Marijuana
Like growers, dispensary operators know that broader legalization of marijuana could lower prices and bring more competitors into their business. (Christian Escobar Mora, EPA / February 27, 2012)
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By Joe Mozingo, Los Angeles Times
March 10, 2012
Just weeks before the deadline for state ballot initiatives, the effort to put a marijuana legalization measure before voters in the general election is in disarray as the federal government cracks down on medical cannabis and activists are divided on their goals.

After Proposition 19 received 46% of the vote in 2010, proponents took heart at the near-miss. They held meetings in Berkeley and Los Angeles and vowed to put a well-funded measure to fully legalize marijuana on the 2012 ballot, when the presidential election would presumably draw more young voters.

Instead, five different camps filed paperwork in Sacramento for five separate initiatives. One has given up already and the other four are teetering, vying for last-minute funding from a handful of potential donors.

Backers need more than $2 million to hire professional petitioners to get the 700,000-plus signatures they say they need by April 20 to qualify for the ballot. But they are getting little financial support from medical marijuana dispensaries that have profited from laws that pot activists brought forth in earlier years.

Certainly, some dispensaries cannot help because they are paying large legal bills to fend off the federal government. But like growers, dispensary operators know that broader legalization could lower prices and bring more competitors into their business.

Of the four possible initiatives, the one apparently with the most vocal support within the movement is the Repeal Cannabis Prohibition Act, written by defense attorneys who specialize in marijuana cases. The measure would repeal state criminal statutes on marijuana possession, except those for driving while impaired or selling to minors. The state Department of Health would have 180 days to enact regulations before commercial sales became legal.

Libertarian activists came up with Regulate Marijuana Like Wine, which would have the department of Alcoholic Beverage Control oversee marijuana sales, same as beer and wine. Backers commissioned a poll they say found that 62% of Californians would support the measure. But time is against them. They filed early, so their deadline for signatures is March 20. So far, they have collected only about 50,000.

A third proposal comes from the Reefer Raiders, friends and disciples of the late pot guru and author Jack Herer, who have filed pot initiatives in one form or another since 1980. Led by a wild-bearded Bert "Buddy" Duzy, the California Cannabis Hemp & Health Initiative would legalize "cannabis hemp" for industrial, medicinal, nutritional and "euphoric" use.

The fourth idea comes from more staid groups: Americans for Safe Access, United Food and Commercial Workers Local 5 and the state chapter of the National Organization to Reform Marijuana Laws (NORML). They are pushing the Medical Marijuana Regulation, Control and Taxation Act, which would give more legitimacy to medical marijuana by adding state oversight and controls that the Legislature has been unable to enact.

At a recent forum in Marin County, Dale Gieringer, the state director for NORML, elicited consternation from the audience when he said that voters were more likely to go for regulating medical cannabis than allowing commercial sale — a key rift within the movement.

Proponents of all the initiatives have lamented that they had to compete with one another. "We're all chasing the same dollars," said Steve Collett, a Libertarian activist and Venice CPA who's behind the marijuana-like-wine measure.

Collett said that given the federal crackdown on dispensaries that began five months ago, he hoped the marijuana industry would pour money into the ballot initiatives, particularly his, which includes a provision to prohibit local and state authorities from aiding the Drug Enforcement Administration on pot cases. But the industry hasn't come through in any notable way.

"This is very difficult to understand," said Steve Kubby, a longtime activist who worked on the medical marijuana Proposition 215 in 1996 and is the main proponent of Regulate Marijuana Like Wine. "Here's an industry that was able to come up with $100 million in taxes last year but is unable to come up with money to ensure its own future in the face of a federal government trying to exterminate them."

The state Board of Equalization estimates it annually collects between $57 million and $105 million in sales tax from dispensaries.

Backers of all four measures predict that the price of marijuana would drop if any of them passed. In Israel, where medical marijuana is legal, prices are a fraction of what they are in California.

"A distinct minority of the dispensaries are actually supporting legal reform, maybe 10%," said Steve DeAngelo, executive director of the state's largest dispensary, Harborside Health Center in Oakland. "That's a symptom of an unregulated market. Anyone can jump in. And the people who jump in like gray areas. They like no regulations. They just want to jump in and make as much money as they can."

DeAngelo is backing the medical regulation initiative because he says Californians need to see medical cannabis safely and responsibly distributed before they will trust broader legalization. The measure would create a state marijuana board, levy a supplemental sales tax and require mandatory registration for all cultivators, processors and distributors.

Debby Goldsberry, a longtime activist and co-chair of the Repeal Cannabis Prohibition Act, said some dispensary owners don't put much hope in being saved by ballot initiatives. They view the current crackdown as a backlash to the near-success of Proposition 19, .

Since October, the feds have waged a multipronged attack.

In California, the DEA has raided at least 36 dispensaries and growers, confiscating marijuana, cash and computers. The state's four U.S. attorneys have sent at least 150 letters to landlords of dispensaries, ordering them to evict their tenants or face seizure of their property and prosecution. They've also threatened cities and counties that have tried to set up a permit system for dispensaries and growers.

On the financial front, the Federal Deposit Insurance Corp. has pressured banks to close accounts linked to marijuana. And the IRS has audited dozens of dispensaries using an obscure provision of the federal tax code that prohibits drug traffickers from making any deductions.

Harborside was ordered to pay $2.5 million in back taxes. "All our funds that we could have used for political purposes are tied up in litigation," DeAngelo said.

The wealthy donors who helped fund Proposition 19, including billionaire George Soros and retiredinsurance executive Peter Lewis, are more likely to fund measures in Colorado and Washington state that have already qualified for the ballot. Those are cheaper states to win, requiring far less media buys.

Ethan Nadelmann, founder of the Drug Policy Alliance and an advisor to Soros, said measures in those states are "tightly drafted initiatives and the polling is looking good."

This week, in California, the proponents of the medical initiative began turning their efforts to an Assembly bill that would establish similar regulation. They are hoping legislators will be spurred to act by Atty. Gen. Kamala Harris, who sent letters to the leaders of both chambers in December urging that "state law itself needs to be reformed, simplified and improved to better explain to law enforcement and patients alike how, when and where individuals may cultivate and obtain physician-recommended marijuana."

Still, in a last-ditch effort to get one measure on the ballot, the backers of the three remaining legalization proposals agreed to endorse whichever one got funding.

"At this point we're at a Hail Mary pass situation," said defense attorney William Panzer, a coauthor of the Repeal Cannabis Prohibition Act and Proposition 215. "But if we make the Hail Mary pass, we have a chance."

joe.mozingo@latimes.com