Justice, Taxes, and Felony Justice: Minnesota's current efforts to legalize leisure marijuana contain extra than simply legalizing marijuana

While opposition to recreational marijuana legalization by Minnesota Republicans appears to have taken the subject off the table for the 2021 session, a bill introduced by supporters of legalization is more than a space saver for a more receptive one Future.

The 179-page invoice, HF 600, reflects the current state of current legalization efforts in the U.S. and shows how the problem has evolved from legalization, regulation and taxation to broader attempts to address the negative effects of decades of cannabis bans. "Justice" is the theme; The word appears 41 times in the text of the invoice.

Amongst other things, the measure would create a social justice bureau on a new cannabis board of directors whose members must be "a person experienced in promoting social justice". The bill would also give "social justice applicants" preferences for licenses and grants to help those who may not have access to credit and investors to start cannabis-related businesses.

It would also use a portion of the tax revenue for community development grants in places with a high percentage of residents who would qualify for social justice applicants according to standards. (According to the law, social justice applicants are veterans who have lost their honorable discharge status as a result of a cannabis-related crime and also live in a census area with a high poverty rate or lower median family income. A definition is similar to the earlier federal Opportunity Zones set up.)

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The bill makes no mention of the breed, but the sponsors say that by focusing on areas of high poverty, it will capture many people of color, especially African-Americans, who have historically borne the brunt of the arrests and convictions of marijuana.

Sen. Melisa L.ópez Franzen

Senator Melisa López Franzen, DFL-Edina, the law's main sponsor in the Senate, said justice is a necessary aspect of any law in order to garner support among DFL members, let alone among Republicans in the House of Representatives and Senate. Helping people start a business is of key importance. "Who will benefit from this industry?" She asked. “You have to have money to make money. You have to have investors, especially in a new industry. So how do we ensure that the people in the communities hardest hit by the ban are part of the future of this industry? "

Minnesota bill reflects national trends

Bruce Barcott, an author who covers legalization efforts for the Seattle-based website Leaflysaid the Minnesota bill reflects current national legislative trends. "We have come a long way since (the Washington and Colorado initiatives in 2012) figuring out what pieces of legislation need to be put into law to make sure this industry is fair and equitable," said Barcott. “Unfortunately, one of the dynamics that has emerged in other states is that the people who suffered most from the war on drugs under the marijuana ban – that is, color communities, especially black Americans – have not yet reaped the benefits of legalization. "

Minnesota law's focus on who can get licenses and how they can be helped is similar to the approach taken in other states, particularly New York, which is in its third year trying to pass a legalization bill. "States are working on new ways to correct this," said Barcott of the industry's disproportionate advantages.

The other common thread is how tax revenue is spent. Early bills provided a boost to law enforcement resources, which Barcott said was aimed at getting moderate voters and moderate lawmakers on the side of legalization. However, the problem of policing in color communities, highlighted by the death of George Floyd, has made this funding more problematic.

The Minnesota bill does not add any new resources to the police. Instead, the revenues would be spent on economic and community development, which is in line with the results of other states. Because of the racial disparities in wealth, including home and business ownership, preferring licenses over people of color is not enough, Barcott said.

"It takes a retail business hundreds of thousands of dollars to get started," he said. Banks will not lend to these companies because of federal restrictions on what remains an illegal activity at that level and the types of equity many people can draw on – second mortgages, family loans – less for communities with fewer generational wealth Are available. That means some sort of loan or grant program is required if states want to give low-income residents the opportunity to be entrepreneurs, not just consumers, in places with a recreational marijuana industry.

The bill addresses this through a number of grant programs: for farmers (CanGrow); for entrepreneurs who want to get into the industry (CanTrain); for workers (CanLearn); for startups that navigate the complex regulatory landscape (CanNavigate); for non-profit organizations that would offer startup loans (CanStartup); and for Community Development Grants (CanRenew).

