Going Green: An Analysis of Colorado’s Amendment 64

by Sara Murphy, JD ’16

Image 2

On January 1, 2014, Colorado became the first place in the world to legitimize the sale of marijuana and marijuana-based products.[1] This historic moment was quickly eclipsed by uncertainty as to whether Colorado could actually regulate cannabis without running afoul of the federal Controlled Substances Act’s ban on the manufacture or distribution of the drug.[2] The lack of clear guidance from the federal government has caused many problems for those who wish to use marijuana and those who work in the marijuana industry. Businesses struggle to protect large cash inflows, because banks refuse to deal with persons or entities engaged in unlawful activity.[3] Contracts with marijuana businesses are often unenforceable outside of Colorado.[4] Lawyers fear prosecution by the federal government if they counsel clients on how to navigate the marijuana market. And low-income individuals risk losing their federal housing subsidies if they consume cannabis, even if they are using it to treat a medical condition.[5]

In short, the fear that the federal government will crack down on Colorado’s experiment has created obstacles that reduce the effectiveness of Colorado’s regulatory scheme. Congress needs to clear up the uncertain legal minefield — preferably sooner rather than later. Five states (Arizona, California, Maine, Massachusetts, and Nevada) are preparing to place recreational marijuana initiatives on the 2016 ballot, and three other states (Missouri, Montana, and Florida) are contemplating similar moves.[6] The New York State Senate’s Standing Committee on Finance is currently considering a bill that would decriminalize marijuana for those over the age of 18 and “regulate, control, and tax [marijuana] in a manner similar to alcohol.”[7] Voters in Mississippi are trying to get enough signatures to put marijuana legalization on the 2016 ballot.[8] Legalization is going to become a more frequent policy outcome, and without Congress’ cooperation states will be unable to fully implement a safe and effective marijuana regime.

This paper attempts to explain the issues raised by the passage of Amendment 64 and details some of the practical problems caused by this legal grey area. Part I describes the Controlled Substances Act (“CSA”). Part II describes the history and passage of Amendment 64 and the federal response to Colorado’s new law. Part III outlines the constitutional issues implicated by Amendment 64 and explains the argument made by Nebraska and Oklahoma that the Colorado law is preempted by the CSA. Part IV discusses the on-the-ground implications of the legal grey area, and Part V suggests several actions the federal government might take to address the problem.

I. The Controlled Substances Act

In 1970, Congress passed the Controlled Substances Act (“CSA”),[9] which implemented a comprehensive regime aimed at preventing traffic in controlled substances and combating drug abuse.[10] The CSA prohibits the manufacture, distribution, or possession of controlled substances unless authorized by the statute.[11] Each controlled substance is placed on one of five schedules based on its properties and on its accepted medical uses.[12] Marijuana is listed as a Schedule I drug, which means it is believed to have a high potential for abuse, it has no accepted medical use in treatment in the United States, and it is not accepted as being safe even when taken with medical supervision.[13] The CSA also forbids the sale of drug paraphernalia, which includes “items primarily intended or designed for use in ingesting, inhaling, or otherwise introducing marijuana.”[14]

The CSA is somewhat controversial because it regulates some purely intrastate activity. The authority to regulate and criminalize drug use ordinarily resides with state governments; Congress can only regulate interstate commerce, the instrumentalities, persons, and things in interstate commerce, or activities that substantially affect interstate commerce.[15] In enacting the CSA, Congress declared that the manufacture, local distribution, and possession of controlled substances at the state level could have a substantial and direct effect on interstate commerce.[16] It was thus appropriate for Congress to decline to differentiate between controlled substances manufactured and distributed within a state and those that flowed through interstate commerce.[17] In Gonzales v. Raich, the Supreme Court confirmed that Congress acted within its constitutionally delegated authority even though it was regulating a “locally cultivated product” – marijuana – for use by individuals within a state’s borders.[18]

Congress explicitly stated that it did not intend to preempt the field of drug enforcement in passing the CSA, and that state laws on the same subject matter regulating what would traditionally be within the police power of the state were to be followed so long as there was no positive conflict between the two.[19] This was in keeping with the general recognition that Congress’ authority to regulate dangerous substances does not preempt states from using their police power to regulate the same dangerous drugs; states can create their own criminal penalties for drug use and can even decriminalize drugs should they choose to do so.[20] The CSA also requires the Attorney General to cooperate with local, state, tribal, and federal agencies regarding trafficking and abuse of controlled substances.[21]

II. Amendment 64: The Colorado Experiment and the Federal Response

A. A Shift in Attitudes: The Legalization Movement

Attitudes towards the legalization of marijuana have changed drastically in the past forty years. A recent Gallup poll shows that 51% of Americans support legalizing marijuana, up from 12% in 1969 and 34% in 2003.[22] Twenty-three states and the District of Columbia allow the use of marijuana for medical purposes, fourteen states have decriminalized the possession of small amounts of marijuana, and four states – Colorado, Washington, Oregon, and Alaska – and the District of Columbia have legalized marijuana use.[23] The trend seems to stem in large part from personal familiarity with and more relaxed attitudes about marijuana use. Nearly 47% of Americans have tried marijuana at least once, and a majority believe cannabis is actually less harmful than alcohol.[24] From that perspective, it makes little sense to legalize and regulate both alcohol and tobacco but not marijuana.

Proponents of legalization are doing their best to give the traditional stoner stereotype a serious makeover. Entrepreneurs like Jane West are using creative marketing strategies in an attempt to transform cannabis into a sophisticated social activity. West is the founder of a business called “Edible Events” that blends cannabis with carefully selected foods, artistic venues, and music to create an “unforgettable evening affair” with the long-term goal of normalizing cannabis use.[25] The attendees at her events are a “far cry from the stereotype of the dim stoner slacker munching down a bag of Cheeto’s [sic] and watching Beavis and Butthead.”[26] Those who hope to shift perceptions of cannabis users should be pleased with the progress Colorado has made over the past few years. Coloradans increasingly view marijuana use as being “mainstream” and have begun to dissociate it from its traditional stigmas.[27] The state’s biggest newspaper, the Denver Post, even appointed a “marijuana editor” following the passage of Amendment 64. The paper’s website now sports an entire section devoted to marijuana news, analysis, culture, food, and reviews. According to CNBC, the media’s focus on cannabis is just one indicator that pot has “crossed the threshold of acceptability.”[28]

The shifting attitudes in Colorado are by no means ubiquitous. Many residents, government officials, and police officers are concerned about the unintended consequences of rushing into full legalization. Governor John Hickenlooper is among those who opposed Amendment 64. He feared that for Colorado to “go it alone” would lead to a rebranding of the state as a marijuana haven, causing employers to think twice before moving to Colorado.[29] Governor Hickenlooper also stresses that legalization sends a terrible message to minors: they may start to think that pot isn’t bad for their health, despite studies that show marijuana use at an early age may affect long-term memory.[30] His concerns are echoed by public health and safety advocates, who worry about the long-term effects the drug will have on adolescents and adults. Persistent cannabis use is associated with problems like IQ decline and greater neuropsychological impairment (e.g. executive functioning and processing speed).[31] Public health advocates worry that by decriminalizing marijuana use and possession, the state government is sending a signal that cannabis is not harmful,[32] giving an unofficial nod to once-hesitant citizens who are interested in lighting up.

Law enforcement agencies also have concerns. Greeley Police Chief Jerry Garner concedes that marijuana may not be worse than alcohol, but argues that having two intoxicants available for public use makes things harder for law enforcement.[33] He is concerned that people will be less safe because it is easier to access marijuana.[34] Many opponents of legalization worry that drawing new lines between legal and illegal drugs is a slippery slope. What other drugs might be legalized by popular referenda? And how will the federal government respond?

B. A Brief History and Overview of Amendment 64

The regulatory structure envisioned by Amendment 64 and its implementing legislation work alongside the already existing medical marijuana scheme. In 2000, Colorado citizens passed Amendment 20 by ballot initiative. The amendment decriminalized the use of medical marijuana by patients whose doctors had recommended that they use the drug for relief from a debilitating medical condition.[35] In 2009, the Department of Justice published the so-called “Ogden memo,” which outlined a new federal policy regarding medical marijuana investigations and prosecutions.[36] The DOJ would not prosecute individuals whose conduct was “in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.”[37]

Amendment 64 was passed by Colorado voters as a ballot initiative on November 6, 2012, and was adopted as an amendment to the Colorado Constitution on December 10.[38] The amendment legalized the recreational possession and use of marijuana for persons above the age of twenty-one.[39] Colorado residents may possess up to one ounce of marijuana and grow up to six marijuana plants in an enclosed, locked space.[40] Amendment 64 also governs the lawful operation of marijuana-related facilities and requires the Department of Revenue to adopt regulations to facilitate the safe growth, production, distribution, and use of marijuana within the state.[41] Local governments can choose to opt out of allowing marijuana facilities in their jurisdictions through an ordinance or by a public vote,[42] or may regulate the time, place, manner, and number of marijuana facilities if they choose to allow them to operate.[43]

C. The Cole Memorandum

Governor Hickenlooper and then Colorado Attorney General John Suthers reached out to U.S. Attorney General Eric Holder for guidance shortly after the passage of Amendment 64[44] to find out whether the federal government would sue to prevent the state from implementing regulations regarding the growth, manufacture, possession, and recreational use of marijuana.[45] It was not until August 29, 2013, eight months later, that the U.S. Department of Justice (“DOJ”) outlined a new policy on marijuana enforcement.[46] The so-called “Cole Memorandum” acknowledged that it was possible for state and local governments to create and enforce effective regulations that would not undermine federal objectives,[47] and outlined eight federal enforcement priorities:

  • Preventing the distribution of marijuana to minors;
  • Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;
  • Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;
  • Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
  • Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
  • Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
  • Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
  • Preventing marijuana possession or use on federal property.[48]

