Political Economy of Medical Marijuana by Anthony White

The Political Economy of Medical
Marijuana: Are its costs overstated?
Institute for Economic Inquiry
Anthony White

White
1

1. Introduction
States are legalizing medical marijuana due to the potential benefits it might have
for people suffering with diseases. Despite the overwhelming evidence that has caused
40 out of 50 states to change their medical marijuana laws, Nebraska is still conflicted.
However, the time to act is now. Two bills have been introduced that would revise the
state’s laws on medical marijuana. The first bill (LB390, 20151
), proposed by Senator
Crawford, allows very limited access to low THC-CBD oil for a group of patients
suffering from Intractable Epilepsy under the supervision of the Nebraska Medical
Center. This bill was passed May of 2015. The second bill (LB 643, 20152
), proposed
by Senator Garrett, models itself on more comprehensive legalization that would allow
patients suffering from certain conditions access to marijuana for medicinal purposes.
Since 1996, twenty-three states as well as the District of Columbia have legalized
Marijuana for medicinal purposes for patients suffering from a number of conditions.
Proponents of this change argue that the drug offers various potential medical, societal
and economic benefits. They have faced criticism over the scientific merits of these
claims from opponents of the measure. Opponents have alleged costs that are associated
with weakening drug enforcement laws and the social and economic ills associated with
legalizing medical marijuana.
This paper seeks to find answers to the many questions surrounding the medical
marijuana legalization discussion. We will look at the number of Nebraska residents
affected by conditions treatable with medical marijuana and will analyze various clinical
trials and studies in medical marijuana states (MMS) to help identify possible outcomes
of medical marijuana if it were legalized in Nebraska.
In addition, we will look at the possible effects medical marijuana as a policy change
has on society as a whole. We will use data from various MMS to determine specific

1
LB
390,
2015,
Legislature
of
Nebraska

http://nebraskalegislature.gov/FloorDocs/104/PDF/Intro/LB390.pdf

2
LB
643,
2015,
Legislature
of
Nebraska

http://nebraskalegislature.gov/FloorDocs/104/PDF/Intro/LB643.pdf

White
2

patterns associated with the legalization of medical marijuana and what the implications
of these patterns are. This analysis examines the impact medical marijuana legalization
has on social ills such as crime, adolescent use, depression and suicide rates.
We will then look at the potential effects medical marijuana has on the economy. We
investigate monetary benefits and costs associated with medical marijuana. This includes
the potential for job creation and the possibility of cost savings for Nebraska police
departments. We examine the implications of this policy change on banks and the
liability they face while engaged in activities in violation of federal law as well as how
the inconsistency between state and federal law affects medical marijuana dispensaries.
The objective of this multi-perspective analysis is to serve as a summary of reliable
information for those interested in this controversial topic. Although this analysis will
not be able to discuss all aspects of the research, we hope to help you contemplate the
various benefits Nebraska would achieve if medical cannabis were legalized.
2. Historical Legality of Marijuana
Many treat the legalization of marijuana as a modern day experiment, however,
by looking at the historical context behind the criminalization of marijuana, one may
understand quite a different story. The idea that marijuana has been historically illegal is
a misconception about the drug and in fact, the illegality of the drug is a historical
anomaly. The current logic used to determine the illegality of the drug comes from a
period of anti-immigrant fear mongering beginning in the late 1920’s. Thus, instead of
considering the legalization of the drug to be an experiment, it may be more accurate to
understand the criminalization of marijuana as a failed experiment to rid society of
artificially created social ills associated with immigrants. Although, marijuana had been
an illegal product during the majority of the 20th
century in the United States, the fact is
marijuana has played a major role throughout the history of the country. Therefore, it is
necessary to understand the historical context around the legality of the marijuana in
order to understand the implication of its current status in the United States.
2.1 Marijuana as a Legal Commodity

