Canna Law Blog ™

Canna Law Blog

LEGAL SUPPORT FOR THE CANNABIS BUSINESS COMMUNITY SINCE 2010

Marijuana Franchising: Just Walk Away

Posted in Business Basics, Federal law and policy, Legal Issues

Right up there with cannabis colleges and publicly traded marijuana companies, we caution our readers on marijuana franchising. Do not be wooed by glitzy pitches of you becoming the new owner of the next “McDonald’s of marijuana” in your area.  Avoid Marijuana Franchising

What is franchising? Based in securities law, franchising involves a supplier — the franchisor — who permits an independent operator/franchisee to use the supplier’s trademarks, distribute the supplier’s distinct goods, and even to use the supplier’s building design. In exchange for this, the franchisee pays the franchisor a fee, all of which is memorialized in a franchise agreement. For example, to open a McDonald’s franchise you typically must pay at least $45,000 to McDonald’s and to open a UPS Store franchise you typically must pay UPS at least $29,950. The franchisee is then usually required to buy all (or at least most) of its supplies from its franchisor (think cups, burgers, napkins, french fries) and to pay its franchisee a percentage of all sales. Franchisors usually maintain substantial control over the operations of its franchisees and, in return, they usually provide those franchisees with branding and marketing support. Franchising is not to be confused with licensing which is governed by contract law and typically only entails one company giving another company the right to use intellectual property (such as a trademark) pursuant to a licensing agreement

The Federal Trade Commission has oversight of franchising via the FTC Franchise Rule. Before execution of a franchise agreement and before any money can change hands between a franchisor and a franchisee, the FTC requires that franchisors furnish potential franchisees with a Franchise Disclosure Document (FDD). The FDD must be very detailed and usually must include audited financial statements from the franchisor. The FDDs also include 23 areas of background on the franchisor including a list of other franchisees in the licensed territory (including who the potential franchisee may contact and consult before negotiations with the franchisor), restrictions on sources of products and services, intellectual property and trademarks possessed by the franchisor, the business experience of the franchisor, any bankruptcies or litigation involving the franchisor, earnings claims, and the estimated total franchise revenues and franchisor profitability. Federal law requires this information be given to the franchisee to enable the franchisee to have sufficient information with which to make an educated decision regarding whether to become a franchisee in a given franchise program. Many states also have their own franchise laws and some of these require that the FDD contain state-specific requirements.

How does marijuana franchising fit into all this? It really doesn’t. At least, not yet, and not in a way in which a reasonable person would want to participate. Here’s why:

1. Federal conflict and lack of state oversight. Marijuana is still a federally illegal controlled substance. This means that a franchisee could be subject to arrest and prosecution for violating the federal controlled substances act — if this is not in your potential franchisor’s Franchise Disclosure Document, you should be worried. As far as we know, the states have not yet begun policing cannabis franchising.

2. State marijuana regulations. Certain states explicitly preclude cannabis franchising in their cannabis regulations. For example, in Washington state, cultivators are currently limited to one production license associated with one business entity, so franchising simply cannot work for cultivators. In addition to this, strict state residency rules may prohibit ownership of a franchise by anyone other than in-staters. Most states have or likely will have rules regarding financial investment caps into a given marijuana entity that would make franchising either difficult or impossible. Most states also have laws prohibiting revenue-sharing between certain interested parties or marijuana business licensees that too would render franchising illegal.

3. Predictability. Until marijuana is legal federally — and even then we do not know what shape legalization will take –marijuana businesses operate from federal enforcement memo to federal enforcement memo. State marijuana laws are also in a constant state of flux. A new president in 2016 could stymie the entire momentum of legalization as we know it. All of this makes marijuana business profits less predictable than that of a burger chain. Franchising is an investment by a franchisee into the franchisor’s business model, brand, and corporate livelihood. That sort of stability just is not and cannot be there in marijuana. At least not yet.

4. Profitability. Nearly all marijuana businesses are still in start-up mode, struggling to make a steady profit. One of the main reasons to pay to become and remain a franchisee is to benefit from the franchisor’s economic strength, which it can use to advertise and to market in a way that benefits all franchisees. How many marijuana businesses have that kind of financial firepower? Again, most do not yet.

