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Marijuana Measure Brings Far More Questions than Answers

Seeing Through the Smoke

page6marijuanadpOn Nov. 8, voters said ‘yes’ to Question 4, the so-called Massachusetts Marijuana Legalization Initiative. But that’s all they said ‘yes’ to. What happens now, concerning everything from whether marijuana shops can be licensed, to where and how many of them, remain somewhat unsettling question marks that municipalities will need to resolve.

Peter Vickery says ballot questions are, for the most part, “blunt instruments.”

And by that he meant that, generally speaking, these questions are broad in meaning, as opposed to sharp, or specific, and are usually to be considered a starting point, with the details to be colored in later.

And so it is with the Massachusetts Marijuana Legalization Initiative, a.k.a. Question 4 on this month’s election ballot. In simple terms, the question asks the voter whether he or she supports a proposal to legalize marijuana but also regulate it in ways similar to alcoholic beverages. And they can only vote ‘yes’ or ‘no,’ said Vickery, an employment law attorney based in Amherst, a community where the vast majority of voters — something approaching 70% — did in fact vote ‘yes.’

But that’s all they voted for, he went on, adding that all those ‘yes’ votes do not mean the town will want or support several marijuana shops in its vibrant downtown — or even one of them.

“People change — opinions change,” he explained. “What people were voting on was a ballot question. And what ballot questions do is let you vote ‘yes’ or ‘no.’ You know by the end of the election that the people have spoken, but it’s not always easy to tell what they’ve said.

“What they’ve said in Amherst is ‘yes’ to Question 4,” he went on. “But whether they thought ‘yes’ to Question 4 in terms of wanting several marijuana shops in our downtown — I don’t really know if that’s what they were voting in favor of.”

Peter Vickery

Peter Vickery describes ballot questions as ‘blunt instruments,’ short on needed specifics.

And this sentiment essentially dominates every corner of the state, where the phrase ‘I don’t really know’ is being uttered by all kinds of people concerning all manner of topics related to recreational marijuana and its legalization — from how to license and tax those seeking to set up shops, to how many jobs this industry (and it can certainly be called that now) will create in the Bay State.

Springfield Mayor Domenic Sarno, in a published press release and also follow-up remarks to BusinessWest, probably spoke for every elected official in the state when he said, “we’re in uncharted waters, and in such should take a step back, maybe a proper time-limited moratorium, so that we can proceed with extreme caution.”

The mayor, who wasn’t shy in his opposition to the question before the election, went on to say that before municipalities like Springfield do anything with regard to this measure, the state has to come forward and perhaps eliminate or mitigate many of the question marks that now define this matter.

“I do believe that the state must look at a more progressive tax to deal with all the — pardon the pun — headaches of eventual expenses vs. revenues,” said Sarno, citing issues ranging from public safety enforcement to employment and addiction issues, and more, adding that until such specifics are known, the city is in many ways operating in the dark.

And that hardly makes it unique among the state’s 351 municipalties, most of which are trying to shed some light — or at least some conjecture — on the matter.

That was the goal of one presentation in Amherst a few weeks ago, a conversation moderated by Vickery and hosted by the Business Leadership for Amherst Area Strategies (BLAAST).

 

Dominic Sarno

Dominic Sarno

I do believe that the state must look at a more progressive tax to deal with all the — pardon the pun — headaches of eventual expenses vs. revenues.”

 

The program included the city’s police chief, a former marijuana retailer from Colorado, a member of the state’s opioid taskforce, and one of the authors of the ballot question, said Tim O’Brien, president of the Amherst area Chamber of Commerce, adding that it’s a good example of the kind of fact-checking and opinion-taking that all cities and towns should embark upon as they consider how to best live with Question 4.

“Something that was illegal is now legal, and we have to ready to observe some change,” he said. “There may be some unintended consequences, but we’ll have to deal with those. There are a great many unknowns at this point.”

For this issue, BusinessWest tries to answer some of the questions concerning the marijuana law and its implications for municipalities and businesses alike. But, and this will become clear in the course of this discussion, specific answers are difficult to come by.

Joint Concerns

So perhaps it’s best to start with what we do know, which, all things considered, isn’t much apparently.

Here’s how the ballot question’s official summary reads:

The proposed law would permit the possession, use, distribution, and cultivation of marijuana in limited amounts by persons age 21 and older and would remove criminal penalties for such activities. It would provide for the regulation of commerce in marijuana, marijuana accessories, and marijuana products and for the taxation of proceeds from sales of these items.

