool to milk stable tax revenues from the farms and package stores which the administration may allow to operate. The idea would be to tax farms and/or distribution networks at such a high rate as to just allow them to eke by while maintaining relatively high pot prices. Tax evaders would face civil forfeiture. While enforcement may be difficult against some distribution models, like delivery services, which could operate discreetly under the federal radar, there would be far fewer problems with taxing large-scale farms, which as a matter of definition aren’t going anywhere.

Await an Incident.

This may be Obama’s ace up his sleeve. Public opinion is against federal interference for now, but with the first scandalous breaking news story out of Colorado or Washington, the political tides may rapidly shift.  Put simply, there’s a certain advantage to waiting and seeing. If legalization results in lower crime rates and teen usage, the president will be glad in hindsight that he didn’t try to interfere with a good thing.  On the other hand, if some unintended consequence shifts public opinion, Obama can readily implement a contingency plan which he kept ready for such an occasion.  Ultimately the president, no more than any of else, knows exactly what will happen as a result of last month’s historic initiatives. It pays to be responsive.

If I were president, and I’m quite thankful that I’m not, I would announce an enforcement policy in favor of using civil asset forfeiture to shut down profiteering traffickers but allowing not-for-profit collectives to open farms, dispensaries, and coffee shops. In addition, I would instruct the IRS to use 280E to levy high effective tax bills on all collectives in order to keep the retail price of pot relatively stable. I would offer assistance to states to enforce drugged driving and transportation laws at their borders.  And I would never bother any cannabis user growing at home for their own use. There would be a price to pay, but it’s the least one can do to end a long and senseless civil war.