The DOJ instructed prosecutors to focus only on whether the conduct at issue implicated these priorities when making charging decisions, without taking into consideration the scale or profitability of the marijuana operation.[49] The DOJ would allow states to remain the “primary means of addressing marijuana-related activity” so long as the regulatory structure sufficiently ensured that federal priorities would not be compromised.[50] If the federal government decided that state enforcement efforts were lacking, it could “seek to challenge the regulatory structure itself in addition to continuing to bring individual enforcement actions . . . .”[51] Since the directive was issued, federal raids of marijuana retailers and growers have been restricted to those who are suspected of violating other federal laws.[52]

The Cole Memorandum reflected the traditional division of labor between the federal and state law enforcement agencies; the federal government traditionally devotes its resources to “big picture” priorities embodied in the CSA and depends on state governments to address lower-level activities through their own drug laws.[53] Some see the Memorandum as a realistic acknowledgement that the federal government cannot prevent states from decriminalizing marijuana.[54] Others view the new policy as a “needless capitulation and partial retreat from the executive branch’s obligation to faithfully execute the laws of the United States,”[55] and raise the question of whether the executive branch has the power to decide to not enforce the CSA in this manner. While the President can choose to not enforce a law if he believes it to be unconstitutional, he cannot affirmatively authorize something that is otherwise prohibited by statute. In other words, he cannot legislate.[56] Some scholars feel that the executive branch’s decision to selectively not enforce the law in states where marijuana is legal amounts to an affirmative authorization that “seems to cross the line into utter lawlessness” and is as troublesome as the federalism problem.[57]

D. Congress’ Minimal Response to State Marijuana Laws

Congress’ response to state marijuana laws has been minimal; most of the reactive guidance has come from the executive branch. However, last December, Congress quietly slipped a provision into a spending bill that prohibits federal drug agents from raiding medical marijuana retail operations in states where the use of medical marijuana is legal.[58] Although the legislation will not change enforcement priorities–it is a codification of the Obama administration’s current policy–­it is significant in that it provides security for medical marijuana retailers, who feared that a future administration might be less tolerant of their operations.[59]

III. Constitutional Questions: Federalism and Preemption

A. Gonzales v. Raich: Congress’ Reach Under the Controlled Substances Act

In 2005, the Supreme Court considered whether the Controlled Substances Act was unconstitutional to the extent that it prevented individuals from possessing marijuana for medical use under California’s Compassionate Use Act. In Gonzales v. Raich, the Supreme Court held that the CSA was a valid exercise of federal power under the Commerce Clause,[60] even though its prohibition of the manufacture and possession of marijuana applied to intrastate as well as interstate activities.[61] Justice Stevens, writing for the majority, relied on prior case law establishing Congress’ authority to “regulate purely intrastate activity that is not itself ‘commercial’ in that it is not produced for sale, if it concludes that failure to regulate that class of activity would undercut the regulation of an interstate market in that commodity.”[62] The Court concluded that Congress had a rational basis for believing that home-consumed marijuana would likely be drawn into the illegal interstate market because of the high demand (and potential for large profits).[63] It thus acted well within its constitutional authority to “regulate Commerce . . . among the several States” when it decided to include intrastate activity under the CSA.[64]

B. A Discussion of Dual Sovereignty and Federalism

The Constitution grants federal and state governments certain spheres of sovereignty within which each may promulgate and enforce laws and regulations.[65] In cases where states and the federal government have concurrent lawmaking authority to regulate a particular area, the Supremacy Clause[66] establishes that federal law preempts state law.[67] The Court’s preemption doctrine recognizes three types of preemption: express preemption, implied (field) preemption, and conflict preemption.[68] There is no express or implied preemption of Colorado’s Amendment 64 by the CSA; the federal statute explicitly contemplates state regulation on the same subject matter,[69] and the law is not “so pervasive . . . that Congress left no room for the States to supplement it.”[70] Any constitutional arguments against Amendment 64 raise questions of conflict preemption.

The question of whether there is conflict preemption is more complicated. The Supreme Court has recognized two scenarios in which conflict preemption exists: (1) when compliance with both federal and state law is a “physical impossibility;” or (2) when state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.[71] Conventional constitutional understanding suggests that Amendment 64 does not meet the first part of the test. Compliance with both Amendment 64 and the CSA is not a “physical impossibility” because the state law does not require individuals or businesses to violate federal law–after all, one can simply decide not to use, distribute, or sell marijuana products.[72] The Court’s decisions have made it clear that even if a state allows conduct that the federal government prohibits (or vice versa), it is not “physically impossible” to comply with both laws, because individuals can follow both by refraining from engaging in the conduct at issue.[73]

The question of whether there is “obstacle preemption”–the second part of the test–is not so clear. The dispute really boils down to how the issue is framed. If Colorado’s move is viewed as nothing more than decriminalization of the drug (a valid exercise of its police powers), it can exist alongside the CSA; but if the law is viewed as an affirmative authorization of conduct Congress has prohibited and a hindrance to the realization of Congress’ goals, it might be preempted. The Cole Memorandum suggests that state legalization of marijuana would not necessarily threaten federal enforcement priorities and could actually “affirmatively address those priorities by, for example, implementing effective measures to prevent diversion of marijuana outside of the regulated system and to other states . . . .”[74] But Nebraska and Oklahoma have argued, as is discussed further in the next section, that Colorado’s law “undermines express federal priorities in the area of drug control and enforcement.”[75] They contend that Amendment 64 “affirmatively authorizes conduct prohibited by federal law”[76] by providing for the creation of a regulatory framework that governs (and thus encourages the growth of) a state-supervised marijuana industry.[77] Since Congress has mandated that the manufacture, distribution, or possession of marijuana be a criminal offense in order to eliminate interstate trafficking and drug abuse,[78] Colorado’s authorization of that same prohibited activity conflicts with the federal law.

In making this argument, Nebraska and Oklahoma have been careful not to implicate the anti-commandeering principle. The principle, as explained by Professor Robert A. Mikos, “stipulates that Congress may not command state legislatures to enact laws nor order state officials to administer them . . . [T]he rule does not limit Congress’s substantive powers but rather only the means by which Congress may pursue them.”[79] Congress cannot penalize states for refusing to enforce federal law or for legalizing marijuana, even when the result is a gap in the controlled substances statutory scheme.[80] Thus, Colorado may choose to take a novel approach regarding the criminality of marijuana use and possession even if its refusal to cooperate decreases the federal government’s ability to enforce the CSA. Colorado cannot obstruct the objectives of federal law, but neither can it be forced to further those objectives.[81]

To sum up: the federal government cannot force Colorado to further its objectives, so Colorado may decriminalize marijuana even if it partially undermines the purposes of the CSA. If the Supreme Court feels that Colorado’s regulatory scheme affirmatively authorizes conduct in violation of the CSA, it may strike down the parts of the law that authorize and regulate marijuana facilities. The DEA would be on its own to investigate marijuana trafficking in the state and would have to deal with the black market that would likely replace the current legal marketplace. If the Supreme Court decides that Colorado’s regulatory scheme does not present an obstacle to the goals of the CSA, Colorado’s scheme would be upheld. Such a decision would resolve the constitutional uncertainties surrounding Colorado’s experiment, but the problems caused by the discrepancy in the treatment of marijuana at the state and federal level (see Part IV) would probably still exist. If Congress wants to allow the experiment to continue, the better way to resolve the potential preemption problem is to pass new legislation exempting Colorado (and other states in which marijuana is legal) from federal laws that criminalize marijuana.

C. Constitutional Challenge: Nebraska and Oklahoma v. Colorado

In December 2014, Nebraska and Oklahoma submitted a motion to the Supreme Court asking for permission to file a complaint against Colorado.[82] Nebraska and Oklahoma allege (among other things)[83] that Colorado’s Amendment 64 is in direct conflict with the Controlled Substances Act because it allows private actors in a “state-sanctioned and state-supervised industry” to grow, package, and distribute marijuana in violation of the CSA.[84] The states agree that Colorado can constitutionally decide to legalize marijuana with respect to its own criminal law; they are only challenging what they see as Colorado’s facilitation of a budding marijuana industry.[85] Their argument is that Colorado’s establishment of a state-specific marijuana policy is an attempt to legislate “in an area constitutionally reserved to the federal government” that “conflicts with federal drug-control laws and federal drug-control policy . . . and obstructs the accomplishment and execution of the full purposes and objectives of Congress – and is therefore preempted.”[86]

In addition to their constitutional arguments, Nebraska and Oklahoma maintain that they have suffered substantial and irreparable harm as a direct result of Amendment 64. The states assert that the rules promulgated by the Colorado Department of Revenue are not sufficient to prevent either interstate transfer or acquisition by criminal enterprises of marijuana sold legally in Colorado’s retail dispensaries.[87] As such, marijuana has been flowing into Oklahoma and Nebraska, increasing the amount of time and resources the states must spend apprehending, prosecuting, and incarcerating those trafficking Colorado-sourced pot.[88] The states are asking the Supreme Court to declare Sections 16(4) and (5) of Article XVIII of the Colorado Constitution (the provisions allowing for lawful operation of marijuana-related facilities and regulation of marijuana establishments) unconstitutional under the Supremacy Clause, and to enjoin Colorado from implementing Sections 16(4) and (5) and any statutes or regulations promulgated pursuant to those sections.[89]

Then-Attorney General John Suthers readily acknowledges that Colorado inadvertently supplies marijuana to states like Nebraska, Wyoming, and Utah; indeed, law enforcement officials in those states have seized marijuana wrapped in Colorado packaging.[90] However, he believes that the lawsuit is without merit[91] and argues that the states’ real grievance is that the federal government has failed to enforce federal laws making marijuana trafficking and possession a crime.[92] While Suthers’ defense may be an appropriate response to this lawsuit, full enforcement of federal drug laws in Colorado would bring the burgeoning marijuana experiment to a crashing halt. Even a slight chance of federal prosecution would discourage most (if not all) growers, distributers, and retailers from continuing their operations. Individuals interested in consuming marijuana despite the increased risk of federal prosecution would be forced to turn to the black market to purchase the drug. In short, Amendment 64 would be completely undermined.

