Plan B Forum

Earlier this year, Colorado made history by becoming the first US state to sell marijuana legally. Since then, the number of businesses offering a wide range of pot experiences has exploded, and some foresee a "Green Rush".



Marjorie is accompanying her husband on a business trip to Denver. She has a day free.

"If you're in France, you go on a wine tour, if you're in Colorado these days, you go on a pot tour," says Marjorie, 66.

Some cannabis tour companies cater for buses of bachelor parties. But Marjorie went for "Green Tripz" - a VIP tour in a "pot-friendly" limousine.

"This is a smoking vehicle, just don't blow it at me, that's rule number one," says Mike, Marjorie's driver and guide.

"I can't start smoking straight away because I'll be too loaded," says Marjorie.

At the beginning of the year, Colorado became the first state to legalise cannabis, after voters approved the change in 2012.

The result is not only the birth of new marijuana tour companies, but also a startling burgeoning of the cannabis industry as a whole.

Business graduates and young entrepreneurs such as Brett Schneider of the MaryJane Group have flooded into the state looking to get in on the action.

"I think the sky is the limit for the industry," he says.

"One of the things I've learned is that the real way to go about it is to be safe and responsible. If you hold those as your two brand attributes that you really stand true to, you can change the perception of cannabis."

First stop on Marjorie's tour is a dispensary that grows marijuana, one of the more than 250 cannabis retail outlets established in the city of Denver in just six months.

She is fascinated to hear about the different types of cannabis on offer and the different effects they could have on her state of mind.

Among her purchases at the first stop are the products that have become an unexpectedly huge hit in Colorado - cannabis "edibles". Edibles include the classic cannabis brownie but much more besides - marijuana candies, drinks and chocolate bars.

"I got a pre-rolled joint and a little tin of chocolates," Marjorie proudly announces. She takes a quick puff in the limo on the way to our next stop, which Mike describes as a "big surprise".

This extraordinary proliferation of cannabis outlets - and the new varieties of them - has angered opponents of marijuana legalisation.

"We are seeing in front of our eyes the creation of the next tobacco industry," says Kevin Sabet, one of the national founders of a group called Smart Approaches to Marijuana.

"This idea of control and regulation is a mirage. The industry is controlling what is happening," he says.

In particular, he wants edibles banned immediately, arguing they are relatively untested and contain high concentrations of the active ingredients of cannabis.

"The industry needs to take all these edibles off the shelves," Mr Sabet says. "The idea that you have to cut a chocolate bar in to 16 pieces in order for it to be safe is absurd. No one does that,"

Since legalisation, more people are seeking help in hospital emergency departments for acute cannabis-related illness, says Dr Christopher Caldwell, Director of Emergency Medicine at Denver Health.

"One trend we are seeing is much, much higher concentrations of marijuana in patients that we were never seeing before," he says.

He says most incidents come from overconsumption of marijuana edibles, though most patients recover completely with time.

"The other thing that we are seeing is folks' willingness to take just about anything somebody gives them with the introduction of, 'This will get you high,'" says Dr Caldwell.

As we pull up to "Dab Kingdom", a little house decorated on the outside to look like a kindergarten, we witness just what an effect that can have.

"'Dabs' are concentrated trichomes, the psychoactive part of the marijuana, so that's what's going to get you high," says the barman, showing us a little block of resin.

"It's kind of like taking marijuana's version of a shot," he says, to Marjorie's delight, though she had no idea what she was getting into.

He lights a blowtorch, places a small amount of the resin on a metal nail, and blasts it.

Marjorie inhales the vapours through a glass tube and holds it in. The effects are almost immediate.

She becomes uncommunicative. First giggly, and then quiet and apparently very queasy, she aborts her tour saying she needs to lie down in the dark, missing out on a trip to the bong and water pipe shop.

As other states consider following Colorado's example, it's clear that when it comes to weed, there are going to have to be limits.

There are approximately 88,000 deaths attributable to excessive alcohol use each year in the United States. This makes excessive alcohol use the 3rd leading lifestyle-related cause of death for the nation. Excessive alcohol use is responsible for 2.5 million years of potential life lost (YPLL) annually, or an average of about 30 years of potential life lost for each death. In 2006, there were more than 1.2 million emergency room visits and 2.7 million physician office visits due to excessive drinking. The economic costs of excessive alcohol consumption in 2006 were estimated at $223.5 billion.

