This commentary was published in Newsweek on January 2, 2018.
The new year brings with it a new age of legal marijuana: As of Monday, the growing, sale and use of recreational cannabis in California is now legal for individuals over the age of 21. But will it change much in the state?
Marijuana growers who plan on growing cannabis on private land next season will encounter new state requirements to address the crop’s impact on California’s creeks and streams. The success of the policy will be tested by the state’s ability to bring growers into the legal cannabis sector. Currently, an estimated 80% of the state’s cannabis crop is grown for the black market.
The CalCannabis cultivation licensing system is a new program by the California Department of Food and Agriculture (CDFA) for permitting the crop to be grown legally on private land. The State Water Board recently adopted interim policies that will affect the license, including checks on a grower’s water rights, restrictions on the diversion of water for irrigating cannabis crops, and site-specific requirements to control runoff into local streams from growing operations. Many elements of the new statewide requirements are based on pioneering regional efforts to regulate cannabis cultivation in the North Coast.
As a prerequisite for the cultivation license, growers relying on water from local tributaries must have valid water rights or apply for a new surface water right that allows them to divert and store water. This requirement is critical to the State Water Board’s new policies that compel growers to divert surface water to storage in winter for irrigating cannabis during the dry months when streams are low. Diversions are allowed to resume in winter once a stream’s minimum flow target is met. Many growers will need to obtain necessary permits and capital for constructing water storage on site. Water measuring and recording requirements will also compel growers to install devices to track their stream diversions and usage.
The new statewide requirements also seek to reduce the risk of contamination to tributaries from cannabis farm runoff. For example, licensed growers across the state will be required to provide adequate distance between cultivation operations and streams and wetlands. The requirements also establish rules for reducing erosion from access roads, increasing irrigation efficiency, minimizing runoff, and handling fertilizers, pesticides, and herbicides safely.
These new requirements will result in additional costs to many growers looking to enter the legal market, on top of new compliance costs, taxes, and reduced revenues that legalization could bring. Some experts suggest that the high cost of “going legal” could jeopardize the state’s ability to enroll enough growers to make the policies effective.
Van Butsic, an assistant cooperative extension specialist at UC Berkeley and a member of the PPIC Water Policy Center research network, conducts research on cannabis cultivation in the state. “The State Water Board’s interim policy may have a better chance of achieving desired environmental outcomes if compliance can be obtained at a reasonable price,” Butsic says. He suggests that small growers—the majority of cannabis operations in the state—will especially find it difficult to absorb the costs of compliance.
This raises difficult public policy questions on how to reduce the cost of compliance while continuing to protect water quality and the environment, how to encourage small farmers to join the legal sector, and how to effectively enforce the new rules in a sector dominated by very small farms. Resolving these issues will be vital to meeting water quality objectives in the emerging legal cannabis sector.
Despite uncertainty at the federal level, California is making steady progress toward creating a system to regulate the legal use of marijuana. In many ways, the most interesting activity in marijuana policy is taking place at the local level, as counties and towns wrestle with how to define the role of the industry in their communities.
This year’s state budget includes a trailer bill designed to address a number of implementation issues raised by the passage of the Medical Cannabis Regulation and Safety Act in 2015 and Proposition 64 last fall. The biggest challenge was reconciling the two laws to create a single regulatory framework for both medical and recreational marijuana, a recommendation put forth in a recent PPIC report. The trailer bill also includes other provisions that aim to clarify and fill in details around implementation. For example, the bill:
Although Californians have supported the legalization of both medical and recreational marijuana, possession of the substance remains illegal under federal law. In past years, Congress has passed legislation that makes enforcement of federal marijuana law a low priority. However, Attorney General Jeff Sessions, who has opposed relaxing restrictions on marijuana, has reportedly sent a letter to Congress asking that it rescind that directive. Like so many federal-state issues at that moment, it is very difficult to predict future decisions concerning enforcement of federal marijuana law.
The relationship between the state and local jurisdictions is clearer. One section of the trailer bill reaffirmed that the new regulatory structure does not limit the authority of cities, towns, and counties. But the clarity of that relationship doesn’t mean that there isn’t controversy. Conflicts have emerged within communities as they try to balance different local interests.