Other states fear that the lawsuit, if successful, could represent a dramatic expansion of federal power at the expense of state autonomy. In the spirit of preserving state power, several Oklahoma lawmakers called for the state attorney general to drop the lawsuit, noting that “f the federal government can force Colorado to criminalize marijuana . . . it could also force Oklahoma to criminalize a wide range of goods and activities that would be an anathema to the citizens of Oklahoma that we are sworn to serve.”[93] Many Oklahoma residents have asked their representatives to file a brief in defense of Colorado if the Supreme Court agrees to hear the case, because they fear that the suit poses a significant threat to states’ rights.[94]

IV. Implications for Colorado

Both Amendment 64 and the CSA are fully enforceable in Colorado. Although participants in the marijuana market know that their activity is permitted by the state (so long as they comply with the relevant regulations), they are operating with the hope that the federal government will continue to look the other way. Policymakers within the state are also well aware that the federal government can at any time begin enforcing the CSA in Colorado using its own resources. The government could alternatively choose to sue Colorado on the grounds that the state’s regulatory system for licensing and taxing the marijuana industry are preempted by the CSA.[95]

The Cole Memorandum is not entirely clear and probably does not represent a permanent policy position, but it does give marijuana retailers, growers, and distributers some assurance that the federal government will not prosecute them simply for possessing or selling marijuana under Colorado’s laws so long as doing so does not undermine broader federal objectives. While congressional clarification of the states’ ability to regulate the marijuana industry would certainly be preferable, the Cole Memorandum provides a modicum of comfort to those involved in Colorado’s marijuana market. But those who choose to use, possess, manufacture, and distribute marijuana legally within Colorado’s borders face more than just an uncertain and unstable legal environment. The inconsistency in the treatment of marijuana has led to numerous secondary problems for retailers, distributers, and consumers of marijuana who must interact with the federal government in order to file taxes, deposit money in banks, and enforce contracts. The federal government’s continued insistence that marijuana should be classified as a Schedule I drug[96] and its transitory response has created an uncomfortably awkward environment for those individuals involved in marijuana-related activities within Colorado. A few of the trickle-down problems are outlined in this section.

A. Banking

Perhaps the biggest problem facing the marijuana industry in Colorado is that cannabis establishments do not have access to banking services. Banks are rightly concerned that they will face civil and criminal liability if they interact with marijuana businesses, even if those businesses are operating legally under state law. Banks that provide loans or open accounts for marijuana-related businesses may be charged under the Money Laundering Control Act[97] for knowingly conducting financial transactions that involve proceeds of an unlawful activity (which includes the “manufacture, importation, sale, or distribution of a controlled substance”), or under the Bank Secrecy Act (“BSA”) for failing to do sufficient due diligence on their customers.[98] Bank employees and officers who are prosecuted for violations of these laws can be sentenced to up to twenty years in prison.[99] In addition, all national and state-chartered banks are required to obtain FDIC insurance and thus must comply with federal laws governing federal deposit and share insurance.[100] Federal insurers can bring civil actions against banks for violations of the BSA and have the power to revoke federal deposit insurance, effectively forcing the targeted bank to close.[101]

In the months leading up to the opening of the first recreational marijuana shops in Colorado, it became clear that banks would refuse to provide services to state-licensed marijuana producers and retailers without assurance from the federal government that they wouldn’t be punished for doing so. In October 2013, the governors of Colorado and Washington sent a letter to several federal agencies requesting that they provide guidance enabling the banking industry to offer banking services to marijuana-related businesses operating in compliance with state law.[102] The following February, the Department of Justice and the Department of Treasury issued advisories intending to reassure banks that they would not be punished for providing services to such businesses.[103]

The DOJ’s advisory reiterated its commitment to using federal resources to address significant marijuana-related cases consistent with the eight priorities outlined in the Cole Memorandum; it suggested that banks might not be prosecuted for offering services to businesses whose activities did not interfere with those priorities.[104] At the same time, the DOJ professed its willingness to prosecute banks that become entangled in supporting illegal activity in contravention of those priorities (e.g. if a bank knows that the business is diverting marijuana across state lines) for money laundering,[105] engaging in monetary transactions in property derived from unlawful activity,[106] conducting an unlicensed money transmitting business,[107] or violations of the Bank Secrecy Act.[108] The Treasury Department guidelines require banks providing financial services to marijuana-related businesses to file abbreviated Suspicious Activity Reports, since the funds are derived from illegal activities.[109] The advisories did not have the intended effect of encouraging banks to interact with marijuana-related businesses. The banking industry quickly responded that the guidelines did not ease their concerns; there was still a chance that banks might face federal sanctions for supporting activities related to the possession or distribution of marijuana.[110]

The barriers that prevent marijuana business owners from accessing banking services are problematic for several reasons. Marijuana has quickly become a lucrative industry in Colorado; in 2012, retailers sold an estimated $700 million of medical and recreational marijuana.[111] Cash-only businesses are a tempting target for criminal activity–robberies and violent crimes are more likely to take place when the expected payout is large.[112] Business owners have been forced to hire security specialists to move and safeguard their massive piles of cash.[113] Furthermore, it is currently impossible to track the flow of funds generated by the sale of marijuana. The absence of a paper trail makes it harder to audit marijuana businesses, creating opportunities for tax evasion.[114] And the ability to trace funds tied to marijuana would likely aid in preventing diversion of marijuana proceeds to illegal enterprises and to other states.[115]

Colorado lawmakers and regulators remain frustrated with the federal government’s insufficient response, but have begun to devise creative solutions in the absence of federal guidance. The state is experimenting with a new credit union, called the “Fourth Corner Credit Union,” which plans to offer banking services to marijuana businesses and was recently approved by Colorado’s banking regulators.[116] Even if the Fourth Corner Credit Union is able to securely hold funds on behalf of marijuana businesses, other banks may not accept checks drawn on Fourth Corner accounts because any money coming from the credit union will be tied to unlawful activity.[117] The Colorado Banking Association is not convinced that any institution can comply with the burdens required by the Treasury Department and DOJ advisories.[118] It believes that the only lasting solution is for Congress to pass legislation addressing the matter.[119] Congress could solve the banking problem either by carving out an exception to the marijuana ban or by protecting banks that provide services to marijuana-related businesses operating in compliance with state law.[120]

B. Federal Tax Deduction

The federal government may shy away from legitimizing state experiments with marijuana regulation, but it has no problem taxing the marijuana industry. The federal government has the power to tax income derived from both lawful and unlawful activity.[121] Businesses in the marijuana industry are subject to a special tax provision that prohibits write-offs for businesses that traffic in controlled substances.[122] Section 280E of the Internal Revenue Code provides that:

No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business . . . [that] consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.[123]

Because cannabis is a Schedule I drug under the CSA, Section 280E prevents marijuana businesses operating legally under Colorado law from deducting any logistical expenses–including employee salaries or rent–from their taxes.[124] Marijuana-related businesses are therefore forced to pay substantially higher taxes that may threaten their survival.[125] Many of these businesses pay more than 80% of their profits to the federal government.[126] The IRS has indicated that it will continue to enforce the tax code in states that legalize marijuana and has underscored its inability to make adjustments to the law.[127] Only Congress has the power to amend either the CSA or the IRC to allow marijuana-related businesses to benefit from certain tax deductions.[128] To relieve some of the burden on legal marijuana companies, Colorado enacted legislation to authorize affected businesses to claim deductions on their state income tax returns.[129]

C. The Legal Profession

As Professor Sam Kamin notes, “the legal minefield [presented by the different treatment of marijuana at the state and federal law] . . . calls out for experienced legal counsel to help marijuana practitioners negotiate the complicated, ever-changing web of marijuana rules and regulations.”[130] Yet lawyers are hesitant to satisfy this demand due to the federal government’s ability to prosecute lawyers who advise clients on how to run a marijuana business for aiding and abetting the unlawful conduct of their clients.[131] The Cole Memorandum suggests that the government will focus its resources on more significant infringements on federal law, but the risk of prosecution still looms over those who advise clients on legal matters relating to their marijuana operations.

The Colorado Rules of Professional Conduct add an additional layer of complication. Rule 1.2(d) prohibits lawyers from “counsel[ing] a client to engage, or assist[ing] a client, in conduct the lawyer knows is criminal or fraudulent” although lawyers may discuss legal consequences of any proposed course of conduct.[132] In the wake of Amendment 64, it became unclear what sort of advice Colorado lawyers could give their clients without violating Rule 1.2. In October 2013, the Colorado Bar Association’s Ethics Committee issued a formal opinion in which it attempted to clarify the ethical questions involved in counseling clients on marijuana-related issues. It struggled to come up with a “bright line distinction” between permissible and impermissible lawyer conduct; although public policy considerations favored allowing lawyers to give “the full range of legal advice” to clients, the CBA concluded that the rule prevented lawyers from advising a client “regarding the full panoply of conduct permitted by the marijuana amendments to the Colorado Constitution and implementing statutes and regulations.”[133] For example, assisting clients in negotiating contracts or leases facilitating the purchase or sale of marijuana would be violations of the ethics code.[134] In an attempt to resolve this dilemma, the Colorado Supreme Court amended Rule 1.2 to include an additional comment:

A lawyer may counsel a client regarding the validity, scope, and meaning of [Amendment 64] . . . and may assist a client in conduct that the lawyer reasonably believes is permitted by these constitutional provisions and statutes, regulations and orders, and other state or local provisions implementing them. In these circumstances, the lawyer shall also advise the client regarding related federal law and policy.[135]

Although the adopted comment permits lawyers to counsel clients in the marijuana industry without violating their ethical obligations, marijuana’s status as a Schedule I controlled substance may still deter attorneys from providing advice to those in need of help navigating the complex regulatory system.[136]

