Prescription drug prices continue to climb, putting the pinch on consumers. Some older Americans appear to be seeking an alternative to mainstream medicines that has become easier to get legally in many parts of the country. Just ask Cheech and Chong.
Research published Wednesday found that states that legalized medical marijuana — which is sometimes recommended for symptoms like chronic pain, anxiety or depression — saw declines in the number of Medicare prescriptions for drugs used to treat those conditions and a dip in spending by Medicare Part D, which covers the cost on prescription medications.
Because the prescriptions for drugs like opioid painkillers and antidepressants — and associated Medicare spending on those drugs — fell in states where marijuana could feasibly be used as a replacement, the researchers said it appears likely legalization led to a drop in prescriptions. That point, they said, is strengthened because prescriptions didn’t drop for medicines such as blood-thinners, for which marijuana isn’t an alternative.
The study, which appears in Health Affairs, examined data from Medicare Part D from 2010 to 2013. It is the first study to examine whether legalization of marijuana changes doctors’ clinical practice and whether it could curb public health costs.
The findings add context to the debate as more lawmakers express interest in medical marijuana. This year, Ohio and Pennsylvania passed laws allowing the drug for therapeutic purposes, making it legal in 25 states, plus Washington, D.C. The approach could also come to a vote in Florida and Missouri this November. A federal agency is considering reclassifying medical marijuana under national drug policy to make it more readily available.
Medical marijuana saved Medicare about $165 million in 2013, the researchers concluded. They estimated that, if medical marijuana were available nationwide, Medicare Part D spending would have declined in the same year by about $470 million. That’s about half a percent of the program’s total expenditures.
In a city with dispensaries as common as coffee shops, Denver is undoubtedly the epicenter of the legal marijuana movement. And if you’re in the business of bud, it’s a good place to be: Colorado accounted for a third of the country’s 2.7 billion dollar marijuana market last year.
But with being America’s fastest growing industry, comes growing pains. Marijuana is still illegal on the federal level, which has led to conflicting state laws, restrictive regulations, and endless problems for cash-only marijuana business owners and operators.
VICE News meets the investors cashing in on the green rush and finds out how fractured marijuana laws are causing the American market to miss out.
In this excerpt, VICE News visits OrganiGram, a licensed medical marijuana grow operation in Moncton, Canada, where CEO Denis Arsenault is hosting a tour for potential investors from major Canadian banks.
Watch “Inside America’s Billion-Dollar Weed Business: The Grass is Greener” – http://bit.ly/1ClaRLb
Legalized marijuana sales are spreading across the U.S., but the industry’s businesses are facing steep federal tax bills thanks to a wrinkle in the tax code dating back to the 1980’s.
Millions of Americans rushed to finish their taxes in the hours just before the midnight deadline Wednesday. But for business-owners in the cannabis industry, a years-long tax battle is far from over.
Supporters of legal marijuana cited tax revenue as big factor in pushing through laws that have allowed medical marijuana sales in 23 states and recreational pot in four. But the businesses that grow and sell marijuana in those states are also staring at a steep federal tax bill, especially when compared with businesses in other industries.
That’s because of a little-known wrinkle in U.S. tax law that has turned out to be a major problem for pot businesses, even when operating where sales of medical or recreational marijuana are legal under state law. In 1982, Congress enacted Section 280E of the federal Tax Code to prevent drug traffickers from being able to claim business expenses related to illicit dealings on their federal tax returns. (Seriously, lawmakers decided to close the loophole after a drug dealer successfully wrote off travel expenses as well as the cost of a scale for weighing drugs.)
Of course, 280E predates the recent wave of marijuana legalization on a state-level by a couple of decades, but the federal laws outlawing marijuana remain in effect. That leaves marijuana cultivators and dispensary owners across the country in a tricky situation in which they may be operating legally under the laws of their respective states while the federal government — including the Internal Revenue Service — still technically consider them outlaws.
With medical marijuana legal in 23 states and Washington, D.C., there are now millions of card-carrying cannabis users working at companies across the U.S. While four states and the District have legalized recreational marijuana use, pot is still illegal under federal law, and many business owners still subscribe to the plant’s Reefer Madness stigma and don’t want to allow people to smoke on the job. For some of those owners, that can mean getting sued for failing to accommodate an employee who has a medical condition.
Regardless of how you feel about marijuana, there are certain rules employees and employers need to follow when it comes to drugs in the workplace. If you make a mistake, you could find yourself in court. Todd Wulffson, a partner at California-based employment and labor law firm Carothers DiSante & Freudenberger, is one of the many lawyers who have been busy defending employers in these types of cases. Wulffson says that to protect your business you need to update your employment policies and human resources programs, and train all managers.
