In 2015, subscription boxes—monthly services that ship curated makeup, or snacks, or even treats for your pooch—were booming. One of them, Marvina, acted a little differently. Marvina charged a subscription fee of $95 per month, but the company wouldn’t use UPS or the postal service to deliver. Instead, it requested a day and time when you would be home, and then hand-delivered a package to your doorstep during that timeframe. The simple, black box would have a red telltale leaf on it. Inside would be four different samples of organic, locally grown marijuana.
Marvina was started by Dane Pieri, an industrial designer by trade who got the entrepreneurship bug during his time as a student at Carnegie Mellon University, which coincidentally houses some of the top thought leaders in drug policy. He realized he was in the perfect “where” and “when” of entrepreneurial opportunity—he was living in San Francisco, which had approved use of medical marijuana and had a wealth of diverse dispensaries, and he saw the marijuana industry about to transform.
“It’s pretty rare that you have such a massive market that over a course of a decade goes from being completely underground to…a new industry,” says Pieri.
He partnered with a local dispensary that grew hard-to-find strains of weed, and he pitched his company as a blend of a subscription box and a wine-of-the-month club. He believed there was a market of customers who didn’t want to deal with the weed-themed jokes laced through the industry, as well as customers who didn’t know where to begin when choosing between names like Triple Diesel, Grape Skunk, and Ghost Train Haze.
But Marvina lasted less than a year, never generating enough customers to become a sustainable business. The company was limited in two ways from the beginning, explains Pieri. It had created a premium niche product, but the customer base was limited to a specific geographic location.
Despite previously calling working in the marijuana industry “a once in a lifetime opportunity,” Pieri found himself soured on the industry after Marvina. It wasn’t about his failed business—it was about how complicated all the rules and regulations were. His vision of growing his business across state lines was clouded as he learned the landscape. Marijuana was legal in some states, semi-legal in others, and in some states where marijuana was illegal, cities were taking things into their own hands. To top it off, it was still illegal everywhere under federal law. It was a mess.
“I learned at CMU to just take action and ask for forgiveness later. That’s not something you can do in this industry. Before you do anything, you have to ask for permission and kiss a bunch of rings. If I had to do that, I’d lose my hair and gain 50 pounds,” jokes Pieri, who graduated from CMU in 2011 with a degree in industrial design and human-computer interaction. He has now moved on to work in another controversial industry—he codes 3D maps for drones at San Francisco start-up Hivemapper, yet another intersection with his alma mater. (CMU is home to Sanjiv Singh, the CMU professor who cofounded Near Earth Autonomy, which helps drones see the world around them.)
Pieri is correct about his assessment of the marijuana industry: It’s all over the place. Some cities, like Pittsburgh, have decriminalized possessing marijuana, while it’s still illegal in Pennsylvania. (Decriminalization means that those found in possession of weed will not get arrested but instead receive a fine.) Some states, like Michigan, are fine with patients smoking it for medicinal purposes, but it is not decriminalized. Other states, such as Alaska, Colorado, Oregon, and Washington have legalized large-scale commercial production for non-medical use.
As many states and cities consider various forms of legalization (58% of Americans are in support of legalizing marijuana, according to a 2015 Gallup Poll), it’s easy to forget how the government currently classifies weed. Marijuana remains a Schedule I drug—not recognized to have any legitimate medical use. Other drugs, considered more dangerous, are approved by the FDA for medical use, including cocaine and methamphetamine.
Untangling marijuana’s potential as a legalized drug means sorting through a lot of strands of information—and misinformation. The bulk of pro-marijuana organizations are funded, directly or indirectly, by the late Peter Lewis, the former chairman of Progressive Insurance, and George Soros, a prominent financier. There are fewer organizations fighting marijuana legalization, and Kevin Sabet, co-founder of Smart Approaches to Marijuana, is one of the few fulltime figures crisscrossing the country to argue against legalization.
As a result, policy makers must get the bulk of their information from a small number of sources. They are debating diverse issues—how could public health be affected if a Schedule I drug is legalized? Would city police forces be able to focus on more crimes that aren’t drug related?