D. Public Housing

Colorado residents who live in federally subsidized housing are prohibited from growing, consuming, possessing, or distributing marijuana regardless of state law.[137] In 2011, the U.S. Department of Housing and Urban Development directed Public Housing Agencies (“PHAs”) to deny new applicants who use medical marijuana admission into the public housing program based on federal law prohibiting the extension of housing benefits to those who illegally use controlled substances.[138] Even those residents with disabilities cannot use medical marijuana as a reasonable accommodation because persons who use illegal drugs are disqualified from protection under the Rehabilitation Act and the Americans with Disabilities Act.[139]The U.S. Department of Housing and Urban Development has also concluded that accommodations for medical marijuana users are not reasonable under the Fair Housing Act.[140]

Those who live in public housing may feel as though they are being treated unfairly. Wealthier citizens are free to use marijuana (recreationally or for medicinal purposes), but citizens living in housing projects risk losing their homes if they choose to consume or grow cannabis.[141] The prohibition effectively amounts to discrimination based on social class: those who can afford to live on their own can take advantage of Colorado’s marijuana laws. While low-income recreational marijuana users may garner less sympathy, public housing tenants who want to use marijuana for medical relief–say, to reduce nausea resulting from chemotherapy[142]–may have to find other ways to alleviate their symptoms. They may be deprived of a choice of medical treatment based solely on their need for subsidized housing. The solution is not as simple as stepping off of federal property before using cannabis because Amendment 64 prohibits open and public consumption of marijuana.[143]

E. Contracts

Contracts with those in the marijuana business tend to be unenforceable because cannabis remains illegal at the federal level. In 2012 an Arizona state court refused to recognize a loan agreement between two Arizona residents and a Colorado dispensary as valid because purpose of the agreement was “to finance the sale and distribution of marijuana . . . in clear violation of the laws of the United States.”[144] In 2013 Colorado remedied this problem for contracts governed by Colorado law with a statutory provision declaring that as a matter of public policy, contracts pertaining to marijuana are enforceable within the state.[145]

V. How Do You Solve a Problem Like Marijuana?

Colorado is forging ahead into uncharted territory. Without further guidance from Congress, states that legalize medical or recreational marijuana cannot be certain that their regulatory schemes will be allowed to operate unimpeded by federal prosecution or other legal action. Congress seems to be in no great hurry to clear up the confusion–not surprising, since marijuana is a touchy political issue.

It is not enough for the federal government to decline to prosecute most marijuana activity in states where such activity is legal. Not only does this policy leave room for future administrations to backtrack, it does nothing to prevent individuals from bringing civil claims under the Racketeer Influenced and Corrupt Organizations statute (“RICO”).[146] RICO allows any person who is injured in his business or property to bring a suit against any person or entity engaged in racketeering activity (which includes dealing in a controlled substance).[147] Absent clear Congressional direction regarding the status of marijuana as a controlled substance under the CSA, marijuana enterprises (and the public officials who license them) may face civil lawsuits under RICO.

Many constitutional law scholars seem to agree that if Congress is going to allow Colorado to move forward with this experiment, legislation is needed to solve the problems that stem from the mismatched treatment of marijuana.[148] Professor Jonathan C. Adler has suggested that Congress might enact a law making the use, possession, and distribution of marijuana in violation of state law a federal crime, much like what was done with alcohol.[149] U.S. attorneys would be authorized to assist law enforcement in states where use of marijuana continued to be illegal, but would be prevented from interfering with legalization in states that wanted to adopt such policies. According to Professor John C. Eastman, such a solution “would be perfectly constitutional and fully consistent with federalism.”[150]

Professor Sam Kamin proposes a congressional amendment to the CSA that allows states to opt out of the statute’s marijuana provisions.[151] He envisions a system in which the Attorney General would be authorized to certify that a state’s regulation of marijuana did not conflict with federal priorities.[152] After certification, federal law regulating marijuana would no longer apply to the use, manufacture, and distribution of the drug in that state.[153] This solution, like Professor Adler’s, would legalize marijuana in some states and remove the risk of a policy change by a newly-elected president, eliminating some of the problems (discussed above) that stem from the current discrepancy in federal and state treatment of cannabis.[154]

If Congress refuses to act, the Food and Drug Administration (“FDA”) or the Drug Enforcement Agency (“DEA”) could move marijuana off the Schedule I list, provided they amass enough scientific evidence to justify rescheduling the drug.[155] States that oppose legalization could have their own laws criminalizing marijuana and still be consistent with the FDA’s decision.[156] From Colorado’s perspective, it does not matter how the change comes about. States need substantive and permanent guidance as to whether they can proceed with marijuana legalization and regulation. Until they are given some direction, state governments, law enforcement, and the marijuana industry will be forced to face considerable confusion and climb over unexpected–and sometimes insurmountable–federal obstacles.


[1] See Marijuana in America: Colorado Pot Rush (CNBC Television Broadcast Feb. 26, 2014), video available at https://www.youtube.com/watch?v=IPSESMwQpaU.

[2] See Maia Szalavitz, Two U.S. States Become First to Legalize Marijuana, Time (Nov. 7, 2012), http://healthland.time.com/2012/11/07/two-u-s-states-become-first-to-legalize-marijuana/.

[3] Jeffrey Stinson, States Find You Can’t Take Legal Marijuana Money to the Bank, The Pew Charitable Trusts (Jan. 5, 2015), http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2015/1/5/states-find-you-cant-take-legal-marijuana-money-to-the-bank.

[4] See Yvonne Wingett Sanchez, Arizona Medical-Pot Ruling May Reverberate, azcentral.com (May 9, 2012), http://www.azcentral.com/news/politics/articles/2012/05/08/20120508arizona-medical-pot-ruling-may-reverberate.html.

[5] See Nancy Lofholm, Federal Housing in Colorado Remains Off-Limits to Marijuana – For Now, The Denver Post (Jan. 25, 2014), available at http://www.denverpost.com/marijuana/ci_24989650/federal-housing-colorado-remains-off-limits-marjuana-now.

[6] See Jonathan Topaz, The New Clash over Cannabis, Politico (Jan. 11, 2015, 5:24 PM), http://www.politico.com/story/2015/01/the-new-clash-over-cannabis-114158.html, archived at http://perma.cc/24UL-3SSF.

[7] S01747 Summary, N.Y. State Assembly, available at http://assembly.state.ny.us/leg/?default_fld=&bn=S01747&term=2015&Summary=Y&Actions=Y&Text=Y&Votes=Y (last visited Jan. 19, 2015), archived at http://perma.cc/XKV5-PEPV.

[8] Jimmie E. Gates, Petition to Legalize Weed Wants Your Signature, The Clarion-Ledger (Jan. 1, 2015), www.clarionledger.com/story/news/local/2014/12/31/ballot-initiative-marijuana-mississippi/21099249/.

[9] Codified beginning at 21 U.S.C. § 801.

[10] See Gonzales v. Raich, 545 U.S. 1, 13 (2005).

[11] 21 U.S.C. §§ 841(a)(1), 844(a).

[12] See 21 U.S.C. § 812.

[13] See 21 U.S.C. § 812(b)(1). Shortly after the passage of the CSA, the American Academy of Pediatrics Committee on Drugs acknowledged that there was no accepted medical use for marijuana, and agreed that, without further research on long-term use of the drug, it should be considered potentially harmful. Sumner J. Yaffe et al., Drug Abuse Legislation for the 1970’s, 48 Pediatrics 990, 992 (1971). Given the criteria for scheduling drugs, marijuana seemed to have been properly placed. But the Committee did not find the chosen criteria to be satisfactory: “t should be noted that marijuana, a relatively harmless substance, and heroin, a hazardous substance, are placed together in Schedule I, indicating that the criteria for scheduling can be improved.” Id. at 990.

[14] 21 U.S.C. § 863.

[15] See Raich, 545 U.S. at 16–17.

[16] 21 U.S.C. § 801(3).

[17] See 21 U.S.C. § 801(5).

[18] See Raich, 545 U.S. at 32–33.

[19] 21 U.S.C. § 903.

[20] See George J. Terwilliger III, Partner at Morgan Lewis & Bockius LLP, Remarks at a National Press Club Event: Marijuana and the States: How Should Federalism Principles Inform the Federal Government’s Response to State Marijuana Initiatives? (Dec. 5, 2013), video available at http://www.fed-soc.org/multimedia/detail/marijuana-and-the-states-how-should-federalism-principles-inform-the-federal-governments-response-to-state-marijuana-initiatives-event-audiovideo; Robert Mikos, State Versus State on Marijuana Reforms, Law Professor Blogs Network (Dec. 18, 2014), http://lawprofessors.typepad.com/marijuana_law/2014/12/state-versus-state-on-marjiuana-reforms.html, archived at http://perma.cc/3YY3-VAKF (noting that Congress cannot prevent states from repealing criminal sanctions on the use of drugs).

[21] 21 U.S.C. § 873.

[22] Lydia Saad, Majority Continues to Support Pot Legalization in the U.S., Gallup (Nov. 6, 2014), http://www.gallup.com/poll/179195/majority-continues-support-pot-legalization.aspx, archived at http://perma.cc/EB27-HTLR.

[23] Seth Motel, 6 Facts About Marijuana, Pew Research Ctr. (Nov. 5, 2014), http://www.pewresearch.org/fact-tank/2014/11/05/6-facts-about-marijuana/, archived at http://perma.cc/J3CL-ZTHL.

[24] Id.

[25] See About Us, Edible Events, http://www.edibleeventsco.com/about-jane-west-edible-events-denver/ (last visited Jan. 6, 2014), archived at http://perma.cc/HJ7R-77TF.

[26] Alex Grieg, Colorado’s High Flyers Get High in Style at Sophisticated Cannabis Soirees with ‘Munchies for Foodies’, Daily Mail (Jan. 27, 2014), http://www.dailymail.co.uk/news/article-2546521/Colorados-high-flyers-high-style-sophisticated-cannabis-soirees-munchies-foodies.html, archived at http://perma.cc/S98H-Z85D.

[27] See Marijuana in America, supra note 1.

