Should Felons Be Allowed In Legal Cannabis Industries?
There are many states who have legalized cannabis, either medicinally or recreationally, that outlaw felons from participating in the industry.
When states outlaw the participation of felons in their cannabis industries, it’s important to understand who exactly they are keeping out. In order to understand this, we need to look at some of the underlying trends of drug incarceration in America.
Cannabis has long been a vehicle to incarcerate citizens, specifically those that are black, brown and poor. Despite white Americans self-reporting drug use at a higher rate than African Americans and Latinos, the latter two communities bear the brunt of drug arrests.
According to a study done by the American Civil Liberties Union released in 2013, African Americans made up 14% of the U.S. population, but constituted more than 36% of all arrests for weed, mostly for possession charges.
A report by New Frontier Data and Drug Policy Alliance explored the incarceration rates for cannabis in California ahead of the Amendment 64 vote that legalized Adult Use.
The report notes,
“Only 8% of Los Angeles County residents are black, yet they make up 30% of people jailed for marijuana only offenses in the county. Comparatively, Latinos account for nearly half (49%) of the county’s population, but make up 42% of those jailed, and whites are 27% of the population, but make up 20% of the jailed population.”
So in a world where over half of the country has legalized medicinal or Adult Use cannabis, creating a multi-billion dollar industry, what happens to those incarcerated for the same plant? How do we include those who had their lives destroyed by cannabis prohibition into the new legal market?
Many states are starting to see the sense in providing some sort of reparation to those formerly incarcerated for a drug that is now legal, and making a lot of people rich, in their states. Massachusetts was the first state to include some sort of provision for those who have been affected most by cannabis prohibition and enforcement, making sure these people would be able to participate in their state’s new legal industry.
Other states followed suit. Ohio set aside 15 cannabis licenses for minority businesses in their law; Pennsylvania required cannabis license applicants to outline their process for including minorities in their businesses.
Some states are trying, but fall embarrassingly short of the mark. Maryland tried to pass a bill to ensure minorities were represented within their new legal industry, but that bill was not actually acted upon. Not a single minority applicant was granted one of their 15 licenses. Because of this, multiple lawsuits have been filed against the Maryland Medicinal Cannabis Commission (MMCC), and former police chief and member of the MMCC, Harry Robshaw III, is being accused of exercising “overt racism” in the selection process.
Cities within states outlawing felons have also decided to act.
Oakland, a city in California historically overly-targeted by the War On Drugs, is working to make sure those who were jailed for cannabis are included in California’s new industry. Oakland has guaranteed half of their city’s cannabis licenses will be “Equity Licenses” reserved for those who have been convicted of a marijuana charge.
The damage done, and still being done, by the War On Drugs is no secret. Instead of declining, we have only seen drug use zoom upwards. Instead of rehabilitating drug addicts, we now have a full-on Opioid Epidemic in our country and private prisons at capacity, with 2.3 million Americans locked inside.
Allowing former “marijuana felons” into the legal cannabis industry helps repair some of that damage. For those who have carried the burden of a felony marijuana charge brought on them by their state, and are now seeing the same plant make a lot of people rich, reparations are due.
It’s up to those in the cannabis industry and writing cannabis law to fight for their inclusion.
A new report estimates that medical marijuana could cut into the pharmaceutical industry to the tune of $4 billion annually.
The report released by New Frontier Data suggests that if patients exchanged conventional prescription drugs for medical marijuana in 9 specific conditions, pharmaceutical companies could be affected accordingly.
“Any opportunity for alternatives that could result in reduced pharmaceutical drug use might present a compelling point of discussion from a public policy standpoint,”
said John Kagia, executive vice president of industry analytics for New Frontier.
The report takes into consideration the prescription opioid painkillers that have caused a nationwide epidemic and a resurgence in heroin use. By swapping addictive opioids with medical marijuana, it could have an effect on mortality and addiction rates associated with opioid use.
The research uses data from a 2016 study that tracked prescription spending of Medicare patients in states with legalized medical marijuana. A secondary study estimated that by legalizing medical marijuana nationwide, it could amount to $1.1 billion in taxpayer savings.
New Frontier used this data by using the average reduction of 11 percent to yearly spending on prescriptions, specifically to nine conditions that are most commonly used when qualifying for medical marijuana programs. They include chronic pain, PTSD, sleep disorders, anxiety, epilepsy, nerve pain, nausea and vomiting caused by chemotherapy, Tourette syndrome and glaucoma.
By using market research data for these conditions and calculating annual spending on prescription drugs through 2019, they estimated that annual spending on prescription drugs for these conditions would go from $40 billion in 2016 to $44 billion in 2019. Applying the 11 percent reduction to prescription spending between 2016 and 2019 could add up to $18.5 billion.
But given the size of the pharmaceutical industry, these numbers are pocket change.
