Las Vegas Sun

April 22, 2018

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Q+A: Why this Brookings expert took the VA to task over medical marijuana

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Steve Marcus

Marijuana plants are shown at a Desert Grown Farms Cultivation Facility in Las Vegas, Dec. 15, 2016. The company operates three medical marijuana dispensaries in the Las Vegas Valley.

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John Hudak is a senior fellow at the Brookings Institution

The title of John Hudak’s January report examining the U.S. Department of Veterans Affairs’ response to a congressional inquiry on medical marijuana pulls no punches.

“When the VA lies to Congress about medical marijuana, it lies to our wounded warriors,” the report was headlined.

Hudak, a member of the Brookings Institution and one of the nation’s foremost experts on marijuana policy, examined VA Secretary David Shulkin’s response to a letter from Democratic members of the House Veterans Affairs Committee in October asking him why the VA wasn’t conducting research into medical marijuana.

During a visit to UNLV last week, Hudak discussed the report and several other issues related to legalized marijuana during an interview with the Sun. Excerpts of the interview follow:

Given the number of veterans in our community, I think our readers would be interested in hearing an outline of your report. What were your takeaways?

The background is that the VA secretary was sent a letter by the Democratic ranking member of the House Veterans Affairs Committee in October.

And shortly before Christmas, Secretary (David) Shulkin responded with language that was just false, saying that the VA could not study medical marijuana because it's an illegal substance and other things that I found particularly inflammatory, like it's important for VA to look for other therapies for PTSD and chronic pain, like yoga.

I thought it was an insensitive letter. I thought it was a letter that failed to acknowledge existing research. And it was a letter that frankly contained explicit lies.

I think that in part because of the report, the secretary reversed course. The next day, he was in a Senate Veterans Affairs Committee meeting, and he was asked about this.

And he hemmed and hawed a little bit and said, "Well, it's not that we're restricted, but there's this huge bureaucracy behind doing that research, which is challenging."

I note in the report that this is the most generous interpretation of Secretary Shulkin's language.

But when you're talking about veterans, when you say bureaucracy is too challenging to find wellness solutions for our veterans, if that is what you believe you should not be the secretary of Veterans Affairs.

So it is that mindset that exists in many corners of this administration: Everything marijuana is bad, don't bother looking at the science, find the easy way out and, when pressed, lie about it because the expectation is that members of Congress aren't going to do their homework.

In reality, ranking member (Tim) Walz from Minnesota did his homework. He reached out to people who knew this content and asked them how they interpreted it.

It moved the VA secretary to change his language, but now we'll have to see whether he changes his actions and VA really starts looking at this in a serious way.

What does the research say about the effects of medical marijuana on PTSD?

We don't have a lot of information right now, in large part because the federal government has done such a poor job encouraging that research.

The secretary is right: There are a lot of bureaucratic hurdles that prevent this kind of work from being done. And the result of that is that we have limited scientific knowledge of how cannabis interacts with the system to assist with the symptoms of PTSD, which of course are many.

We have some anecdotal research. We do know that there's pretty good research out there right now about the ability to use cannabis as a means of weaning yourself off opioids if you have an opioid use disorder, which is an increasing problem not only in the U.S. at large but especially in veterans communities.

We know that it can help with chronic pain, and so there are symptoms that veterans can benefit from. And a lot of veterans claim benefits from cannabis.

But unfortunately, when you have a government that puts up bureaucratic hurdles, does not necessarily support research into medical efficacy and in many cases would prefer funding research that looks at harms and risks, you end up with a muted state of scientific knowledge.

It's not because researchers don't want to do the work. It's oftentimes that researchers are scared off by those bureaucratic hurdles, which prevent them from doing the work they want to do.

Switching gears to another topic, U.S. Attorney General Jeff Sessions said this month that federal prosecutors "haven't been working small marijuana cases before, they are not going to be working them now.” If I’m in the legal marijuana industry, should I be breathing a sigh of relief?

So it's really not clear what the attorney general means by 'low-level cases.' You can imagine that means simple possession, not that federal government tends to prosecute that too often. But that is really in the eye of the beholder.

You could consider low-level cases to be large, legal marijuana growing operations if you think about it meaning low-risk or less risky than illegal operations. But when you think about low-level traditionally means, it tends to mean a small number of grows, simple possession.

So if you're a home grower in the hinterlands of Nevada or a home grower in the states that allow it more broadly, you can imagine the six plants on your property could be a low-level offense.

But if you're a commercial grower, it's easy to imagine a definition whereby you are a high-level offender. Growing thousands of plants is a pretty major set of felonies in federal court.

So I don't think there's a reason to breathe a sigh of relief just based on that language.

But if I'm a casual user, maybe the heat’s off a bit?

Yes, I think so. The federal government tends not to change simple possession for marijuana that is unrelated to other offenses. So if you've kidnapped someone, for instance, sometimes you'll see people get charged with possession of marijuana when prosecutors are just throwing everything at them.