5. Limited branding power. The value of franchising lies mostly in the franchisor’s intellectual property like trademarks, copyrights, patents, company ethos, policy manuals, business procedures, and trade secrets. Think of Starbucks and its world-renowned green and white colors, its baristas all clad in black, and its distinct coffeehouse feel. What marijuana business even comes close to that?  Now, how many of those have that sort of branding clout outside their own state? Almost none.

Marijuana franchising is highly questionable from both a legal and an economic standpoint. So, before you pony up a robust franchise fee, at least make sure you know what you would really be getting as marijuana franchisee. Who is the alleged franchisor and what is their record of business? What are the risks of such an investment? What are the details of the franchise agreement? Is that agreement even enforceable? What are the state and local laws in play? Who other than the lawyers, the accountants, and the franchisor are really going to benefit?

For a feasible alternative to franchising, be sure to check out Marijuana Licensing Works Well When Done Well.

 

They Said It On Marijuana, Quotable Saturday, Part LIII

Posted in Advocacy
Chris Christie

Chris Christie should bow his head in shame for his recent cannabis comments

Our role at this blog is not to endorse anyone for President in 2016, but we certainly will call it as we see it when it comes to presidential candidates’ positions on cannabis and right now we must take umbrage at Chris Christie’s stupid mouthings, including the following:

I’ve had many taxpayers at town hall meetings who will ask me about, why not legalize marijuana to make the taxes go a little higher? To me, that’s blood money. I’m not going to put the lives of children and citizens at risk to put a little more money into the state coffers, at least not on my watch.

Then, not satisfied with that ridiculous bit of political drivel, Christie felt compelled to let voters know that he has no clue nor interest in science or objectivity by calling marijuana a “gateway drug”:

Every bit of objective data tells us that it’s a gateway drug to other drugs. And it is not an excuse in our society to say that alcohol is legal so why not make marijuana legal. … Well … why not make heroin legal? Why not make cocaine legal? You know, their argument is a slippery slope.

We thought you should know….

Inaccurate Marijuana Testing Will Lead To Lawsuits

Posted in Business Basics, General, Legal Issues

The media is currently abuzz about the inadequacy of lab testing for marijuana and marijuana infused products, which once again raises a critical issue for business owners: lawsuits. There are circumstances under which marijuana producers, processors and retailers alike can be held liable for a defective product, even without any knowledge of the defect. Anyone in the chain of product distribution, whether or not they grew or produced the defective product, may be held liable if the product makes a consumer sick.  Marijuana products liability

In an attempt to curb potential liability, as well as to comply with state law, producers and processors turn to testing labs to determine the potency and the mold, mildew, fungus and pesticide content of their products. The problem is that scientific protocols followed by marijuana testing labs are not always accurate.

A compelling potency analysis study conducted by The Oregonian found that of fifteen marijuana-infused edible products sold in Portland dispensaries, “only one contained accurate potency information on its label.” These results should be distressing to cannabis business owners who regularly obtain purported potency levels that vary wildly depending on which lab conducted the analysis. Though  the majority of products tested contained less THC than claimed, one product contained significantly more. And although consumers can sue for false and misleading advertising when a product is less potent than claimed, a consumer who suffers side effects from a product more potent than claimed could end up bringing a products liability case. Labeling products with an accurate potency level must be a top priority for marijuana producers and processors.

In addition to inaccurately represented THC content, a recent piece by the International Business Times reported a study which found that marijuana in Colorado is often tainted by pesticides, heavy metals and fungi — this is the stuff products liability lawsuits are made of. Though Colorado law requires marijuana producers to test their product for both potency and impurities, this study shows that enforcement of purity requirements has been insufficient. In Washington State, for example, thirteen percent of cannabis products were rejected by officials for contaminates like E. coli, salmonella and yeast mold. If testing requirements for marijuana are not enforced and contaminates like these reach consumers, products liability lawsuits will be inevitable. One such lawsuit could be enough to shut down a marijuana business, be it for damage to reputation or just an inability to pay the money damages.

