11/13/16 Doug McVay

This week we look at the present and future of marijuana policy in the US with our special guest drug policy reform activist and marijuana policy expert Sam Chapman with New Economy Consulting.

Century of Lies
Sunday, November 13, 2016
Doug McVay
Drug War Facts
Download: Audio icon col111316.mp3



NOVEMBER 13, 2016


DEAN BECKER: The failure of drug war is glaringly obvious to judges, cops, wardens, prosecutors, and millions more now calling for for decriminalization, legalization, the end of prohibition. Let us investigate the Century Of Lies.

DOUG MCVAY: Hello, and welcome to Century Of Lies. Century Of Lies is a production of the Drug Truth Network for the Pacifica Foundation Radio Network, on the web at DrugTruth.net. I'm your host Doug McVay, editor of DrugWarFacts.org.

Well, folks, you may have noticed that November Eighth we had an election. And, a lot of things, oh, a lot of things happened. Three different states managed to approve medical marijuana, another state saved its medical marijuana program, and four states voted to fully legalize adult use of marijuana and to regulate its distribution, production, and sale.

There's going to be a lot of changes in the next year or so, and to help me sort through it, I have, we have a guest today. His name is Sam Chapman. Sam is a founding member of New Economy Consulting LLC, that's a firm based in Portland Oregon focused on advising entrepreneurs and investors in the cannabis industry. His previous experience includes consulting for statewide political campaigns, assisting local governments in writing rules and regulations, and advising small business start-ups on raising capital.

In 2013 Sam co-authored House Bill 3460, the Oregon law that legalized medical marijuana dispensaries. Sam currently serves on the Oregon Liquor Control Commission Business Rules Advisory Committee and the City of Portland Marijuana Task Force. He's been a resident of Oregon for 20 years and holds a baccalaureate degree from the University of Oregon in Philosophy and Political Science. It was while he was a student at the University of Oregon that I met Sam, he impressed the heck out of me, and I thought he was -- yeah, had a heck of a good future in this, and, well, you know, it's good to know I was right. It is an honor to know you and to have you on the show. Sam, how you doing today?

SAM CHAPMAN: I'm doing okeh, Doug, all things considered. I'm doing okeh. Thanks for having me on.

DOUG MCVAY: Indeed. Now, there's so much that I want to ask you about, I mean, in addition to all those others, in the state of Oregon, where both of us live, there were dozens of cities and counties that were voting on the possibility of bans, you know, bans of marijuana businesses, and others were voting on taxes, actual sales taxes, which, for folks who don't live in Oregon, Oregon doesn't have sales tax. That phrase is considered profane in the state of Oregon. Somehow, it's okeh when it's applied to marijuana, though.

Let's start with the easy part and ease our way into this. In Oregon, what happened? As I said, we had dozens of people voting on this stuff. I guess a lot of the bans failed and taxes passed, or am I just --?

SAM CHAPMAN: Yeah, I think that's accurate. So, this election cycle, there were at my last count 58 different localities that were voting on whether to allow adult use recreational licenses in their town. My last tally was 23 of them said yes, that was, let's see, 21 cities and two counties confirmed and said yes, we are willing to create, if we have not already, time place and manner regulations for these businesses. And then, 36 of them, which was 32 cities and four counties, decided to continue instituting a ban of those businesses. And I haven't gotten an update since yesterday, but the city of Turner is a dead tie at 368 votes, apparently, which I thought was interesting.

But, you know, so that's kind of the shake-out. Was it what we expected? I don't think so. I expected more cities to open up, frankly. A lot of the calculations that we did were based on how these individual localities, cities and counties, voted for Measure 91. And so for example the city of Lake Oswego voted 56 percent in favor of Measure 91, so that seems to be a good indication that, you know, maybe they would open up this November, and in reality, I think what we're seeing is a massive case of NIMBYism, not in my back yard. Lake Oswego shot down having these businesses in their city by 61.4 percent, you know, and so I think that there's a lot to be said for that.

I think that in general, a lot of these residents throughout Oregon are okeh with the idea, they don't care if their friend or their grandmother, or someone else, or people over the age of 21 consume in a safe, responsible manner, but they do not want this in their back yard. And I think it's going to be really interesting to see how that continues to play out in terms of the checkerboard of business allowances through the state when it comes to the cannabis industry.

