HOW STATES ARE LEGALIZING
marijuana in the shadow
of a federal prohibition
As of May 2023, 23 states and the District of Columbia have already been down this path. Their experiences implementing new laws can serve as a potential roadmap for other states considering legalization. To paraphrase US Supreme Court Justice Louis Brandeis, states can serve as “laboratories of democracy” that can inform legislation in other states.
1: In the Weeds with Heather Trela
Until the early 20th century, marijuana was used in the United States in a variety of ways and was mostly unregulated. Early colonists were encouraged by Britain to grow hemp and the crop was used in the production of rope, paper, and cloth. Marijuana was also an ingredient in mainstream medicines as a treatment for a variety of ailments, including cholera, dysentery, alcoholism, opiate addiction, epilepsy, and asthma. The recreational smoking of marijuana was also introduced.
The first regulation of marijuana occurred with the 1906 Pure Food and Drug Act, which required that over-the-counter drugs containing cannabis had to be labeled. As marijuana use was tied to the 1910 influx of Mexican immigrants to the US, 29 states passed marijuana prohibitions. In 1937, Congress passed the Marihuana Tax Act to “impose an occupational excise tax upon certain dealers in marihuana, to pose a transfer tax upon certain dealings in marihuana, and to safeguard the revenue therefrom by registry and recording.” The act did not criminalize the drug, per se, but failure to pay said taxes or follow regulations was punishable by fines up to $2,000, up to five years in jail, or both. The Marihuana Tax Act stayed on the books until 1969 when the Supreme Court struck it down as a violation of the Fifth Amendment protection against self-incrimination in Leary v. United States.
After the Marihuana Tax Act was deemed unconstitutional, the Nixon administration encouraged Congress to create a new system for classifying drugs based on their medical utility and addictive potential. The result was the 1970 Controlled Substances Act, which established federal drug policy. Marijuana — like heroin and LSD — was classified as a Schedule I drug, meaning it has no currently accepted medical use and has a high potential for abuse. With this classification, marijuana became illegal under federal law.
In 1996, California became the first state to enact medical marijuana legislation with the Compassionate Use Act. In the next four years, Oregon, Alaska, Washington, Maine, Hawaii, Nevada, and Colorado followed suit. Colorado became the first state to legalize recreational marijuana in 2014. As of January 2020, 11 states and the District of Columbia have passed legislation permitting recreational marijuana and 33 states and the District of Columbia have some medical marijuana laws on the books.
New rulings are shaping marijuana markets.
As marijuana legalization spreads across the US and marijuana markets mature, the judicial branch is playing a larger role in shaping these markets. Of particular interest are courts' attitudes toward residency requirements for medical and retail dispensary licensing, interstate commerce, and, in New York, the implementation of the social equity program for licensing. This analysis examines the arguments in a number of key cases, the impact of court decisions on marijuana markets, and how, as concerns at least one oft-cited legal doctrine, a showdown at the Supreme Court may be inevitable. Read More >
The first dispensaries are open in New York but there are still many unanswered questions.
It’s poised to be a big year for marijuana in New York State. Shortly after licenses were awarded by the Office of Cannabis Management (OCM), the first adult-use dispensary in the state opened on December 29, 2022, in New York City, with additional retail following both downstate and upstate within weeks. As the retail market expands, the team at the Institute is keeping their eye on a number of developments. Here are five of the trends that we will be watching. Read More >
Delayed state guidance has had a direct effect on municipalities weighing whether or not to opt out of retail and on-site consumption lounges in their jurisdictions.
The end of the year brings a looming deadline for municipalities in New York State. When the Marijuana Regulation & Taxation Act (MRTA) legalized adult-use/recreational marijuana earlier this year, one of its provisions permitted towns, cities, and villages the opportunity to opt out of the state issuing licenses for marijuana dispensaries and/or on-site consumption lounges within their jurisdiction. The Marijuana Opt-Out Tracker is a regularly updated dashboard that allows users to view which municipalities have made the decision to opt out of adult-use marijuana dispensaries and/or on-site consumption lounges in their jurisdiction as the December 31st deadline approaches. View the Tracker >
Final appointments to the Cannabis Control Board and the Office of Cannabis Management were not made until September 2021—six months after MRTA became law—and the Cannabis Control Board didn’t hold their first meeting until October 5, 2021. The delayed state guidance has had a direct effect on local government decision making. Read More >
The legislative process for legalization takes center stage as the initiative process faces challenges.
The COVID-19 pandemic and resulting public health emergency caused massive disruption over the past 18 months—jobs were lost, events were cancelled, and people had little choice but to adapt to a virtual world as schools, governments, and offices transitioned to being at least partially, if not fully, remote. One policy that didn’t seem to be slowed down by the pandemic, however, was marijuana legalization. From July 1, 2020 to June 30, 2021, nine states legalized new programs for medical and adult-use/recreational marijuana—the largest number of states to legalize marijuana during any comparable year to date. Read More >
37: It's Legal | In the Weeds Pt. IV
A look at similarities between recent efforts to decriminalize magic mushrooms and the legalization push for marijuana.
