The California Marijuana Legalization Initiative Won’t Create the Next Big Tobacco

Today the UCSF Center for Tobacco Control Research and Education released a report entitled A Public Health Analysis of Two Proposed Marijuana Legalization Initiatives for the 2016 California Ballot: Creating the New Tobacco Industry. Coming just a day after the California Medical Association endorsed the Adult Use of Marijuana Act, the new report is much more critical of the AUMA, suggesting many similarities between marijuana and tobacco. I am a fan of the Tobacco Research Center’s work, and I agree with them that marijuana is not harmless, but I disagree with them that this will create the next Big Tobacco just because the ballot initiative doesn’t contain all the policies they would like to see.  I don’t think the ballot initiative process is the place to nail down particular policies. I think rulemaking is going to be an ongoing process, and we shouldn’t get locked in now—especially since we don’t know enough about the future regulated market.

A couple of caveats at the outset. First, I am a former member of the Blue Ribbon Commission on Marijuana Policy, serving as Chair of the Public Safety Working Group, and, as such, I was involved in the development of many of the recommended policies that were subsequently adopted by the AUMA. I attended a meeting with the authors of the report, and I disagreed with them then that we had to replicate everything from tobacco regulation (though, I will reiterate, I think some of the lessons are valuable). I think I’m clear-eyed about the limitations of the Commission (and my own knowledge), but take this with however many grains of salt you deem necessary. Second, I’m not a public health expert, just a criminal law professor, so I can’t do anything like a deep dive into the public health studies. (That said, I will say, as an observer, that the studies seem to me to be far more equivocal than what we now know about tobacco.)

My main objections to the Tobacco Center’s report can be divided into two categories: whether the post-legalized marijuana industry is on the way to becoming Big Tobacco, and whether the ballot initiative process is the place to nail down policies.

I’m not a fan of the tobacco industry, but the main problem I have with it is this: they lied. They knew their products were killing people and they did everything they could to hide it. I think many people feel the same way, and certainly state of mind (scienter/mens rea) is a bit big part of criminal liability. There isn’t anything like that on the marijuana side. There is no evidence that marijuana sellers are hiding smoking gun evidence from their own studies of the harms or addictive qualities of marijuana. They don’t have armies of lawyers working on their side to throw procedural hurdles in the way of discovery. They aren’t a juggernaut remotely like Big Tobacco, which had a degree of resources and sophistication that shored up a losing position for years.  This doesn’t mean that marijuana is good for you, or a vitamin, or anything else. But the reason I hate Big Tobacco is not just that they were killing people, but that they knew about it and lied about it.

The structure of the marijuana market is also totally different. Big Tobacco was big because there were big companies controlling it. The marijuana market is fragmented. There is no company with the size and scope of Philip Morris/Altria, and there isn’t going to be unless the federal government legalizes. Publicly traded companies that are federally regulated are not going to invest in marijuana without federal action—so the fact that tobacco companies have been interested in marijuana for decades is interesting but not relevant. Even if the federal regime changes, there will either be superseding federal regulations—making state regulations preempted—or existing state constraints on ownership (limiting licenses, limiting concentration, requiring residency) will prevent market concentration.  (Happy to talk in comments about the new “brands” of pot from Willie Nelson, Snoop Lion, etc.–they are mostly IP/branding plays, with nothing like the integration of RJR or Philip Morris, or even the franchising of McDonald’s, which supplies food to franchisees.)  The size of the legal marijuana market might be large (though I’m skeptical that post-prohibition prices will be anything like they are now), but the Big Tobacco story also has to have market concentration. Without concentration, coordination Big-Tobacco-style is much more difficult.

The report is also critical of industry participation, seeing that as leading to capture. I think this is a legitimate concern, but I also think industry participation now is crucial as we transition from a black (really, gray) market to a legal one. I want to make sure that the illegal grows that poison land, water, and the fish and wildlife that live there are rooted out, and that there are incentives for the current industry to move towards regulation (and to report pollution by the unregulated). I think to make sure that growers, grows, and sellers move towards a regulated market, we need to talk to them to hear their concerns. I don’t want their concerns to dominate, but I think the implementation of regulations will be more effective if the people being regulated are able to provide input. I don’t envision them having a veto, and I certainly don’t want them driving the agenda. I don’t think the AUMA gives them that power.

Here’s why: much of what the AUMA proposes involves ordinary rulemaking by ordinary government bodies following ordinary procedures. Many of the details are delegated. This is not a proposition that micromanages. The BRC was explicit in its report that a ballot initiative would be a first step, not the final step, in regulating marijuana. Propositions are much harder to change than ordinary rulemaking. We don’t know what the post-AUMA world might look like, so it’s important to maintain flexibility. It might be similar to tobacco in some respects, in which case, by all means, I will support efforts to import the lessons of tobacco regulation into the marijuana context. But I think the usage patterns of marijuana are different (many tobacco users smoke a pack a day; I don’t see the same being true of joint smokers, but please correct me if I’m wrong), I think the social norms are different, and I think there’s a lot we just don’t know yet.

Besides, it’s not as though marijuana is completely unregulated under the AUMA. You can buy tobacco at the 7/11. You can’t buy marijuana except at certain stores that only sell marijuana, and localities can regulate these businesses further. You can buy an unlimited amount of tobacco. You can’t buy an unlimited amount of marijuana. The smoking age is currently 18 in California (though there was a move to raise it to 21). It’s 21 for marijuana. But none of these baseline rules precludes further regulation on the state or the local level. Most of what the proposition does is simply to move marijuana out of the criminal justice realm, a move the report’s authors agree with.

I really do think there will be public health issues involving a regulated market; I also think a regulated market has a much better chance of addressing those issues than our current one. I don’t think we know enough simply to assume that a failure to copy tobacco regulations is a mistake. I don’t think that means I’m naïve about the harms, that I want people to increase use, or that there aren’t risks to creating an industry. In fact, I really welcome the Tobacco Center’s perspective. I just think that these issues are best resolved via the regulatory process—not at the ballot initiative level—at which point I look forward to hearing more from them.

[Cross-posted at The Reality-Based Community]

David Ball

David Ball is an Associate Professor at Santa Clara School of Law. He writes and teaches primarily in the fields of criminal law and criminal procedure, with a special focus on sentencing and corrections. He also serves as the Co-Chair of the Corrections Committee of the American Bar Association.