DOUG MCVAY: Right, of course, Lake Oswego is right outside of Portland, so that, I mean, in a sense, they can just -- Portland can have all that stuff and we'll just be the nice safe suburb. But that's not the case for some of these eastern Oregon -- I mean, there's, there are some that are just in the middle of the nowhere that have decided on bans, too, right?

SAM CHAPMAN: Yeah, that's correct, yeah, I mean, Ontario is a pretty obvious one, in fact, I don't even think they were on the list, I believe that they had already opted out. But, yeah, there's a lot of eastern Oregon counties and cities that Rob Bovett of the Association of Counties has ironically coined "Hell No" counties, and they actually have a map and essentially most of eastern Oregon is red on that map. Not for Republicans, but for banned localities.

And so, you know, again I think it's going to be interesting. I think that some of these cities will continue to take a hard stance, and I think over the next year to two years, some of these cities will start to see the tax revenue that's being generated. I mean, you know, a rural town of only 500 people that can create ten new jobs, and bring $15,000 -- you know, fifteen thousand dollars, that's no money at all for a city like Portland but, you know, that can hire a 911 dispatcher part-time in some of these areas. Right? And that can create ten new jobs, and, you know, I know some of these cities where a new mayor will get elected on creating ten new jobs.

You know, this is a major win, or loss, for rural economies in the state of Oregon, and I think that that is going to be the major focus moving forward, is whether or not these cities can afford to say no to some of this new tax revenue that's going to be coming in.

DOUG MCVAY: Because literally, by not having -- allowing those businesses in their jurisdiction, they are saying no to any possible cut of the tax revenue that the state's getting from these. And it's quite a lot of money we're making so far, right? Do you have any of the numbers handy?

SAM CHAPMAN: You know, I don't. I think last was at least, I think, $60 million gross had come in. You know, I don't have the numbers handy, but it's a lot. And I think, you know, the legislature actually is going to have to come back in the February session to fix how that money can actually be removed. It's actually in a general -- it's going to a general fund right now where schools will not actually be able to remove that money to use it. So, it was -- that was not -- it was simply a writing error, that wasn't any type of foul play by a politician or a lobbyist, or anything of that nature. It was just language that was not written correctly, and someone just wasn't necessarily paying full attention there.

So, that will get fixed. That's one of the many minor fixes that the legislature is going to be looking at. But, you know, it's going to be interesting, and I think in general, the outcome of the continued checkerboard for the state of Oregon highlights the importance of local lobbying, of working with your city council, of education, of not showing up with flames and pitchforks yelling at people. I mean, we have -- I mean, I've been a part of that, I mean, you know, we have historically, that has been, you know, a method of wanted change, with few results, and I think that, you know, with our current state of the country in general, it's very important to understand that in order to get people on the other side of your issue to even listen to you, you must first listen to them and understand where they're coming from. And I think that's going to be a really important lesson that either our industry will take in stride, or will ignore, and we'll have a lack of progress as a result.

DOUG MCVAY: I want to shift to the next level. We've been talking about locals, and actually this is a good segue, as you're talking about the need to do local organizing and local lobbying. We've had four states that have just joined the ranks of the legalized adult use: California, Maine, Massachusetts, and Nevada all approved their legalization measures. All of those states had medical cannabis legalized, and had medical cannabis businesses, there was already a nascent industry in those. But now, they've legalized the adult use.

You've had a lot of experience in the state of Oregon as it evolved from medical-only to the combination of medical and legal adult use. What kind of advice do you have for these four states that are now where Oregon was a few -- what do they need to watch out for, what's -- drop 'em some wisdom.

SAM CHAPMAN: Sure, yeah. So, I think that, you know, the medical cannabis going prior to full adult use is a very important incremental step in the process. Right? I do think that a couple of years from now we may see a state just skip over medical and go straight to adult use, but I think we're still a couple of years out. So, you know, the proving ground of -- proving ground opportunity that medical cannabis provides for these states is immense, and I think the most important thing that people should be looking at that are having a hand in shaping these laws is the foundation in which you are creating the first step. Right?