And then policy makers have to parse that information into some kind of hard-to-balance equation: Could marijuana dependency really double, but end up helping cities economically with millions of dollars in tax revenue? Could legalizing weed reduce petty arrests and racially targeted tickets, but create tobacco-like marketing campaigns that sway teenagers?
Like Pieri, states in the United States and countries around the world are obviously intrigued by the opportunity that the marijuana industry could bring. But what are the costs, and what are the benefits?
Criminal Drug Versus Giggle-Inducing Ganja
Understanding marijuana’s current place in the market means understanding its history, says Jay Aronson, who focuses his research at the intersection of science, technology, law, and human rights, and is also the founder of the Center for Human Rights Science at CMU.
“We’re in a strange situation today where drugs relatively equivalent in terms of harm are treated differently,” he says. “Alcohol and tobacco, very dangerous drugs which have dangerous long-term health and social impacts, are legal but regulated. But other drugs like marijuana, which is pretty similar in terms of its potential for harm and long-term danger, aren’t legal.” The historical difference, he points out, is the presence of large corporations backing alcohol and tobacco but not marijuana.
Marijuana’s early criminalization, according to most historians, has been tied to those who brought it to the United States—Mexican immigrants. In 1914, border states used the laws against drugs to search and deport immigrants. Another minority group—African Americans—were using it as part of the jazz culture in the 1920s and 1930s. The brand-new Federal Bureau of Narcotics had had enough. They took up arms, calling marijuana “killer weed,” and “an assassin of youth.”
Countries around the world are obviously intrigued by the opportunity that the marijuana industry could bring. But what are the costs, and what are the benefits?
However, during the 1960s and 1970s, the drug started to gain mainstream acceptance, thanks in part to the beat and hippie movements that embraced marijuana. And, in 1972, a bipartisan congressional commission analyzed marijuana’s health effects, and found them to be mild enough that they argued to decriminalize the drug. But President Richard Nixon disagreed, and marijuana continued on with its current classification.
There’s a catch-22 with figuring out marijuana’s possible health issues—as a Schedule I drug, it’s tricky to get permission to test it on human subjects. But without those tests, it’s really hard to get it reclassified.
The catch leaves current policy makers in a bind—without much research, how do they know what the effects of legalizing marijuana would be on public health?
When the media want to talk about the future implications of marijuana, one name always appears: Jonathan Caulkins. Part of the reason is due to his straight-talk book Marijuana Legalization: What Everyone Needs to Know (Oxford University Press, 2012), and another part is due to his experience co-directing RAND’s Drug Policy Research Center in Santa Monica, as well as opening RAND’s Pittsburgh branch. He’s currently a professor of operations research and public policy at CMU.
When Caulkins is asked a question, he loves to answer with a question. And he has a pop quiz for people considering legalizing marijuana: “Of all the marijuana used in the United States, what proportion is used by adults who do not have an abuse and dependence problem, and who use fewer than 10 days per month?”
The answer is low—depending on the metric, it’s approximately 3%, which can deconstruct the image that marijuana is primarily used by so-called weekend warriors, folks who show up to work and raise kids but who enjoy a joint now and again. The marijuana industry won’t give these users a second thought, because it will focus on a much more lucrative market: daily users. In fact, he notes that 50% of marijuana is consumed by people who spend more than 50% of their waking hours high.
And what are the numbers for people who might be in between but are at risk of falling into the danger zone of dependence? According to the National Survey on Drug Use and Health, 4.2 million people self-report enough problems to meet the clinical definition for abusing marijuana, which is around 21% of current (meaning past-month) users. That’s a little higher than alcohol, on which 13% of current users report dependence.
After you weigh the concerns with dependence, the news gets better. The medical community is in near unanimous agreement that marijuana won’t kill. It doesn’t make people violent. It also doesn’t cause organ failure, like alcohol’s cirrhosis of the liver or tobacco’s lung cancer.
But another health discussion involves this question: If people start to use more marijuana, will they also use other substances more? Research is split evenly—half of it suggests that people might drink less alcohol if marijuana is legalized, and half suggests that alcohol use and abuse would increase if marijuana were legalized.
