New marijuana law needs fixing

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From The Beacon, December 2016
 
With the passage of Question 4, Massachusetts is set to become one of just eight states that have legalized the recreational use of marijuana. The November election brought overwhelmingly good news for the commercial marijuana industry, as their go-to-the-ballot-box strategy was a smashing success. Fueled by millions of dollars in out-of-state industry donations (the industry outspent opponents by a 2-to-1 margin), cannabis business interests were able to influence the outcome and significantly increase their market by legalizing recreational use in four new states.
 
Massachusetts is now the commercial marijuana industry’s East Coast base, because of our population and because of our prime location in the center of a compact geographic region. The industry will certainly use Massachusetts as the retail platform for Rhode Island, Connecticut, New York, Vermont and New Hampshire.
 
Local officials are scrambling to get information and plan their own policy responses. This will be very difficult in the short term, as there are many unanswered questions and many significant flaws in the new law.
 
While there are many smaller details that warrant attention, the major problems that must be fixed are:
 
1. Deadlines that are too short to give state and local officials enough time to prepare for and administer the law.
 
2. The preemption and loss of local control.
 
3. The unregulated “home grow” provisions that could foster a new black market for marijuana sales.
 
4. The inadequate tax revenues written into the statute.
 
Question 4 sets an unrealistic deadline, instructing the state to construct the entire regulatory framework for the commercial marijuana industry by Jan. 1, 2018. That is too little time to recruit and appoint a first-ever, three-person Cannabis Control Commission and give the rookie commissioners the time to build a new state agency, recruit and hire agency staff, draft initial versions of all regulations, solicit input from all stakeholders, promulgate final regulations, and provide enough lead-time for a rational roll-out that protects the public interest. If the state fails to meet the Jan. 1 deadline, the industry has written Question 4 in such a way that the commercial industry would arise in a mostly unregulated environment, because medical marijuana operators would automatically be licensed as commercial agents for recreational marijuana, giving them a near-monopoly in the marketplace.
 
The Legislature and governor should act swiftly to extend these deadlines and give the state and municipalities more time to get the regulatory framework in place and adopt reasonable rules to govern this new commercial industry.
 
A second major concern is the preemption of local control. The new law prevents cities and towns from making local decisions on whether to allow commercial retail sales in their municipalities. Here it is clear that the marijuana industry lobbyists learned a lesson from Colorado, the first state to legalize recreational use. The Colorado law allows local governing bodies to ban retail sales in their communities – and 70 percent of their cities and towns have enacted such a ban.
 
Question 4 makes it impossible for selectmen, mayors, councils or town meetings to make this decision. Instead, communities are only allowed to enact a ban if 10 percent of local residents who voted in the last state election sign a petition to place a question on the ballot, and voters approve the question at a state general election in 2018 or later. This means the earliest that communities can even consider a ban will be nearly a year after commercial sales become legal. It is hard to imagine that this industry-friendly loophole was unintentional.
 
Further, Question 4 includes language that would allow the CCC to preempt or disallow any local zoning rule, ordinance or regulation that is inconsistent with their wishes – a concern made even more serious because the “advisory board” in the law is actually a pro-industry panel dominated by commercial marijuana interests.
 
The Legislature should act swiftly to restore decision-making authority to municipal governing bodies on the question of commercial bans, and clarify that the CCC cannot override local zoning decisions and ordinances on the location and operation of locally permitted commercial facilities, including recreational marijuana. The broad preemption language must be eliminated.
 
Starting on Dec. 15, home cultivation of marijuana will be allowed through a totally unregulated “home grow” provision, which will allow individuals to cultivate up to 12 plants at any one time. Calculating the street value, that’s $60,000 worth of marijuana. And based on reasonable processing estimates, the 12 plants could yield approximately 12,000 joints, or thousands of “servings” of marijuana-infused edibles.
 
Local and state law enforcement officials are gravely concerned about the home grow language in the new law. The sheer volume of home-grown marijuana will certainly incentivize a burgeoning black market that will hit the street at least a year before official, regulated commercial sales become lawful, creating a source of sales that could easily reach school-aged children and teenagers.
 
The Legislature and governor should delay the home grow provision and develop language to appropriately regulate and monitor this activity to protect residents and youths.
 
Another major concern is the rock-bottom tax revenue that would be generated by Question 4, where it is again clear that the marijuana industry learned a lesson from earlier experiences in Colorado and Washington state. In addition to state sales taxes, the Colorado law imposes a 25 percent tax on marijuana, and cities and towns can enact their own local sales taxes of up to 8 percent. The state of Washington imposes a 37 percent excise tax, and cities and towns can collect their own local sales tax of up to 3.4 percent.
 
In Massachusetts, the commercial interests behind Question 4 set the state marijuana excise tax at just 3.75 percent, and capped the local-option marijuana excise tax at only 2 percent.
 
Given the significant new burden of regulating and monitoring a new commercial industry (which will deal with a controlled substance that is still illegal under federal law), the state and local revenue rates are unreasonably low and damaging to public budgets. Cities and towns will have new responsibilities in areas of public safety, public health, zoning, permitting and licensing. At 2 percent, the local revenue will fall far short of local needs.
 
The Legislature and governor should increase the allowable state and local tax rates to bring them in line with Colorado and Washington and other “first-wave” legalization states.
 
There is no question that the will of the voters should be respected, but it is also clear that the law has several significant drafting flaws that require fixing. Just as the Legislature and governor acted in 1981 to make Proposition 2½ workable, lawmakers can take action to address the shortcomings in Question 4.
 
Doing so is an urgent matter that would benefit the public interest and every community.