Pubdate: Thu, 23 Jun 2005
Source: Los Angeles City Beat (CA)
Copyright: 2005 Southland Publishing
Contact:  http://www.lacitybeat.com/
Details: http://www.mapinc.org/media/2972
Author: Idan Ivri
Cited: Gonzales v. Raich (www.angeljustice.org/)
Cited: National Organization for the Reform of Marijuana Laws
(www.norml.org)
Bookmark: http://www.mapinc.org/mmj.htm (Cannabis - Medicinal)
Bookmark: http://www.mapinc.org/pot.htm (Cannabis)
Bookmark: http://www.mapinc.org/find?115 (Cannabis - California)

HALF-BAKED ECONOMICS

High Court Ruling Ignites Debate Over The Policing Of Pot In The
Marketplace

This spring, a few months before the Supreme Court ruled in Raich v.
Gonzalez that the Federal government has authority over state
marijuana laws, a high school economics lecture broke out in the
courtroom. Justice John Paul Stevens wanted to know whether the
medical marijuana marketplace would affect the price of pot on the
black market.

Attorney Randy Barnett for Angel Raich equivocated, "Well, it would
reduce demand and reduce prices, I think. But --" Justice Stevens
interrupted: "If you reduce demand, you reduce prices? Are you sure?"
Barnett answered "Yes." Laughter swept the courtroom. Stevens added:
"Oh, you're right. You're right. Okay. Yeah. Yeah."

As it happened, the question loomed large in the court's final opinion
this month. At first, it seems like a simple matter of common sense:
Sick people stop buying marijuana illegally because they can get it
from their dispensaries. Substitute widgets or hamburgers or bicycles
for weed, and your 11th grade econ textbook dictates what happens
next: Less demand in the market (in this case the black market) means
more unsold supply, meaning lower prices (for marijuana) across the
nation, which undermines the federal government's power to regulate
interstate commerce/ban drugs.

The Court found that Congress had a "rational basis" for believing the
scenario above was real, and that's all it took to overpower state
laws.

But dig just a bit deeper and some bizarre paradoxes of applying
regular economics to black markets emerge. For example, the Supreme
Court assumed (and common sense tells us) that the aim of government
laws on marijuana is to keep the price of illegal pot as high as
possible. But the corollary to the "low demand drives low prices" drug
model is that everyone who smokes pot illegally is actually
contributing to the government's anti-drug effort by pushing its price
higher. Huh?

UCLA Professor Mark Kleiman, an expert in drug control policy, has a
different theory -- albeit one that's not particularly well known in
policy, judicial, or academic circles. According to Kleiman, the
dominant driver of illegal drug prices is actually the supplier's
costs of evading the police.

In other words, the government spends billions of dollars hunting down
drug growers and dealers, and the user pays handsomely to make it
worth their while. And, crucially, the fewer dealers risking getting
busted out on the streets, the greater the chances of any one of them
getting caught, and the more they'll charge you for drugs.

In the Raich case under Kleiman's model, it's entirely rational to
believe the opposite of what the court found -- that a partial
legalization scheme (licit medical marijuana) would actually increase
the price of the drug on the street. With no sick people buying from
the dealers, there would be fewer dealers in business and cops would
find it easier to bust the remainder.

"Other things equal, if the enforcement pressure on the market [stays]
the same and now the market [is] smaller, there is a little more
enforcement pressure per gram, and therefore you would expect the
price to go up, not down," Kleiman told CityBeat. In other words, it's
possible that legal medical marijuana would actually strengthen the
Federal ban on recreational marijuana.

In a more simplistic form (e.g. "Cops should spend time catching the
real criminals!"), pro-marijuana advocates have been making the case
for years.

"I think [medical marijuana prosecutions are] a shameful waste of
valuable resources and really a violation of what the people of the
state of California wanted when they passed Proposition 215," said
Bruce Margolin, an attorney and director of Los Angeles NORML,
referring to the initiative that legalized medical marijuana in 1996.

Unsurprisingly, police officers point to the added efficiency of the
old all-or-nothing approach to pot smokers. "Because there is now a
fine line between a legal operation and an illegal one, it takes more
police resources, a lot of paperwork, things we wouldn't normally be
involved in having to prove," said LAPD spokesman Lt. Paul Vernon.
"That takes more work, not less."

The implication is that by increasing the confusion among cops
enforcement in general would be weakened. And that's just the official
line, reserved for inquiring reporters. In reality, the current system
of partial legalization may be even less popular among police.
"[Marijuana laws are] enforced at the local level by local cops and
local sheriffs," said Teresa Schilling of the California Attorney
General's office.

"They are sworn to uphold the law and many of them do feel duty-bound
to enforce federal law [as well]," Schilling admitted. Of course,
marijuana has no medical uses whatsoever according to the Feds.

Kleiman predicted Vernon's counterargument about the extra paperwork
to the letter, and he's also quick to concede that the number of users
of medical marijuana may not be enough to free up significant police
resources. "I'm not 100 percent clear that the effect I described
would happen," said Kleiman, "But at least it's clear that the
knee-jerk [supply and demand] argument doesn't hold up."

More research is in order. New identification cards could obviate the
extra headache that law enforcement agents feel trying to sort out
who's sick and who's not. "In San Francisco County they are open about
how they want to set up their system. A lot of [dispensaries] have
their own identity card systems, and there's an effort to create a
state program," said Schilling.

The LAPD and other law enforcement agencies worry that extra pot will
turn up in the black market. Lt. Vernon said the LAPD will take action
if "they can be linked to specific crime in the City of Los Angeles,
[including] street sales of marijuana, and association with gang crime
or street crime or violent crime."

Two recent busts suggest the LAPD is serious. The Compassionate
Caregivers dispensary on La Brea was the scene of 14 arrests in May,
and the LAPD confiscated $186,000 from the United Medical Caregivers
Clinic (UMCC) on Wilshire. Bruce Margolin of NORML is representing
Compassionate Caregivers and disputes any wrongdoing on the employees'
part.

But both Margolin and Kleiman pointed out that medical marijuana is
expensive compared to the going rate of the drug on the street,
limiting the danger of leakage. "Certainly it is the case that some
producers might decide to conceal their sales of purely illicit
cannabis under production for the [medical] market," Kleiman said,
"but it's hard to see that that would matter much."

"The places most receptive to the presence of [medical cannabis] clubs
tend to be the places where strictly illicit cannabis is easiest to
obtain," Kleiman wrote on his web log prior to talking to CityBeat for
this piece. "The ubiquity of the illicit cannabis supply =85 greatly
reduces the impact of making it medically available."

Still, even if the Supreme Court had had data showing that medical pot
is unlikely to leak much, and even if California had a true medical
marijuana ID system reducing the headache for patients and police,
Kleiman still assumes the justices would have ruled the same way this
month. The "rational basis" test is just too weak.

"The absence of particularized findings does not call into question
Congress' authority to legislate," wrote Justice Stevens in the
opinion. In other words, Congress doesn't need to produce any actual
proof that medical marijuana weakens the regulatory scheme, just a
hunch. "We have never required Congress to legislate with scientific
exactitude," Stevens added. "The congressional judgment that an
exemption for such a significant segment of the total market would
undermine the orderly enforcement of the entire regulatory scheme is
=85 not only rational, but `visible to the naked eye,'" wrote Stevens
confidently, raising the question of whether Supreme Court justices
could use some free time at a UCLA public policy course or two.
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MAP posted-by: Larry Seguin