[28] Marijuana in America, supra note 1.

[29] Marijuana Country: The Cannabis Boom (CNBC Television Broadcast Jan. 5, 2015), video available at http://www.cnbc.com/live-tv/cnbc-originals/full-episode/marijuana-country-the-cannabis-boom/379637315796.

[30] See id.

[31] Madeline H. Meier et al., Persistent Cannabis Users Show Neuropsychological Decline from Childhood to Midlife, 109 Proc. Nat’l Acad. Sci. U.S. 2657 (2012), available at http://www.pnas.org/content/109/40/E2657.full.

[32] See Robert A. Mikos, On the Limits of Supremacy: Medical Marijuana and the States’ Overlooked Power to Legalize Federal Crime, 62 Vand. L. Rev. 1421, 1454 (2009).

[33] See Marijuana in America, supra note 1.

[34] See id.

[35] Michael Francisco, Assistant Solicitor General of Colorado, Remarks at National Press Club Event: Marijuana and the States: How Should Federalism Principles Inform the Federal Government’s Response to State Marijuana Initiatives? (Dec. 5, 2013), video available at http://www.fed-soc.org/multimedia/detail/marijuana-and-the-states-how-should-federalism-principles-inform-the-federal-governments-response-to-state-marijuana-initiatives-event-audiovideo. Doctors had to recommend the use of marijuana because federal law prohibits doctors from prescribing it. Id.

[36] See U.S. Dep’t of Justice, Memorandum for Selected U.S. Attorneys on Investigations and Prosecutions in States Authorizing the Medical Use of Marijuana (Oct. 19, 2009), available at http://www.justice.gov/opa/blog/memorandum-selected-united-state-attorneys-investigations-and-prosecutions-states, archived at http://perma.cc/3ZV8-V2FL.

[37] Id.

[38] Codified as Colo. Const. art. XVIII, § 16.

[39] Colo. Const. art. XVIII, § 16(1) (West, Westlaw through Nov. 2013 amendments).

[40] Colo. Const. art. XVIII, § 16(3) (West, Westlaw through Nov. 2013 amendments).

[41] See Colo. Const. art. XVIII, §§ 16(4)–(5) (West, Westlaw through Nov. 2013 amendments).

[42] Police Found. & Colo. Ass’n of Chiefs of Police, Colorado’s Legalization of Marijuana and the Impact on Public Safety: A Practical Guide for Law Enforcement 54 (2015), available at http://www.policefoundation.org/sites/g/files/g798246/f/201501/Legalized%20Marijuana%20Practical%20Guide%20for%20Law%20Enforcement.pdf, archived at http://perma.cc/D9KQ-N8BV.

[43] Conflicts between State and Federal Marijuana Laws: Hearing Before the S. Comm. on the Judiciary, 113th Cong. 1 (2013) (statement of Jack Finlaw, Chief Legal Counsel, Office of Colorado Governor John W. Hickenlooper).

[44] See id.

[45] Sam Kamin, Cooperative Federalism and State Marijuana Regulation, 85 U. Colo. L. Rev. 1105, 1110–11 (2014).

[46] See generally U.S. Dep’t of Justice, Memorandum for All United States Attorneys: Guidance Regarding Marijuana Enforcement (Aug. 29, 2013), available at http://www.justice.gov/iso/opa/resources/3052013829132756857467.pdf, archived at http://perma.cc/UPV7-4X8C.

[47] Id. at 2–3.

[48] Id. at 1–2.

[49] See id. at 3.

[50] See id.

[51] Id.

[52] See Evan Halper, Congress Quietly Ends Federal Government’s Ban on Medical Marijuana, L.A. Times, Dec. 16, 2014, http://www.latimes.com/nation/la-na-medical-pot-20141216-story.html, archived at http://perma.cc/BH43-PKZD. Despite its willingness to allow for state experimentation, the Obama administration professes to “steadfastly oppose[] legalization of marijuana and other drugs because legalization would increase the availability and use of illicit drugs, and pose significant health and safety risks to all Americans . . . .” Marijuana, Office of Nat’l Drug Control Pol’y, http://www.whitehouse.gov/ondcp/marijuana (last visited Apr. 8, 2015), archived at https://perma.cc/6TJS-4AR2.

[53] Guidance Regarding Marijuana Enforcement, supra note 46. The role the states play in enforcement of marijuana laws is substantial. There are roughly 170 state and local law enforcement officials for every one Drug Enforcement Agency (“DEA”) agent, and the DEA handles about 1% of the roughly 800,000 marijuana prosecutions each year. Robert D. Alt, President of the Buckeye Inst. for Pub. Pol’y Solutions, Remarks at a National Press Club Event: Marijuana and the States: How Should Federalism Principles Inform the Federal Government’s Response to State Marijuana Initiatives? (Dec. 5, 2013), video available at http://www.fed-soc.org/multimedia/detail/marijuana-and-the-states-how-should-federalism-principles-inform-the-federal-governments-response-to-state-marijuana-initiatives-event-audiovideo.

[54] See Jonathan H. Adler, Johan Verheij Mem’l Professor of Law, Case Western Reserve Univ. Sch. of Law, Opening Remarks at a National Press Club Event: Marijuana and the States: How Should Federalism Principles Inform the Federal Government’s Response to State Marijuana Initiatives? (Dec. 5, 2013), video available at http://www.fed-soc.org/multimedia/detail/marijuana-and-the-states-how-should-federalism-principles-inform-the-federal-governments-response-to-state-marijuana-initiatives-event-audiovideo.

[55] See id.

[56] See Alt, supra note 53.

[57] John C. Eastman, Henry Salvatori Professor of Law & Cmty. Serv. at Chapman Univ. Sch. of Law, Remarks at a National Press Club Event: Marijuana and the States: How Should Federalism Principles Inform the Federal Government’s Response to State Marijuana Initiatives? (Dec. 5, 2013), video available at http://www.fed-soc.org/multimedia/detail/marijuana-and-the-states-how-should-federalism-principles-inform-the-federal-governments-response-to-state-marijuana-initiatives-event-audiovideo.

[58] See Halper, supra note 52.

[59] See id.

[60] U.S. Const. art. I, § 8, cl. 3.

[61] See generally Gonzales v. Raich, 545 U.S. 1 (2005).

[62] Id. at 18.

[63] Id. at 19, 22.

[64] Id.

[65] See Gregory v. Ashcroft, 501 U.S. 452, 457–58 (1991); see also U.S. Const. amend. X.

[66] U.S. Const. art. VI, cl. 2.

[67] For a discussion of different types of preemption, see Stephen A. Gardbaum, The Nature of Preemption, 79 Cornell L. Rev. 767, 770–71, 775 (1994); Caleb Nelson, Preemption, 86 Va. L. Rev. 225, 225–27 (2000).

[68] See Nelson, supra note 67, at 226.

[69] See 21 U.S.C. § 903.

[70] Arizona v. United States, 132 S.Ct. 2492, 2501 (2012) (internal citation omitted).

[71] See Nelson, supra note 67, at 228.

[72] Eastman, supra note 57.

[73] See Nelson, supra note 67, at 228 n.15.

[74] Guidance Regarding Marijuana Enforcement, supra note 46.

[75] See Complaint at 21-22, States of Neb. and Okla. v. State of Colo., No. 22O144, available at http://www.scribd.com/doc/250506006/Nebraska-Oklahoma-lawsuit, archived at http://perma.cc/ASM9-BGKQ.

[76] Brief in Support of Motion for Leave to File Complaint at 11, States of Neb. and Okla. v. State of Colo., No. 22O144, available at http://www.scribd.com/doc/250506006/Nebraska-Oklahoma-lawsuit, archived at http://perma.cc/ASM9-BGKQ.

[77] See id at 15–16.

[78] See id at 3–5.

[79] Mikos, supra note 32, at 1446.

[80] See Mario Loyola, Why are Conservatives Fighting Colorado’s Legal Weed?, The Atlantic (Jan. 5, 2015), http://www.theatlantic.com/politics/archive/2015/01/why-are-conservatives-fighting-colorados-legal-weed/384186/, archived at http://perma.cc/756T-NYKS.

[81] See Arizona v. U.S., 132 S. Ct. 2492, 2501 (2012). For a more complete discussion of the boundary between permissible preemption and impermissible commandeering, see Mikos, supra note 32, at 1445–52.

[82] See Motion for Leave to File Complaint, States of Neb. and Okla. v. State of Colo., No. 22O144, available at http://www.scribd.com/doc/250506006/Nebraska-Oklahoma-lawsuit, archived at http://perma.cc/ASM9-BGKQ.

[83] Oklahoma and Nebraska also argue that Amendment 64 violates the United States’s treaty obligations under the Single Convention on Narcotic Drugs of 1961, the Convention on Psychotropic Substances of 1971, and the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988. Id. at 10.

[84] Id. at 9.

[85] See Brief in Support of Motion for Leave to File Complaint, supra note 76, at 5.

[86] Complaint, supra note 75, at 22.

[87] Id. at 24–25.

[88] Id. at 25–26.

[89] See id. at 28.

[90] See The Cannabis Boom, supra note 29.

[91] See id.

[92] See Lyle Denniston, Two States Sue to Block Colorado Marijuana Markets, SCOTUSBlog (Dec. 19, 2014), http://www.scotusblog.com/2014/12/two-states-sue-to-block-colorado-marijuana-markets/, archived at http://perma.cc/HWY8-DHZP.

[93] Matt Ferner, Oklahoma Republicans Want to Snuff Out Their State’s Lawsuit over Colorado Marijuana, Huffington Post (Jan. 5, 2014), http://www.huffingtonpost.com/2015/01/05/colorado-marijuana-lawsuit_n_6418534.html, archived at http://perma.cc/VT2X-XM3N.

[94] See id.

[95] See Kamin, supra note 45, at 1108.

[96] See 21 U.S.C. § 812(b)(1).

[97] 18 U.S.C. §§ 1956–57.