So, what does the licensure structure look like? Who is the entity that is going to be overseeing these businesses? How is it affecting, you know, if you're going from, as Oregon did, just kind of a medical cannabis program where patients and growers were kind of working with each other to a much more structured and regulated industry that had medical licenses and things of that nature, I think it's really important to realize that, you know, there's a really good chance that whatever foundation you put in place for medical cannabis, whether it be dispensaries, or production, or processing, or whatever, it's going to be hard to veer too far from that when you make the jump to adult use. They need to be similar.

There needs to be a thought of, not a guarantee, right, no one has to cede that adult use is coming the year after medical, but it's very important that you recognize that whether it's medical or it's adult use, we're still talking about cannabis here. Right? And I think that from a regulatory perspective, there's no difference between the two when it comes to the topics of keeping it out of the hands of children, not diverting across state lines, not mixing it with, you know, cartel activity, all of the Cole Memo points. Right? It's the same points.

And so I think that it's really important that, you know, these states, when they're implementing these laws, right, it's often the law itself -- is often much different than the reality that it becomes through implementation. Right? And so, whether it's an agency doing the implementation or whether it's the legislature that comes and decides, well, this law wasn't actually what we meant, we're going to revise it, which obviously is what happened here in Oregon with Measure 91, which has led to a lot of the checkerboard-ness that has happened here.

I think that, you know, figuring out how to make a clear structure, with one overlooking authority to where everyone can go to, is definitely a lesson that they can learn from Oregon, in terms of the fact that we have three different agencies governing one plant with completely conflicting rules and regulations that are causing more headaches than they are solving problems. And, you know, that's not to say that we could have avoided that. I think everyone is going to run into these types of hurdles, whether they be problems with regulatory agencies or, you know, infighting within the industry, or whether it becomes a, you know, the unfortunate medical versus adult use dichotomy that we continue to see throughout states.

I mean, you know, if we looked at how Washington kind of did their initiative, it was, they skipped over codifying medical retail. Right? And went straight to recreational, which left a lot of those businesses, you know, in this gray area where Oregon decided, again, incremental strategy, to codify medical dispensaries and then move to legalization. And I think that it's really important, as quick as we want to go and as much momentum as we do inevitably have, it's extremely important to slow down and look at all of the details when we're talking about implementing this program, and when we're thinking towards the future of what will be, I think, the inevitable destruction of prohibition in whole.

DOUG MCVAY: The experience that we've had, because we had medical for years before we finally had the dispensaries and the sort of regulated business, as it were, it's only been a couple of years, so the experience of putting that together just was, you know, sort of, very much just sort of preparation for the next step.

California is going to be interesting. Do you have any thoughts about Cali, because that one, I mean, they did just pass a regulatory bill for the medical side, but, California decided not to wait for laws, and so for the better part of the last 15 years they have had dispensaries throughout the state, and actual businesses, you know, paying the taxes and the rest. Now, the regulation comes in, and so now they've got the adult use. Do you have any thoughts about California in particular?

SAM CHAPMAN: Yeah. I think, you know, a lot of people have talked about a tipping point for a long time, and, you know, that can be a tricky conversation, but I really think that California coming online, and it's not truly going to come online for another year or two, the implementation of such a large state is not going to be a flip of a switch by any means. But, the fact that California is already the world's sixth largest economy on its own, and the number one cannabis economy, and it's only medical, it's the number one cannabis economy and it's medical, you know, it's a game changer.

I really think that California coming online, there's going to be a lot of headaches, right? I mean, if we look back at the historical context of California, you know, the reason there have been headaches is because there has not been a state, you know, a cohesive state structure for regulation. Right? And so that's why we've continued to see more federal action in California for, you know, from the DEA and things of that nature. Now that it's coming online, I think it's a huge signal to the federal government that there are so many people now that have supported this, and in return, so many political leaders and elected politicians that are now going to have to heed the opinion of their constituents, to where I don't see us moving backward at all. I see California coming online as one of the last big pieces of the cookie that needed to crumble for Congress to really start taking tangible action on banking reform, and tax reform.