First, employers need to be familiar with the laws that have been passed in their states and consider a drug policy that doesn’t prohibit employees from using cannabis on their own time. With 86 percent of Americans supporting medical marijuana, an overly restrictive policy may chase some of your workers to another employer. Marijuana, while still classified as a Schedule I drug without medical use, does have medical benefits, and a bipartisan bill to make medical marijuana legal on the federal level has been introduced in the Senate.
Until then, employers need to take steps to avoid becoming a target of an employee lawsuit (whether the employee would have a strong case or not). “There are four scenarios that play out in these types of lawsuits that I see over and over again,” Wulffson says.
A trio of high-profile senators this week unveiled a package of drug reforms that would effectively end the federal war on medical marijuana once and for all. The bill, from Republican Rand Paul and Democrats Cory Booker and Kirsten Gillibrand, wouldn’t legalize medical weed across the country, but it would remove the threat of federal prosecution for patients who use it in states where it is legal. It would also represent a federal acknowledgment of weed’s medicinal potential—something the U.S. government has repeatedly refused to concede since Richard Nixon launched the war on drugs in the 1970s.
That Paul, Booker, and Gillibrand have teamed up on the bill is telling, and the good news for the pro-pot crowd comes in both the chicken-and-egg variety. On the one hand, as rising stars on the national stage, all three will have ample opportunity to further their cause—particularly Paul, who is expected to officially jump into the race for the GOP presidential nominationlater this year. On the other, it’s unlikely that the trio would have made this a priority if they were the least bit nervous that their efforts would come back to bite them. And they have good reason to be confident in that regard: A majority of Americans back full-scale marijuana legalization, and even those who don’t tend to believe that it’s simply a matter of when, not if,the nation’s eight-decade-long prohibition of pot comes to an end.
Still, believing legalization is inevitable doesn’t make it so. The question, then, is how we get from the present—with Congress bullying Washington, D.C., officials in a bid to stop them from following the will of voters and making weed legal—to full, nationwide legalization?
Sens. Rand Paul (R-KY), Cory Booker (D-NJ), and Kirsten Gillibrand (D-NY) on Tuesday will introduce a bill that would legalize medical marijuana at the federal level.
The bill would reclassify marijuana in the federal scheduling system from schedule 1 to 2.
The bill would also permanently prohibit the federal government from shutting down medical marijuana operations in states where pot is legal for medicinal purposes.
The bill would eliminate federal restrictions on medical marijuana
Sen. Rand Paul (R-KY) is one of three senators sponsoring the medical marijuana bill. (Alex Wong/Getty Images)
The bill is the first time in history the Senate will consider allowing medical pot, according to the Marijuana Policy Project.
A Senate aide, who walked me through the proposal, said the bill would prevent the Drug Enforcement Administration and other federal agencies from intervening in states’ medical marijuana laws. Since states began enacting their own medical marijuana laws, the DEA has regularly raided and shut down state-legal medical marijuana dispensaries, because pot remains illegal for all purposes under federal law.
A spending deal attempted to end federal interference in December, but the provision in that deal wasn’t permanent. Neither the spending deal nor the new bill prevents federal agencies from intervening with states’ marijuana legalization laws, although the Obama administration has deprioritized the enforcement of pot prohibition in states where the drug is legal.
The proposal reclassifies marijuana from schedule 1 to 2
The Paul-Booker-Gillibrand proposal also goes further than the spending deal by reclassifying marijuana from schedule 1 to 2. Under schedule 1, the federal government considers marijuana to have no medical value and some potential for abuse. Under schedule 2, the feds would acknowledge marijuana has somemedical value but a high potential for abuse. So the bill would force the federal government to acknowledge marijuana’s medical value for the first time.
The legislation would also exclude CBD, a nonpsychoactive compound with medicinal properties that’s found in pot, from the definition of marijuana.
The bill would also attempt to unlock more marijuana-related research. It would require the attorney general, acting through the DEA, to issue at least three licenses to FDA-approved research institutions for pot-related studies. And it would eliminate the Public Health Service review for marijuana research, which can sometimes add months or even years to a study’s approval time.
The Senate aide said the bill was necessary in light of movement at the state level to legalize medical marijuana and recommendations from several medical associations, including the American Academy of Pediatrics, to reschedule the drug to allow for more research. It’s an attempt, in other words, to bring the federal government in line with a growing number of states and medical groups.
She angered medical marijuana advocates by opposing a voter initiative last year.
