If you've been following this blog for the past few weeks, you've noticed that I've been teasing out my forthcoming article entitled "Marijuana Agriculture Law: Regulation at the Root of an Industry." I wrote about marijuana appellations, as well as the potential for counties across the country to start adopting a marijuana ordinance. I've been working on the article for the past few months, and I'm pleased to finally post a full draft online. See here for access to the article. The article will be published in the Florida Law Review sometime next year, but this draft is available immediately. Major themes covered include the potential commoditization/consolidation of the marijuana industry, the environmental regulation of marijuana agriculture, and the administrative challenges of regulating this new industry. Below is the introduction to the article:
Across the United States, voters are weighing the costs and benefits of marijuana legalization. As many as sixty marijuana legalization initiatives may appear on election ballots in 2016, legalizing the recreational or medicinal use of marijuana in as many as 17 states and adding to the growing number of states that have already legalized marijuana. As states move toward legalization, governments will need to address a broad range of regulatory issues, including the distribution, sale, and consumption phases of the supply chain. But legal marijuana’s track record so far suggests that the agricultural component of the marijuana industry is being ignored. Whether states are failing to appreciate marijuana’s agricultural roots or choosing to disregard them, the industry’s direction will be out of state control until regulatory frameworks are in place.
Nowhere has this been more apparent than in California. In 1996, California voters passed Proposition 215, the Compassionate Use Act (CUA). With the CUA California became the first state to legalize the medicinal use of marijuana, exempting patients and prescribing physicians from criminal prosecution. The text of the act was short, and did not address how the state or local governments were intended to regulate the marijuana industry. It did not, for example, assign regulatory authority to an administrative agency, articulate limits on possession or cultivation, or propose a broad regulatory framework from which the state or local governments could operate.
In the wake of the CUA a legal medical marijuana industry was created in California, and the industry experienced tremendous growth, notwithstanding the absence of any meaningful state regulations. But the CUA’s omissions prompted the state legislature to enact the Medical Marijuana Program Act (MMPA) in 2003, which, among other measures, restricted the number of plants medical marijuana patients or designated caregivers could cultivate, and assigned further regulatory authority to the Attorney General. Even these limits, however, became legally ambiguous guidelines after the California Supreme Court ruled that the rights established by constitutional amendment Proposition 215 could not be limited by legislative act. The upshot of these early experiments with marijuana legalization is that California’s burgeoning marijuana industry has been more or less unregulated for twenty years.
In the absence of regulation, marijuana cultivation in California has exploded, with approximately 50,000 marijuana farms accounting for 60% of all marijuana grown in the United States. There are as many marijuana farms in Humboldt County, California, as there are wineries statewide. And this un-checked growth in marijuana agriculture has consequences for the sustainability and potential growth of the industry. Marijuana farming has been blamed for sucking rivers dry, poisoning soil and water resources with pesticides and rodenticides, and clearing mature forests. Much of these criticisms are flawed, as research on the environmental impacts of marijuana farming is nascent and rarely acknowledges that farmers can grow responsibly and sustainably on private lands.
Many farmers would welcome the security of being in compliance with state and local laws, while being distinguished from cartel operations or destructive “trespass grows” on public lands. As it stands, farms on private property remain vulnerable to police raids and asset forfeiture laws, and are unable to take advantage of typical agricultural government services, such as crop insurance programs or pesticide-free certifications. Because marijuana agriculture’s regulatory contours have remained ambiguous for so long, the marijuana agriculture industry has been poorly understood by states and the public. This disconnect presents a threat to responsible management of legal marijuana markets.
Fortunately, change is on the horizon in California. In January 2016, the Medical Marijuana Regulation and Safety Act (MMRSA) came into effect, with ambitious proposals to create comprehensive regulations for marijuana agriculture. The MMRSA assigns authority for various regulatory responsibilities to a variety of state agencies, including the Department of Food and Agriculture, Department of Fish and Wildlife, Department of Public Health, and the State Water Resources Control Board. Said the author of the bill, “cultivators are going to have to comply with the same kinds of regulations that typical farmers do…it's going to be treated like an agriculture product.” It took twenty years to get there, but marijuana cultivation has finally been recognized as an agricultural activity in California, and may now be regulated as such.
The same cannot be said for every state that has legalized, or is considering legalizing, medicinal or recreational marijuana. In many states the immediate regulatory priority is the distribution, sale, and consumption of marijuana. Colorado legalized recreational marijuana by passing Amendment 64: The Regulate Marijuana Like Alcohol Act of 2012. For political and public health reasons the analogy makes sense, but it also reveals a regulatory blind spot. States may be using alcohol as a model for regulating the distribution, retail, and consumption of marijuana, but marijuana is much more than a retail product. It is also an agricultural product, and by some measures, the largest cash crop in the United States. Since marijuana prohibition laws were passed long before any regulations for cultivation were developed, states are facing an unprecedented challenge: regulate, for the first time ever, one of the country’s largest agricultural industries.