[98] See Julie Anderson Hill, Banks, Marijuana, and Federalism, Case W. Res. L. Rev. 13–17 (forthcoming) available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2489089##, archived at shttp://perma.cc/7EMM-7ESM.

[99] See Jacob Sullum, Marijuana Money is Still a Pot of Trouble for Banks, Forbes (Sept. 18, 2014), http://www.forbes.com/sites/jacobsullum/2014/09/18/local-banks-terrified-by-friendly-neighborhood-marijuana-merchants/, archived at http://perma.cc/Z6U9-R4QS.

[100] See Hill, supra note 98, at 21.

[101] See id.

[102] See Letter from John W. Hickenlooper and Jay Inslee, Governors of Colorado and Washington, to Jacob J. Lew, Sec’y of the Treasury, et al. (Oct. 2, 2013), available at http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheadername1=Content-Disposition&blobheadername2=Content-Type&blobheadervalue1=inline%3B+filename%3D%22Govs.+Hickenlooper%2C+Inslee+call+for+flexibility+in+federal+banking+regulations+for+marijuana+businesses.pdf%22&blobheadervalue2=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251893131086&ssbinary=true, archived at http://perma.cc/DL6N-5V27.

[103] See Serge F. Kovaleski, U.S. Issues Marijuana Guidelines for Banks, N.Y. Times, Feb. 14, 2014, available at http://www.nytimes.com/2014/02/15/us/us-issues-marijuana-guidelines-for-banks.html, archived at http://perma.cc/PH7L-6AQG.

[104] See U.S. Dep’t of Justice, Memorandum for All United States Attorneys: Guidance Regarding Marijuana Related Financial Crimes (Feb. 14, 2014), available at http://www.justice.gov/sites/default/files/usao-wdwa/legacy/2014/02/14/DAG%20Memo%20-%20Guidance%20Regarding%20Marijuana%20Related%20Financial%20Crimes%202%2014%2014%20%282%29.pdf, archived at http://perma.cc/3HR4-JEFB.

[105] See 18 U.S.C. § 1956.

[106] See 18 U.S.C. § 1957.

[107] See 18 U.S.C. § 1960.

[108] Guidance Regarding Marijuana Related Financial Crimes, supra note 104.

[109] U.S. Dep’t of Treasury, Financial Crimes Enforcement Network, BSA Expectations Regarding Marijuana-Related Businesses at 3 (Feb. 14, 2014). If the bank “reasonably believes, based on its customer due diligence, [the business] does not implicate one of the Cole Memo priorities or violate state law” it may file a special “Marijuana Limited” SAR. Id. at 3–4. If the bank believes the business might be engaged in activity that does implicate a federal priority, it must file a “Marijuana Priority” SAR. Id. at 4.

[110] See Kovaleski, supra note 103.

[111] Christopher Ingraham, Colorado’s Legal Weed Market: $700 Million in Sales Last Year, $1 billion by 2016, The Washington Post (Feb. 12, 2015), http://www.washingtonpost.com/news/wonkblog/wp/2015/02/12/colorados-legal-weed-market-700-million-in-sales-last-year-1-billion-by-2016/.

[112] See Letter from John W. Hickenlooper and Jay Inslee, supra note 102.

[113] See Alan Pyke, Big Banks Balk, So Colorado Has Created a Credit Union for the Marijuana Industry, ThinkProgress (Dec. 9, 2014), http://thinkprogress.org/economy/2014/12/09/3601055/colorado-marijuana-credit-union/.

[114] See Katie Rucke, Congress Hears Testimony on Legalized Marijuana, Mint Press News (Sep. 11, 2013), http://www.mintpressnews.com/congress-hears-testimony-on-legalized-marijuana/168732/.

[115] Letter from John W. Hickenlooper and Jay Insleesupra note 102.

[116] Pyke, supra note 113.

[117] Id.

[118] Id.

[119] Id.

[120] See Sullum, supra note 99.

[121] James v. United States, 366 U.S. 213, 218 (1961).

[122] Terrence McCoy, How the IRS and Congress Cripple the Marijuana Industry with an Obscure, Decades-Old Law, The Washington Post (Nov. 5, 2014), available at http://www.washingtonpost.com/news/morning-mix/wp/2014/11/05/how-the-irs-and-congress-cripple-the-marijuana-industry-with-an-obscure-decades-old-law/.

[123] 26 U.S.C.A. § 280E.

[124] McCoy, supra note 122.

[125] Katie Kuntz, Federal Tax Hits Colo. Marijuana Business Hard, Coloradan (Nov. 7, 2014), available at http://www.coloradoan.com/story/news/local/2014/11/08/federal-tax-hits-colo-marijuana-business-hard/18674425/.

[126] Id.

[127] See Letter from Andrew J. Keyso, Deputy Associate Chief Counsel for the Department of Treasury, to Fortney Pete Stark, U.S. Representative (Dec. 16, 2010).

[128] See id.

[129] Hearing on “Conflicts between State and Federal Marijuana Laws Before the S. Comm. on the Judiciary, 113 Cong. 4 (2013) (statement of Jack Finlaw, Chief Legal Counsel, Office of Colorado Governor John W. Hickenlooper).

[130] Kamin, supra note 45, at 1115.

[131] Id. at 111516.

[132] Colo. RPC 1.2(d).

[133] Colorado Bar Association Ethics Committee, Formal Opinion 125 – The Extent to Which Lawyers May Represent Clients Regarding Marijuana-Related Activities, 42 Colo. Law. 19 (Dec. 2013).

[134] Id.

[135] Rule Change 2014(05) (Colo. Mar. 2014), available at http://www.courts.state.co.us/userfiles/file/Court_Probation/Supreme_Court/Rule_Changes/2014/2014(05)%20redlined.pdf.

[136] See Kamin, supra note 45, at 1115.

[137] Letter from Helen R. Kanovsky, Gen. Counsel of the U.S. Dep’t of Hous. and Urban Dev., to John Trasvina et al. (Jan. 20, 2011).

[138] Letter from Sandra B. Henriquez, Assistant Sec’y for Pub. and Indian Hous. in the U.S. Dep’t of Hous. and Urban Dev., to All Field Offices and Public Housing Agents (Feb. 10, 2011) (“The Quality Housing and Work Responsibility Act (QHWRA) of 1998 (42 U.S.C. § 13661) requires that PHAs administering the Department’s rental assistance programs establish standards and lease provisions that prohibit admission into the PH and HCV programs based on the illegal use of controlled substances, including state legalized medical marijuana.”). PHAs have the discretion to establish their own policy regarding whether or not to continue assisting existing residents who use medical marijuana. Id. They can decide to deny or terminate assistance to individual users rather than entire households for both new applicants and existing beneficiaries. Id.

[139] Letter from Helen R. Kanovsky, supra note 137.

[140] Id. (“Accommodations that allow the use of medical marijuana would sanction violations of criminal law and thus constitute a fundamental alteration in the nature of the housing operation. Indeed, allowing such an accommodation would thwart a central programmatic goal of providing a safe living environment free from illegal drug use.”).

[141] See Nancy Lofholm, Federal Housing in Colorado Remains Off-Limits to Marijuana – For Now, The Denver Post (Jan. 25, 2014), available at http://www.denverpost.com/marijuana/ci_24989650/federal-housing-colorado-remains-off-limits-marjuana-now.

[142] Marijuana, The American Cancer Society (last rev. Aug. 26, 2014), http://www.cancer.org/treatment/treatmentsandsideeffects/complementaryandalternativemedicine/herbsvitaminsandminerals/marijuana.

[143] Colo. Const. art. XVIII, § 16(3)(d) (West, Westlaw through Nov. 2013 amendments). Although it is unclear what constitutes open and public consumption, the law is strictly enforced. In 2014, there were 900 citations for public use of cannabis. Michael Song & Chris Halsor, Regulation 101 Panel at the Colorado Association of Chiefs of Police Conference: Marijuana Impact on Public Health and Safety on Colorado (Jan. 14, 2015).

[144] Kamin, supra note 45, at 1113 n.33.

[145] Colo. Rev. Stat. Ann. § 13-22-601 (West 2014).

[146] See Eastman, supra note 57.

[147] 18 U.S.C. §§ 1961, 1962, 1964.

[148] See e.g., Francisco, supra note 35.

[149] Adler, supra note 54.

[150] Eastman, supra note 57.

[151] Sam Kamin, supra note 45, at 112021.

[152] Id. at 1120.

[153] Id. at 1121.

[154] Id.

[155] Eastman, supra note 57.

[156] Id. Congress could also revoke the delegated authority and move marijuana off the Schedule I list on its own. Id.

Liar, Liar…Possible Changes Ahead for Lie Detection Legislation

Liar, Liar…Possible Changes Ahead for Lie Detection Legislation

Jenna Tynan[*]

 

Most of us experience the distinct pleasure of completing a job application at some point in our lives. One can expect standard questions including name, address, and employment history. Depending on the state, employers may or may not ask questions related to an applicant’s gender orientation, marital status,[2] or criminal history.[3] But how does an employer know if you lie? Recently, I discovered the most curious statement on a Massachusetts-based application: It is unlawful to administer lie detector tests to job applicants. Interestingly enough, Massachusetts law requires that all employment applications display these notifications.[4] An employer who administers an illegal lie detector test faces fines up to $1,000 for initial violations and even imprisonment for subsequent violations. These penalties also apply to employers that fail to provide notice statements on their applications.