For example, Proposition 64 allowed for the cultivation of up to six plants per individual. In January, the city of Fontana passed an ordinance requiring any resident who wanted to grow up to six plants purchase a $411 permit. Getting a permit required that the applicant have no prior drug convictions or overdue fines. The ACLU (American Civil Liberties Union) and the advocacy group Drug Policy Alliance have joined together to file a lawsuit claiming the ordinance is too restrictive.
Calaveras County also illustrates the challenges of implementing marijuana regulations at the local level. At the same time that Proposition 64 received support statewide, 67% of Calaveras voters approved a county tax on marijuana production. The tax vote appeared to signal the county’s support for the marijuana industry. This past spring, however, after four of the five seats on the county board turned over, that body began considering a ban on commercial cultivation. With more than 1,000 registered growers (who each paid $5,000 in fees to operate) in a county of 45,000 people, the proposed ban is controversial.
Findings from the PPIC Statewide Survey support the idea that cannabis becomes divisive when the issue moves closer to home. When asked about the federal role, 60% of California adults and 66% of likely voters in our May survey said that the federal government should not enforce federal marijuana law in states that have decided to allow marijuana use. And though a majority of California adults (56%) say marijuana should be legal, state residents are divided when it comes to retail sales of marijuana in their communities. While 48% favor retail sales of recreational marijuana in their city or community, a similar proportion (47%) are opposed. Regionally, opposition to retail sales is highest in Orange/San Diego Counties (53% oppose). As cities across the state determine the regulatory standards for marijuana sales, they may find divergent views within their communities.
Federal, state, and local governments all have a say in marijuana regulation. It is clear from the issues yet to be resolved that the statewide election was just the beginning of a complex process to build the regulated, legal market for cannabis that California voters supported.
Mark Baldassare, PPIC president and CEO and director of the PPIC Statewide Survey, spoke at the Pacific Chapter of the American Association of Public Opinion Research annual conference in San Francisco today, December 16, 2016. Here are his prepared remarks for a post-election panel discussion.
One of the most historic turnarounds in California initiative history has been largely overlooked in the wake of the stunning presidential election results. Californians passed a recreational marijuana initiative this fall after rejecting a similar effort six years ago. The 2010 initiative, Proposition 19, failed with 46.5 percent of the vote. This year, Proposition 64 passed with 57.1 percent. How did support grow by 10.6 points, allowing this controversial policy to move into the victory column? The answers are found in both national and state trends.
First, Americans’ views on marijuana legalization have shifted in recent years. When asked in Pew Research Center national surveys, “Do you think the use of marijuana should be made legal or not,” fewer than 50 percent said “yes” in 2010 and 2011 while a majority have said “yes” since 2013. Two key events happened in 2012: Washington and Colorado voters passed initiatives to legalize recreational marijuana. Alaska, Oregon, and Washington, DC, voters followed in 2014. This November, Massachusetts and Nevada—and perhaps Maine, depending on a recount underway—joined California voters in legalizing recreational marijuana.
California public opinion mirrors these changing national attitudes. PPIC surveys have been repeating the Pew Research Center’s question for six years. In our surveys, the percent of adults saying “yes” to legalizing marijuana was below 50 percent before November 2010, when Proposition 19 failed. Support for legalization edged up to the majority in 2013. Some Californians apparently changed their minds about marijuana legalization after other states passed initiatives.
Did California’s marijuana legalization pass because its base of support grew stronger? Or because its appeal expanded to more demographic groups? The answer is “both” when we analyze the final PPIC surveys before the November 2010 and November 2016 elections. These surveys were within close range of the election results (44% Proposition 19, 55% Proposition 64) with a comparable 11-point difference between 2010 and 2016. We compare the likely voters who said “yes” to Propositions 19 and 64 across parties, political, and demographic groups.
The only majority supporters of Proposition 19 in 2010 were Democrats, liberals, and Californians under 35 years old. This fall, there were double-digit increases in the yes vote for Proposition 64 among Democrats, liberals, and residents under age 35. The consolidation of support in these groups was important in the 2016 California election context. This presidential election attracted a larger electorate with liberal leanings than the 2010 gubernatorial election did. That is reflected in the passage of several progressive reform and tax initiatives this November, as noted in an earlier PPIC blog post.