Marijuana business owners must make sure that they are working with reputable testing labs and they should obtain multiple sets of analyses if possible. They also must be sure to label their products accurately. Don’t think that using creative sampling techniques to get your product through the testing process is a good idea. If the test results come back clean, but your product makes a consumer sick, you will still be liable. Here are some of the tips we’ve previously shared on how you can protect your business from product-related lawsuits:

  1. Set up your cannabis business to protect yourself from personal liability. For more on this, check out Cannabis Businesses And Corporate Separateness and Cannabis Business and Corporate Separateness, Part II.
  2. Vet both the manufacturers with whom you work and the products you sell.
  3. Use appropriate packaging and warning labels on the products you sell. For more on this, check out Cannabis Products and Dosing: Educate, Educate, Educate and Label, Label, Label and Pot Puppies? Let’s Talk Labeling and Packaging. NOW.
  4. If you are a retailer, have contracts with your manufacturers that specify the manufacturer’s product safety requirements, the manufacturer’s liability for defects or other problems, the manufacturer’s agreement to fund your defense costs if you are sued over a problem arising from the manufacturer’s product, and the requirement that the manufacturer maintain adequate insurance.
  5. Get good insurance for your business.

Oh, and be careful out there.

Marijuana’s Environmental Impact And The Laws That Regulate It

Posted in Legal Issues, Medical Cannabis, Recreational Marijuana

Marijuana businesses — just like other businesses — impact our environment. Environmental laws relating to water rights, energy consumption, pollution, and overall carbon footprint all can and do impact marijuana businesses.

Environmental laws typically focus on containing or preventing pollution and disciplining corporate polluters, but they also cover the regulation of natural resources, environmental impacts, air and water quality, and waste management, just to name a few. Given all the facets of both indoor, outdoor, and greenhouse cultivation, in addition to chemical-intensive extractions and infusions of marijuana products, you can easily see why environmental laws are coming into play in the marijuana industry.  Marijuana Businesses and the Environment

Waste management is one of the most common environmental law issues for marijuana businesses. Most marijuana states strictly dictate exactly how to dispose of marijuana products and how those products can be stored or disposed of post-destruction. States have also done a solid job of delineating between “dangerous” and “non-dangerous” cannabis waste and setting up protocols for their destruction and disposal. Most states also take great care to analyze and restrict the types of pesticides, soil amendments, and fertilizers that can be safely applied to marijuana crops.

Though fewer states have enacted laws dealing with marijuana’s impact on water and air quality, we are starting to see glimmers of such scrutiny. For example, in Washington State, recreational marijuana producers and processors are being notified by the Puget Sound Clear Air Agency (an arm of the Department of Ecology) that their businesses must comply with air quality regulations post-licensing. Specifically, producers and processors must pay a $1,150 fee to the Agency and submit an application for a Notice of Construction permit, detailing the following:

  • Odor control equipment for producing/growing and or processing (type, quantity, make and model, flow rate); and
  • Solvent usage information including Material Safety Data Sheet (MSDS) for each type.

Producers and processors must also submit with their application the following items:

  • A plan view drawing of their facility including:
    • each room, greenhouse, or outdoor area and the work preformed in each
    • location of each odor control device, associated ductwork, and stacks
  • Schematic drawing of HVAC system for facility indicating path of all air flowing through area where growing or processing occurs
  • Spec sheets for each type and model of odor control device and fan
  • Spec sheet for extraction device
  • MSDS for extraction solvents
  • MSDS for each additional solvent and volatile organic material used
  • Environmental checklist (SEPA)

Energy consumption by marijuana growers is also becoming a big issue. The Washington Post reports that in a 2012 study of the “carbon footprint of indoor cannabis production,”  it was estimated that indoor cannabis (both illegal and legal) uses $6 billion worth of electricity every year, amounting to 1 percent of overall U.S. electricity. In some production-intensive states like California, its percentage was much higher.

