Apr 25 2016 . 20 min read
Elevating the Conversation with John Hudak
Elevating the Conversation with John Hudak
John Hudak is deputy director of the Center for Effective Public Management and a senior fellow in Governance Studies at the Brookings Institution, a nonprofit public policy organization based in Washington, DC.
In late 2012 right around the time Colorado and Washington were about to vote on legalization measures, a colleague and I had a conversation about the work I do on presidential power, administration, and regulation. And he asked if had ever thought of looking at cannabis? I said, ‘No, I really haven’t.’ He said no one is studying governance issues around this, everyone is studying the safety side, economic side or the movement side of it, but no one is thinking about the reality that states are going to have to start implementing this if they pass it. So I bounced the idea around and decided to take a look at the policy surrounding cannabis because I didn’t know that much about it. As I looked at it, I realized there were going to be a lot of challenges and this was not going to be an easy thing to do because it’s a brand-new policy area and no one’s done anything like this before. And then as Colorado and Washington legalized I got to work and started to focus on governance and implementation issues and eventually that grew into a broader portfolio of politics and other parts of the policy which is something I am very comfortable with -- whether government works effectively -- and I applied it to this very interesting, very unique policy area. I began as someone who studies government and now I feel more at home saying I am somebody who studies cannabis.
I don’t know if it’s been too dramatic in terms of public polling. In 2012 legalization nationwide had majority support, it does still today. What has changed is people’s opposition to it has dampened a bit. Even if they still oppose it, they are looking around the country and seeing that the sky isn’t falling. They see it as something they dislike, something they don’t want their kids to have, something that they think presents a public health or safety issue but they don’t see it with such a guttural instinctual dislike that they are going to get organized or riled up. It’s not like what we see as far as the opposition to the Affordable Care Act or other really hot-button issues like immigration reform. It’s something that people who like it, still like it and still support it and people who oppose it do so with less passion these days. It’s a similar trend to what is happening with same-sex marriage. There are a lot of reasons for us to think there will be changes on opinion just based on generational replacement. The people most opposed to marijuana are 65 and older. It’s the only age group in the U.S. with less than majority support. They are dying off and as they do, they are being replaced in the electorate by those turning 18, and these people have the strongest support for marijuana legalization which is well over 70 percent nationwide. For every 100 people who die of old age, they are being replaced by 100 18 year olds. You are losing people who oppose marijuana legalization at 35 percent and replacing them with people who support it at 75 percent -- that’s a huge shift in public opinion. You don’t have to change minds, you just have to change the people in the electorate -- and that’s a lot easier.
Obviously Nevada will. Massachusetts almost certainly will. I would be shocked if California didn’t, they look pretty well positioned. I think those are the three states most likely to be on the ballot and most likely to pass as well. I think Maine is likely going to miss the ballot. Florida is going to have a medical initiative on its ballot. I think Arizona might have adult use but it’s a tough state in terms of getting initiatives on the ballot. They have had some internal bickering there because different parts of the legalization movement haven’t been able to coalescence around wording and that’s presented a challenge in a way that the movement needs unification. A movement with one voice is much easier to advance causes and so Arizona is a possibility, but it’s not as certain as Nevada, Massachusetts or California.
It’s hard to see a path that defeats the initiative in Nevada. Between now and November, I think if there was some sort of really tragic situation that arose because of medical marijuana there might be an outside shot that could defeat the legalization measure. But it’s a presidential election year, the electorate is going to be younger, less white, more liberal. There will be a lot of money being put behind the initiative and not a ton of money being put up to oppose it, or that would be my guess, because that’s how it is in most states. Nevada is a changing place, it’s much more liberal in general than it used to be, it’s much more Democratic and the people here, their liberalism motivates them to vote and there are a lot of Libertarians here. And Libertarians, even if they don’t like marijuana legalization, they like government regulation or intrusion less. You can imagine people who don’t like it, don’t want to use it, don’t care for it -- voting in favor of legalization just to get the government out of the business, which, in some ways, is ironic because it’s actually a heavily regulated product.
Obviously he opposes it. He opposed the medical initiative in Florida and that was a big reason why it was defeated, but it was barely defeated. Mr. Adelson is somebody who will probably throw some money behind opposing it but his money worked in Florida because it was so unexpected. Now a lot of people in the movement are prepared for him to spend in Nevada and they are planning accordingly. They were sort of caught off guard in Florida and they didn’t respond effectively. When you are thrown a political curveball in the last few months of an election and you are not prepared, it’s a fast track to losing and the Florida medical supporters lost as a result. I don’t think Adelson’s money will be as effective in Nevada as it was in Florida unless he starts to spend exorbitant amounts of money, if he throws $30, $40 $50 million dollars behind it, you could then maybe see it having an effect. But if he does something similar to what he did in Florida (Adelson spent approximately $3 million on Florida), I think it’s just not going to be effective.