The proposed law would authorize persons at least 21 years old to possess up to one ounce of marijuana outside of their residences; possess up to 10 ounces of marijuana inside their residences; grow up to six marijuana plants in their residences; give one ounce or less of marijuana to a person at least 21 years old without payment; possess, produce or transfer hemp; or make or transfer items related to marijuana use, storage, cultivation, or processing.

The measure would create a Cannabis Control Commission of three members appointed by the state Treasurer which would generally administer the law governing marijuana use and distribution, promulgate regulations, and be responsible for the licensing of marijuana commercial establishments. The proposed law would also create a Cannabis Advisory Board of 15 members appointed by the governor. The Cannabis Control Commission would adopt regulations governing licensing qualifications; security; record keeping; health and safety standards; packaging and labeling; testing; advertising and displays; required inspections; and such other matters as the Commission considers appropriate. The records of the Commission would be public records.

The proposed law would authorize cities and towns to adopt reasonable restrictions on the time, place, and manner of operating marijuana businesses and to limit the number of marijuana establishments in their communities. A city or town could hold a local vote to determine whether to permit the selling of marijuana and marijuana products for consumption on the premises at commercial establishments.

The proceeds of retail sales of marijuana and marijuana products would be subject to the state sales tax and an additional excise tax of 3.75%. A city or town could impose a separate tax of up to 2%. Revenue received from the additional state excise tax or from license application fees and civil penalties for violations of this law would be deposited in a Marijuana Regulation Fund and would be used subject to appropriation for administration of the proposed law. Marijuana-related activities authorized under this proposed law could not be a basis for adverse orders in child welfare cases absent clear and convincing evidence that such activities had created an unreasonable danger to the safety of a minor child. The proposed law would not affect existing law regarding medical marijuana treatment centers or the operation of motor vehicles while under the influence.

It would permit property owners to prohibit the use, sale, or production of marijuana on their premises (with an exception that landlords cannot prohibit consumption by tenants of marijuana by means other than by smoking); and would permit employers to prohibit the consumption of marijuana by employees in the workplace. State and local governments could continue to restrict uses in public buildings or at or near schools. Supplying marijuana to persons under age 21 would be unlawful.

The proposed law would take effect on Dec. 15, 2016.

So given all that, what do we know? Well, for starters, we know that marijuana use is still forbidden by federal law, a not-so-minor detail that impacts a great many of those question marks moving forward.

And we know that, contrary to what some might believe, the new law does not enable individuals to show up at the workplace stoned — just as they can’t show up drunk. Those basic laws of the business world still exist.

After that, there is mostly just speculation and concern, perhaps in equal quantities. For example:

• Elected officials in border communities are already concerned that people will drive across state lines to buy marijuana products in their municipality — and then drive back to where they came from, perhaps after they’ve consumed some of those products, creating public safety issues;

• Health officials are concerned about the potential impact of the measure on everything from hospital emergency rooms (Colorado, which legalized marijuana four years ago, has experienced a significant jump in patients seeking emergency medical treatment for complications related to suspected marijuana use) to the health of young children, especially with regard to one segment of marijuana products known as ‘chewables;’

• Employers and employer groups are concerned that the new law (while it doesn’t green-light being under the influence on the job) may blur some of the previously sharp lines when it comes to drug testing and other matters.

As Sarno said — and he’s far from the only public official to use the term — these are uncharted and somewhat dangerous waters.

“The people have spoken, so we’ll move forward accordingly,” said the mayor. “What I’m concerned about is that the state has yet to get it in gear and issue any specifics on this.”

Actually, he listed a number of concerns, from employment law matters, to worries about increased drug addiction, to the many hidden costs that may result from this measure.

“I keep hearing that the costs of this program really outweigh the revenues,” he went on. “And who does that fall upon? The municipalities.”

Look West, Young Man

To navigate these uncharted waters, cities, towns, individual elected officials, and some business leaders, are looking for some answers, or at least some help in formulating them.

And for most, this means googling ‘Colorado, legalization of marijuana,’ or words to that effect. And there’s plenty to read, which is good, said O’Brien with a laugh, noting that even if there was money in the budget for a trip to the Centennial State — and there isn’t — he would likely be doing his research with his laptop anyway.

“There’s this thing called the Internet, and along with telephones, it does a pretty good job of providing information,” he said, adding that Massachusetts can, and must learn from Colorado about what has worked, why, what hasn’t worked, and what can be done differently.