Some environmental scholars now see state-by-state legalization of marijuana as an opportunity for local and state law makers to take full control of environmental and energy consumption policies by passing the cost of such effects and consumption onto marijuana businesses via robust licensing and permitting fees. By way of an example, in its medical marijuana licensing process, the City of Las Vegas favored applicants that would be using “green-buildings” or environmentally friendly equipment, or constructing environmentally sensitive grow, processing, and retail facilities within the city. With Nevada facing scarce water and energy resources, this policy makes a lot of sense.

Even outdoor growers are facing pressure under environmental laws because outdoor growing has led to deforestation (see California), loss of wildlife, and erosion, and it often requires large amounts of water and pesticides.

The bottom line? It is only a matter of time before environmental laws and their application and enforcement against marijuana companies becomes a top policy priority.

 

Federal Marijuana Policy: When Will Real Change Come?

Posted in Advocacy, Federal law and policy

Marijuana Politics

This story from Politico popped up on my news feed earlier. A few U.S. senators on both sides of the aisle have sponsored legislation that would protect medical marijuana states from federal enforcement and would give banks legal protections as they deal with the cannabis industry. Public opinion continues to shift in favor of legalization across the board, and even states where we would think marijuana legalization would poll poorly can surprise us. Relaxation of federal criminal law for medical marijuana and banks is among the least controversial of changes currently being pushed for in the cannabis space. The Politico story continues to show that despite positive movement in public opinion, the old guard in the Senate remains largely against legalization. The Senate Judiciary Committee, which has jurisdiction over criminal legislation, is the gatekeeper for these bills, and the Judiciary Committee is full of the dinosaurs that are unwilling to roll with public opinion on the cannabis issue.

It’s great that we have at least some Senators, who tend to be higher profile and more centrist as a whole than members of the House of Representatives, pushing for change, but it is discouraging that they still seem to be spinning their wheels. My question — do we have hope for actually changing some minds on this issue, or are we really just waiting for these people to get voted out of office, retire, or die before we can move forward with reasonable reform?

Successfully changing opinions is not out of the question. Marijuana criminality has some social movement commonalities with state bans on gay marriage. These are issues where in the twentieth century, “reasonable minds” differed on the right answer, but the twenty-first century has clarified that one side is unequivocally right and the other side is absolutely wrong. Mass-produced, über-commercial marijuana may or may not be favorable from a policy perspective, but we have passed the intelligence threshold where reasonable thinking people can say that it is a good idea for someone to go to jail for possessing marijuana. They cannot say that and still be considered reasonable thinking people. It is also no longer reasonable to allow alcohol to be legal pretty much everywhere, and yet keep marijuana illegal and stigmatized.

With gay marriage, we did see high profile flip-flops. Republican Senator Rob Portman changed his mind when his son came out. Mark Kirk, Lisa Murkowski, and Susan Collins followed suit. This led to a cascade effect, where Democrats, not looking to get outflanked on the left, started announcing in droves that they also supported gay marriage. Oftentimes when politicians change their stance on an issue, it isn’t about “evolving” at all. Many of them already supported the issue, but they wait until the political winds are blowing more strongly in its favor before they announce their actual positions. Soon after Rob Portman announced his support for it, more than half the Senate was on record approving of gay marriage (that number decreased a bit after the 2014 midterms, but no one thinks that vote was about gay marriage support).

If a few high profile Senators move on the issue, it could provide cover for a tectonic shift among other legislators. Senator Gillibrand was successful last year in changing the minds of many of her colleagues on her legislation reforming military sexual assault investigations, so let’s hope that she can be similarly successful on this issue.

Government Marijuana is The Real Deal in North Bonneville, Washington

Posted in Recreational Marijuana, Washington

Government MarijuanaSome people mistakenly believe that the Washington State Liquor Control Board owns the stores dispensing cannabis to the public for recreational use. This is not true. There is no government-owned cannabis or cannabis-distribution in Washington. At least, there wasn’t until the tiny town of North Bonneville opened its own state-licensed retail recreational marijuana store this month. North Bonneville is officially the nation’s only municipal government entity selling cannabis for-profit.