Short-Term Health Risks
Excessive alcohol use has immediate effects that increase the risk of many harmful health conditions. These immediate effects are most often the result of binge drinking and include the following—

Injuries, including traffic injuries, falls, drownings, burns, and unintentional firearm injuries.

Violence, including intimate partner violence and child maltreatment. About 35% of victims report that offenders are under the influence of alcohol. Alcohol use is also associated with 2 out of 3 incidents of intimate partner violence. Studies have also shown that alcohol is a leading factor in child maltreatment and neglect cases, and is the most frequent substance abused among these parents.

Risky sexual behaviors, including unprotected sex, sex with multiple partners, and increased risk of sexual assault. These behaviors can result in unintended pregnancy or sexually transmitted diseases.

Miscarriage and stillbirth among pregnant women, and a combination of physical and mental birth defects among children that last throughout life.

Alcohol poisoning, a medical emergency that results from high blood alcohol levels that suppress the central nervous system and can cause loss of consciousness, low blood pressure and body temperature, coma, respiratory depression, or death.

Long-Term Health Risks
Over time, excessive alcohol use can lead to the development of chronic diseases, neurological impairments and social problems. These include but are not limited to—

Neurological problems, including dementia, stroke and neuropathy.

Cardiovascular problems, including myocardial infarction, cardiomyopathy, atrial fibrillation and hypertension.

Psychiatric problems, including depression, anxiety, and suicide.

Social problems, including unemployment, lost productivity, and family problems.

Cancer of the mouth, throat, esophagus, liver, colon, and breast. In general, the risk of cancer increases with increasing amounts of alcohol.

Liver diseases, including—
Alcoholic hepatitis.
Cirrhosis, which is among the 15 leading causes of all deaths in the United States.
Among persons with Hepatitis C virus, worsening of liver function and interference with medications used to treat this condition.

Other gastrointestinal problems, including pancreatitis and gastritis.

In its scientific and medical evaluation, DHHS concluded that “research on the medical use of marijuana ha[d] not progressed to the point that marijuana [could] be considered to have a ‘currently accepted medical use’ or a ‘currently accepted medical use with severe restrictions.’” Id. at 40,560. As noted above, DHHS’ recommendations are binding on the DEA insofar as they rest on scientific and medical determinations. 21 U.S.C. § 811(b). After an exhaustive examination of the issue, the DEA, adhering to DHHS’ recommendation, reached the following conclusion:
To establish accepted medical use, the effectiveness of a drug must be established in well-controlled, well- designed, well-conducted, and well-documented scientific studies, including studies performed in a large number of patients (57 FR 10499, 1992). To date, such studies have not been performed. The small clinical trial studies with limited patients and short duration are not sufficient to establish medical utility. Studies of longer duration are needed to fully characterize the drug’s efficacy and safety profile. Scientific reliability must be established in multiple clinical studies. Furthermore, anecdotal reports and isolated case reports are not adequate evidence to support an accepted medical use of marijuana (57 FR 10499, 1992). The evidence from clinical research and reviews of earlier clinical research does not meet this standard.

We believe that drug prohibition is the true cause of much of the social and personal damage that has historically been attributed to drug use. It is prohibition that makes these drugs so valuable – while giving criminals a monopoly over their supply. Driven by the huge profits from this monopoly, criminal gangs bribe and kill each other, law enforcers, and children. Their trade is unregulated and they are, therefore, beyond our control.

History has shown that drug prohibition reduces neither use nor abuse. After a rapist is arrested, there are fewer rapes. After a drug dealer is arrested, however, neither the supply nor the demand for drugs is seriously changed. The arrest merely creates a job opening for an endless stream of drug entrepreneurs who will take huge risks for the sake of the enormous profits created by prohibition. Prohibition costs taxpayers tens of billions of dollars every year, yet 40 years and some 40 million arrests later, drugs are cheaper, more potent and far more widely used than at the beginning of this futile crusade.