“The impact of medical cannabis legalization is not going to be enormously disruptive to the pharmaceutical industry,” Kagia said. About $425 billion is spent on prescription drugs in the United States alone, and opioid painkillers are a $25 billion market.
While the potential presented in the study is significant, the numbers rest upon several factors, including legalization of medical marijuana at the federal level. “Even if you had legalization overnight, it typically takes a while to get physicians who are comfortable recommending the drug,” said Robert Mikos, law professor at the Vanderbilt University Law School who specializes in drug policy.
Pharmaceutical companies appear to be taking preemptive action against medical marijuana, either through blocking legalization efforts or by using their vast resources to patent cannabis treatments, bypassing a significant amount of regulation. A report by the Washington Post showed that former DEA employees are being poached by the pharmaceutical industry, many of which have a background in regulation. In Arizona, Insys Therapeutics spent $500,000 fighting a grassroots effort to legalize recreational marijuana, while developing their own synthetic THC product.
“I think there are pharmaceutical companies that are worried about the impact that this could have on their sales,”
Mikos said. “Some, rightly or wrongly, complain they’re held to a much higher standard for their products. Their complaint is that you’ve got a movement afoot that is making grandiose and unsubstantiated claims about health benefits, and it’s hard for them to push back against that.”
New Frontier’s data may rest on many variables, but it does suggest a pattern that Mikos believes is worth observing. “If the data are accurate, it does suggest that there’s a significant portion of the population that might benefit from the legalization of medical marijuana,” he said.
Legal marijuana faces hurdles not seen in other billion-dollar industries, but market research into consumer buying patterns and product development is making headway, dispelling myths about the typical marijuana consumer and giving insight into the cannabis consumer’s tastes.
In one study by New Frontier Data, analysts discovered that cannabis consumers are gravitating towards edibles and concentrate products, but moving away from flowers.
Demand for recreational cannabis flowers dropped 21 percent in 2016, and similarly in the medical marijuana market with a 22 percent decline. Conversely, recreational demand for concentrates saw an 11 percent increase, and a 17 percent increase among medical marijuana consumers. There was also an increase in the sale of pre-rolled joints, from 1 percent to 8 percent.
John Kagia, New Frontier Data’s VP of industry analytics, attributes these changes to a market that is operating “in the light of day,” and able to develop new products and methods in a legal environment.
“Concentrate-filled vape pens and sophisticated, dosed edibles simply weren’t available in the illicit market,” Kagia told The Cannabist. “Pre-rolled products have gone from an afterthought filled with leftover cannabis to a premium product made with high-end strains and sold in elegant, easy transport packages.”
Kagia also mentioned that concern for the health effects of smoking and discrete consumption could account for the increased demand for these products.
“You can smell a joint from a mile away, but vaping offers a discreet way to consume,”
he said. “Our society has also undergone a radical transformation in our views towards smoking tobacco, so the perceived benefits of vaping rather than smoking may also be one factor for the market shift.”
Edibles and other cannabis-infused products offer another way to discretely consume cannabis. Within this product segment, recreational sales outpaced medical sales by 300 percent during the first six months of 2016.
But medical marijuana patients are still spending. A decline in patients enrolled in Colorado’s medical marijuana program was expected when the state legalized recreational cannabis, but medical patients have brought balance to the market by purchasing premium edibles and concentrates. Overall, there was a 12,957 decrease in the number of registered medical marijuana patients from December 2015 to December 2016, but the taxes collected from patients during 2016 stayed consistent.
Research also showed that medical patients spend more than recreational consumers, and spend three times more overall. A second study was conducted by New Frontier Data, which collected data from over 300 markets across ten states. Medical patients made a purchase of $136 every 10 days, while recreational customers made a $49 transaction once every 14 days. According to Kagia, medical patients tend to purchase a single product in large amounts, while recreational customers tend to buy smaller amounts of a variety of products.
Beyond recreational and medical marijuana consumers, stakeholders in other industries are interested in the buying habits, purchasing power, and the overall demographics of cannabis consumers.
BDS has started tracking consumer trends in Colorado and California’s markets, and their research shows these markets are as diverse as they are large.
“We’re seeing some real differences between men and women, age groups, generations, attitudes and preferred methods of consumption,”said Linda Gilbert, who is leading this research for BDS.
said Linda Gilbert, who is leading this research for BDS.
For instance, men tend to use cannabis to unwind and socialize, whereas women tend to use cannabis to relieve stress and menstrual symptoms. Beyond that, cannabis users tend to be more active, are more likely to participate in outdoor activities, and are more likely to go to the gym regularly compared to non-users.
All of this research helps companies inside and outside the cannabis industry reevaluate how they approach cannabis consumers. “That’s one of the things that’s been really fascinating to me is how much it becomes part of a routine and lifestyle,” said Gilbert. “But it’s not a couch-potato lifestyle, it’s a healthy lifestyle.”