Significantly, there were also double-digit increases in the yes vote for Proposition 64 in likely voter groups where Proposition 19 had previously fallen short. Notably, independents, moderates, and 35- to 54-year-olds joined Democrats, liberals, and younger voters to form a broader political and demographic coalition of Proposition 64 supporters this fall. Moreover, support grew from less than 50 percent in 2010 to include solid majorities in 2016 among men (47% to 64%), college graduates (47% to 61%), those earning $80,000 or more (46% to 60%), and whites (44% to 55%). In sum, Proposition 64 attracted more of a political mainstream following than Proposition 19 did.
Proposition 64 still did not win by a landslide even with these impressive gains in the depth and breadth of support. Fewer than 50 percent in key demographic groups supported the initiative. They include Republicans (33%), conservatives (31%), Californians age 55 and older (45%), Latinos (47%), women (48%), and the non-college educated (49%). Obviously, many Californians did not jump on the bandwagon and vote for marijuana legalization this year.
Finally, it is worth noting that when we asked voters if the outcome of the vote on Proposition 64 was very important to them, opponents of legalization were more likely to say “yes” than supporters were (60% to 50%). These views could play a critical role because marijuana legalization still faces many hurdles. Will the deep divisions among political and demographic groups surface in local communities when it’s time to implement the new law? Will California lawmakers side with the voters who passed marijuana legalization if the Republican president and Congress change direction on federal enforcement? As always in the initiative process, voters were the deciders but they are not the last word. Now many issues are left to local, state, and federal government officials to sort out.
Find out more about the PPIC Statewide Survey
The morning after Election Day, California appeared to be on a very different path than much of the nation. But in voting to legalize recreational marijuana, Californians were very much in step with the rest of the country. In addition to California’s Proposition 64—which passed relatively easily, with 56% of the vote—measures were passed in Nevada and Massachusetts that legalized recreational marijuana. Measures that legalized or expanded medical marijuana passed in Florida, Arkansas, North Dakota, and Montana. So far, Arizona is the only state to have rejected a recreational marijuana measure. Maine also passed a measure legalizing recreational use, though the vote was close and is subject to a recount.
While marijuana remains illegal under federal law and continues to be classified as a Schedule I drug (meaning it has a high risk for abuse and has no accepted medical value), 63% of Americans now reside in states that have medical or full legalized use, including 21% with legalized recreational use.
Now comes the difficult part. Proposition 64 sets in motion a number of steps and procedures designed to create a regulated market for recreational marijuana. Many of these can be modeled on last year’s legislation regulating California’s medical marijuana market. And the states that have legalized marijuana so far have created a competitive but regulated market structure. But regulatory experience—in California and other states—is in short supply. As one state regulator opined at a recent PPIC event, “Right now, science is lagging policy.”
Marijuana regulation cuts across many areas. Earlier this year, we outlined several key regulatory areas, including cultivation, production, and processing; sales, consumption, and possession; taxes and finance; and public health and safety. The challenge facing California and other states is to implement regulations that can achieve multiple, sometimes conflicting policy goals: limiting the impact of the illegal market, preventing youth drug use, reducing harm to public health and safety, preventing diversion of legal marijuana into illegal markets, and raising revenue. This requires a comprehensive regulatory approach that would document and control the cultivation, production, processing, and sale of legal marijuana.
Our report recommended that California err on the side of caution and adopt a relatively restrictive regulatory model for both the recreational and medical markets. We still maintain that a tight, single market will make marijuana laws easier to enforce and reduce diversion to under-age Californians and to other states. To be sure, a highly regulated legal market will be accompanied by a robust illegal market. But it will be easier to loosen a tight market than to tighten a loose one.
Given the apparent national interest in legalizing marijuana—and the lack of knowledge about this new industry—California is positioned to be a leader in answering difficult questions about how best to regulate it. To play a leadership role, California regulators should collect data on marijuana sales, prices, revenue, and use. Basic market information would play a significant role in closing this knowledge gap and inform better future policy for both our state, and the rest of the country.
Finally, we should note that there is some uncertainty about the future of marijuana regulation across the country. As noted above, federal law still classifies marijuana as an illegal substance. The relatively benign approach that the federal government has taken to enforcing federal law regarding marijuana has been based on three memos written by second-tier cabinet members and some language in an annual appropriation bill. Though President-elect Trump has not explicitly stated his policy on marijuana, it would be relatively simple for the new administration to alter the current federal approach.