I put a poll question on Capitol Bells directed at the staff and aides of Congressional legislators. The poll question was basically: Do your bosses, who oppose marijuana, oppose it because of policy concerns or political concerns? It was insanely overwhelmingly political, members of Congress are not concerned about the policy around it at all. A lot of them thought the 5- to 10-year window for lifting prohibition on cannabis was right. And I think it is too. Congress is so slow to catch up with public opinion. Public opinion is already there on medical marijuana and Congress hasn’t acted in an aggressive way. There’s more than 80 percent support nationwide, and the majority support it in every state that it has ever been in. You have an institution that is always behind the ball in terms of public opinion so you are going to need a little bit more time. Congress will be pushed along by three things. One is going to be sheer public opinion, which is going to be increasingly supportive of marijuana legalization as time goes on. The second is going to be that they see the sky isn’t falling and it’s not as bad as they thought it was going to be. They will see that’s it something they can find palatable or at least something that policy dysfunction between state and federal is so wide that they really need to act to clean it up. The last is going to be that as more states legalize, there’s going to be more of an industry at the table that can have some influence. And the interests of a sitting Congressman are going to change when all of a sudden his constituents depend on it as an industry. As more states start to legalize it, we have already seen members of Congress, whose states have marijuana, start to change their tune a little bit. When bigger states like California and Massachusetts crossover that’s going to be motivation for legislators but it will take time. But that 5- to 10-year window is probably a pretty good guess at some substantial reform. Will they (Congress) get it right? Absolutely not, because at the end of the day, it’s still Congress.
There are a few reasons for that. The first is the demographic change I already mentioned. It’s just a matter of different people being asked about it than were asked about it 10 years ago. But even within the groups that have lower levels of support for marijuana than Millennials, for instance, you see minds changing too. If you trace those demographic groups through time they are starting to soften their stance as well. So people in the ‘90s who were in the 35- to 49-age demographic, if you look at them now they are in their late 60s, their support is higher as a group than it was 20 years ago. And part of that are people seeing that the drug wars failed, and that usage rates are not affected by government intervention. And in terms of people from minority race and ethnicities, they are looking at prohibition devastating their communities, sending people to jail, putting them at a lower chance of getting jobs because they have a criminal record. People used to think of legal marijuana as something that was a very one-sided, simple issue: Should it be legal or shouldn’t it be? But now people are thinking more of it as a public policy and thinking about the different ways that it can affect society, either positively or negatively. When you look it at that way, it’s less about pot and it’s more about freedom, equality, justice or economics. There’s a whole variety of ways you can look at this issue and come to yes and it can be very different than the person sitting across the table from you or the person next to you on the bus. And for the movement, all they need is for you to say yes. You don’t have to agree with the why. A black guy who is 25 is probably going to support it for a very different reason than a 75-year-old rancher, but they both support it and that’s all you need. As people start to think of it in more dynamic ways, they are finding a basis to support it in a way they never had before.
That’s going to come faster than anything else. You have presidential candidates openly supporting it. Clinton does, who is more likely than anyone to become president. Sanders does, to. I think Trump is being guarded, as a candidate sometimes is in a presidential primary, but at the end of the day he is a businessman and he’s going to look at it through an economic lens. He might come out in opposition to it but his more extreme views on issues like immigration and foreign policy are not necessary the type of views that would extend to this. It’s an industry, and I think he’s going to look at it and he can be convinced that it is something that needs reform. I think a place like Nevada, where there’s a lot of wealthy people who are interested in getting into this industry. And those are the type of people Donald Trump would look to and recognize these are not stoners, these are businessmen and I am a businessman not a stoner so let’s at least get government out of this. Maybe Donald Trump will be the guy who makes marijuana great again, I don’t know. But the much more likely scenario is that a Democrat will be elected president and Clinton has been very open about her views on rescheduling. The harder sell is that members of Congress don’t understand scheduling or rescheduling, and I know that firsthand. There’s this idea that if you move marijuana from Schedule 1 to 2 all of sudden it’s legalized -- this is the disconnect. So I have worked really hard to try to communicate with members of Congress that that is not how that works but it’s a bit of a misnomer. When you frame it as something that will assist the conduction of research, people love it but when you just say rescheduling they think all of sudden America is going to become Colorado. The more informed members get about scheduling, the better chances there is for Congress to act but at the end of the day the next president is going to think through his or her picks for attorney general, DEA chief, Secretary of Health & Human Services, FDA head, with this in mind. Because all of those people on the administrative side play such a role in a way that was not the case for President Obama when he took office. There is a real groundswell for reform in this area. As he was thinking through his appointments, marijuana was not really on the table for him but for the new president it will be. And there will be a lot of people from industry, interest groups and elsewhere who are going to be pushing the president-elect to not select top tier presidential appointments based on marijuana, but at least have it as a consideration in the same way they will be considering criminal justice reform, immigration policy – it just becomes a question to ask of a prospective nominee. And if the nominee opposes marijuana rescheduling entirely, they are not going to get the job especially in a Democratic administration. So that puts cannabis in a tier of policy seriousness that it has never had before.