And North Bonneville is serious about its entry into the cannabis marketplace.

The Washington Post describes North Bonneville as “a drab collection of buildings thrown up in the 1970s when its 1,000 residents were relocated to make way for the expansion of the nearby Bonneville Dam.” The Washington Post reports that the City was struggling financially and that the lure of I-502 profits coupled with further potential profits from marijuana tourism was just too much to resist.

The City’s pot shop is called The Cannabis Corner and it sells “dozens of strains of marijuana and in several different forms, from pungent buds to infused cookies and coffee. It sells glass bongs and rolling papers.” Though many cities and counties in Washington have banned or severely limited marijuana operations, North Bonneville’s Public Development Authority got right to work on how to participate in marijuana legalization. The City’s Mayor, Don Stevens, supported the idea from the get-go. Stevens is “58 [years old], a former Marine with wire-rim glasses, a beard and curly gray hair along the sides of his head. As a teenager in 1970s Oregon, he joined the pro-marijuana group NORML, believing that legalization was just around the corner.”

Though not all City residents were initially on board with establishing a marijuana retail shop, dissension dissipated during a state regulatory approval process that took more than a year. Since federal drug laws render cannabis illegal, the City could not run the store directly. Instead, in November 2013, it passed an ordinance creating a public development authority to runs and manage the marijuana store. The five-member authority is responsible for all retail store business decisions and for divvying up and distributing store profits. The authority’s first line item action with its initial pot profits? Renovating the town’s run-down playground.

Many are likely wondering whether government cannabis is cheaper than that sold by private companies. So far, marijuana from The Cannabis Corner has been sold at between $15 to $18 a gram, which is apparently significantly less than nearby privately owned retail stores, all of which are held to the same strict regulatory standards and robust excise taxes.

North Bonneville has done a good of being transparent with the public and its own citizens about the Cannabis Corner. It has not hesitated to be upfront about both its intentions and its operations by, among other things, using an FAQ page on the city’s website to address issues head on. By way of example, one of our personal favorite North Bonneville FAQs regarding The Cannabis Corner is the following:

Question: Won’t people leave our town because of this?

Answer: Perhaps. And we would hate to see good people go just to avoid this issue, for they will have to leave the state of Washington as well as North Bonneville. We have to place our allegiance with the deserving folk who don’t or can’t leave. Indications are that many fine folk will be moving here because of the peripheral economic opportunities likely to grow up around this business.”

Well said, North Bonneville.

Marijuana Science Needs To Catch Up With Legalization

Posted in Federal law and policy, Medical Cannabis

The CARERS Act, the Senate Bill filed last month to greatly liberalize federal medical marijuana laws, includes a provision requiring the Drug Enforcement Agency (DEA) issue three licenses permitting manufacturing of marijuana and derivatives for FDA-approved research.

Right now, the University of Mississippi is the only federally legal game in town for manufacturing marijuana for research. The National Institute on Drug Abuse has issued just this one marijuana cultivation license and so all federally approved clinical trials must obtain their marijuana from this single source.

To put it bluntly—it’s schwag.  Marijuana Science

The product coming out of Colorado, California, and Washington is light years ahead of what is being produced at Ole Miss and it is hoped that this Senate Bill will allow the Feds to start playing catch-up and give researchers and patients access to the same grade product available through state regulated programs.

Decades of senseless prohibition have stifled marijuana research at a time of exponential advances in research technologies. As a result, there is a huge lack of good science out there on marijuana. That is not to say that the science we have is bad, but there just is not nearly enough of it. Imagine how farther advanced our understanding of marijuana would be today if 45 years ago Congress hadn’t deemed marijuana to have “no currently accepted medical use.” In the meantime, countries like Israel are way ahead of us when it comes to marijuana research and technology and the longer we wait to get serious about it, the more we will fall behind.

Cannabis is a complex plant. Unlike alcohol, which has only one active ingredient, cannabis is comprised of dozens of cannabinoids—some of which have been discovered just in the past decade. Cannabinoids, unlike alcohol, interact with each other — a phenomenon known as the “entourage effect” — and they can produce widely varying effects depending on the product’s cannabinoid profile.