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Another key piece of the bill is a mechanism for individuals convicted of marijuana-related offenses to clear records of those convictions. According to the legal provisions, this would be done automatically in smaller cases and after a review by a new Cannabis Expungement Board for more serious crimes.

Franzen said early marijuana arrests and convictions "are often the entry point into the criminal record" and something that often affects young people, she said. "You can see more of these cases in color communities." Unlike wealthier young people who can afford lawyers and have dismissed or changed charges against a non-marijuana case, poor people are more likely to have this on their records. Extinction, she said, "is a big part of equity."

Based on lessons from other countries

The fundamental change in the law under the law is to make marijuana possession and use legal. Unlike some early legalizing states, Minnesota would allow adults to grow their own plants and allow small amounts to be given away by individuals. It would also allow for some public consumption in businesses and events dedicated to the sale and use of marijuana.

Commercial production and sales would be regulated by the new cannabis management board. Store owners and tour operators selling marijuana products will be charged a 10 percent tax on sales value, although no sales tax will be changed for customers.

Leili Fatehi

Leili Fatehi

Leili Fatehi, a lawyer and lobbyist who co-founded Minnesotans for Responsible MarijuanaThe bill introduced this year is almost identical to a measure that was tabled shortly before the COVID-19 pandemic in 2020 and which mirrors legislation in other states.

She explained the length of 179 pages and said the bill was the first comprehensive law to legalize Minnesota. He described a marijuana bill that was heard as a "conversation starter" in the Senate two years ago.

"Turning a product that is currently illegal and criminalized into a legal industry affects many different things," said Fatehi. "This bill draws on a lot of knowledge from other states, so innovation was possible." It must also incorporate the state's existing medical marijuana program.

Fatehi said the only area that is missing details is money for various grants. Fatehi is also concerned that the tax rate on the bill may not be enough to pay for regulation and social justice grants. The last thing proponents want is a law to legalize marijuana that will increase the state deficit.

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"What they have been aiming for is to make the industry entry as accessible as possible to support this artisanal local market, but the fees are much lower than other states," Fatehi said.

Barcott said he also noticed the low tax rate on the Minnesota bill – and the lack of a retail sales tax that is being billed to consumers. According to a state-to-state analysis done by Fatehi, Montana has a 20 percent excise tax on wholesalers. Nevada has an excise tax of 15 percent and a retail sales tax of 10 percent. Washington has a sales tax of 37 percent.

"Consumers will pay for it," Barcott said of higher taxes. "You can't tax it at 75 percent, but consumers pay a noticeable consumption tax."

Franzen said the 10 percent rate in the bill was a placeholder "to signal to the public that we don't want to overwhelm him, to overwhelm him so much that there is still a black market." However, she wants the bill to pay for itself, including funding programs like a cannabis substance use disorder advisory board to respond to problems caused by better access to marijuana. "Just because it's legal doesn't mean it won't have any negative effects," said Franzen.

Potential problems

The Minnesota bill also adheres to another trend in how it treats large and nongovernmental companies that may be trying to enter the market. The short version: You are treated as an outsider, but access is not directly denied, which the bill would have put in contradiction to the interstate trade clause of the US Constitution.

The state would create three license levels: one for "craftsmen"; one for "micro businesses"; and another for "mass cultivators". The difference is in size: micro-operators can grow up to 2,000 square feet of plants, craft operators can grow up to 10,000 square feet of plants, and mass operators can grow up to 30,000 square feet. (The microbusiness licenses give very small businesses an opportunity to get into the industry. They can grow and sell marijuana in a retail store, and even have room to consume in-store products.)

However, the bill says the state cannot license the larger operators for five years – unless the board determines that the micro and craft licensees are not producing enough marijuana to serve the market. This provision is intended to favor smaller and more likely local businesses in startups.

A five year restriction for larger operators is longer than most other states and creates a potential problem. Although the bill would allow the cannabis authority to allow larger operators if supply is insufficient, the delay could be enough to persuade customers to black market sales due to lack of supply and price increases – which undermines one of the main points of legalization: disrupting the illegal and unregulated Sales.