How can states legalize something that is illegal under federal law? Rockefeller Institute Chief of Staff and Fellow Heather Trela explains the growing tension between states and the federal government over marijuana policy, and where it may lead.
Guest:
Heather Trela, Chief of Staff and Fellow, Rockefeller Institute of Government
Read the Report:
Clash of Laws: The Growing Dissonance between State and Federal Marijuana Policies
Transcript was generated using AI software and may contain errors.
Jeff Sessions 00:00
I mean, we need grownups in charge in Washington to say marijuana is not the kind of thing that ought to be legalized. It ought not to be minimized. That it’s, in fact, a very real danger. You cannot play with it. It’s not funny. It’s not something to laugh about. Good people don’t smoke marijuana.
Andrew Cuomo 00:21
New Jersey may legalize marijuana, Massachusetts already has. On the other hand, the Attorney General Sessions says he’s going to end marijuana in every state. I think we should fund DOH to do a study. Let them work with the State Police and other agencies, look at the health impact, economic impact, the state of the law. This is an important topic. It’s a hotly debated topic. And it’d be nice to have some facts in the middle of the debate.
Jim Malatras 01:08
Welcome to Policy Outsider from the Rockefeller Institute of Government, where we break down pressing public policy issues facing New York State and the nation, and bring you the latest research and analysis from the Rockefeller Institute team. I’m Jim Malatras, president of the Rockefeller Institute. Today, we’re talking with Heather Trela, fellow and chief of staff at the Institute, about recreational marijuana. Canada just legalized recreational marijuana for the entire nation. In New York State, Governor Andrew Cuomo announced a series of listening sessions to talk about implementing and developing a program for recreational marijuana in New York State. Heather, its pleasure to be with you today.
Heather Trela 01:45
Thank you for having me.
Jim Malatras 01:47
Take us through the basic mechanics of legalizing something like marijuana that is illegal at the federal level.
Heather Trela 01:53
Currently in the United States, nine states and the District of Columbia have legalized recreational marijuana use. Another 31 states and the District of Columbia have medical marijuana laws on the books. Public opinion right now is hovering about 62 percent in favor of legalization. However, despite the movement in the states toward legalization, marijuana is against federal law. That’s because of the 1970 Substance Control Act, which dictated that marijuana is a Schedule 1 drug, meaning it has no redeeming medical value and is highly addictive. For states to operate in a way that is not completely in violation of federal law, they have to be careful. On the surface, you would think federal law would trump state law because of the Supremacy Clause. However, that is not 100 percent clear that this would actually happen. For federal preemption to happen either states would have to pass regulations in keeping with federal law or the federal government would have to enforce federal law. That has not happened much to date. So the states have to make sure that they are not drawing too much of the attention of the federal government. The federal government is somewhat limited in what they can do with marijuana enforcement for a couple different reasons. One is the Rohrabacher Blumenauer Amendment that Congress passes and renews with most spending bills. That limits the Department of Justice from using federal funds to go after and prosecute those people and organizations that are operating in compliance with state medical marijuana laws. That does not provide any protection to recreational marijuana. In that instance, the Department of Justice is somewhat limited in how much they can go after the states.
Jim Malatras 03:39
That’s a unique version of federalism, as we would call it in public policy circles where the federal government and state governments both have authority and they’re sort of conflicting. You indicated there’s a growing tension emerging with the current federal government. Why is that now? Has there been a shift in federal policy from the Obama administration to the Trump administration? What’s going on there? What was the Obama administration doing differently than the Trump administration, where maybe more of these tensions between the federal government and the states are emerging?