White
3

Marijuana has not always been illegal in the United States. In fact, marijuana and
hemp (the plant from which marijuana is derived) have been a part of American History
since the 1600’s when it was used to make ropes, sails and clothing. In the late ninetieth
century, marijuana became popular in medicine and was sold openly in pharmacies.
2.2 Marijuana and Anti-Immigrant Fear-Mongering
In the early 1900’s, Mexican immigrants introduced the recreational use of
marijuana. Prejudice took over and as a result, the American public began associating
marijuana with these Mexican immigrants. As the Great Depression hit and
unemployment skyrocketed, the American people felt resentment toward the immigrants
and their relation to marijuana. In effect, the public’s fear of marijuana grew even more
and by 1931, it had been outlawed in 29 states.3
Anti-immigration and anti-marijuana propaganda became prevalent in the 1930’s.
Much of the further hysteria around the drug can be attributed to the founding of the
Federal Bureau of Narcotics (FBN) in 1930. Headed by Harry Anslinger, the
organization became known for its campaign against marijuana.4
During this campaign,
he often linked anti-immigrant sentiments and racial minorities with marijuana.
Anslinger is documented as saying:
Most
marijuana
smokers
are
Negroes,
Hispanics,
jazz
musicians,
and
entertainers.
Their

satanic
music
is
driven
by
marijuana,
and
marijuana
smoking
by
white
women
makes

them
want
to
seek
sexual
relations
with
Negroes,
entertainers,
and
others.
It
is
a
drug
that

causes
insanity,
criminality,
and
death
—
the
most
violence-‐causing
drug
in
the
history
of

mankind.5

He
later
testified
to
congress
in
favor
of
the
Marihuana
Tax
Act
of
1937:

3
Marijuana
Timeline

http://www.pbs.org/wgbh/pages/frontline/shows/dope/etc/cron.html

4

Federal
Bureau
of
Narcotics

https://www.addiction.com/a-‐z/federal-‐bureau-‐of-‐narcotics/

5
Herer,
Jack,
Jeanie
Cabarga,
and
Jeanie
Herer.
The
Emperor
Wears
No
Clothes:
The
Authoritative

Historical
Record
of
Cannabis
and
the
Conspiracy
Against
Marijuana.
N.p.:
n.p.,
1994.
Print.

White
4

Here
we
have
drug
that
is
not
like
opium.
Opium
has
all
of
the
good
of
Dr.
Jekyll
and
all
the

evil
of
Mr.
Hyde.
This
drug
is
entirely
the
monster
Hyde,
the
harmful
effect
of
which
cannot

be
measured.
Some
people
will
fly
into
a
delirious
rage,
and
they
are
temporarily

irresponsible
and
may
commit
violent
crimes…
It
is
dangerous
to
the
mind
and
body.
6

Additionally,
Anslinger’s
testimony
included
a
letter
from
The
Alamosa
Daily
Courier,
which

said:

I
wish
I
could
show
you
what
a
small
marihuana
cigaret
can
do
to
one
of
our
degenerate

Spanish-‐speaking
residents.
That's
why
our
problem
is
so
great;
the
greatest
percentage
of

our
population
is
composed
of
Spanish-‐speaking
persons,
most
of
who
are
low
mentally,

because
of
social
and
racial
conditions.
7
2.3 The Experiment: Marihuana Tax Act and Controlled Substance Act
I. Marihuana Tax Act of 1937
Due to the culmination of the anti-immigrant political environment and anti-
marijuana propaganda, Congress passed the Marihuana Tax Act of 1937, which imposed
a tax on the sale of cannabis, hemp and marijuana. This did not explicitly criminalize
marijuana possession, however it included penalties that could affect those in possession
of the drug marijuana with a potential of a $2000 fine or 5 years of imprisonment.8
After
this Act was introduced, marijuana was removed from pharmacies and in 1943
disappeared from the US Pharmacopeia.
9
II. The Controlled Substance Act of 1970

6
Hearing
on
H.R.
6385,
(April
1937),
accessed
at

http://www.druglibrary.org/SCHAFFER/hemp/taxact/anslng1.htm

7
ADDITIONAL
STATEMENT
OF
H.
J.
ANSLINGER,
COMMISSIONER
OF
NARCOTICS

http://www.druglibrary.org/schaffer/hemp/taxact/t10a.htm

8
Marijuana
Tax
Act
Law
&
Legal
Definition

http://definitions.uslegal.com/m/marijuana-‐tax-‐act%20/

9
The
Medical
Cannabis
Coalition
of
Hawaii

http://mcchi.org/is-‐it-‐really-‐medicine-‐a-‐not-‐so-‐brief-‐but-‐interesting-‐history-‐of-‐medical-‐
marijuana/