However, there is encouraging research that shows that if marijuana is legalized, people will use fewer prescription opioids for pain management, which could have dramatic ramifications:
In recent statistics released by the Centers for Disease Control and Prevention, there were 43,982 drug overdose deaths in the United States in 2013. Of these, 22,767 (51.8%) were related to prescription drugs. In comparison, there are only 16,000 homicides in a year.
However, Caulkins says if marijuana is legalized, there is a concern that tobacco use will go up.
“If tobacco use goes up even 1% because of marijuana legalization, then nothing good came from it. Tobacco is killing over 400,000 people a year.”
A more optimistic future view is to hope that marijuana will be used more as a vape, like e-cigarettes, and that the vaping of marijuana could convince cigarette smokers to vape instead. “That would be a huge public health win,” says Caulkins.
Caulkins points out that one of the biggest myths around marijuana is that the United States has prisons full of marijuana users draining all of the country’s criminal justice budgets. “That’s basically wrong,” he says flatly.
Marijuana accounts for a large number of arrests, but usually users with no other criminal involvement aren’t thrown in jail—they appear in court and are later fined. About 2% of people behind bars, reports Caulkins, are serving time for purely marijuana-related offenses, and they tend to be the growers and traffickers.
But there are more complicated criminal issues in cities where weed is illegal. Take Pittsburgh, which recently voted to decriminalize marijuana in December of 2015. After a city councilman commissioned a report from CMU students, they did qualitative interviews across the city. They found that in 2014, 70% of Pittsburgh’s marijuana possession arrests were made against African Americans. (The police force said that is because more low-income people are users and that, in Pittsburgh, the black community is poorer on a greater scale than the white community.)
This is nothing new, says Alfred Blumstein, who has studied the criminal justice system for 40 years and in 2012 was appointed as the chair of the Science Advisory Board for the Office of Justice Programs in the U.S. Department of Justice. He currently is a university professor of urban systems and operations research at CMU. He notes that the targeting of these communities started with the War on Drugs that was launched against crack in the 1980s: “Crack was marketed on the street. If you were outside carrying drugs and money from drugs you had better been carrying a gun to defend yourself.”
From 1985 to 1993, there was a rise in homicides largely from gun violence surrounding drugs. In 1993, part of the reason gun violence declined was due to police increasing their stop-and-frisk policies, in which they could stop anyone whom they deemed suspicious and feel for a gun. It happened primarily in low-income neighborhoods, which, during the crack epidemic, were often African American neighborhoods.
“When they were doing the stop-and-frisk, they were feeling around to see if they could find a gun. Or they might ask you to empty all your pockets, and lo and behold, there was a joint. A lot of arrests for marijuana were not because of the black [underground] market. They were because of the stop-and-frisks in black neighborhoods,” explains Blumstein.
Although those people might not have gone to jail, they still got possession charges. The CMU students noted in their report that those charges could follow individuals for years and impair their ability to get employment.
“Anyone who ends up with a criminal charge will feel an impact when they try to access social services,” says Jack Devine, a senior at CMU in ethics, history and public policy.
As the War on Drugs gained more and more critics, Blumstein was a member of the Pennsylvania Commission on Sentencing in the late 1980s and early 1990s. He recalls the Commission was merging a matrix of drug sentences into a matrix of sentences for ordinary crimes and somewhat lowered the sentence for 100 grams of cocaine to the same level as robbery with serious bodily injury (which can carry prison sentences of 20 years). Yet, some prosecutors objected vigorously, claiming that the commission was “legalizing cocaine.”
“What the hell was driving the intensity of being unreasonably tough on cocaine?” Blumstein wondered.
His guess? Asset forfeiture. If police and prosecutors cracked down on drug sellers, they could then claim the assets. Asset forfeiture got so prevalent that some states created a new pipeline for forfeited items; they had to go into the general treasury fund. But Blumstein says that didn’t stop some police or prosecutors, who simply went to federal agents, had them capture the assets, and then split the profits. “There is a unity among enforcement agencies—they’re dependent on each other,” he says. “They’ve gotten used to surviving on assets.”
