Who should have regulatory authority over marijuana?

The Mayor of Seattle signs an ordinance creating a regulatory framework for marijuana in the city.  Photo: Jen Nance.

The Mayor of Seattle signs an ordinance creating a regulatory framework for marijuana in the city.  Photo: Jen Nance.

Recreational use of marijuana is now legal in Colorado, Washington, Oregon, Alaska, and Washington DC.  Between now and election day 2016, an additional 14 states may place marijuana legalization initiatives on their ballots, including: Arizona, Arkansas, California, Georgia, Ohio, Maine, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, and Wyoming.  23 states and Washington DC have legalized medical marijuana, with up to seven states pending legislation.  In 2016 Florida is likely to again consider legalizing medical marijuana; a similar 2014 ballot measure narrowly failed to reach the 60% supermajority required.  

Amid the stampede to legalize marijuana production, distribution, sale, and use, states are experimenting with various regulatory schemes.  A central question in developing a regulatory framework for marijuana is: who should have authority to regulate it?  So far there have been a multitude of approaches.  Some states are proposing to create a new institution devoted to marijuana regulation.  Ohio's 2015 ballot initiative proposes a Marijuana Control Commission.  Pending legislation in California proposes an Office of Medical Marijuana Regulation responsible for creating rules, with local governments in charge of enforcement.  Elsewhere states are placing authority in an existing institution, such as the Oregon Liquor Control Commission or the Washington State Liquor Control Board.  Colorado uses a hybrid model in which local governments and the state legislature share responsibilities.  And some ballot initiatives require the legislature to decide at some future date where authority should lie.

The marijuana legalization movement is developing rapidly, but it's worthwhile for states to think about which of their many institutions is best equipped to handle regulation of the burgeoning marijuana industry.  There remains a great deal of uncertainty in this regard, but at the very least it seems clear there isn't a one-size-fits-all model available.  A relatively small state like Maine might be able to handle a centralized approach, concentrating regulatory authority in a state-level institution.  California, on the other hand, has a diversity of stakeholders with varying degrees of tolerance for marijuana cultivation and use, so a decentralized power-sharing arrangement, where local governments set the terms of engagement, makes sense.  

Regardless of the choice, it will be important for states to understand the limitations of their choice.  Local governments are typically not as well-funded, staffed, or equipped to handle administrative burdens as state-level agencies are.  On the other hand, state agencies tend to be less responsive to local context and might be overwhelmed themselves with state-wide regulation.  

Take California, for example.  A pending Senate proposal would establish a regulatory body - the Office of Medical Marijuana Regulation - that would create regulations and issue licenses.  Local governments would be responsible for enforcement.  The proposal is a poor approach in my view, as state-wide regulations may not be responsive to local conditions, and as a consequence, local governments may not be enthusiastic about their enforcement obligations.  On the other hand, the California Assembly is proposing to establish a regulatory agency that sets the rules, while various state agencies would be responsible for enforcement.  Again, the proposal doesn't maximize local knowledge and sensitivity, and this time, fragments enforcement responsibilities across departments, creating the potential for confusion or diffusion of responsibilities.  A better approach for California, in my view, would create a state-level agency dedicated to marijuana regulation that creates a basic regulatory framework and serves to support local governments in setting specific rules and developing enforcement capabilities by providing technical expertise and financial assistance.  In any case, adoption of any of these proposals is likely better than nothing.  California's lack of marijuana regulation does not bode well for the state's preparation if current polling accurately foretells full blown legalization in 2016.  

Some states are using existing mechanisms - like their liquor control boards - to create a smooth transition.  But marijuana is a unique industry, and may eventually require a more tailored regulatory framework.   The legal marijuana industry is the fastest growing industry in the United States, and may eventually become larger than the entire organic food industry, the NFL, or newspaper publishing.  Estimates of the size of the US black market marijuana industry range from $10 to 120 billion annually.  Slotting marijuana regulation into existing mechanisms might avoid messy transitions for now, but eventually states will have to come up with a more dedicated regulatory plan.  Where states choose to allocate regulatory powers is an issue that will require more attention than it currently receives.