Many states actually have similar “lie detector” laws limiting employers’ use of polygraphs and other examinations to test current and prospective employee honesty. These state laws are extensions of the federal Employee Polygraph Protection Act (EPPA),[5] which also prohibits private employers from administering lie detector tests. But state laws can differ drastically from the EPPA. First, the EPPA prohibits only physiological-based lie detecting tests. The Massachusetts Act prohibits using any lie-detecting instrument including written tests. And the EPPA exempts public employees from its provisions, whereas the Massachusetts Act does not. Finally, and most notably, the Massachusetts Act and a similar Maryland statute[6] require that employment applications contain notices that administering lie detector tests constitute illegal employment practices. The EPPA, however, only requires employers to post a description of the Act in the workplace.[7]

Both the EPPA and state lie-detector statutes leave certain employment practices untouched. Employers may still use polygraphs during misconduct investigations. Further, employers may still utilize behavioral interviewing methods.[8] Finally, these laws do not prohibit using Myers-Brigg Type Indicator (MBTI) tests, although using the MBTI as a pre-employment test, however, is generally disfavored.[9] Thus, prospective employers are free to use the STAR (Situation, Task, Action, Result) method of behavioral interviewing. Employers can even discover whether its workforce consists of E-J-S-T’s or I-N-F-P’s, using the Myers-Briggs test. They just can’t use tests to determine if applicants are L-I-A-R’s.

The EPPA and similar statutes have some meaningful benefits for applicants—they prevent employers from using inconsistent or inaccurate diagnostic tools to assess employee honesty.[10] In extreme circumstances, employers could use lie detecting examination results to hide discriminatory employment practices. For example, an employer’s firing decision may be driven by race-based, age-based, or gender-based motives. Yet, the employer could point to a failed lie detecting examination to support its decision, thereby concealing its discriminatory motive. Arguably, the EPPA and similar statutes also benefit employers by forcing them to utilize more probing and reliable reference checks than uncertain lie detection diagnostics. Moreover, if polygraph examinations were common employment practices, those employers forgoing the costly tests would potentially face greater liability under negligent hiring or negligent retention claims.[11]

Despite these potential benefits, the EPPA and state lie detector statutes have serious drawbacks. First, what “employers” are covered? This question may be especially tricky for volunteer organizations when the line between employee and volunteer begins to blur. Next, small businesses and those using online application systems bear a substantial risk of violating the notice provision of lie detector laws. Small businesses may be unaware of the law’s notice requirements. Moreover, online application systems may not effectively display notice statements on applications. Massachusetts’ businesses face minimum fines of $300 for initial violations, and senior officials may be imprisoned up to ninety days for repeat violations.[12]

A more serious concern, however, is what “employees” are covered. In this respect, the scope of these laws may go too far. For example, these laws prohibit polygraph tests for employees who are entrusted to care for loved ones. With harrowing stories of child abuse at home and at care facilities, it may be time for another carve out. Notably, the EPPA and other state statutes do exempt certain employees from polygraph protection.[13] Nevada, for example, allows polygraph tests to be given to manufacturers of controlled substances. Rep. Dennis Ross (R-FL) likely had these exemptions in mind when he recently introduced the “Protecting Our Children Act.”[14] The proposed law would exempt applicants who provide childcare from the protections of the EPPA. But the proposed law would prevent employers from subjecting current caregivers to polygraph analysis except for investigatory purposes.

Rep. Ross’ bill would restrict the EPPA’s application. And if the bill does pass into a law, some states may be inspired to add similar exemptions to allow for testing of child caregivers. State legislators may even find that more intensive statutory revisions are required. For now, Massachusetts-based job applications will still don curious lie detector notices. But no lie detector test can tell for how long.


[*] J.D. Candidate, Harvard Law School, 2016.

[2] Federal Laws Prohibiting Job Discrimination Questions And Answers, U.S. Equal Employment Opportunity Comm’n (Nov. 21, 2009), http://www.eeoc.gov/facts/qanda.html [https://perma.cc/8DGW-8NGW].

[3] FAQ, Ban the Box Campaign, http://bantheboxcampaign.org/faq/ [https://perma.cc/CGG9-5DZR].

[4] Mass. Gen. Laws Ann. ch. 149, § 19B (West 2014).

[5] Employee Polygraph Protection Act of 1988 (“EPPA”), Pub. L. 100-347, 102 Stat. 646.

[6] Md. Code Ann. Lab. & Empl. § 3-702 (West 2014).

[7] EPPA § 2003, supra note 4.

[8] Kathy Gurchiek, Behavioral Interviewing Popular, but Training in Use Urged, Soc. For Human Resource Mgmt. (Jan. 28, 2008), https://www.shrm.org/hr-today/news/hr-news/Pages/behavioralinterviewingpopular.aspx [https://perma.cc/HR64-CZ83].

[9] Pre-Employment Tests: What About the Myers-Briggs?, EmployTest (Mar. 16, 2011), https://www.employtest.com/employment-testing-blog/bid/58574/Pre-Employment-Tests-What-About-the-Myers-Briggs [https://perma.cc/ZHQ2-4C5S] (“The MBTI results do not translate well to the aggregate level. In effect, it does not create a “type” that can aptly describe a group of individuals, such as a work team within a company.”).

[10] The Truth About Lie Detectors (aka Polygraph Tests), Am. Psych. Assoc. (Aug. 5, 2004), https://www.apa.org/research/action/polygraph.aspx [https://perma.cc/S5CZ-GM3C] (“Most psychologists agree that there is little evidence that polygraph tests can accurately detect lies.”).

[11] See generally Nesheba M. Kittling, Negligent Hiring and Negligent Retention: A State by State Analysis, Am. Bar. Assoc. (Nov. 6, 2010), https://www.americanbar.org/content/dam/aba/administrative/labor_law/meetings/2010/annualconference/087.authcheckdam.pdf [https://perma.cc/AGW4-GZMD].

[12] See supra note 3.

[13] See supra note 4 (exempting, e.g., federal, state, and local governments, private individuals engaged in national security-related activities, and private employees of companies in the security and pharmaceutical sectors).

[14] H.R. 4954, 113th Cong. (2014).

Cash for College? House Committee Advances Tax Breaks for Students

Cash for College? House Committee Advances Tax Breaks for Students

Sean Morrison[*]

 

With students long gone on summer break, the House Committee on Ways and Means recently advanced legislation by a vote of 22-13 that combines several of the existing tax incentives for higher education into one unified tax credit.[2] Representatives Diane Black (R-TN) and Danny K. Davis (D-IL), who introduced the Student and Family Tax Simplification Act of 2014 (H.R. 3393) last October,[3] said in opening remarks to the June markup that a streamlined credit for higher education costs would better serve families coping with the rising cost of post-secondary education.

The Committee bill is likely just an election year talking point rather than a realistic effort at reform. Yet it does provide a preview of what’s ahead in 2017, when Congress will have to make a decision on the future of tax incentives for higher education.

The short bill—totaling only 14 pages—combines three current tax incentives, the American Opportunity Credit (AOTC), the Lifetime Learning Credit, and the tuition deduction—into a single AOTC.[4] The new incentive would provide a dollar-for-dollar (100 percent) credit for the first $2,000 of qualified higher education costs and a 25-percent credit for qualified costs above $2,000. The Act caps the new AOTC at $2,500 and makes the credit refundable up to $1,500.

Graduate students would undoubtedly fare better under the proposal than they do under current law.[5] Unlike the current AOTC, the new credit would not be limited to the first four years of a student’s post-secondary education. And the new credit is more valuable to graduate students than the existing Lifetime Learning Credit because the new credit has a higher cap and is partially refundable. The current Lifetime Learning Credit, on the other hand, has a lower cap, uses a more complicated credit calculation formula, and is not refundable. For undergraduate students, the new simplified credit increases the refundable portion by $500. And undergraduate students convicted of a felony for possession of a controlled substance, who are currently ineligible for  the current AOTC, would be eligible for the new credit.

The Joint Committee on Taxation (JCT) estimated that the bill, as introduced by Rep. Black and Davis, would cost $35 billion over ten years (including the offsetting increases in revenue generated by eliminating existing provisions).[6] Chairman Camp, however, made several modifications, such as increasing the income level at which the credit phases out, resulting in a revised estimated cost of $96.5 billion.[7] While the cost may seem steep, Congress cannot avoid a major expense on education incentives in the near future unless it is willing to let education incentives revert back to pre-2009 levels. The current AOTC expires in 2017 and the last AOTC extension—from 2012 through 2017—was estimated to cost $67 billion (without the offsetting impact of eliminating the tuition deduction or Lifetime Learning Credit).[8]

Rep. Davis and Rep. Black began working to reform higher education tax incentives as Chair and Co-Chair of the Tax Reform Working Group on Education, one of several working groups put together by Chairman Dave Camp (R-MI) and Ranking Member Sandy Levin (D-MI) in February of 2013.[9] Much of the Student and Family Tax Simplification Act was incorporated into Chairman Camp’s comprehensive tax reform proposal released earlier this year. Camp’s comprehensive plan includes other changes that would help offset the cost of the education incentive overhaul.[10] But Chairman Camp’s grand plan has almost zero chance of advancing in the next few months.[11] And Camp’s tenure at the helm of the powerful Committee on Ways and Means will end next January—no matter what happens at the polls in November.[12]

In this environment, the House Committee has started advancing smaller, piecemeal proposals, such as the Student and Family Tax Simplification Act. Yet the Committee has only taken up politically popular, revenue-draining proposals, including a proposal to make the research and development tax credit permanent and an expansion of the child tax credit.[13] So far, the Committee has left the less popular, revenue-raising parts of Chairman Camp’s plan alone. The Committee has recently even taken up proposals that reverse course from less popular parts of Chairman Camp’s five-month-old plan: the Committee advanced, and the House passed, a proposal to make bonus depreciation permanent, which JCT estimated would cost $263 billion over ten years.[14] Chairman Camp’s overhaul plan would have let the lucrative provision expire.

All of this suggests that the piecemeal proposals, including the Student and Family Tax Simplification Act, are not a new strategy to enact comprehensive tax reform before Camp’s retirement, but rather an old strategy for generating talking points in an election year.


[*] J.D. Candidate, Harvard Law School, 2015.