Heather Trela 04:12
The Obama administration and their actions really allowed for the state medical marijuana laws to proliferate? That’s because they passed a series of memos in the Department of Justice that guided federal activity. In 2009, they passed the Ogden memo, which basically stated a laissez faire attitude to state medical marijuana laws. If a grower or distributor was compliant with their state law where marijuana was legal, the federal government was basically going to look the other way. They were not going to come in and get involved unless you violated state law or you violated in part of another criminal activity. They expanded that with the Cole Memo, which then also granted protection to recreational marijuana. States, while still being nervous about federal law, felt a little safer in passing legislation to allow for marijuana. That all changed with the election of President Trump and more specifically with the appointment of Attorney General Jeff Sessions. Jeff Sessions has been a longtime opponent to marijuana in all forms. He famously is quoted as saying, good people don’t smoke marijuana while he was a senator. When he took over the Justice Department, he rescinded the Cole Memo, which basically left a lot of uncertainty. It did not mean the federal government was necessarily going to come storming into the states, but it left discretion up to state attorneys, and how they were going to prosecute, and if they were going to prosecute such crimes. That really spins a lot more uncertainty into something that had been somewhat settled up until that point.
Jim Malatras 05:50
It’s just a little unusual too because at the same time that the current administration came into office was at the same time several states, I think you indicated to one of your reports said they passed ballot initiatives legalizing marijuana in some form. How does that work when a direct will of the people are voting for something at a state level versus what the federal law enforcement through the Department of Justice and the attorney general is doing? What kind of confusion or problems does that create in states trying to legalize this in a place like Massachusetts or New York or other places?
Heather Trela 06:26
2016 was an odd election because it did bring in Jeff Sessions’ power, but also saw a number of ballot initiatives that expanded the reach of legalized marijuana in the states. After 2016, I think the majority of Americans live in states now where there is some form of legalized marijuana. Now, this does cause a lot of problems, this uncertainty for state-licensed and state-approved marijuana industries because of this federal uncertainty. One of the big issues is just the basic operations of dispensaries, they can’t really use banks and financial institutions. Financial institutions are generally governed by the federal government. Marijuana is a federal crime, so banks are very hesitant to get involved in the marijuana industry. There was some movement in this under the Obama administration, there were some memos that gave some guidance. Those have also since been rescinded with no new guidelines put in place. Jeff Sessions is really and the Department of Justice have really forced more chaos into an area where there was some stability. Because of this, most dispensaries have to be a cash only business. That makes dispensaries a target. When you have that much cash sitting around, people know that. So they have to often invest in a lot of security and other additional measures to try to protect their finances. Unfortunately for them, they can’t write off any of these expenses for their businesses on their federal tax returns because again, illegal activity. A lot of the basic business expenses that other organizations could claim on their tax returns, marijuana dispensaries are unable to do. Again, hurting their profit margin and making the business harder to expand in a clear way.
Jim Malatras 08:08
They can’t file it as income though, even if it’s not legal at the federal level. How do you show the income under a dispensary in Colorado, for instance?
Heather Trela 08:17
The federal government, it falls for any illegal activity, they expect you to still declare your revenue. It’s more of an issue for the state taxes, because in the states where they have implemented recreational or medicinal marijuana, states are taxing this as a source of revenue. This is one reason why it’s so attractive to so many states. After the recession, a lot of states had budget shortfalls. This is a nice way to have a big source of income coming in to fill in some of those holes in their budgets. Colorado, California, many of these states are seeing a big financial boon from marijuana not just domestically or within their state, but there’s a burgeoning marijuana vacation market. People are traveling to Colorado just to take marijuana sponsored tours, because they can engage in activity in the state. There is some financial benefit to this as well as medical or just civil liberties.
Jim Malatras 09:14
Besides just having a cash business, which seems problematic for businesses or even tax purposes, which it seems like there could be some potential issues there, how about for the individual person in the state that thinks they have access to now even medical marijuana, put aside recreational for a moment, you’ve written that there’s some problems with respect to certain groups like veterans and others where they may think they have a right in the state but they don’t, how does that work with a veteran not having access to it? Why is that the case?
Heather Trela 09:42
It’s an unfortunate side effect of the federal prohibition, many veterans receive their medical coverage through the VA, Veterans Affairs, a federal organization. Marijuana has shown some promising evidence in addressing PTSD and some other medical conditions that veterans do disproportionately have. But because they receive their medical care from a federal institution, their doctors are not allowed to even discuss medical marijuana with them. They can’t get as a prescription. Other groups that receive federal benefits can also be punished for smoking marijuana or using medical marijuana in a state that’s legal. It could impact your federal housing access, your job access, there’s a lot of you think you’re following the law, and then you forget about all the federal benefits that you are now going to be denied? Because if you test positive that could be used to justify denying you benefit or access to certain things.