Now, that inevitably leads to the conversation of, okeh, if Congress is in a better position, but the make-up of Congress has changed, right, so we have a completely Republican-controlled Congress, and, you know, arguably or not arguably, you know, a potentially hostile presidential cabinet that we may deal with. And I think that there are a lot of opinions out there right now around all of that, and most of them have good merit.

But, for me, when I step back, you know, and this has a lot to do with California coming online, I don't -- I think it has less to do with who is president, it has less to do with the presidency in general and more to do with the fact that this, the cannabis industry, is so ingrained in this country from an economic prosperity standpoint, and tax revenue standpoint, to where the money that has already come into these states, or the money that is being projected, like California, to billions of dollars of revenue to come into the state, I can't think that it would anything less than political suicide for some of these politicians to press pause on all of this.

Now, can they derail us in a different direction that will slow us down towards our goal? Absolutely. And they will probably do that. But can you hit pause at this point in the game? I find it really hard to believe that you could.

DOUG MCVAY: Well, and that was the next question, is about the national. Before we get there, I just have to take one -- take care of one bit of housekeeping. You are listening to Century Of Lies, we're a production of the Drug Truth Network for the Pacifica Foundation Radio Network, on the web at DrugTruth.net. I'm your host Doug McVay, editor of DrugWarFacts.org.

Our guest today is Sam Chapman, he is a drug policy reform activist, a drug policy and marijuana policy expert, and a part of New Economy Consulting LLC, which is based in Portland, Oregon. And he's a good guy. Used to work with Students for Sensible Drug Policy. You were actually on their board, weren't you, the SSDP Board at one point?

SAM CHAPMAN: No, I was not on the board, but I did help oversee all of the Oregon chapters for several years while I was in college. Yeah, my experience with Students for Sensible Drug Policy, without a doubt, has gotten me to where I am today, for sure.

DOUG MCVAY: Right on. They're a fantastic organization, and of course people can find out more about them at SSDP.org. Got to put in a plug for the group, you know, got to.

SAM CHAPMAN: Absolutely.

DOUG MCVAY: So, yeah, let's talk national. The, we, on the one hand, there was an event early in the campaign at which the new president was asked about marijuana. He -- after talking about, after rambling a little bit, managed to say that he thought that states should probably, it should probably be left up to states. Okeh. The transition team seems to be very heavy with people from the Heritage Foundation, which, that's the Bill Bennett, Ed Meese side of the Republican Party, the social conservatives who still think marijuana's a bad thing. They've promoted Kevin Sabet, and, you know, there's a chance we might see Rudy Giuliani as attorney general. Nationally, what do you see happening in the next year?

SAM CHAPMAN: Yeah, so, I mean, you know, there's a lot of ways to cut that pie. Right? I mean, I think the first thing is that it is too early to tell exactly what is going to be coming out of a Trump administration, and I think that, you know, I try and give myself a little bit of peace by thinking about, okeh, if it's Giuliani or Christie, right, obviously neither of them are good on cannabis issues. The reason that I believe that they're not good on cannabis issues is because their states are not good on cannabis issues. They have not needed to lead or be quiet on the issue, right, the states have not passed anything significant enough to hold their feet to the fire. And I think that changes when they step into a national context that has over 50 percent, well over 50 percent, of the country's states have at least some type of medical cannabis law on the books.

I mean, the state of Georgia has a CBD law, for crying out loud, I mean, how many people do they execute every year? I mean, that is a very conservative, Bible Belt state. So, you know, I try and look at, you know, the positive lights in some of the darker areas of this. Right? You know, I think that -- cannabis for president! I mean, look at the election numbers. I mean, cannabis went eight for nine on election night, and I haven't done the tally yet, but I wouldn't be surprised if more people voted for cannabis than voted for either Hillary or Trump. I mean, I haven't seen the numbers yet, but that would not surprise me.

DOUG MCVAY: Well it's certainly the -- that was certainly true for the state of Florida. I mean, more than 70 percent approval for the medical marijuana issue there, and it was a very close race between the other two. I mean --

SAM CHAPMAN: Right. So again, you know, I try and stray away from predictions as to what a Trump presidency or a fully Republican controlled Congress would do, or probably more importantly not do, I guess, in this situation. And more on the fact that, you know, once you turn on the fire hydrant of holy cannabis tax water, and you get politicians drinking from that fire hydrant, they don't turn back. Period. I can't think of an instance where a politician has ever, you know, gotten a chance to see revenue come into their state and then say nah, nah, we don't really care. Lottery, no you can take your lottery money back. Right? Gambling, you know, alcohol, cigarette tax. I have yet to see a politician give that money back. Right?