[2] Markup of: H.R. 3393, “Student and Family Tax Simplification Act”; H.R. 4935, “Child Tax Credit Improvement Act of 2014,” House Committee on Ways and Means (June 25, 2014), https://waysandmeans.house.gov/event/markup-of-h-r-3393-student-and-family-tax-simplification-act-h-r-4935-child-tax-credit-improvement-act-of-2014/ [https://perma.cc/6QFT-T55Y]; Votes of the Committee, House Committee on Ways and Means (June 25, 2014), https://waysandmeans.house.gov/UploadedFiles/H.R._3393_Final_Passage.pdf [https://perma.cc/GTC6-TMBJ].

[3] H.R. 3393, 113th Cong. (2013).

[4] Markup Text of H.R. 3393, House Committee on Ways and Means (June 25, 2014), https://waysandmeans.house.gov/UploadedFiles/HR_3393_062514.pdf [https://perma.cc/4CKP-QCPV].

[5] See Description of H.R. 3393, The “Student and Family Tax Simplification Act,” Joint Committee on Taxation (June 23, 2014), https://www.jct.gov/publications.html?func=startdown&id=4622 [https://perma.cc/C3JN-Y3C3].

[6] Id.

[7] See Description of An Amendment in The Nature Of A Substitute To The Provisions Of H.R. 3393, The “Student and Family Tax Simplification Act,” Joint Committee on Taxation (June 24, 2014), https://www.jct.gov/publications.html?func=startdown&id=4624 [https://perma.cc/NSJ9-FQSP].

[8] Estimated Revenue Effects Of The Revenue Provisions Contained In An Amendment In The Nature Of A Substitute To H.R. 8, The “American Taxpayer Relief Act Of 2012,” As Passed By The Senate On January 1, 2013, Joint Committee on Taxation (Jan. 1, 2013), https://www.jct.gov/publications.html?func=startdown&id=4497 [https://perma.cc/PX58-H3HE].

[9] Bernie Becker, Ways and Means unveils tax reform working groups, The Hill (Feb. 13, 2013), http://thehill.com/policy/finance/283021-ways-and-means-unveils-tax-reform-working-groups [https://perma.cc/H5NY-B4Y3].

[10] Camp Tax Plan Has Implications for Higher Education, Nat’l Assoc. of Student Personnel Administrators (Mar. 5, 2014), https://www.naspa.org/rpi/posts/camp-tax-plan-has-implications-for-higher-education [https://perma.cc/6Y52-6GD2].

[11] Martin Sullivan, If Camp’s Tax Reform Bill Won’t Pass, Why Is It So Important?, Forbes (Mar. 10, 2014), https://www.forbes.com/sites/taxanalysts/2014/03/10/if-camps-tax-reform-bill-wont-pass-why-is-it-so-important/ [https://perma.cc/5ED5-TB49].

[12] Mark Tower, U.S. Rep. Dave Camp: ‘I don’t have any plans’ after congressional term is up, MLive (last updated Apr. 25, 2014), https://www.mlive.com/news/saginaw/index.ssf/2014/04/us_rep_dave_camp_i_dont_have_a.html [https://perma.cc/Z7RS-M69J].

[13] See Bernie Becker, House Ways and Means to consider more tax breaks, The Hill (Mar. 23, 2014), http://thehill.com/policy/finance/207162-house-ways-and-means-to-consider-more-tax-breaks [https://perma.cc/LJN5-TVT3]; Richard Rubin, Child Tax Credit Gets Boost From House Republican Plan, Bloomberg (June 23, 2014), https://www.bloomberg.com/news/articles/2014-06-23/child-tax-credit-gets-boost-from-house-republican-plan [https://perma.cc/W5Z8-565Z].

[14] Howard Gleckman, Dave Camp’s Great Bonus Depreciation Flip-Flop, Forbes: Business in the Beltway (May 29, 2014), https://www.forbes.com/sites/beltway/2014/05/29/dave-camps-great-bonus-depreciation-flip-flop [https://perma.cc/79J4-5GEQ].

Volume 51, No. 1 Available Online

Volume 51, No. 1 of the Harvard Journal on Legislation, featuring articles by Congressman Clyburn (D-SC), Professors Alejandro E. Camacho of UC-Irvine Law School and Professor Robert L. Glicksman of George Washington University School of Law, Joseph Henchman and Christopher L. Stephens  of the Tax Foundation, and Professor Linda Sugin of Fordham Law School, was published on March 12th and is now available on the JOL website!

2014 Symposium Recap

Over lunch on February 11 and 12, the Harvard Law School Journal on Legislation hosted its annual symposium. This year’s topic, Drug Policy: Reality and Reform, proved timely and engaging to members of the Harvard Law community. Welcoming a standing-room-only audience to hear from some of the field’s leading experts and authorities, JOL succeeded in creating a meaningful dialogue around a topic seeped in critical statutory and policy implications.

The first panel opened with brief remarks from Jeffrey Miron, a Senior Lecturer on Economics at Harvard University who is known for his economic insights on the war on drugs and other related topics. The discussion, moderated by Harvard Law professor and former Deputy U.S. Attorney General Phillip Heymann, jumped immediately to brief historical accounts of the drug war, focusing specifically on an aspect which all panelists had dealt with in their careers: mandatory minimums. The perspectives ranged from academic theory to first-hand accounts from a former judge and the state director of a national non-profit organization working on the topic.

Former federal judge for the District of Massachusetts Nancy Gertner and John Pfaff, Associate Professor of Law at Fordham Law School, opened the conversation with detailed perspectives on the impact of mandatory minimums for drug offenses. Gertner recalled instances during her judicial career where she would have to sanction an offender per the mandatory minimum requirements and her frustrations, even when she felt that these minimums failed to produce the most equitable outcome. Gertner currently serves on the Board of Directors for The Sentencing Project, an organization working to advance the criminal justice system by promoting sentencing reform.

Professor Mark Osler of the University of St. Thomas Law School continued the thread of sentencing reform with his unique perspective of legal counsel in a critical sentencing case with far-reaching national impact. Osler served as lead counsel in Spears v. US where he successfully argued in the US Supreme Court that sentencing judges be allowed to reject the 100:1 ratio between crack and powder cocaine in the federal sentencing guidelines. Osler is renowned as a sentencing expert and has testified on the matter both in Congress and before the U.S. Sentencing Commission.

Finally, Barbara Dougan spoke on her experiences as state director for Families Against Mandatory Minimums (FAMM). Her organization works to reform sentencing laws in Massachusetts, and she was successful in contributing to the first-ever state drug sentencing reform in 2010. She urged her fellow panelists and the audience to remember that behind the statistics of drug sentences are individual human beings whose lives hang in the balance.

The conversation continued later in the evening during the documentary screening of “The House I Live in.” Students watched the condensed version of the film, which involved several personal narratives from offenders who had been sentenced under the mandatory minimum guidelines, experts in the field, and historians, among others.

The film was harshly critical of the drug war, and skeptically posed the question of how drugs become an actionable offense. The root of this issue, the film maintained, has unjust historical roots –  early privileged classes of individuals (i.e. the elite upper-class white) used drug offense enforcement as a means of discrimination against minority populations, sentencing the minorities in order to free up jobs. The film then traced the growth of this system, discussing the political enterprising of the “war on drugs” in the 1970s and 1980s and the concentration of drug trades in low-income urban areas. The film made no pretense of being a purely descriptive documentary—its intense anti-drug war advocacy was the focus throughout. One expert in the film even claimed the systematic discrimination in the current sentencing and prison system represents a modern-day Holocaust.

After the film, students engaged in a discussion with Osler and Dougan about some of the issues brought up by the documentary. Examining the range of topics and potential drug war solutions, from sentencing reform to outright legalization, the conversation concluded with an extremely pertinent and significant observation by Dougan. She noted how people talk about the extremes, mandatory minimums and a drug war on one end and sentencing reform and legalization on the other. But all of the steps in the middle, she said, represent progress. Dougan emphasized the lack of attention given to those small increments of progress that need to happen before we can get arrive at the other end of the spectrum.

One the second day of the symposium, the topic narrowed to the area of drug policy that has been dominating the headlines: marijuana.

With Colorado and Washington in the midst of implementing legal, recreational marijuana systems and other states such as Oregon and Alaska considering the move, the momentum would seem to be on the side of the reform movement. The standing-room only audience seemed to favor this approach as well. When moderator Professor Charles Nesson, himself a strong supporter of legal marijuana, polled the students in attendance, nary a hand went up in opposition to legalization.

The panel was more divided. Nesson’s support for legality was echoed by United States Congressman Jared Polis (D-Colorado), who was conferenced into the event via skype to offer introductory remarks. Panelist Ethan Nadelmann, Founder and Executive Director of the Drug Policy Alliance, posited that ending marijuana prohibition was a moral necessity to help stem the tide of broader drug war injustices. But the opponents of legalization put up a spirited defense in front of the skeptical audience.

Massachusetts State Senator John Keenan stressed the dangers of putting yet another substance with harmful and habit-forming effects in the hands of big corporations, who would react to the profit incentives in the market and sell cannabis aggressively. With such huge societal costs from tobacco and alcohol already, Keenan said, we should not rush to make things worse with a new commercialized drug. At the very least, he concluded, we should wait to see how the experiments in Colorado and Washington develop before we adopt legal marijuana nationwide.

Charles Stimson, Senior Legal Fellow at the Heritage Foundation agreed with Keenan and discussed what he called the often overlooked negative health effects of, and number of people receiving treatment for, heavy cannabis use.

Nadelmann countered that he’d be perfectly willing to wait and see how things went in Colorado and Washington if not for the fact that hundreds of thousands more Americans, a disproportionate percentage of them minorities, would be arrested for marijuana offenses in the interim. The bad effects of marijuana, he said, were not enough to justify the worse effects of so many needless arrests and disrupted lives.

There was no exit poll, so it is unclear whether Keenan and Stimson succeeded at changing some minds. The event as a whole, though, helped give a full and well-argued airing to the positions of all sides, as did the entire symposium. JOL hopes that students and faculty employ the perspectives they gained from the symposium as they evaluate and even participate in the debates surrounding American drug policy.

– 2015 Symposium Chairs Kellen Wittkop and Colin Ross