Like Caulkins, Blumstein doesn’t see legalizing marijuana as breaking down major criminal networks. Even in states where it’s still illegal, it’s sold more often through peer networks and from people’s homes rather than seedy street corners.
“Marijuana has been the leader in the realization that the enforcement efforts have not been very effective. The harm caused by the enforcement seems to be appreciably greater than the harm associated with the drug,” says Blumstein.
The Future of Legalization
Colorado, Oregon, Washington, Alaska, and Washington, D.C., have all made marijuana legal. Eleven more states have made medical marijuana legal and decriminalized it. Seven more states have approved medical marijuana use only, and five states have decriminalized marijuana.
The lobby for legalization is gaining steam—in 2016, it’s expected that legalization may well be on the ballot for Arizona, California, Maine, Massachusetts, and Nevada.
Caulkins isn’t surprised by the movement. The biggest change that has happened in the past 24 months is that the industry itself is lobbying for reform.
And it’s the outgrowth of that lobbying that worries him. He sees a future of large companies creating high-powered marketing campaigns and lobbying in state capitals. In a way that, to him, echoes big tobacco companies: “It may not be literally true that big tobacco companies will be the companies that end up selling marijuana. But you should expect the companies to have that kind of ethics, that kind of approach. It’s entirely possible that even if it’s a homegrown, new company that emerges in the marijuana industry, they may hire the VP of marketing from a tobacco company.”
The lobby for legalization is gaining steam—in 2016, it’s expected that legalization may well be on the ballot for Arizona, California, Maine, Massachusetts, and Nevada.
Legal marijuana is already cashing checks—it grew 74% from 2013 to 2014. If nationally legalized, it’s projected to be larger than the organic food industry. The money could also flow into states. In 2015, Colorado posted $70 million in tax revenues from the sale of marijuana. (Most of which was from tourists; in-state buyers tend to use medical marijuana and enjoy a tax exemption.)
Caulkins, however, isn’t impressed with the number: “$70 million is helpful but not decisive.” He thinks states will be limited as to how much they can tax marijuana, because in many states residents can drive a few hours and get their stash in a different state with cheaper taxes. Colorado is unique in this regard; it’s large enough to bar easy road trips for cheaper weed.
It could be said that the first step to marijuana legalization is decriminalization, and 76% of Americans were reported to support decriminalization, according to a 2014 survey from the Pew Research Center. The CMU students saw this anecdotally in their home city of Pittsburgh. At a 2015 public hearing, they were surprised to see the outpouring of those in favor of decriminalization. In contrast, no one spoke up against it. Although some of the students expressed personal preferences that marijuana be decriminalized, they also found their position tempered with the reality of what that policy would bring.
“Our main concern is that we thought it was a little bit more of a silver bullet than it is. We thought it would be a huge step in reducing structural problems in lower-income communities, but it’s really a small change to a couple of paragraphs of Pittsburgh’s city code,” says Stephen Nimalasuriya, a CMU senior in ethics, history, and public policy.
It’s a larger step from decriminalization to legalization, and it’s one that Caulkins is trying to temper with what he calls “different flavors of legalization.”
Legalization could make marijuana act like the alcohol industry, but an alternative is to have it act like a co-op—in fact, literally, like a community garden. Instead of having a large corporation selling marijuana, you could get together with up to 45 friends and grow and share your own weed. No money changes hands; you all just chip in to tend to the garden.
“The co-op has a realistic chance of undercutting a substantial amount of the black market without creating a lobbying force and a commercial interest,” estimates Caulkins.
If the marijuana industry did look and act like the alcohol industry, it easily could grow into a business worth billions and billions of dollars—after which it would be close to impossible to put that genie back in the bottle. Meaning: If the nation legalized marijuana but then decided it doesn’t like what it sees, options might be limited.
“It’s the single most likely scenario—that we go with the alcohol model. We’re going to see a lot of people struggling with marijuana dependency and wonder why we thought it was smart to create another industry that’s going to shape public policy around a dependence-inducing intoxicant,” predicts Caulkins. “And 25 years later, people are going to look back and say, ‘What idiots you were; what were you thinking?’”