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We’re taking a market that was underground and bringing it above board for the first time in history: Expert on legalization of marijuana

Erik Altieri NORML Executive Director joins the On the Move panel to discuss the future of marijuana policy reform.

Video Transcript

JULIE HYMAN: It has been a challenging year for investors in marijuana stocks. If we look at one ETF that tracks the industry, MJ, it is down about 60% this year. It's perhaps been more encouraging on the legal and policy front. And to talk about that angle, we're joined by Erik Altieri, he is the executive director of NORML, what used to be known as the National Organization for the Reform of Marijuana Laws.

He's joining us from Washington DC. Erik, as you know, a lot of different states have already legalized marijuana for both medical and recreational use. There's some talk about nationalized legalization as well. Your organization's 50 years old. How close are we to nationalized legal marijuana?

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ERIK ALTIERI: We are probably really at that watershed moment for this issue in the country. We currently have 11 states and Washington DC with legalization for adult use and 34 states with medical use programs. And as we saw this year, we have growing support at the federal level for passing legislation that will finally end our federal prohibition on cannabis.

That bill was approved by the House Judiciary Committee, it has 116 co-sponsors in the House. And we expect that legislation to be primed to move in 2021, especially after we see what happens in this election, where we expect some big ballot initiative victories for marijuana.

ADAM SHAPIRO: Erik, we even heard from the vice presidential candidate, Kamala Harris, saying, legalize it, during the vice presidential debate. But I've got to ask you, we saw it fail surprisingly in New Jersey. So even among Democrats, there's not a 100% guarantee to do this. Why do you remain optimistic?

ERIK ALTIERI: Well, it's because we have the will of the people truly on our side on this. Often, politicians are very cautious creatures. They wait for the parade to form, and then they rush to lead it. And that really describes what we see in New Jersey. That failed by a couple votes in this legislative session. A lot of those issues were unrelated to marijuana in particular.

But what we do see is recent polling shows from 65% to 68% of New Jersey voters are ready to pass legalization in just two weeks. So it's going to be a resounding message to their lawmakers, not just in that state, but across the country, that the American people are tired of our failed and racist prohibition, and they're ready for a more sensible approach to marijuana that involves legalization and regulation.

DAN HOWLEY: Outside-- you know, outside of Jersey, where it's, you know, it's likely to pass, I guess, when we do have a national program, right? It's different on the state level. But how do you then ensure the equity of a nationalized weed program, right? How do you ensure that people who are put in for low level crimes involving weed have their records expunged?

How long does it take to get a national program up and running? And I guess, you know, are there still questions as to whether or not it would be up to each state, similar to how alcohol is done, or would it be kind of a national board that kind of governs each individual dispensary throughout the country?

ERIK ALTIERI: We fully expect the path for cannabis legalization at the federal level will mirror that of alcohol, which is basically, we'll deschedule it from the Controlled Substances Act, and then we'll have a patchwork of 50 states that have similar but slightly different programs. We still have that with alcohol today, Blue counties, where you can't sell any at all.

And states will find out what works best for them. But what the federal government can do is oversee those issues, particularly relating to equity. We can do that through grants to certain communities that have suffered from under the drug war through the SBA, the Small Business Administration, or other programs like that.

But so much of this still will be done at the state level, even expungement. We can expunge records federally, but about 98% of marijuana arrests are done at the state level. So it'll have to be done at the state level. And we've seen that already happen in states that have moved towards legalization.

Pretty quickly, or even in tandem with passing these legalization laws, they often implement an expungement program that allows anyone who has charges for marijuana possession, something that is now would be legal today but was illegal, you know, a year ago, they move pretty quickly to clear those records. Because we don't want anyone suffering from the collateral consequences of carrying around a marijuana charge for what is now a legal activity.

JULIE HYMAN: Erik, when you talk about the state execution of these laws in terms of expungement, you also have to look at execution in terms of operations, right? Because we've seen a rocky rollout in many places, both in Canada and in the United States, where you have supply issues, where the system isn't ready. What do you think is the biggest issue that needs to be fixed on that front?

ERIK ALTIERI: Well, I think it's important, especially for the states as they move to implement new programs, is that there is no need to really reinvent the wheel here. As I said, we have 11 states that have already done this and have it in place. You have very good models to look at. I think Colorado has a pretty successful model, Washington state has a rather successful model.

Learn the lessons from those that went before you. But ultimately, we're taking a market that, for decades and decades, was completely underground, illicit, and unregulated. And we're bringing that above board for the first time in history. So there will be some issues, whether the growers have all the supply ready, things like that.

But what we've seen in the longer term is that all balances out. Colorado had these problems when they first implemented, supply was short, costs went up. Over the course of six to 12 months, that flattened out. And, you know, the demand was met by the supply. And they instituted sensible regulations when they saw that they needed to add new ones.

It's just-- it'll be a bit of a learning process, but thankfully, for any state moving forward in 2020, 2021, there's 11 great models to look at.

MELODY HAHM: Erik, I'm glad you mentioned Colorado. I actually did a piece there on a cannabis bus tour a couple years ago. And there are many millionaires, right, that have been created through this process with all these innovative business models. But I wanted to point out a cheeky tweet from the Colorado governor, who was responding to a report saying that Texas would benefit greatly with legalization of marijuana, potentially see $2.7 billion in annual cannabis sales.

And he jokingly said, oh, please don't legalize Texas, because that would take away tourists from Colorado. So tell us about the different pieces at play. Do you feel like the total addressable market here is so vast that if all states legalize, would those sorts of interesting opportunities and entrepreneurship continue to exist? Or do you think it would kind of get stale, and people won't find the novelty and experience of it as interesting?

ERIK ALTIERI: Listen, wine is legal in 50 states, people still go to Napa Valley, right? They still go to these wineries, they still do tasting tours. There's still a culture around wine and wine drinking and wine production. And I think that it'll be exactly the case with marijuana. Not all states are going to have the cultural aspect or the broad growth and cultivation industry that some other ones may have to their neighboring borders.

So there is going to be an important impact in a lot of these states, where they will have those tourism dollars. But just the raw numbers are already staggering. So far, it's estimated the legal cannabis industry has made about 250,000 full-time paying jobs in this country. You add the ancillary industries, packaging and everything else, we're up to 300,000.

That's more than five times the number of Americans, like, working in most of the coal industry, it's more than the textile industry. And that's with 11 states that have legal marijuana and, you know, 34 with medical. You expand that out, it's going to create brand new jobs, new sources of tax revenue, and it's going to also free up law enforcement and judicial resources to focus on combating real violent crime, which is where I think most Americans would prefer to see that money spent.

JULIE HYMAN: Who knows? At some point, maybe we'll see people touring fields of marijuana in Mendocino County, who knows? Thanks so much, Erik, appreciate it. Erik Altieri is the executive director of NORML, look forward to talking to you post-election about what the outlook is like at that point. Thanks again.