We believe that by eliminating prohibition of all drugs for adults and establishing appropriate regulation and standards for distribution and use, law enforcement could focus more on crimes of violence, such as rape, aggravated assault, child abuse and murder, making our communities much safer. We believe that sending parents to prison for non-violent personal drug use destroys families. We believe that in a regulated and controlled environment, drugs will be safer for adult use and less accessible to our children. And we believe that by placing drug abuse in the hands of medical professionals instead of the criminal justice system, we will reduce rates of addiction and overdose deaths.

MOST people would agree that some drugs are worse than others: heroin is probably considered to be more dangerous than marijuana, for instance.

Because governments formulate criminal and social policies based upon classifications of harm, a new study published by the Lancet on November 1st makes interesting reading. Researchers led by Professor David Nutt, a former chief drugs adviser to the British government, asked drug-harm experts to rank 20 drugs (legal and illegal) on 16 measures of harm to the user and to wider society, such as damage to health, drug dependency, economic costs and crime. Alcohol is the most harmful drug in Britain, scoring 72 out of a possible 100, far more damaging than heroin (55) or crack cocaine (54).

It is the most harmful to others by a wide margin, and is ranked fourth behind heroin, crack, and methamphetamine (crystal meth) for harm to the individual. The authors point out that the model's weightings, though based on judgment, were analysed and found to be stable as large changes would be needed to change the overall rankings.

The Deputy Attorney General Washington, D.C. 20530
February 14, 2014

MEMORANDUM FOR ALL UNITED STATES ATTORNEYS

FROM: James M. Cole, Deputy Attorney General
SUBJECT : Guidance Regarding Marijuana Related Federal Crimes

On August 29, 2013, the Department issued guidance (August 29 guidance) to federal prosecutors concerning marijuana enforcement under the Controlled Substances Act (CSA). The August 29 guidance reiterated the Department’s commitment to enforcing the CSA consistent with Congress’ determination that marijuana is a dangerous drug that serves as a significant source of revenue to large-scale criminal enterprises, gangs, and cartels. In furtherance of that commitment, the August 29 guidance instructed Department attorneys and law enforcement to focus on the following eight priorities in enforcing the CSA against marijuana-related conduct:

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.
Under the August 29 guidance, whether marijuana-related conduct implicates one or more of these enforcement priorities should be the primary question in considering prosecution under the CSA. Although the August 29 guidance was issued in response to recent marijuana legalization initiatives in certain states, it applies to all Department marijuana enforcement nationwide. The guidance, however, did not specifically address what, if any, impact it would have on certain financial crimes for which marijuana-related conduct is a predicate.

The provisions of the money laundering statutes, the unlicensed money remitter statute, and the Bank Secrecy Act (BSA) remain in effect with respect to marijuana-related conduct. Financial transactions involving proceeds generated by marijuana-related conduct can form the basis for prosecution under the money laundering statutes (18 U.S.C. §§ 1956 and 1957), the unlicensed money transmitter statute (18 U.S.C. § 1960), and the BSA. Sections 1956 and 1957 of Title 18 make it a criminal offense to engage in certain financial and monetary transactions with the proceeds of a “specified unlawful activity,” including proceeds from marijuana-related violations of the CSA. Transactions by or through a money transmitting business involving funds “derived from” marijuana-related conduct can also serve as a predicate for prosecution under 18 U.S.C. § 1960. Additionally, financial institutions that conduct transactions with money generated by marijuana-related conduct could face criminal liability under the BSA for, among other things, failing to identify or report financial transactions that involved the proceeds of marijuana-related violations of the CSA. See, e.g., 31 U.S.C. § 5318(g). Notably for these purposes, prosecution under these offenses based on transactions involving marijuana proceeds does not require an underlying marijuana-related conviction under federal or state law.