Though U.S. scientists have made strides to understand how cannabinoids effect humans, an even more fundamental problem is the lack of common standards to test cannabis for these various cannabinoids. Much like you see nutritional labels on food, states are beginning to mandate potency labeling for cannabis so patients and consumers know what is in their product.

Too often, what you see on the label is not exactly accurate. Marijuana testing methodologies are nowhere nearly as sophisticated as for other consumer products such as food, the labels on which are backed by armies of analytical chemists using finely tuned methods for ensuring food safety.

Why should marijuana, if regulated, be treated any differently?

There is a huge need for research to bring marijuana up to the same standards to which we regulate food, drugs, and, cosmetics. The CARERS Act looks like it will be a good first step for people who want to know what exactly they are consuming in their cannabis and for companies that want to provide that information without violating federal law.

U.S. Government Warns CBD Companies: The Bigger Compliance Picture

Posted in Business Basics, Federal law and policy, General, Legal Issues, Medical Cannabis

CBD and US GovernmentLast month, the U.S. Food and Drug Administration (“FDA”) issued warning letters to six cannabis companies, some of whose products were claimed to contain cannabidiol (“CBD”). The FDA warned the companies about marketing and selling unapproved drugs to diagnose, mitigate, treat or prevent diseases in humans or animals.

The FDA letters are direct and specific in their warnings and required actions. For example, the FDA’s February 26 letter to Hemp Oil Care about the company’s Cibdex Hemp CBD Complex Drops and other products stated the following:

  1. The FDA determined that Hemp Oil Care’s website promoted the company’s products as mitigations or cures for diseases such that the products must be regulated as drugs by the FDA under the Federal Food, Drug, and Cosmetic Act (“FDC Act”).
  2. Hemp Oil Care’s products are “new drugs” under the FDC Act because they are not recognized as safe and effective for the health conditions that Hemp Oil Care listed on its product labels.
  3. New drugs cannot be legally introduced into interstate commerce without the FDA’s prior written approval. Such approval requires scientific information to demonstrate the new drug is safe and effective.
  4. Hemp Oil Care violated the FDC Act because it misbranded its products. The diseases for which Hemp Oil Care marketed its products cannot be self-diagnosed or self-treated by people other than health care professionals. For this reason, Hemp Oil Care’s instruction labels informing users whether and how to use its products violate the FDC Act.
  5. Hemp Oil Care is responsible for investigating the FDA’s alleged violations and for preventing future violations.
  6. Hemp Oil Care must ensure its compliance with all federal laws and FDA regulations.
  7. If Hemp Oil Care fails to promptly address the violations, the FDA can take legal action without further notice – including seizing goods belong to Hemp Oil Care and taking measures to suspend Hemp Oil Care’s business operations.
  8. The FDA gave Hemp Oil Care 15 business days to notify the FDA how the company was correcting the violations.

As of the publication of this blog post, Hemp Oil Care’s website  cannot be accessed.

The item 6 compliance “catch-all” above in bold font is important not only for the CBD companies that received FDA Warning Letters, but also for all commercial marijuana companies. Even though marijuana operations in legalized states are illegal under federal law, the federal government expects cannabis companies to comply with federal laws and regulations that apply to all companies. As demonstrated by the FDA Warning Letters to the companies producing CBD products, failure to do so can have significant consequences.

The FDA did not specifically target Hemp Oil Care and the other companies that received Warning Letters because they were involved with cannabis-related CBD products. The FDA’s website contains many other Warning Letters to companies alleged to have violated FDA laws by introducing new drugs. Rather, like all these other companies, CBD companies must take steps to understand whether FDA laws and regulations apply to their operations and take the actions necessary to comply with such laws. The same is true for companies engaged in commercial marijuana operations in states where such operations are legal – specifically regarding product labels and claims.

With the Justice Department’s August 29, 2013 Memorandum on Guidance Regarding Marijuana Enforcement and February 14, 2014 Memoranda on Guidance Regarding Marijuana Related Financial Crimes, President Obama’s Administration provided the general framework on how federal and state governments will work together to regulate state-legalized cannabis companies. These memoranda also provide cannabis companies information on how to manage their operations and address critical risks.

