A study by the Rand Corporation, commissioned by Vermont lawmakers and due to be released on January 15, 2015, could shape the future debate on retail marijuana legalization. Further moves toward legalization are expected in the Vermont legislature following receipt of the report.
This is significant because it signals two big changes. The first is in the quality of the information that goes into the debate. The report is expected to be exhaustive in its exploration of the current marijuana landscape, the alternatives for the shape of the legal industry and the collected experience for other jurisdictions that have legalized.
Both advocates and opponents can be expected to mine Rand Corporation’s analysis in depth, but the quality of the conversation may be improved with verifiable data and consensus about what the issues are. Secondly, but perhaps more importantly for investors, it indicates a return to normal legislative processes.
Framing the Questions
Members of the Vermont legislature’s Joint Fiscal Committee got a preview of the report in early November. It is expected to cover nine policy issues:
- How will the number of producers and their production methods be regulated?
- Does Vermont want to allow for-profit companies to enter the market, find other ways to raise revenues from nonprofits or control distribution through the state?
- How will advertising be regulated in a way that satisfies the state’s interests without infringing on constitutional free-speech rights?
- How will prevention messages be balanced with promotions? And how will prevention and treatment be funded until revenues start coming in, especially because marijuana use can have secondary impacts on alcohol, tobacco and opiate use?
- How will criminal offenses and fines change, and how will driving under the influence be managed?
- What will thresholds be for legal marijuana’s strength?
- How will the presence of molds or pesticides, for example, be regulated — especially when it comes to edible marijuana?
- How will pricing be structured, and what will its effect be on the black market?
- How will flexibility be built into all these policies in order to respond to lessons and changing conditions?
It appears to be a comprehensive approach to the issue. How Vermont answers these questions may not be the same as the way the citizens of other states answer these questions. But identifying the questions is a major first step. As any good lawyer knows, if you can frame the question, you stand a much better chance of getting the answer you want.
The Importance of Being Boring
Ballot initiatives to legalize marijuana are dramatic, but very infrequent. Some states do not permit them and, as is currently happening in Alaska, they can be undermined by subsequent action of the state legislature. None of this contributes to a healthy, predictable, functioning business economy. So far, however, it has been the only alternative to gridlock.
Rhode Island’s legislature is expected to take action on legalization early in the next session. If Vermont follows, will it become the trend? This would be very big news because it could also speed up the process of legalization considerably, and allow investors to become involved more broadly.
The Rand Corporation’s report on legalization can be expected to have ramifications beyond Vermont and may ultimately be more important than the Vermont legislature’s decision on legalization. But an improved dialogue and an additional state’s decision to end prohibition would be a big win.