Early indications suggest that states are making little effort to regulate marijuana cultivation, or fail to appreciate the disruptive potential of marijuana agriculture. 21 states may have marijuana legalization initiatives on their ballots for the 2016 elections. Colorado, Washington, Oregon, Alaska, and Washington DC have already legalized the medicinal and recreational use of marijuana. But few of these states are anticipating the unique regulatory challenges that marijuana agriculture presents. Even fewer are prepared to tackle them.
This Article argues that marijuana is a burgeoning agricultural industry, and calls for regulations that recognize it as such. As the field of marijuana agriculture law is incipient, this article provides a roadmap for the major regulatory issues states and the industry are likely to encounter. Many agricultural policies and programs are created or supported by the federal government, and would not apply to marijuana agricultural activities that run afoul of federal marijuana prohibition laws. Therefore, states and the marijuana industry will need to be creative in providing analogous regulatory functions.
The most immediate choice regulators will be forced to make is between an approach that incorporates the marijuana industry into the existing regulatory framework for agriculture (essentially treating marijuana like any other agricultural product), or an approach that creates a separate regulatory framework for marijuana cultivation. While the former has its benefits, and may be achievable long-term, marijuana’s transition from the black market may call for a targeted regulatory scheme in the interim.
Another fundamental issue facing the marijuana agriculture industry has not yet been conclusively resolved: is marijuana an agricultural commodity? Commodities are fungible goods with no qualitative differentiation, such as wheat or soybeans. Many existing farmers fear that marijuana markets will be flooded with cheap, indistinct marijuana grown by “Big Ag” conglomerates. To counteract these concerns, some industry groups are advocating for states to adopt an appellation model of marijuana cultivation that would preserve markets for regional marijuana products and maintain quality standards. States and counties can play a large role in this existential question by adopting or rejecting the appellation model, or by enacting other regulations that facilitate or preclude the consolidation of marijuana agriculture.
There is an environmental component to marijuana agriculture that will also require regulatory attention. Pesticides and fertilizers facilitate plant growth, but may reduce soil and water quality. There is a market for organic or pesticide-free marijuana that states and the marijuana industry may wish to cultivate. Marijuana agriculture also requires appropriate quantities of water for irrigation and, when grown indoors, energy resources. Regulators must balance an interest in providing resources to a growing industry with the need to manage those resources sustainably.
When the environment does not cooperate, the federal government has been instrumental in providing stability to the agricultural industry by regulating crop insurance and providing disaster relief. As marijuana farmers would not be eligible for these programs, states may want to provide their own support structures. However, it may be difficult to avoid the federal government’s institutional and legal reach, presenting federal preemption concerns.
Another question concerns power sharing: where can/should regulatory authority be placed? Local governments may play a large role in the direction of marijuana agriculture, as states with marijuana regulations have so far been broadly permissive of counties and municipalities creating their own (often more restrictive) marijuana agriculture regulations. Local governments can utilize their lawmaking powers to shape agricultural policy for the marijuana industry, but this decentralized nature of policy-making may come at the expense of regulatory clarity for the state as a whole.
Keeping the regulatory framework centralized on the state level provides more consistency, but may be difficult to apply in states where political support for marijuana cultivation changes drastically by jurisdiction. In addition, states will need to decide whether to consolidate regulatory authority for marijuana into one state agency, or to assign different roles and responsibilities to several agencies and regulate cooperatively. Colorado has adopted the former model, while California the latter.
In February 2016, Humboldt County passed a comprehensive commercial marijuana cultivation ordinance, one of the first of its kind. As the heart and soul of California’s marijuana agriculture sector, Humboldt County has consistently played a leadership role in the development of the marijuana industry, and this ordinance may prove instrumental in shaping marijuana agriculture policies around the country. The ordinance addresses many of the issues identified in this article, placing limits on farm size, water, and energy use, while developing an artisanal labelling program. The Humboldt County ordinance is an ideal case study for the nascent field of marijuana agriculture law, and underscores the need for state and local governments across the nation to start developing their own regulatory framework.
Never before has a major agricultural product entered legal markets with the pace and scale that marijuana is entering them today. States face an unprecedented regulatory challenge, and ignoring the agricultural dimension of the marijuana industry is not a sound long-term approach. This article will present and analyze the most significant legal and regulatory challenges states will face when legalizing marijuana. Responsible and sustainable marijuana agriculture can be fostered at the state level, but only if regulations are responsive to the unique and unprecedented challenges that marijuana agriculture presents.