Bob Nakosteen

Bob Nakosteen

They say they have a $1 billion recreational marijuana industry that creates 18,000 jobs; that’s 1, 8, zero, zero, zero. That’s what they say … and this is from the proponents of legalized marijuana, so maybe that has to be taken with a grain of salt.”

 

Bob Nakosteen, a professor of Management at UMass Amherst, who was approached to discuss some of the business ramifications of Question 4, has also turned his attention to Colorado.

Some of the numbers are intriguing, he said, while wondering out loud just how reliable they are.

“They say they have a $1 billion recreational marijuana industry that creates 18,000 jobs; that’s 1, 8, zero, zero, zero,” he said, using some additional emphasis to get his point across. “That’s what they say … and this is from the proponents of legalized marijuana, so maybe that has to be taken with a grain of salt.

“I’m not expecting that many jobs here,” he went on, adding that there is already an infrastructure in place for medical marijuana (made legal in this state a few years ago) and this may impact the number of ‘new’ jobs to result from Question 4’s passage.

What is generally conceded is that the marijuana business will not sprout up like a weed (pun intended), quickly or easily, and the industry locally is almost certain to be dominated by smaller firms, most of them home-grown (another pun) startups or locally owned partnerships, in large part because of the federal ban on marijuana, which makes it difficult to operate in many states.

As Kris Kane, the Boston-based president of the marijuana investment and consulting firm 4Front Ventures, told the Boston Globe recently, “The notion that there are these gigantic, big-money players running in to take this whole thing over is just fiction.

“There’s no Phillip Morris, no Anheuser Busch, no cannibus division at Bank of America,” he went on. “Even the most successful company is still barely in the growth stage.”

Still to be determined in Springfield, Amherst, and everywhere else in the Bay State for that matter, is just how many of these home-grown enterprises will earn the privilege of growing or selling marijuana products, where (meaning which areas will be zoned for such activity), and under what conditions (meaning the specific terms printed on the licenses), said Nakosteen.

He noted that even Amherst, an extremely liberal community dominated by tens of thousands of college students and known to some as the ‘People’s Republic of Amherst,’ is as big a question mark in this regard as the proverbial ‘next town.’

“While Amherst is, in most all ways, a very liberal community, when it comes to business, it can be quite conservative, and I think there would be some resistance to large numbers of marijuana shops,” said Nakosteen, noting that new ventures must generally endure a comprehensive review of their plans and a long list of conditions, architectural and otherwise, before being able to do business. “It will be very interesting to see how it all plays out.”

This is especially true in the downtown, which is quaint and diverse, and therefore a draw for students, their families, professionals, tourists, retirees, and other constituents, said Nakosteen, adding that it competes in many ways with Northampton’s downtown.

And at this time, no one really knows whether a marijuana shop — or two or three — would become a competitive advantage or disadvantage.

“Amherst has enough trouble competing with Northampton anyway, in terms of the attractiveness of downtown for spending money, other than the students at UMass,” he told BusinessWest. “Downtown Amherst has been challenged for as long I’ve been here, and Northampton, as it’s developed, has become the more attractive destination. What would marijuana shops mean for that equation?”

He asked the question, but didn’t feel qualified to answer it, which means he is not unique.

And while Amherst, because it is a liberal college town, is perceived by many to be a litmus test of sorts on the marijuana matter, or a community to be watched, Vickery hopes ample amounts of attention will also be focused on far-less-affluent cities and towns.

“I expect people to watch Amherst, but I would hope that they would not watch it exclusively, and would also look for the impact on less-affluent communities like Holyoke and Springfield, and also Orange and Athol,” he said. “There is already a huge addiction and substance abuse problem in those communities. I think Amherst will be able to cope, but other communities that are less well-off will bear the brunt of policies designed for the comfort of the middle class.”

Where There’s Smoke …

Returning to his comments about ballot questions being blunt instruments, Vickery said Amherst, and other communities across the state, will find out just how blunt.

“As the implications become more manifest, as the town starts to consider over the next few years what the ramifications might be for the downtown Amherst economy and the impact on the wider community, from the standpoint of public health, public safety, etc., that 70% may be chimerical,” he explained. “It may be 70% in favor of the state-wide law, but in our backyards … that’s a much different question.”

And certainly only one of many hanging over the ballot measure and what will happen because of it.

As Sarno noted, Springfield, like most all communities to be sure, will be taking some steps back before it takes any forward in this uncharted territory.

George O’Brien can be reached at obrien@businesswest.com

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