As last month’s FDA Warning Letters to CBD companies demonstrate, marijuana companies are not immune to federal regulatory oversight simply because they are involved in cannabis-related commercial activity. Cannabis companies’ biggest risks may not be their involvement in marijuana-related activities, but rather ignoring commercial regulations with which all companies, regardless of industry type, must comply.

They Said It On Marijuana, Quotable Saturday, Part LII

Posted in Advocacy

Lincoln on prohibition

Prohibition will work great injury to the cause of temperance. It is a species of intemperance within itself, for it goes beyond the bounds of reason in that it attempts to control a man’s appetite by legislation, and makes a crime out of things that are not crimes. A Prohibition law strikes a blow at the very principles upon which our government was founded. - Abraham Lincoln, December 18, 1840 before the Illinois House of Representatives.

Wow. Just wow. Leave it to Abraham Lincoln to have stated what is wrong with prohibition probably more eloquently than anyone else before or since. Wow. This quote really does pretty much just say it all.

Marijuana And Racism: Bearing The Blunt Of The Problem

Posted in Advocacy

Marijuana Racism

Recreational marijuana is now legal in Washington, Oregon, Alaska, Colorado and D.C. (sort of). And medical marijuana is legal in one form or another in another 23 or so states. But across the country many people continue to be jailed for marijuana related offenses, and a disproportionate number of those people are African-Americans. In the DC area, African-Americans arrested for marijuana rose from 3,228 to 4,908 in the past two years.

The statistics tell a story of police targeting African Americans everywhere from Washington to Washington DC. Ezekiel Edwards, the director of the A.C.L.U.’s Criminal Law Reform Project states that “we found that in virtually every county in the country, police have wasted taxpayer money enforcing marijuana laws in a racially biased manner.” According to the United States Department of Justice, the United States spends over a billion dollars on marijuana related crimes a year, with a large chunk of this money going towards prosecuting and imprisoning people for consumption or small sales. If you can afford a good lawyer and are able to make a good impression with the police or with a judge, the illegality of marijuana is going to be less of a problem for you than for someone who cannot. Though legalization will obviously not fix our nation’s racial problems, it would be a step in that direction.

Beyond enforcement, unfair marijuana rules are taxing our prison system. We incarcerate more people per capita than any other developed country, giving us a quarter of the world’s total prisoners. Of these prisoners in jail for drugs, 1 out of 8 are there for marijuana related offenses, making many prisons overcrowded. To help fill this gap in space, the United States is starting to shift towards private prisons. As incarceration rates skyrocket, the private prison industry expands at exponential rates, holding even more people in its prisons and jails, and generating massive profits. Since private prisons are private for profit businesses, the more people incarcerated, the greater their profits. Putting profits into incarceration incentivizes increasing inmate numbers, regardless of the sentence they actually deserve.

The current enforcement of outdated marijuana laws across the United States also means that resources are diverted away from more important uses. The New York Times reports that “in 2011, there were more arrests for marijuana possession than for all violent crimes put together.” When money is tight, is a marijuana centered war against young African-Americans really the best way to focus taxpayer dollars? Ignoring the money at stake, is this a good long-term choice for our country?

Legalizing marijuana is only half the battle. Decriminalization and working to reduce or eliminate prison sentences for those convicted of marijuana related crimes is just as important. State by state legalization means that a poor African American man could in one state be going off to prison for doing exactly what a more privileged entrepreneur profits from in a different state. Legalization also does nothing for those already in jail for cannabis crimes. One obvious fix would be legislation to release everyone incarcerated on marijuana possession charges. Most everyone who advocates for legalization would be fine with this, but what about prisoners who engaged in large scale marijuana sales?

In DC, protesters recently chanted “Legalization Ends Discrimination.” They may be on to something.

What do you think?

This post was written by Katherine Schroeder, an undergraduate intern with our firm and a senior International Studies major (in the Honors Program) at the University of Washington.