But typically that's not what happens. The DEA and FBI go after much bigger fish. But this is Jeff Sessions' Justice Department, so it's hard to predict what the federal government will do on many issues but especially on this one.

You’ve discussed this in your previous visits to UNLV: As more time passes under the Trump administration and there still hasn’t been a crackdown on legal marijuana, it appears less and less likely that one will happen. Do you think that’s still the case?

I think that's absolutely the case. I think when Jeff Sessions rescinded the Cole memo (an Obama-era policy for the federal government not to interfere with legal-marijuana laws) on Jan. 4 and issued the Sessions Memo, if you want to call it that, that was a tough day for the industry. It was something I expected to happen, but it was not apparent what the fallout would mean.

On Jan. 5, you could have envisioned DEA agents going in and cracking down on a lot of recreational marijuana grows and dispensaries, and U.S. attorneys prosecuting those cases.

You didn't see that. And I think with each passing day, one of two things is happening: Either the DEA is gearing up for large-scale raids, which takes strategy and timing, or they're just not doing it.

And I think the latter is much more likely, because when you as a law enforcement entity begin the planning process for large-scale raiding, typically that involves intelligence. It involves research. It involves trying to figure out who will be where and when, when it will be safest for agents to move in.

You don't really need to worry about any of that with legal marijuana. You have a list of companies with their addresses. Guns are not allowed on premises. So there is very little risk to federal agents going in.

So I don't think it's that sort of gear-up strategy. I think it's an attorney general who's a lot of bark, but his ability to bite is pretty restricted by just the size of the industry right now and the limited resources he has.

Meanwhile, a report came out this month saying wholesale marijuana prices in the legal industry are at a low point. Did you anticipate that would occur?

That happens everywhere where legalization happens, both for recreational and for medical.

It happens faster in recreational marijuana because those markets tend to be larger, but Nevada started sales early — earlier than expected. Because of that, your readers are familiar with supply shortages and things like that in your market.

That was hard, because the recreational growers weren't growing at capacity, and also in part because all of the licenses were not handed out yet.

So you did what most states do: get your existing medical producers up and running because they have their facilities already.

But as more people come online, more product is going out. So it's a simple supply and demand issue affecting prices, and that's what happened with wholesale prices.

Doesn’t this chop the legs out of the argument from legalization opponents that prices of legalized marijuana will be higher than those on the black market, and therefore there will be incentive for people to buy from illegal dealers?

Yes, absolutely. There's a lot of good, empirical data that chopped the legs out from under the arguments by the anti-marijuana crowd. This is among them.

I think when sales first begin — it was true in Nevada, Colorado, Washington and elsewhere — once legalization begins, prices are so high that who's going to want to buy legal marijuana?

Prices have been high in Nevada for six months. You've made $33 million in tax revenue.

People are still buying expensive marijuana. There's a novelty to it. There's a safety to it, both in terms of knowledge of the product you're getting, but also from whom you're purchasing it.

Those things all factor into the cost-benefit analysis that a consumer is considering.

It's sort of funny, no one ever thinks as a marijuana user as a rational economic actor. But most of them actually are. They think about costs, not just in price but in external costs that factor in, like safety and security. And people are buying more (legal) marijuana each month relative to the previous month. That's a trend that will almost certainly continue, and it's something that is certainly incentivized as prices go down for wholesale marijuana.

Have we seen an effect on the black market from legalization?

I think it's pretty early to measure that in Nevada.

It is hard to measure, period. You have to ask drug dealers and illegal buyers about their true decisions and behaviors. There are ways to get at those type of issues, but they're hard. It's expensive survey research to do.

If on average, 10 percent of residents consume marijuana in a state that has legalized, part of that will be black market and part will be legal market.

So to get a sample of people who you're confident are telling you the truth, that's a lot of phone calls to make.

So we'll know over time, typically based on law enforcement, what they are seeing in terms of drug seizures, in terms of operations that they know are going on in the state — whether they've changed their products or moved on.

We know it's had an impact in Colorado and in Washington. Some estimates are that the black markets have taken 40 percent to 50 percent hits in the first few years.

You have to expect there is an impact on the black market. I mean, you don't sell $200 million of marijuana in six months and have that going only to new consumers who've never purchased in the black market.

I think that where you will have some more black market activity will be people who are home growing when they're not supposed to be. For instance, you can't have a home grow in Clark County. But there will be home growers in Clark County. My guess is they were previously growing.

My argument is that allowing home grow rights is riskier than banning them. But in an environment in which cannabis is legal, you could have illegal activities popping up because the culture is a little bit different.

So you can imagine someone growing cannabis and then having it on them, and personal possession of that cannabis is not illegal regardless of where it came from. But I think that's a small minority of individuals.

Nevada will ultimately start to see displacement of the black market. It won't go away completely, particularly in a state as geographically large as this one, where you can go quite a distance before you can encounter a place to legally purchase cannabis.

But it's going to happen.