MIAMI — Democratic National Committee Chairwoman Debbie Wasserman Schultz’s interest in running for U.S. Senate has encountered strong resistance from a usual ally of her party: medical-marijuana activists.
Because of her congressional votes and her criticisms of a Florida medical-marijuana initiative last year, four political groups that advocate for prescription cannabis and drug decriminalization vowed to campaign against the Florida representative if she sought the Senate in 2016.
“She’s voted repeatedly to send terminally ill patients to prison. And we’re certainly going to make sure Floridians know that – not to mince words,” said Bill Piper, national affairs director with the Washington-based Drug Policy Alliance, which has received funding from liberal luminaries such as George Soros.
“This issue is evolving very quickly and hopefully she will evolve,” Piper said. “But if she doesn’t, you can expect medical marijuana patients and supporters to dog her on the campaign trail.”
The 43-year-old war on drugs had never seen such a barrage of opposition as it did in 2014, with successful marijuana legalization initiatives in several U.S. states, California’s historic approval of sentencing reform for low level drug offenders and world leaders calling for the legal regulation of all drugs — all of which cement the mainstream appeal of drug policy alternatives and offer unprecedented momentum going into 2015.
Oregon, Alaska and Washington D.C. joined Colorado and Washington state in legalizing recreational marijuana and will soon start seeing the tax benefit from the estimated $41 billion that U.S. consumers spend annually on marijuana. That these states voted for legalization during a Republican romp in November elections underscores the conviction among drug policy analysts that legalization has entered the mainstream culture. It’s a matter of time, they say, before more states — and countries — follow suit.
Proof of that allure lies in the South, where conservative states had kept their distance from the marijuana legalization until recently. Legalization activists have spearheaded decriminalization and medical marijuana campaigns in Texas, Alabama and Georgia, with initial bi-partisan support in some state legislatures, and 2015 promises further momentum. California, though, remains the state to watch. If the most populous state, and the world’s 8thlargest economy, legalizes cannabis use via ballot initiative during the 2016 presidential elections, as it’s expected to do, it may lead to a dramatic chain reaction across the country — following the path of the gay marriage movement — and ultimately force the federal government to revisit its policy on the drug.
And California is not idly waiting for 2016 — in November the state made a salvo on another drug war front. Voters approved Proposition 47, which will reduce penalties for low-level drug crimes. The possession of small amounts of cocaine and heroin, for example, will soon be treated as misdemeanors, not felonies — a move that is expected to affect about 40,000 offenders annually and save hundreds of millions of dollars.
The coming year will also witness implementation of a landmark decision in 2014 by the U.S. Sentencing Commission, which acted on the recommendation of Attorney General Eric Holder. Starting in November, low level drug offenders — an estimated 46,000 prisoners who have spent at least 10 years in prison — will be released from prison as part of a clemency initiative to reduce sentences for non-violent drug offenders.
And there are other signs Washington may be shifting direction in the drug war. Tucked away in the $1.1 trillion spending bill is an amendment that prohibits the Justice Department from using federal funds to target state-run medical marijuana programs —a major shift in federal drug policy. The provision also keeps federal agents from arresting people involved in pot businesses who are complying with state laws.
Expect similar legislative efforts in Washington during 2015, say drug policy watchers. There is no way Congress will take up full legalization yet, especially with the GOP still divided on cannabis. But Congress will continue to introduce reform-centered legislation — though probably with not enough support to see passage — on issues like drug sentencing, industrial hemp use and medical access to marijuana.
Last night wasn’t a good night for Democrats. But when asked instead to vote on issues that many Democrats care about, voters backed progressive ballot initiatives around the country. This is particularly true in the area of criminal justice, which has become a rare point of bipartisanship among some Democrats and Republicans. In a spate of ballot initiatives around the country, voters sent a signal that they are ready to reform a system that has sent more people in the United States to jail than in any other country in the world.
Each of these initiatives embraces a notion known as “Smart on Crime.” The phrase is a replacement for the old adage of “tough-on-crime” and means that, rather than threatening heavy punishments for a long list of so-called crimes, jurisdictions focus instead on doing what actually, empirically, makes communities safer. In reducing or eliminating penalties for some actions that would be better addressed through public health or rehabilitative policies, jurisdictions can focus more resources on serious, violent crimes. Or, as U.S. Attorney General Eric Holder put it last year, “Too many people go to too many prisons for far too long for no good law enforcement reason.”
Alaska, Oregon, and Washington, D.C. put pot legalization on the ballot, and all three passed it. As of last night, there are now more than double the number of jurisdictions that have legalized marijuana for recreational use, even as it remains federally prohibited. In Washington, D.C., where African Americans make up almost half the population, the margin of victory was staggering, with voters supporting the measure by a ratio of 7 to 3.
