An eager reader notes that Governor Kristi Noem could have knocked 4.19 percentage points out of the Yes column on Amendment A and prevented the constitutionalization of marijuana in South Dakota if she had just offered some sensible compromises on cannabis policy and stayed home in South Dakota to campaign against the cannabis amendment instead of traipsing about the country for Trump (although, given that Noem’s cross-country campaigning didn’t help Trump win, maybe her firepower campaign-trail firepower wouldn’t have made much difference on Amendment A). Now the Governor is waging her shaky and shady lawsuit against her own state, which will only add to her 2022/2024 campaign image the black marks of losing another court case and bringing Trumpist election subversion to South Dakota.
John Tsitrian says Noem should cut her mounting losses and focus on crafting good policy to make the most of cannabis for South Dakota. Step #1, says Tsitrian, is to study the benefits other legalizing states are enjoying:
The widely followed investment information service Investopedia did a lengthy study on the economic benefits of marijuana legalization last month and drew some conclusions that Noem should consider before scolding South Dakotans about their choices. Here’s a breakdown on Investopedia’s findings:
Better than expected sales in Colorado and Washington “have resulted in buoyant tax revenues.”
Jobs would be created. Says Investopedia, “setting up marijuana nurseries and dispensaries would be the first step for the states that voted in favor of medical marijuana. These would not only create jobs but also set the ball rolling for economic activity in the pot industry in these areas.”
Investment opportunities would appear, likely bringing outside money into South Dakota.
Law enforcement costs would either be substantially reduced or diverted to the fight against other criminal activities.
Investopedia’s conclusion? “As more and more states move to individually decriminalize pot use in various ways, and as the economic benefits of a legal marijuana industry take effect, there are also many compelling reasons to consider nationwide legalization.”
Meantime, what about the effects on crime rates in general where marijuana has been legalized? A Connecticut criminal lawyers association cites studies that show crime rates are either unaffected or have decreased. Researchers at Boise State University have concluded that legalizing marijuana would benefit the criminal justice system [John Tsitrian, “Instead of Fighting Legal Marijuana, Noem Should Focus on How to Make the Inevitable Work in South Dakota,” South Dakota Standard, 2020.12.26].
Crime rates may not rise in response to cannabis legalization, but corruption may:
In the past decade, 15 states have legalized a regulated marijuana market for adults over 21, and another 17 have legalized medical marijuana. But in their rush to limit the numbers of licensed vendors and give local municipalities control of where to locate dispensaries, they created something else: A market for local corruption.
Almost all the states that legalized pot either require the approval of local officials – as in Massachusetts — or impose a statewide limit on the number of licenses, chosen by a politically appointed oversight board, or both. These practices effectively put million-dollar decisions in the hands of relatively small-time political figures – the mayors and councilors of small towns and cities, along with the friends and supporters of politicians who appoint them to boards. And these strictures have given rise to the exact type of corruption that got Correia in trouble with federal prosecutors. They have also created a culture in which would-be cannabis entrepreneurs feel obliged to make large campaign contributions or hire politically connected lobbyists.
For some entrepreneurs, the payments can seem worth the ticket to cannabis riches.
For some politicians, the lure of a bribe or favor can be irresistible [Mona Zhang, “How State Marijuana Legalization Became a Boon for Corruption,” Politico, 2020.12.27].
That corruption may break in favor of out-of-state big corporate cash rather than local cronies who can’t afford to pay to play:
But the competition for licenses has been so intense that companies quickly found ways of going beyond the cap, offering more community givebacks in order to win their support. In this scramble for licenses, large, well-heeled firms were able to offer municipalities greater financial benefits compared to small, locally run businesses – the opposite of what the law intended.
For instance, the national pot powerhouse PharmaCann (“Improving people’s lives through cannabis”) offered the town of Wareham, on the Cape Cod Canal,money for police details; paid an art conservation company to restore a painting; and put up money for a local oyster festival, among other sweeteners [Zhang, 2020.12.27].
