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The right way to legalize marijuana (no, we’ve been doing it wrong)

Denver County Fairmarijuana
Talk about a pot pie: This year’s Denver County Fair will feature a marijuana theme.
(Ed Andrieski / Associated Press)

Mark A.R. Kleiman is out this week with the single most comprehensive look at the trend toward legalizing pot you’re likely to find. He doesn’t spend much space on the pros and cons of legalization -- almost anyone can tick those off on the fingers of both hands -- but on the right way to do it, and the wrong way.

Short version: Colorado and Washington are doing it the wrong way, and the federal government’s hands-off approach isn’t making things any better.

Kleiman’s grasp of the topic isn’t surprising. A professor of public policy at UCLA, he’s been a recognized expert on drug policy for years. (He’s also one of the few people we know who effectively shorted the housing bubble, selling his four-bedroom house on tony Mulholland Drive for a handsome profit in 2005 and sitting out the rest of the housing boom -- and bust.)

RELATED: The feds give a green light to the pot business

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Washington state hired him to consult on its launch of legal marijuana sales after legalization was passed in 2012, though the relationship wasn’t always mutually satisfactory. Kleiman’s consultancy ended last September, months before legalization took effect; he wasn’t especially circumspect about the shortcomings of Washington’s approach.

That’s what makes his latest piece in the Washington Monthly so useful. Kleiman observes that legalization by the states is here, and it will spread. But he doesn’t have much use for the idea that this is a testament to their role as “laboratories of democracy” (to cite Louis Brandeis’ phrase).

“Dr. Frankenstein,” he writes, “also had a laboratory." 

In fact, he writes, the current trend of state-by-state legalization risks creating a monster. The states are licensing activities that remain felonies under federal law, notwithstanding the federal government’s current stated intention to look the other way. That makes activities in the states “quasi-pseudo-hemi-demi-legal,” Kleiman says -- what happens if a new president decides to get tough?

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Kleiman argues that now is precisely the right moment for Congress to step in with a federal law legalizing and regulating the pot industry. That’s because the pot industry is still too small, poor and fragmented to lobby against effective federal regulation. But it’s only going to get bigger and richer from here, and it won’t be long before it has the deep pockets to block effective federal oversight, like the liquor industry. A federal law could leave most oversight to the states, but set parameters that would help them keep it under control, discourage interstate smuggling, and limit such downsides as drug abuse and unrestrained marketing.

Among Kleiman’s specific recommendations: tax marijuana by weight or THC content, not by price. The latter system, which is the law in Washington and Colorado, won’t keep prices high, which is important both for maximizing tax revenue and discouraging abuse.

He advocates selling marijuana only through state-owned stores, like the “ABC” stores that hold a monopoly on liquor sales in many states. And he advises any states that take that route to house their marijuana sales agencies not in the tax or revenue department, which would have an incentive to expand sales as much as possible, but in the public health department, which would be inclined to keep a lid on the market.

Kleiman recognizes that expecting anything intelligent out of the current Congress is, well, a pipe dream. But he observes that a presidential election is just around the corner. “Soon enough, candidates for president are going to be asked their positions on marijuana legalization. They’re going to need a good answer. I suggest something like this: ‘I’m not against all legalization; I’m against dumb legalization.’”


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