On Election Day 2020, voters in the District of Columbia and Oregon will get to decide ballot initiatives about the decriminalization of psilocybin mushrooms (more commonly referred to as magic mushrooms). If these ballot measures are passed, Washington D.C. and Oregon will follow Ann Arbor, Denver, Oakland, and Santa Cruz in decriminalizing magic mushrooms. In doing so, efforts to decriminalize the fungus exhibit similarities to early marijuana legalization efforts: an initial focus on decriminalization—often at the city level—followed up by legalization pushes that emphasize the documented medicinal benefits of the drug. Read More >
34: Drugs on the Ballot
Adult-use legalization efforts recently stalled in New York and New Jersey, despite apparent public support. We examine why.
Of the 10 states that permit adult-use marijuana, only Vermont did so through the legislative process — permitting home cultivation of a small number of marijuana plants, but failing to tackle the more complex issue of creating a commercial market for retail sales. The other nine states have implemented adult-use through the initiative process, which allows citizens to propose a new statute to be approved directly by voters and circumvent the legislature. Why have efforts to pass adult-use marijuana stalled legislatively while they have achieved better success through ballot measures? Read More >
A $1.7 billion adult-use marijuana industry in New York could generate a total economic output of $4.1 billion and total employment of 30,700.
One of the most effective arguments for the legalization of marijuana is the economic opportunity it would create for New York State and its residents. Previous studies have found that 63.4 percent of surveyed adults agree that the creation of the industry and corresponding jobs would be a justification for legalization. The legalization of marijuana provides an interesting case study and natural experiment in the field of economic development. It is rare that new industries and supply chains must be created in such a short time frame. Read More >
State policymakers considering marijuana legalization and implementation should answer these questions first.
The 10 states that have implemented legalized adult-use marijuana are operating in the somewhat uncertain context of regulating a practice that is illegal at the federal level. Presumably, no state wants to do anything that brings the attention — and enforcement — of the federal government, so there is added pressure on implementation decisions. No matter how states ultimately choose to adopt and implement adult-use marijuana, however, there are some common questions that states should consider, drawing from the experiences of the states that have gone before them. Read More >
8: A Gateway Drug for Federalism
Emerging data indicate that marijuana can play an important role as a less-addictive alternative to opiates.
The damage from opioid abuse is not limited to individual users, but has ripple effects that impact families, communities, and governments. Policymakers and activists are grappling with how to best address the problem, but are often stymied by budget constraints and a lack of evidence as to what actually works. Recent research, however, has found that legal access to marijuana may be a potential tool for addressing the opioid crisis. Read More >
The Cole memo protected states that had legalized marijuana from federal prosecution — until it was rescinded last year.
The laissez-faire approach codified by the Cole memo allowed the legalization of both medical and recreational marijuana in the states to grow without being challenged by the federal government. By abandoning it, former Attorney General Sessions gave US attorneys the freedom to begin prosecuting people who violate the federal prohibition on marijuana, regardless of state law. Read More >
As Congress faces its deadline to pass a spending plan, lawmakers will also have to decide whether to renew an amendment that prohibits the Department of Justice from using federal funds to interfere with state laws that legalize medical marijuana.
The Rohrabacher-Blumenauer Amendment prohibits the Department of Justice from using federal funds to interfere with the implementation of state laws that legalize medical marijuana. As Congress faces its deadline to pass a spending plan, lawmakers will also have to decide whether to renew the amendment or to let it sunset, potentially opening the industry to federal prosecution in the 29 states where medical marijuana has been legalized. Read More >
Marijuana dispensaries could be particularly vulnerable to federal civil asset forfeiture, as the drug is classified as illegal by the federal government despite legalization in many states.
In July 2017, Attorney General Jeff Sessions announced that the Justice Department would allow federal agency forfeiture, also known as “federal adoptions” of assets seized by state and local law enforcement agencies. The practice, an expansion of civil asset forfeiture, was curtailed by the Obama administration in 2015 by then-Attorney General Eric Holder. Though civil asset forfeiture is not necessarily well-known to the public, the practice is unpopular across the political spectrum. Read More >
The Rohrabacher-Blumenauer amendment prevents the federal government from committing funds to interfere with the implementation of legalized medical marijuana in the states — but it must be renewed each year.
Without the Rohrabacher-Blumenauer amendment, the Department of Justice is free to invest resources in prosecuting dispensaries and medical marijuana users for violations of federal law. States, meanwhile, are not walking away from the continued expansion of legalized marijuana despite the potential uncertainty. Read More >
Trump administration officials have signaled they intend to rigorously enforce federal laws related to marijuana but limited Department of Justice resources and large marijuana tax revenues for states may discourage them from doing so.
During the presidential campaign, candidate Trump indicated that marijuana usage was an issue best left to the states, but Trump administration officials have given indications that they intend to rigorously enforce federal laws. Resources, rather than rhetoric, may ultimately decide if the Trump administration follows the lead of the 2013 Cole memo, which deprioritized enforcement of federal law related to marijuana, or is more aggressive in enforcement. Read More >
Heather Trela is director of operations and fellow at the Rockefeller Institute of Government. Her research focuses on federalism issues with an emphasis on marijuana policy. She was a doctoral candidate at, and holds a master’s degree in political science from, the Rockefeller College of Public Affairs and Policy as well as a bachelor’s in economics and political science from Hartwick College.
Laura Schultz is executive director of research at the Rockefeller Institute of Government. She explores how state and local governments can support innovation and generate economic growth, and evaluates the fiscal and economic impacts of federal, state, and local policies and emerging economic trends.