Thank you very much.
My name is Sam Kamin and I am the Vicente Sederberg Professor of Marijuana Law and Policy at the University of Denver, Sturm College of Law. I hold a J.D. and a Ph.D. from the University of California at Berkeley and I've been teaching both constitutional and criminal law for more than 18 years.
In 2012 I was asked by Governor Hickenlooper to serve on the task force that he was appointing to implement amendment 64 that legalized marijuana for adult use in Colorado.
The next year I was appointed by California's lieutenant governor, Gavin Newsom, to serve in a similar capacity on a blue ribbon commission that he put together in California to consider best practices for marijuana regulation and legalization.
Since that time I've continued to consult with both state and local governments about marijuana regulation. I've written extensively on the interaction between state and federal law in this area, and I've taught law students courses on marijuana regulation and public policy.
Last week I submitted a brief to this committee outlining my impressions of how marijuana regulation has proceeded in Colorado. As I outlined there, I believe that Colorado has largely been successful in spite of a number of challenges. In fact, many initial opponents of legalization in our state have come to appreciate the successes of marijuana regulation there.
As you have a number of witnesses who can speak directly to the specifics of the Colorado regulatory experience, particularly to my right, I would like to use my time today to talk about what Canada can hope to learn from the American experience as it considers adopting regulations of its own to legalize and regulate marijuana for adults.
In my brief I outline five take-aways that I think Canada and this committee can take away from our experience and I'd be happy to answer any questions you have about them during that period.
First, I think it's important to understand the limits of marijuana regulation. Robust regulations, like those implemented in California and Washington, can keep organized crime out of licensed marijuana production and can help ensure that marijuana products are consistent, well-labelled, and free of contaminants. But regulation alone cannot solve all the problems currently associated with marijuana prohibition. In fact, I believe that regulating licensed businesses may be the easiest task in the legalization of marijuana, and I'll explain what I mean through an example.
The diversion of marijuana from Colorado, where it is legal, to other states where it is not, is rarely attributable to the malfeasance of businesses regulated under Colorado law. In fact, I think that there are two primary factors that are responsible for the diversion of marijuana out of Colorado. The first is criminals who have taken advantage of the prevalence of marijuana production in Colorado to produce it there for export to other states.
This conduct is prohibited by both state and federal law and can be addressed only by law enforcement, rather than by regulatory agencies. Colorado continues to work with its partners in the federal system to ferret out illegal production of marijuana and to arrest those responsible for it.
The second principal factor in the diversion of marijuana outside of Colorado is that people are buying it lawfully within Colorado and then taking it and reselling it illegally elsewhere. Again, there is only so much that the regulatory system can do to limit this conduct. While consumers can be educated as to the applicable law, if they choose to ignore that law that is a question for law enforcement rather than regulators.
My second principal lesson from the American and Colorado regulatory experience is that it is crucial to establish relevant metrics for the evaluation of a marijuana regulatory regime and to begin measuring those as soon as possible and, in any event, prior to the implementation of regulations.
One can only know whether legalization is meeting its goals if one clearly establishes those goals in advance and has settled on the relevant measures of success. For example, Bill C-45 expresses as a principal goal a reduction in the use of marijuana by young people—though one might wonder whether moving from prohibition to regulation is the best way to reduce use.
Other harms of marijuana consumption should also be studied, including use of marijuana by vulnerable groups, heavy or problematic use by adults, and use that poses a danger to others, for example through impaired driving.
It is also important in this context that marijuana not be considered in a vacuum. While no one wishes to see marijuana use rise among vulnerable groups, it is important to determine whether marijuana use supplements or displaces the use of other substances such as alcohol, tobacco, and harder drugs. If teens are choosing to use marijuana over alcohol, for example, that is certainly less serious than if they are adding marijuana use to the combination of substances they are already consuming.
Furthermore, it is important to understand that changes in law enforcement practices can impact behavioural measurement in ways that may confound data analysis. For example—and we have experienced this in Colorado—if patrol officers are trained as they should be to identify the characteristics of marijuana intoxication, we can expect more arrests for driving under the influence of marijuana, whether more of that conduct is occurring or not. It may simply be that training more officers on how to do this leads to more arrests in ways that might indicate an increase in impaired driving when none is occurring.
My third principle takeaway is this. By legalizing marijuana at the federal level, Canada would create an opportunity for the provinces to adopt regulatory models that are not currently available in the United States. As long as marijuana remains prohibited by federal law in our country, the states are necessarily limited in the types of regulatory regimes they can implement.
For example, the ongoing federal prohibition makes the dispensing of marijuana by federal mail impossible in the way that Canada is able to. Similarly, it is impossible for American states to develop a state-run distribution model akin to the one used to sell alcohol in Canada and some American jurisdictions and that apparently Ontario is considering for the distribution of marijuana here.
There are many potential advantages to state control of distribution. It allows the government to control price, to easily identify the licensed purveyors, to collect all revenue rather than simply taxing it, and to control the way the product is marketed to consumers. However, because such a model would put state employees in the position of directly violating federal law, such a model would create a direct conflict between state and federal law in the United States, and no American jurisdiction has attempted to implement one.
The freedom that Canadian provinces will have in determining how and whether to regulate cannabis distribution within their territories thus presents a great opportunity. If the various provinces adopt a diverse array of regulatory models, we might be able to greatly expand our understanding of how different kinds of regulation impact consumer behaviours. We have not been able to measure that in the United States. Most of our regulatory systems look quite similar. If there were a variety of distribution models here in Canada, coupled with the modelling and metrics that I spoke about beforehand, we would be able to learn a great deal about which regulations are effective and which are not.
Fourth, it is important not to oversell the fiscal benefits that legalized marijuana can bring. It is tempting to see marijuana legalization as a double fiscal win. Less money needs to be spent on law enforcement while more money comes in from the taxation of a substance previously sold only on the black market. I believe caution is necessary with regard to both of these, for two reasons.
First, as I described above, regulating marijuana for production and sale is hardly the end of marijuana law enforcement. Steps will need to be taken to stamp out illegal production and sale in order to channel marijuana production into the licensed market. Furthermore, the costs and the ongoing costs of establishing and operating a robust marijuana regulatory regime are not to be discounted.
The second reason to be cautious about the fiscal impact of marijuana is that lawmakers should not expect game-changing revenue from marijuana taxes, particularly at first. Regulatory compliance by producers will be expensive, and in order for regulated marijuana to compete on price with the black market, tax rates will need to be kept low initially. I believe there are good reasons to move away from marijuana prohibition, but enriching state coffers is not among them.
Fifth and finally, it is important to understand that the decision to legalize and regulate marijuana rather than to prohibit it is merely the first step along a path. Marijuana regulation is an iterative process rather than a one-time pronouncement. One of the crucial lessons Colorado and other states have learned in the last five years is that consumer behaviours change quickly in response to regulation and to market forces. Legalization will have unintended consequences, and regulators will need to be flexible and nimble in order to keep up. Patience will be needed as loopholes and other regulatory gaps are identified and closed.
I believe the experience of Colorado and other American jurisdictions indicates that this effort is worth the candle, but the process will not be without its complications and frustrations.
I thank you for your time this morning and for the invitation to appear before this hearing. I look forward to your questions.