Given South Dakota‘s history of corruption fed by the Republican Party‘s monolithic control, an explosion of cannabis cash seems ripe for further exploitation by South Dakota’s elected officials and the multi-state cannabis companies who know how to play them. But a Governor dedicated to openness and good government could work now to implement controls to prevent that corruption from following cannabis into our corner pot shops.
Initiated Measure 26 includes provisions allowing city and county governments to establish (Section 55), limit the number of (Section 56), and charge “a reasonable fee” for (Section 60) medical cannabis establishment licenses. IM 26 does require that at least one principal officer of a medical cannabis shop be a resident of South Dakota (Section 55). In localities that limit the number of cannabis licenses, IM 26 also directs the Department of Health to “solicit and consider input from the local government as to its preference for registration” (Section 56), which may provide for some state oversight of the fairness of the locals’ chosen cannabis partners. IM 26 may avert some corruption by capping application fees at $5,000 [Section 72(10)(a)], but that cap still leaves room for corporations like PharmaCann is Massachusetts, to offer all sorts of other sweeteners. IM 26 leaves the actual criteria for issuing licenses up to the Department of Health (Section 72). The Governor and Legislature could work with the Department of Health to work up more clear criteria to prevent local and state corruption from crashing the pot party.
Amendment A, the broader constitutionalization of medical and recreational marijuana and industrial hemp, gives the Department of Revenue authority to limit the number of licenses issued statewide to “prevent an undue concentration of licenses in any one municipality” (Section 8), but it also grants local governments authority to restrict or wholly ban licenses for growing or selling cannabis (Section 10). Amendment A also includes a problematic ban on growing your own marijuana if there is a licensed retail dealer in your town or county (Section 4). Local governments can override that ban (Section 10), but that default ban could induce the corporate cannabis peddlers to pressure local governments not to trifle with their monopoly—Hey, Minnehaha County, leave that ban in place, or we’ll build our lucrative sales-tax-generating shops just south of 57th Street! Amendment A directs the Department of Revenue to make all sorts of rules (Section 7); the Executive and Legislative branches thus have an opportunity to weigh in and keep the cannabis industry as clean of corruption as possible.
As Tsitrian says, other states show there’s good to be had in opening South Dakota to new crops and new businesses. Other states also show there’s potential for a wave of corruption for a small, economically anemic state that isn’t ready for a big influx of corporate cash and influence. Instead of posturing in a doomed court fight, Governor Noem should get out her lemon squeezer and make the purest lemonade she can from the cannabis industry the voters have invited into South Dakota.
Thanks, Cory. A second issue I raise in the piece is Noem’s self-servingly inconsistent attitude toward South Dakotans and our ability to make decisions for ourselves. She trusts South Dakotans to make our own choices regarding masks, but revokes that trust when we overwhelmingly choose to legalize pot.
That’s a good point, John. Noem has trouble enunciating consistent principles; she speaks in absolutes, but only situationally, invoking the principles that serve her selfish aims of the moment.
The corruption concerns raised by Zhang’s Politico report call into question the principle of “local control” as an absolute. Trust local governments to do whatever they want with cannabis licenses without some layer of regulatory guidance and state oversight, and corruption will erupt. We have to establish firm guidelines that keep wealthy corporations from bribing local officials to crowd out reliable and more accountable local growers and vendors and corner our market. Local control, like personal liberty, is good, but only to a point.
Legally, interstate commerce probably does not apply as the federales still look askance at pot in commerce. Thus, the state may be able to ban out-of-state pot purveyors. Or, the state could set it up like a state enterprise, where Reeves v. Stake would apply, thus allowing the state to favor in-state. Or the state could form a pot compact with another state.
As they do with small amounts in possession currently (and some have done forever), cops will likely ignore a plant or three growing in the back yard in a city or county with a licensed retailer present.
Who thinks Kristi noem will lose this lawsuit she started I think she will and it will also hurt her for reelection because someone could beat her to be our next governor because her anti cannibas interviews sd we will be rec and medical she will loose amendment a is real nevada has one just like ours
Periods are a good idea if you want to communicate in writing.