And with the fact that the cannabis economy here in America is just getting started. I mean, I think the legal industry right now is valued at about $6 billion, and the legal and illegal market is somewhere more like forty or fifty billion dollars. We're just scratching the surface. We are just getting started with recovering the market share from the illegal market into the legal market, to where, you know, I find it really hard to stop our momentum. Again, can it be slowed down? Can it be directed into other paths? Sure. Can they stop us from getting to our eventual goal? At this point, I don't think so. It's a matter of time. How we get there and how long it takes, I think, are the main questions, and at this point, it's so early on, to where, you know, I hesitate to make any other specific types of guesstimates as to how individuals may act as a result of all of these passing laws.

DOUG MCVAY: Sam, any closing thoughts for the listeners? And give us your twitter and other ways that people can find out about you, the work you do, and all that.

SAM CHAPMAN: Sure. Yeah, so, I mean, closing thoughts are, you know, there's a lot of things to be upset about right now. I think we are lucky that cannabis is not yet decided as to where it's going, so I would say everyone hang tight. You know, whether if you're a medical patient, or a legislator, or just a consuming adult, or a veteran, or an investor, a business owner, hang tight.

We've got a lot to learn over the next couple of months, and I think that it's important that everyone continue to develop relations with their local officials. Right? There's a lot of work that needs to be done at the federal level, and it's a very exciting time for all of these new states to be coming online, which highlights again the importance of working with your local governments and your state governments to ensure the systems that you're setting up work for you. It doesn't matter if it works for Trump or not. Right? It's a states' rights thing, and whether or not he sticks on his stance on states' rights, again, is a coin toss, I don't necessarily buy anything that he says either, but I think right now, it's important to hang tight and really wait to see how it plays out in general.

I am optimistic, you know, and I don't expect everyone to be as optimistic necessarily as I am, but in general, I think that the cannabis industry will continue to move forward as a result, as it always has.

So, yeah, if anyone's interested in learning more about New Economy Consulting, they can visit NECOregon.com, that's N as in New, E as in Economy, C as in Consulting, Oregon spelled out, NECOregon.com. I'm also on Twitter, @SeriouslySamuel. And, yeah, you can also contact me through our website contact page. And we've got a blog on there as well, I'm digging up my old blogging jeans here, as a result of our new presidency I think there's going to be a lot of interesting topics to consider and converse about, so you'll probably see me more active in the blogosphere space moving forward over the next couple of months.

DOUG MCVAY: I like what you're saying, too, because you're right. Local organizing is always where it's at, and sometimes I think we maybe lose track of that, but, at a time of great upheaval such as that which we're experiencing now, getting back to the roots and doing that local organizing is absolutely key.

All right, well, we've been speaking with Sam Chapman. He's with New Economy Consulting LLC out of Portland, Oregon, a drug policy reform activist, a marijuana policy expert, and one of the best people I could think of to try and make sense of the 2016 election. Sam, thank you so very much.

SAM CHAPMAN: Thanks for having me, Doug. Any time.


And well, that's all the time we have. Thank you for joining us. You've been listening to Century Of Lies. We're a production of the Drug Truth Network for the Pacifica Foundation Radio Network, on the web at DrugTruth.net. I'm your host Doug McVay, editor of DrugWarFacts.org. Drug Truth Network is on Facebook, please give its page a like. Drug War Facts is on Facebook too, give it a like and share it with friends. You can follow me on Twitter, I'm @DougMcVay and of course also @DrugPolicyFacts.

We'll be back next week with thirty minutes of news and information about the drug war and this Century Of Lies. For now, for the Drug Truth Network, this is Doug McVay saying so long. So long!

For the Drug Truth Network, this is Doug McVay asking you to examine our policy of drug prohibition: the century of lies. Drug Truth Network programs archived at the James A. Baker III Institute for Public Policy.