Read the report Regulating Marijuana in California
The final PPIC Statewide Survey before the November election found Hillary Clinton leading Donald Trump by 26 points among California likely voters and Kamala Harris leading Loretta Sanchez by 22 points. It also found that majorities support measures to extend a tax increase on high incomes, increase cigarette taxes, and legalize marijuana. Research associate David Kordus presented these and other key findings at a briefing in Sacramento last week.
The survey also examined issues that are likely to linger past Election Day. It finds that Californians are divided on the direction of the state. Majorities say the nation is going in the wrong direction, and they express low levels of trust in the federal government. And most Californians say the two major political parties do such a poor job that a third major party is needed.
Read the October PPIC Statewide Survey: Californians and Their Government
Visit the PPIC Statewide Survey website
Six years ago, a California ballot initiative to legalize marijuana for recreational use fell short of a majority—46.5% voted yes. This November, Californians will vote on Proposition 64, another marijuana legalization initiative. Since the 2010 election, four other states and the District of Columbia have legalized marijuana for recreational use, and, in California, the PPIC Statewide Survey series has found increased support for legalization among likely voters and within some key groups.
In our September survey, after hearing the Proposition 64 ballot title and label, 60% of California likely voters said they would vote yes. That includes strong majorities of Democrats and independents and nearly half of Republicans.
As with any election outcome, much will depend on who turns out to vote. Based on past election cycles, we can expect a larger—and younger—electorate in this presidential election year than we saw in the midterm election year of 2010. It remains to be seen, though, if Californians’ changing attitudes toward marijuana legalization will be reflected in the vote on Proposition 64.
Read the September PPIC Statewide Survey
Visit the PPIC Statewide Survey website
Two measures have qualified for the November ballot that ask California voters to increase so-called “sin” taxes. One measure, the Healthcare, Research, and Prevention Tobacco Tax Act, will add an additional $2.00 per pack to cigarettes sold in the state. Currently, the tax is $0.87 per pack, which ranks lower than the cigarette tax in 33 other states. The other measure, the Adult Use of Marijuana Act, proposes to legalize the recreational use of marijuana and impose a state tax on its sales.
States use sin taxes not only to raise revenue for state treasuries, but also to affect behavior. The notion is that as the price of a product goes up, consumption will drop, and with that drop, negative societal consequences—the rate of lung cancer, for instance—will decrease. In fact, revenue from sin taxes often fund related treatment or health care programs.
Though it is early on in the campaigns, Californians hold favorable views of both ballot measures. According to the May 2016 PPIC survey, 67% of likely voters favor an increase in the cigarette tax to fund health care and 60% favor marijuana legalization.
While there are a number of reasons voters may support or oppose these measures, our focus here is on the revenue implications.
How much more money could these taxes bring in?
Both measures hold promise for raising significant funds and represent an alternative source of revenue in a state that is heavily dependent upon personal income taxes. Together, they could bring in more than $2 billion in state revenue. This would be significantly more than the state’s other sin tax on alcohol, which raised about $350 million in 2014.
The state reported more than $800 million in tobacco tax revenue in 2014. An additional $2.00 per pack would more than triple the current tax, suggesting a significant jump in total revenue. The Legislative Analyst’s Office estimates that an additional $1 billion to $1.4 billion would be raised should the proposition pass.
Why wouldn’t total tobacco revenue triple? Total revenue will be determined by both the tax rate and the amount of tobacco purchased. If the increase has the desired effect, cigarette smoking will decline in the future. That, combined with the fact that California recently raised its smoking age to 21, should have an impact on total consumption. Indeed, the share of individuals who smoke cigarettes has been declining in California, from 18.6% in 1996 to 12.8% in 2014. In comparison, alcohol consumption has decreased since 1977, but has remained consistent over the past 20 years.
Nationally, California had the second-lowest cigarette smoking rate in 2014 (after Utah). But it’s worth noting that e-cigarette use nearly doubled among California adults from 1.8% in 2012 to 3.5% in 2013, complicating estimates of future revenue. If passed, the tax would also apply to e-cigarettes. If Californians use e-cigarettes as a substitute for cigarettes, then the measure will also capture revenue due to increased e-cigarette use. As we noted in our recent report, the additional revenue generated by taxing marijuana could be as much as $1 billion a year for the state. In the first full year after legalizing recreational marijuana, Colorado raised just over $120 million in state revenue, and Washington collected slightly less than $130 million. Given California’s larger population, the $1 billion figure is in the right ballpark. But since much is still unknown about the marijuana market, any estimate should be treated with caution.