Usage rates are really important, whether it’s among adults or children. As states begin to legalize, the biggest concern is that kids are all of sudden going to start using marijuana. I think there is a real concern that it is going to be abused, and it’s going to be a serious burden on mental health and addiction services. I think a lot of those concerns are unwarranted but they are still concerns. So when I talk to people in the industry or in the movement, they’ll say marijuana is not as addicting as alcohol or it’s not going to lead to increases in children’s use. But people think it does and you have to address that and you have to overcome that. You can’t just say it’s not true so we don’t have to think about it. It’s true if people think it’s true in a political sense. And so as data increases from the states who have legalized, it gives people in the movement and people trying to change minds an additional tool in the conversation or the argument. The data that has come out of Washington and Colorado so far has been politicized. There are groups like Project Sam that cherry picks data and only tells half of the story, but there are groups like MMP and Norml who cherry pick data to tell the story they want to tell, too. It’s being very politicized. It’s going to take people from independent organizations that can do the research when state governments issue reports to present the information unbiased about what marijuana is doing to each state. Maybe it’s a public nuisance or public safety issue and if it is, people should know that but if it’s actually not and it’s an economic driver and its employing women and people of color and young people and it’s leading to profits in the market and the secondary market and tertiary market than people need to know that, too. I think it’s one of those rare occasions where more data is going to help convince people whether it’s data in a traditional sense, dollars and cents, statistics on use, abuse, public safety and health or more anecdotal data or more experiential data. I think as people come in to contact with it and the systems that are around it, they are impressed by it. Once people tour a dispensary and see it firsthand or go on a tour of a cultivation facility, they gain a greater respect for it, a greater appreciation and, most importantly, a better understanding. It’s in the same way people who have a child who comes out or people who have neighbors who are gay, when they start to experience who people in the LGBT community are, you realize they are not these terrible pedophiles who are out to ruin your marriage and society, you realize they are people just like you, they just have a different preference in terms of love. That experience we know has had a tremendous effect on changing minds on the issue of same-sex marriage and I think in a similar way, as people become more acquainted with the system whether it’s because of personal use or just observation or observation of people who use, that helps to break down barriers. When adult-use marijuana is the product that a soccer mom is enjoying or a businessman after work is using, and people start to think of cannabis like a glass of wine you start to think of it less as a college-age stoner’s couch-lock device. You opinion around it changes dramatically because of a different understanding of the product.
It’s tough, I don’t blame bankers for what they doing. It’s a real risk for them. They are reacting out of fear and they are reacting in ways that hurt their clients but they are reacting as a result of federal policy that does not speak in one effective voice. You have federal policy that says it is okay to have a cannabis enterprise as long as you meet the eight guidelines in the Cole Memo but you can’t have a bank. The lack of banking, of course, means businesses are more prone to the concerns outlined in the Cole Memo and so this is a really serious catch-22. I think one of two things will happen in terms of reform. Either Congress is going to act in a way that resolves this conflict. It’s one of the issues that is getting rapid support in Congress, although not necessarily enough to reform things now. But it’s an issue that is really easy to sell to a Congressman, from what I have heard, because it’s an economic issue and a public safety issue. And if we are going to have this environment where we allow this, we ought to allow these enterprises to have financial products. So Congressmen are coming around on this point and so maybe reform will happen that way. The other way reform can happen is very informal. And that is for Bank of America or Wells Fargo or Chase to just come out one day and say we are working with the cannabis industry now and there’s nothing you are going to do about it. The federal government is not going to seize the assets of Bank of America because it’s starting to give checking accounts to cannabis enterprises. That would be something that would really shift policy. That would be something that, my guess is, Congress and/or the Federal Reserve would play catch-up on and seriously look at reform because one of their largest banking enterprises is now doing this. That is going to happen when a bank sees a profit in it and that will only happen as more states come online and the industry grows. At the end of the day, it’s economic rationality that will drive a bank to do it, but they are not there yet. Banks, despite the financial crisis, still are a bit risk adverse and this is risk they are just not convinced of yet. But it will certainly be a risk they will be willing to take at some point.