As noted in the August 29 guidance, the Department is committed to using its limited investigative and prosecutorial resources to address the most significant marijuana-related cases in an effective and consistent way. Investigations and prosecutions of the offenses enumerated above based upon marijuana-related activity should be subject to the same consideration and prioritization. Therefore, in determining whether to charge individuals or institutions with any of these offenses based on marijuana-related violations of the CSA, prosecutors should apply the eight enforcement priorities described in the August 29 guidance and reiterated above. Footnote 1. For example, if a financial institution or individual provides banking services to a marijuana-related business knowing that the business is diverting marijuana from a state where marijuana sales are regulated to ones where such sales are illegal under state law, or is being used by a criminal organization to conduct financial transactions for its criminal goals, such as the concealment of funds derived from other illegal activity or the use of marijuana proceeds to support other illegal activity, prosecution for violations of 18 U.S.C. §§ 1956, 1957, 1960 or the BSA might be appropriate. Similarly, if the financial institution or individual is willfully blind to such activity by, for example, failing to conduct appropriate due diligence of the customers’ activities, such prosecution might be appropriate. Conversely, if a financial institution or individual offers services to a marijuana-related business whose activities do not implicate any of the eight priority factors, prosecution for these offenses may not be appropriate.

The August 29 guidance rested on the expectation that states that have enacted laws authorizing marijuana-related conduct will implement clear, strong and effective regulatory and enforcement systems in order to minimize the threat posed to federal enforcement priorities. Consequently, financial institutions and individuals choosing to service marijuana-related businesses that are not compliant with such state regulatory and enforcement systems, or that operate in states lacking a clear and robust regulatory scheme, are more likely to risk entanglement with conduct that implicates the eight federal enforcement priorities. Footnote 2. In addition, because financial institutions are in a position to facilitate transactions by marijuana-related businesses that could implicate one or more of the priority factors, financial institutions must continue to apply appropriate risk-based anti-money laundering policies, procedures, and controls sufficient to address the risks posed by these customers, including by conducting customer due diligence designed to identify conduct that relates to any of the eight priority factors. Moreover, as the Department’s and FinCEN’s guidance are designed to complement each other, it is essential that financial institutions adhere to FinCEN’s guidance. Footnote 3. Prosecutors should continue to review marijuana-related prosecutions on a case-by-case basis and weigh all available information and evidence in determining whether particular conduct falls within the identified priorities.

As with the Department’s previous statements on this subject, this memorandum is intended solely as a guide to the exercise of investigative and prosecutorial discretion. This memorandum does not alter in any way the Department’s authority to enforce federal law, including federal laws relating to marijuana, regardless of state law. Neither the guidance herein nor any state or local law provides a legal defense to a violation of federal law, including any civil or criminal violation of the CSA, the money laundering and unlicensed money transmitter statutes, or the BSA, including the obligation of financial institutions to conduct customer due diligence. Even in jurisdictions with strong and effective regulatory systems, evidence that particular conduct of a person or entity threatens federal priorities will subject that person or entity to federal enforcement action, based on the circumstances. This memorandum is not intended, does not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law by any party in any matter civil or criminal. It applies prospectively to the exercise of prosecutorial discretion in future cases and does not provide defendants or subjects of enforcement action with a basis for reconsideration of any pending civil action or criminal prosecution. Finally, nothing herein precludes investigation or prosecution, even in the absence of any one of the factors listed above, in particular circumstances where investigation and prosecution otherwise serves an important federal interest.

Footnotes

1. The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is issuing concurrent guidance to clarify BSA expectations for financial institutions seeking to provide services to marijuana-related businesses. The FinCEN guidance addresses the filing of Suspicious Activity Reports (SAR) with respect to marijuana-related businesses, and in particular the importance of considering the eight federal enforcement priorities mentioned above, as well as state law. As discussed in FinCEN’s guidance, a financial institution providing financial services to a marijuana-related business that it reasonably believes, based on its customer due diligence, does not implicate one of the federal enforcement priorities or violate state law, would file a “Marijuana Limited” SAR, which would include streamlined information. Conversely, a financial institution filing a SAR on a marijuana-related business it reasonably believes, based on its customer due diligence, implicates one of the federal priorities or violates state law, would be label the SAR “Marijuana Priority,” and the content of the SAR would include comprehensive details in accordance with existing regulations and guidance.

2. For example, financial institutions should recognize that a marijuana-related business operating in a state that has not legalized marijuana would likely result in the proceeds going to a criminal organization.

3. Under FinCEN’s guidance, for instance, a marijuana-related business that is not appropriately licensed or is operating in violation of state law presents red flags that would justify the filing of a Marijuana Priority SAR.