How does California compare with other states?
The proposed taxes would be comparable to those currently in place in other states. If the tobacco tax passes, it would boost per capita revenue from $21 per resident to $50 per resident. This would still be below the national average of $57 per resident, though it would be much closer. For marijuana, the estimate of $1 billion in revenue would translate to about $26 per resident. Though there isn’t a national reference point for marijuana taxes, this number would be higher than the per capita amounts raised in Colorado and Washington. Interestingly, California’s alcohol tax revenue is less than most other states. On a per capita basis, California ranks 40th of the 50 states in alcohol revenue collected. In 2014, California collected only $9 per resident in alcohol taxes compared to the rest of the country, which raised $21 per resident. Doubling this rate—which would still be below the national average—could add another $350 million to state revenues.
Notes: Per capita alcohol consumption is taken from the NIAAA, which calculates consumption based on sales and a conversion of gallons in terms of pure alcohol (ethanol). Population data are drawn from the US Census. Cigarette smoking rates are from the CDC.
This commentary was published in the Sacramento Bee on Sunday, July 3, 2016.
What’s next for Bernie Sanders supporters in the wake of a disappointing loss? They will find ballot initiatives – and one in particular – of great interest in California’s November election. For this reason, we expect to see the Sanders voters return to the polls and have a broad impact on election outcomes.
In the 20 years since marijuana was legalized for medical use in California, it has become an increasingly legitimate crop in the state’s agricultural landscape. Yet despite relatively steady progress in moving marijuana cultivation out of the shadows, important questions remain about the crop’s impact on water and the environment, and whether the state can regulate these issues successfully.
Last year the state legislature passed laws designed to regulate medical marijuana production. Should Californians vote to legalize recreational marijuana use this fall, the state will need to take an even more active role in regulating production, as argued in a recent PPIC report.
Marijuana growing has yet to move to large-scale production, but that could change with shifts in state or federal laws. Both the total amount of marijuana produced and number of cultivation sites are difficult to estimate. An often cited but uncertain estimate is that California has about 50,000 cultivation sites. A recent effort to map grows in Humboldt County suggests that most have less than 100 plants and typically cultivate less than one acre. These small grows are usually located far from improved roads and often scattered on steep slopes. Currently, only 7 percent of grows in Humboldt County are on what could be considered prime agricultural land.
The biggest environmental concerns regarding marijuana cultivation—or any agricultural commodity, for that matter—are water use, deforestation, and water pollution. Given the small size of most grows, marijuana production currently does not appear be a major driver of deforestation in California, although building access roads may cause erosion and fragment wildlife habitat.
And although it has been reported to be a thirsty plant, recent estimates of marijuana’s water use in Humboldt County—one of the state’s biggest growing areas—suggest that under 2,000 acre feet a year is used for that county’s entire crop. This is enough to irrigate about 400 acres of almonds (for scale, California currently has more than a million irrigated acres of almonds). Some water used for marijuana irrigation comes from headwater streams that are home to sensitive species, and water use tends to increase in the fall when these watersheds are most stressed. If the crop were to be widely grown in drier areas, water impact might increase. Recent proposals for large marijuana greenhouse operations in Southern California desert communities also raise questions about water supply.
State regulations have recently given regional water quality boards and county governments better tools to manage marijuana growing. The North Coast Regional Water Board has adopted regulations requiring all marijuana operations over 2,000 square feet to enroll in a program requiring monitoring and potential cleanup for water discharge and diversions at existing marijuana operations. Humboldt County has introduced one of the state’s first land use ordinances for marijuana production, which limits cultivation size based on zoning type and square footage of the parcel.
The legal market for marijuana in California is likely to expand, especially if voters approve recreational use this fall. This presents both opportunities and challenges. The state can establish rules that make access to the market contingent upon following environmentally responsible and water-smart growing practices. The challenge is that for the regulations to be meaningful, they must be enforced. State and county officials will need to monitor the location of grows and practices, and collect information that can guide future policies to effectively reduce the crop’s impact on land and water resources. Accomplishing that will require adequate time and staff.
Read “California Streams Going to Pot from Marijuana Boom” (PPIC blog, July 23, 2015)
Visit the PPIC Water Policy Center