Jim Malatras 10:41
Where do you think this heads as states like New York? I mean, New York right now has a medical marijuana program. It’s a nonsmoking program. It’s now moving towards a recreational system like Massachusetts is undergoing. How does this work? What are some of the problems? Do you see any potential court cases emerging between states and the federal government over this seemingly collision course? Even though the federal government’s limited is sort of a second part of this question, what are some of the tools that they have in their toolbox if they want to enforce the federal law in states to crack down, for lack of better term, on states that are actually legalizing this?
Heather Trela 11:25
We are getting to a point where I think the marijuana industry may be getting close to being too big to fail. States have proven to be very resilient and not scared with a new federal guidance. For example, we have four states considering new marijuana legislation by the 2018 election, even in the shadow of so much uncertainty and threats from the federal government. The states are not willing to back down on this particular issue. Again, I think finances have a big part to do with that. But the majority of Americans think this is a good thing. There are some potential court cases and some recent court cases that may impact this. One that actually doesn’t have anything to do with marijuana, but does have an impact on this arrangement was the recent court case, Murphy vs. NCAA. That case actually focuses on sports gambling, and the legalization of sports gambling in the states. NCAA, Major League Baseball, other professional organizations sued the state of New Jersey. The state of New Jersey, they said it violated a federal law that does not allow sports gambling, with the exception of certain states that have been grandfathered in. New Jersey ironically had the opportunity to be one of those states and did not file the paperwork in time. They recently decided that they wanted to allow sports gambling, so they changed their state law. It did not encourage sports gambling but did not prohibit it. This was seen as a violation of federal law and these organizations sued. It made it to the Supreme Court and the Supreme Court actually sided with New Jersey. They used something called the anti-commandeering clause as justification for this decision. Now, the anti-commandeering clause is part of the 10th Amendment that basically states that if the federal government passes a law, they cannot force the state to implement that regulation or law. The federal government has to do it themselves. This would be important for marijuana policy, because it’s basically saying, if the federal government wants to enforce the Schedule 1 prohibition, they cannot force a state to do that. There are some other court cases that have been winding their way through, most have not gotten to the federal level. Most judicial action on this has been settled in states. But potentially it could make it to the courts. New York, there was a recent challenge of de-scheduling marijuana and moving it from a Schedule 1 drug to another classification. There’s also been some court cases that have focused on those who are trying to prohibit marijuana. There was an interesting case, I think came out of Massachusetts, where local people were trying to use RICO statutes to prohibit a dispensary from coming into their neighborhood. This is really the Wild West though, nothing has really been settled. There’s some potential precedent here. Even the Supreme Court has ruled on the Controlled Substances Act that Congress did not expect when they passed that to completely push the state government out of regulating controlled substances, so that could still happen.
Jim Malatras 14:33
For the audience, can you explain what the 10th Amendment is? Not one of those better known amendments, we always talk about the First Amendment or the Fourth Amendment. But the 10th Amendment is probably one of the most important amendments that we have in our system of government. Just for the listeners out there, what is that in sort of layman’s terms?
Heather Trela 14:48
The 10th Amendment is really the crux of most federalism issues. Basically what the 10th Amendment says, is that all powers not specifically granted to Congress or the federal government are reserved to the states.
Jim Malatras 15:03
So incredible power for states.
Heather Trela 15:05
Yes, the states have used that a lot to justify what they call their police powers, regulating public health, and other sort of things, which, especially medical marijuana, could easily fall underneath.
Jim Malatras 15:15
Changing gears a little bit, at the Rockefeller Institute, we’re looking at the opioid crisis, which is front and center on a lot of people’s minds right now. Analysis has shown that every state has been affected and impacted by the opioid crisis where deaths continue to rise and New York and other states aren’t any exception to that. Part of the conversation has turned into using medical assisted treatment, including in some levels marijuana to help fight the opioid crisis like heroin overdoses and use and fentanyl and other deadly synthetic drugs. You’ve touched on some of this in some of your recent research. What does the evidence or research say about marijuana’s effect on opioid abuse or misuse?
