A guy named Philip Morris opened a tobacco shop in London in 1847, or so the story goes. When Phil passed on, the widow Margaret Morris took over the humble family business.
Today, Philip Morris Inc., also known as Altria, is the world’s largest cigarette maker and counts revenue of $30 billion a year.
Last week, Lt. Gov. Gavin Newsom and friends issued a 93-page report focused on how to go about the highly complex task of marijuana legalization. The Blue Ribbon Commission on Marijuana Policy report, the product of numerous hearings and advice from experts, made clear that the Phil and Maggie of marijuana should not be allowed to become the next Philip Morris.
“We are not supporting a free market. We’re supporting a regulated market,” Newsom told me. “If you think this is the next California gold rush, I’m not on that team.”
Based on history and economics, Newsom has his work cut out. California lawmakers tried to protect gold miners from corporations in the 1850s. Soon, corporations perfected the evil art of destroying entire mountainsides in search of gold.
After Prohibition ended in 1933, legislators approved laws supposedly to combat consolidation. Now, a handful of national and international corporations dominate production and distribution of alcoholic beverages, and any legislation affecting their interests.
In 2000, California voters authorized Indian tribes to operate casinos on their reservations. Now, wealthy tribes determine which gambling-related legislation passes and which fails.
Newsom, the one declared candidate for governor in 2018, knows polls show that voters, particularly young people, support legalization of marijuana. That could help him as he runs in 2018 and beyond. But as he further cements himself as the public face of legalization, there are plenty of risks, too.
“If you support legalization, you have to own all the problems that come with it,” said Wayne C. Johnson, a Sacramento consultant who stands ready to trip up Newsom. He regularly runs campaigns against legalization efforts, including an initiative that failed in California in 2010.
The report anticipates that one or more legalization initiatives will be on the 2016 ballot, though it doesn’t make the case for legalization. Instead, the report contains many caveats and warnings. Newsom isn’t supporting any initiative proposed so far and would campaign against measures he thinks are too loaded with special-interest provisions. He also says the current system is a failure, which is true.
“I could sit back passively and abdicate responsibility, as so many politicians do,” Newsom said. “Or I could take some damned responsibility. I’m glad we’re having the conversation now, rather than in 2016.”
The report says the state must “ensure that small and midsize entities, especially responsible actors in the current market, have access to the new licensed market, and that the industry and regulatory system are not dominated by large, corporate interests.”
The report also focuses on the need to keep marijuana out of the hands of kids, using the words “youth,” “adolescent” and “children” 260 times.
However, the report doesn’t suggest banning edible marijuana, embedded in baked goods and candy. The Legislature, the report says, could regulate the products. Maybe. Or maybe the Legislature would fail, as it has done when it tried to ban alcopops, the sweet, fizzy booze that is marketed at young people.
Clearly, kids have ready access to marijuana now. That might change if it were legalized and regulated. Or maybe we would relive history in which the tobacco industry marketed to kids with its Joe Camel logo and sponsorship of sports and music concerts, and, more recently, by buying into e-cigarettes, favored by teenagers.
“The first, and perhaps most effective policy tool (to limit advertising) is shaping the industry’s structure itself, specifically, creating an industry structure that works to limit the size and scale of any one actor. Without very large actors in the industry, few, if any, will have the resources for broadcast media advertising,” the report says.
Such wishful passages read like they’re poll-driven, and they probably are.
By leading the commission for the past year and a half, Newsom has given it status. But its roots date back a year earlier. Santa Monica political consultant Bill Zimmerman started the process of creating the commission a year before Newsom took a public role, on behalf of his client, the ACLU of Northern California, which advocates legalization.
Zimmerman has run several medical marijuana initiative campaigns, including the 1996 effort that legalized medical marijuana in California, although he points out he did not help write Proposition 215, and is critical of its abuses. That bad experience makes it more important that legalization be done methodically. A blue ribbon commission’s imprimatur helps.
If voters approve legalization, the report says, the Legislature and next governor will need to spend years deciding fundamental questions, refining the system and setting a tax rate.
“I would like to think we would be able to conduct ourselves with propriety,” Newsom said.
However, the prequel plays out whenever the Legislature’s governmental organization committees convene and try to regulate alcohol, gambling and tobacco.
California is the cradle of the anti-smoking movement, but the tobacco industry provides the mother’s milk of politics. Lawmakers haven’t approved a tobacco tax increase since 1993, a 2-cent-per-pack tax to fund breast cancer research.
California’s wine tax is among the lowest in the nation. Alcohol taxes have not been raised since 1991. We who drink wine appreciate it. But the point is that legislators don’t mess with a favored industry’s bottom line.
Newsom deserves credit for taking a stand that carries risks, some of which won’t be known for years if he succeeds. Perhaps I’m being paranoid. Maybe corporations won’t dominate the business. Maybe marijuana lobbyists will be more mellow than tobacco and alcohol lobbyists. Or maybe we’ve been here before, many times.