Pubdate: Sun, 09 Jun 2013
Source: Denver Post (CO)
Copyright: 2013 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Dominic Holden, Slate
Page: 1D

THE STARBUCKS OF CORPORATE POT

Jamen Shively tore a page right out of the Starbucks handbook. At a
May press conference in Seattle, the former Microsoft manager
announced plans to open chain stores offering a uniform, high-end
product that satisfies America's craving for a mild buzz. Except it's
not coffee; it's pot.

"Yes, we are Big Marijuana," Shively, 45, brazenly told reporters,
outlining his intent to bring in $100 million in investments to
establish "the most recognized brand in an industry that does not
exist yet." Colorado and Washington, the two states that legalized
marijuana for recreational use last fall, are slated to soon license
pot growers, distributors, and retail outlets (and impose steep taxes
and strict regulations). Shively says he and his partners plan about a
dozen retail outlets in each state, followed by up to 100 in
California, where sales of medical marijuana are legal according to
state law.

Shively's plan will test how far entrepreneurs can push the new state
laws legalizing pot before the Department of Justice charges them with
federal crimes.

Shively is shrugging off the risk. "People are saying, 'You are
putting a target on your back,' but it's really not a big deal," he
said.

Attorney General Eric Holder is the person who will prove Shively
right or wrong. Holder said in February that the White House would
make a decision "soon" about how to respond to the voter-approved pot
laws. Since then, Holder told a House Appropriations subcommittee, "We
are certainly going to enforce federal law," but stopped short of
saying he would try to overturn state laws in court. Holder's
Department of Justice could also prosecute marijuana sellers in
Washington and Colorado, as Justice has done to some medical marijuana
growers. Mostly, though, the Obama administration has so far targeted
growers and sellers who are exceeding the limits of state laws.

Between October 2011 and October 2012, federal law enforcement shut
down 600 dispensaries in California that prosecutors said were
violating the state's medical marijuana law. Meanwhile, massive fields
of medical pot prosper in the California sunshine, and the Arizona
department of health actually regulates and inspects medical marijuana
gardens.

The White House should cheer on the state inspectors and stay out of
the way of entrepreneurs like Shively. If President Barack Obama tries
to stop state legalization, he will lose, if not legally, then
politically. Three key stated goals of banning marijuana are making
the streets safer, weakening gangs, and keeping kids off pot.
Legalizing pot is likely to succeed far better at all three than
banning it has.

Former Mexican President Vicente Fox started making the case for
Shively's plan last week. He joined the press conference to urge Obama
to let state legalization proceed in order to stanch the flow of
profits to bloodthirsty drug cartels. "Business investment" like
Shively's "will bring a solution to Mexico's huge crime problem," Fox
told me.

Legal pot won't eliminate the cartels, of course. But Fox's point is
that every dollar in pot sales that stays in the hands of a legal
business doesn't go to a violent gang across the border. Shively says
he is securing relationships with domestic growers and, to abide by
state law, will only sell cannabis in the same state in which it's
grown.

By all accounts, Americans are on Shively and Fox's side. For the
first time this year, a majority of Americans (52 percent) said they
support legalizing marijuana. Sixty-four percent of Americans think
the federal government "should not" enforce marijuana laws in states
that have legalized pot, according to a December poll. That figure
includes 43 percent of respondents who don't think pot should be
legal-in other words, even if they don't like laws like Washington's
and Colorado's, they still think the president should butt out if such
laws pass.

Once legalization becomes a reality, support for it will likely
continue climbing. Regulating the pot market is the only way to
tightly control it. That includes collecting taxes, which states can
use to pay for programs voters like (especially Obama voters).
Washington state estimates that it will bring in between roughly $250
million and $500 million in taxes annually. Of that, nearly 80 percent
will fund health programs, including up to $110 million annually
earmarked to address substance abuse.

I'm not thrilled by the prospect of smoking the Starbucks of bud, but
I hold out hope that the microbrews of pot can also flourish in the
emerging state markets. And since large-scale operations have the most
to lose, they will be the most accountable. They have the incentive to
check ID (keeping pot out of the hands of kids, since sales to people
under the age of 21 remain illegal); pay taxes (Shively expects to pay
$300 million a year in taxes); and adhere to the letter of the law,
establishing a model for the pot industry that will make it safer than
the illegal market.

If Obama and Holder try to stand in the way of all this progress,
they'll have nothing to offer except more years of a failed war on
drugs. A federal crackdown would offer none of the benefits of
legalization. Rather than fight Jamen Shively and the other would-be
moguls who will surely follow him, the president and his attorney
general should let them do what the White House can't: beat the black
market at its own game.
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MAP posted-by: Matt