Heather Trela 16:01
It’s interesting. There’s actually a two-pronged way that marijuana could impact the opioid crisis. The first is marijuana, medical marijuana, generally, but recreational as well, could be used as a replacement for opioids in dealing with pain management. We are starting to see some studies of that earlier this year. There were some studies by the University of Georgia and the University of Kentucky that looked at prescription rates for opioids in states where there was access to medical marijuana. Both found there was a decrease once marijuana was introduced. The second way that marijuana can be used to combat the opioid epidemic is as a treatment for opioid-use disorder. Several states have now changed their law, including New York, to allow opioid-use disorder as a qualifier for receiving medical marijuana. It’s been found to have some promise in dealing with the effects of weaning a person off of opioid dependency. The issue, I guess, that we need to discuss as part of this is that these stays are very limited because of the prohibition of marijuana. Federally, there’s not a lot of studies that can be done on marijuana.
Jim Malatras 17:13
What is that prohibition for our listeners?
Heather Trela 17:15
Because Schedule 1 drugs are seen to be having no medical redeeming value, they are not easily available for studies, especially for studies sponsored by the federal government, the FDA. It’s kind of a chicken and the egg scenario. You can’t prove that medical marijuana has a medical impact if you can’t study it, but you can’t study it because it was predetermined to not have any medical usefulness.
Jim Malatras 17:40
Who predetermined that in the first place? How did it become a Schedule 1 drug, which is always an interesting history for folks?
Heather Trela 17:46
The history of marijuana regulation has always been more about who uses the drug than the drug itself. Marijuana wasn’t really regulated by the federal government until the turn of the 20th century. But it wasn’t really until the 1970 Substance Control Act, where it was Schedule 1. That was done under President Nixon and it was done over the objection of a lot of the research and some of his staff, who thought there was some value to marijuana. President Nixon saw who he thought predominantly used marijuana were people of color and young people, people who were not very supportive of him and his agenda, anti-war protesters, civil rights protesters. He thought that marijuana could be used as a tool to go after these people. That if these are the people that predominantly use this drug or could be targeted with this drug, it’s a way to disrupt them without having to go after what they’re saying.
Jim Malatras 18:41
Is there any scenario even though the federal government sees no redeeming value in marijuana as a potential thing to combat other opioid abuse? Is there a way for states now to get involved in studying this more or is it still prohibited? Can states have some wiggle room now to study the health effects?
Heather Trela 18:57
There is some wiggle room on this. This is one thing that has expanded in the last few years. Up until recently, there was one designated grower in the entire country that grew marijuana for all studies involving marijuana. The quality I’ve heard was not great. Because marijuana is a natural plant, it’s hard consistently to make sure it’s the same thing over and over again. The federal government has loosened up some regulations where they are expanding that there could be more providers of marijuana for medical research. Actually, Canada, now that it’s legal in Canada, has been authorized to provide marijuana for medical research in the United States. It was interesting, I was reading today that a series of members of Congress have actually tried to use US to leverage President Trump on the issue by saying America First this is a trade issue. Why are we giving away this business to Canada when we could be growing this marijuana within the United States?
Jim Malatras 19:57
Heather, thank you so much for joining us. It was a fascinating discussion and we look forward to what else you put out there on recreational marijuana and medical marijuana as it’s getting implemented in the states. If you’d like to learn more, please head to our website at http://www.rockinst.org for our full reports and analysis. You can also find us on Twitter and Instagram at @RockefellerInst. Thank you for joining us. I’d love you to check out some of our recent reports that we put out. We just put one out on Medicaid expansion in states, how states are looking to expand quality access to healthcare as the federal government’s cutting back, as well as more of our analysis on the opioid epidemic from the director of policy research and the assistant director, Patty Strach and Katie Zuber on the illusions of services our website on the Stories from Sullivan. We’ll be back next month with more insight from the Rockefeller Institute into how public policy shapes our communities and our lives and how it makes it work better for everyone. Thanks so much for joining us.
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