Capitol Alert

Gavin Newsom’s panel: Marijuana shouldn’t be California’s next Gold Rush

Lt. Gov. Gavin Newsom speaks during a public forum on his Blue Ribbon Commission on Marijuana Policy at UCLA in April. At left is David Ball, associate professor at Santa Clara University School of Law.
Lt. Gov. Gavin Newsom speaks during a public forum on his Blue Ribbon Commission on Marijuana Policy at UCLA in April. At left is David Ball, associate professor at Santa Clara University School of Law. The Associated Press

A panel led by Lt. Gov. Gavin Newsom will release a report Wednesday urging Californians to take a cautious approach to legalizing recreational marijuana, suggesting a highly regulated market that protects children, provides flexibility for local governments and guards against fomenting the next “Big Tobacco.”

The long-awaited paper bluntly contends that the pot industry “should not be California’s next Gold Rush.” Instead, it prescribes that sheltering youths and communities must lay at the heart of any proposed regulation.

“While promising to fund other government programs through cannabis tax revenue may be a popular selling point for legalization proponents, we do not believe that making government dependent on cannabis taxes makes for sound public policy, nor do we believe cannabis tax revenue will be very large in relation to the total budgets of state and local government,” the report says.

The recommendations by Newsom’s Blue Ribbon Commission on Marijuana Policy come as a handful of groups prepare to circulate or submit to the state proposals for the 2016 ballot to legalize, tax and regulate marijuana. Commissioners do not make the case for legalization but bill themselves as a policy resource. They stress that a successful legalization effort must be flexible, will take years to develop and requires continued attention from policymakers.

The panel of legal, academic and law enforcement experts wants ballot proposals to provide consumer protections, safeguard access to medicinal marijuana and not allow the state to become dominated by large, corporate pot interests. It also advocates such goals as protecting environmental resources like water, strengthening drug treatment programs and addressing racial and economic disparities.

Though a measured process may be difficult for some to swallow, Newsom said, it is one of the lessons he’s taken from studying other states that legalized marijuana. His group formed two years ago and held public forums in Los Angeles, Oakland, Fresno and Humboldt. It has received support from the ACLU, which reported in 2013 that African Americans are nearly four times more likely than whites to be arrested for possessing marijuana.

Newsom, who is running for governor in 2018, has said he came to support legalizing marijuana out of concern for disparities in the criminal justice system. He has also said he will carefully choose which measure to support, if any.

“It’s got to be done thoughtfully, and it’s got to be done responsibly,” Newsom said. “Period. Exclamation point.”

Nearly two decades have passed since Californians voted to allow patients with a doctor’s recommendations to use marijuana for medicinal purposes. In 2010, voters rejected an effort to legalize recreational weed, as opponents argued that it was a flawed measure that would make communities and workplaces less safe. Legalization has since occurred in Colorado, Washington state, Oregon, Alaska and Washington, D.C. Recent California polling shows that a growing majority of likely voters supports the concept of legalization.

Proposals aimed at next year’s ballot are moving ahead, with political and marijuana policy experts predicting at least one will go before Californians. Last week, a group that includes activists from the 2010 fight announced that it was readying language and had retained a firm to help with signature-gathering. ReformCA brought on veteran Democratic strategist Joe Trippi as well as pollster Celinda Lake. Chairwoman Dale Sky Jones said it will soon unveil a proposal.

“There have been a lot of individuals that have put out some good ideas, but not great language,” she said. “What we are trying to do is find the best of everything and improve upon what some other partners in other states have already done.”

Another group made up of drug policy and other advocates also plans to review the commission’s report before deciding on its own proposal.

Newsom has had discussions with the leading proponents, and said it’s important they come to an agreement on a consensus proposal or they risk losing. “It’s in everyone’s interest, those that support changing the status quo, to figure out a way to collaborate here,” he said.

Legalization in other states set the age at 21. Proponents in California have said they expect to outline ways of keeping the drug out of the hands of children, including putting limits on advertising.

With marijuana illegal under federal law, another recommendation calls for the state to engage federal officials to allow licensed businesses to access banks. The report says California also could ask for changes to Internal Revenue Service rules that ban pot-related businesses from deducting business expenses from federal taxes. That move, it suggests, would give the state flexibility to tax marijuana at various production stages.

The 93-page report does not provide a target tax rate, and Newsom warned that those including specific rates without wiggle room could be making a “colossal mistake.”

Commissioners, however, do discuss the advantage of generating tax revenue at every stage of the supply chain, from cultivation to processing to sales.

“Multiple stages of taxation have the added benefit of acting as checkpoints to prevent illicit cannabis from entering the legal supply chain or to prevent legal cannabis from being diverted to the illicit market,” the report says. It adds that funding from taxes should go to better research on impaired driving and to enforcing restrictions on selling marijuana to minors and growing it on public lands.

Along with stamping out illegal operations, other priorities call for setting up a seed-to-sale tracking system and making room in the industry for current marijuana cultivators who have been “responsible actors.” In the interest of racial equality, the report says, they may want to include a way to expunge some criminal records to allow people to remain in the industry.

“The reason that’s important is we have had decades of racial disparities in marijuana and other drug law enforcement,” said Commissioner Abdi Soltani, executive director of the ACLU of Northern California.

Newsom said he would continue to offer guidance to proponents, adopting a phrase often used when describing ballot measures: “the devil is in the details.”

“I was much more persuadable two years ago than I am today, and there’s no way I will associate myself as a parent first, and as a public servant second, with something that is loosely drafted, that is looking to capitalize on the next California Gold Rush,” he said. “If that’s what proponents are after, then I am going to work hard to defeat that.”

Christopher Cadelago: 916-326-5538, @ccadelago

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