I opposed the ballot question legalizing recreational marijuana in Massachusetts. Nonetheless, the measure passed and it looks like legalization is going to happen. I asked marijuana entrepreneur Rob Hunt, President of Teewinot Life Sciences, to provide the industry perspective on some of the key issues.
Here’s what he had to say:
How does recreational marijuana interact with the market for alcohol? Do you expect alcohol sales to rise or fall? Why?
The adult use cannabis market should have almost no impact on the alcohol market at all. What this market represents is simply an orderly conversion from a long-standing illicit market to a now regulated legal market. It is not as if this new adult use market is emerging from nowhere, it already exists and has existed for years. Now adult cannabis users simply have a safe way to purchase cannabis from licensed retailers who have laboratory tested state-approved products rather than from a criminal enterprise with no safety considerations or government oversight.
What is the evidence of the impact of marijuana legalization on the black market?
Adult-use legalization will have a very large impact on the illicit market. Using Colorado and Washington as comp sets, the legalization of adult-use almost eliminated the illicit market overnight for adult cannabis users within the state. There is simply no reason for one to put themselves in a potentially dangerous situation when they can go to a local shop down the street that has a larger selection of tested products at a comparable price. Best of all, in a legal market, the money stays in the local community and generates tax revenues for the state and the Federal Government.
Some (including me) are concerned that the availability of edible marijuana products will pose a danger for children but also for adults and pets, especially when they are packaged as candies or treats. Are these concerns warranted?
The cannabis industry is very aware that edibles must be very closely monitored. The trend is to make edibles less potent for this reason and to make sure that labeling and packaging are obvious and accurate and that the exit packaging is childproof. As for making products that are packaged as candies or treats, it is no different than making an alcohol product as a blend with fruit juices or iced tea. Flavor should not be the consideration, education and making sure products are kept in safe places should be a much larger consideration for adults using any cannabis product.
According to published research, about 30 percent of marijuana users have some degree of marijuana use disorder, including dependence and addiction. What is the argument for introducing a product that causes harm in a significant percentage of users?
I think the most simple answer is that the state is not “introducing” a product at all. This product was, is and would continue to be available to anyone that wishes to consume it on the illicit market. The question that should be asked is “If this product is already available to anyone that wants it, would it not be smarter to regulate it, keep it out of the hands of children, make sure it is labeled and packaged properly, has potency information available and is grown using specific standards?” If the answer to that question is yes, which is what the voters recently decided it was, then the next question, to address the concerns of many should be, “With the revenue and taxes that are being produced from this now regulated program, would it not be prudent to reallocate some of those dollars back to education and treatment for those who need it? Furthermore, perhaps should we not allocate some of the money that was previously earmarked for incarceration to rehabilitation?”
The medical marijuana ballot initiative was passed in Massachusetts just a few years back. Was that initiative mainly a tactical stepping stone by the marijuana industry on the way to recreational legalization, as appears to have been the case in Colorado?
The two issues are not at all related. Those who need cannabinoid based medications to treat a host of indications had no other options to procure it outside of these compassionate state programs. This was a health question. It is very likely that cannabinoid based medicine continues to move away from the plant and further into the lab. Patients that require cannabinoid based therapies are not concerned with cannabis, they are focused on the complex chemical compounds that the plant produces called cannabinoids. There are to date one-hundred and eleven of these cannabinoids identified. Many of them have been proven to have efficacious qualities, most notably to treat spasticity and for palliative care. As science progresses, new ratios and formulations of cannabinoids will be developed to advance where these medicines will be used to treat the infirm.
Legalizing cannabis for use by responsible adults is a social justice question. These laws were passed simply to allow adults to use a product that has been statistically shown to be less harmful than alcohol without fear of arrest or incarceration.
There is a very clear bright line distinction between these two laws and the reasons for their respective introduction. The one thing they both have in common, as evidenced by the percentage of voters supporting each, is that they are sensible policy by comparison to cannabis prohibition.
What did the Massachusetts ballot measure get right, and what are you concerned about?
It is too early to tell either way. The law just passed and has not made it through rulemaking yet. We will see how it is implemented before we will be able to opine on what is right and wrong with it.
What do you project as the net economic benefit or harm to Massachusetts? What are the key factors to consider?
As James Carville once famously said “It’s the economy, stupid” This law will create many new local jobs both directly tied to cannabis and on the ancillary as well. More importantly, it will take jobs away from criminal enterprises. Previously revenue derived from the sales of cannabis flowed directly back to Mexican cartels, Canada, or local criminal organizations. Now it will all stay in the Commonwealth. Then there are the taxes. Not just the excise taxes, but the Federal and State business taxes, payroll taxes and others. Lastly, the state will not need nearly as much capital for prisons, policing or other programs reliant on cannabis prohibition. You will also see much of this windfall redirected to support social welfare programs. That is good for all citizens in the Commonwealth.
As for harms, there will be a greater need for proper cannabis education and that will cost money. New state agencies or internal departments will be created to oversee the program and that will have related costs as well. Finally, there will no doubt be capital required to treat some users as there is with alcohol and tobacco.
There is tension between US and state law in places like Massachusetts that have voted for legalization. What are the key issues and what is your expectation for how they will be addressed by the incoming Administration and Congress?
I do not think there is enough room to discuss all the related issues in a short article. Things to consider are: the 10th Amendment to the Constitution, The Supremacy clause, the Rohrabacher-Farr amendment, the power of the incoming Attorney General – Jeff Sessions, How Trump or Pence decide to direct AG Sessions, how people close to the administration who are strongly supportive of cannabis progression, such as Peter Thiel or Congressman Dana Rohrabacher, influence the administration policy.
But the most important issue to consider when addressing any political question is – What is the will of the people? What do they want? Because ultimately, politics is about winning elections and if a politician believes that an issue is important enough to the voters in their district, then they will not likely take a stand against it if they wish to remain in office. At this point in time, there is no doubt how the voters feel about advancing cannabis policy. Almost 60% of the electorate supports adult use cannabis and that is taken from polling across both sides of the aisle in liberal and conservative states alike.
Anything else you would like to add?
Please take a look at what is being done on the true pharmaceutical side of cannabinoid-based therapy. I am certain that it will alleviate many of your articulated concerns. When you realize that these pharmaceutical and biotechnology companies are conducting clinical trials and are undertaking all the same steps with the FDA as for any other forward thinking drug development, I am certain that it will illuminate that this issue is about helping patients and not about finding a way to back-door legalization. I am happy to point you in the right direction.
By healthcare business consultant David E. Williams, president of Health Business Group.