Alaska and Oregon were not as certain to pass the initiatives. But both passedby margins of several points ballot initiatives that don’t just legalize possession and growth of pot, but also its sale and taxation. (Washington, D.C. is not permitted to tax and regulate by ballot initiative, and lawmakers plan to follow up with a bill to achieve this).
In each of these jurisdictions, different messages dominated. In libertarian-heavy Alaska, where pot policy was already liberalized, the focus of the campaign was that marijuana is no less safe than alcohol, and those who use it shouldn’t be penalized differently. In Washington, D.C., by contrast, a significant population of very liberal gentrifiers mixed with longtime African American residents who are sick and tired of criminal justice policies that arrest African Americans for pot at eight times the rate of whites.
Majorities also voted in favor of medical marijuana. In Guam, a measure to pass medical marijuana passed early in the day. And in Florida, a medical marijuana ballot initiative that became heavily politicized with a well-funded opposition movement failed, but only because it required a 60 percent vote to amend the Constitution. Despite the initiative’s failure, a solid majority — 58 percent — voted in favor of the measure. The initiative’s loss is still a bit of a surprise, because polls have shown that support among Florida residents for the idea of medical marijuana is as high as 90 percent. In fact, lawmakers passed a much narrower medical marijuana provision last year that, remarkably, had the support of almost every state lawmaker. If their goal in passing it was to pick off support for the more expansive measure on the ballot, they succeeded.
Rounding off the evening, two cities in New Mexico — Santa Fe and Bernalillo — voted to decriminalize pot.
The statewide initiatives won’t go into effect today. There will be months of policy-making, political wrangling, and pushback from Congress. But majorities in every jurisdiction where the question was posed voted to reduce the penalties for marijuana.
In California, voters passed an initiative that embraces that Smart on Crime notion in a more comprehensive way. Proposition 47 reduces the penalties for low-level nonviolent offenses including many drug and property crimes, on the notion that locking people up who haven’t done anything dangerous doesn’t do anybody any good. The initiative changes a number of offenses from felonies to misdemeanors, meaning the sentence for conviction is much lower, and that the impact on an individual’s criminal record won’t be as significant. Many job and voting restrictions, for example, only apply to felonies. Offenses that will be affected by the measure include drug possession offenses, as well as shoplifting, credit card fraud, and forgery.
The initiative also means that some 10,000 individuals already behind bars will be eligible for re-sentencing. This is particularly relevant for California, which has been struggling to reduce its prison population since the U.S. Supreme Court declared its prisons so overcrowded that they violate the Eighth Amendment prohibition against cruel and unusual punishment.
With a passage rate of 58 percent, the initiative may serve as a model for other states. The state already decriminalized marijuana possession several years ago, and has seen arrests go down without significant adverse consequences.
In New Jersey, Democrats and Republicans have joined forces over the past year to pass a package of measures that ensure those behind bars are those who pose a greater danger to society, not the ones who can’t afford to pay bail. Lawmakers took up the issue after a study found that some 40 percent of those who are jailed after they are arrested but before their trial or conviction are there simply because they were poor.
The idea behind bail is that individuals who are charged with a crime put up a bond of significant value to increase the likelihood that they will return for future court dates. But the system creates a class divide. Many are charged with bail under $2,500 — a sum that many wealthier individuals can pay, but is completely out of reach for low-income defendants. Those who end up stuck behind bars pending their trial do not have the same capacity to defend their case. They are more likely to eventually plead guilty, and many have called pretrial detention “ransom” intended to extract such guilty pleas.
Two companion bills were passed by the New Jersey legislature to make the bail system less about how much money defendants have, and more about whether they pose a danger to the public. One bill passed by the legislature took income out of the equation for less dangerous offenders by conducting risk assessments of defendants, and allow those not deemed dangerous to participate in a monitoring program until their trail, rather than to sit in jail. A second bill put Tuesday’s ballot initiative before the voters. That ballot initiative asked voters to give judges power to hold the most dangerous offenders behind bars before their trial — even if they could afford bail. By passing this measure Tuesday, the bail reform package is now fully in effect.
The idea of “Smart on Crime” initiatives is to eliminate the counterproductive criminal policies and re-allocate resources toward those policies that actually reduce violent crime. To that end, some might also consider it a win that in Washington State (where pot is already legal), voters both approved a measureto close a loophole in firearms background checks, and rejected a competing ballot initiative that would have narrowed the state’s gun laws. The measure means that gun sellers and buyers can’t get around limitations on who can own a guy by selling them in private online sales or at gun shows.