White
5

The Controlled Substance Act (CSA) of 1970 categorized drugs into five
schedules based on the drugs’ accepted medical use and the potential for drug abuse and
dependency. Marijuana, a Schedule 1 drug, is defined by the CSA as not having
currently accepted medical uses and a high potential for abuse. Schedule I drugs, which
are the most dangerous drugs, also include Heroin, Lysergic Acid Diethylamide (LSD), 3,
4- Methylenedioxy-methamphetamine (Ecstasy), Methaqualone and Peyote.
2.4 A Response to a Failed Experiment: The Decriminalization of Marijuana
I. Decriminalization across the Nation
The decriminalization of small amounts of marijuana possession first began in the
United States with Oregon in 1973. During the rest of the 1970’s, Alaska, California,
Colorado, Nebraska, New York, North Carolina, Maine, Minnesota and Ohio joined
Oregon in decriminalizing marijuana. Decriminalization generally means that the
possession of reasonable amounts (as determined by the states) of cannabis is considered
a civil offense instead of a criminal offense. Laws in each state may vary.10
Nineteen
states as well as the District of Columbia have decriminalized marijuana.11
II. Decriminalized Marijuana in Nebraska
In 1979, Nebraska became one of the first states to decriminalize marijuana.12
The sale of any amount of cannabis results directly in a felony, which equates to 1-20
years in prison with a mandatory minimum of one year as well as a fine up to $20,000.

10
Which
States
Have
Decriminalized
Marijuana
Possession?

http://www.slate.com/articles/news_and_politics/explainer/2001/02/which_states_have_decr
iminalized_marijuana_possession.html

11
Alaska,
California,
Colorado,
Connecticut,
Delaware,
District
of
Columbia,
Maine,
Maryland,

Massachusetts,
Minnesota,
Mississippi,
Missouri,
Nebraska,
Nevada,
New
York,
North
Carolina,

Ohio,
Oregon,
Rhode
Island,
Vermont

http://norml.org/aboutmarijuana/item/states-‐that-‐have-‐decriminalized

12
Nebraska
ranks
high
in
marijuana-‐related
arrest
rates,
The
Daily
Nebraskan

http://www.dailynebraskan.com/endowment/nebraska-‐ranks-‐high-‐in-‐marijuana-‐related-‐
arrest-‐rates/article_7b6b6a92-‐e70d-‐11e4-‐9d68-‐279676632c95.html

White
6

The penalties of possessing marijuana vary.13
For a chart illustrating Nebraska’s
decriminalization policy on the possession of cannabis, see Appendix, Section 8.2, Item
8.2A.
2.5 Comparing Different Levels of Legalization
There are three main levels of medical marijuana legalization. The most
expansive is referred to as Comprehensive Legalization of medical marijuana. After
Comprehensive, we have Limited Legalization, which would legalize the marijuana
derivative, Cannabinoid oil (CBD) for medical uses. The third level is the
Decriminalization of Marijuana. For a chart explaining these three levels of marijuana
legalization, see Appendix, Section 8.2, Item 8.2B.
3. The Economics of Choice
Medical marijuana has been legalized in some form in 40 out of 50 states not only
because there is proven medical benefits that are associated with the drug, but also
because patients are actively seeking out alternatives to mainstream prescription
medicines in order to treat their conditions. Understanding how patients could rationally
choose alternatives over federally-approved and quality-tested prescription medicine is
necessary for understanding the economics of choice.
Human beings care a lot about choice. In particular, we put a high level of
importance on having choice when it comes our health. For example, let say you have a
terminal illness. The doctor tells you that you have six to eight months left to live.
Having the ability to choose how to spend those last months of life would be extremely
valuable to you, especially if it means having some control over the quality of life you
achieve. You can choose to take a prescription medicine with known quality-of-life-
reducing side effects, or you can try a relatively new and unapproved alternative
medicine, which is said to have the same benefits as the prescription drug, but without the
side effects. To make the situation more complicated, you are also aware of some

13
Nebraska
Marijuana
Laws

http://statelaws.findlaw.com/nebraska-‐law/nebraska-‐marijuana-‐laws.html

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7

research that suggests that alternative medicines, especially when mixed with prescription
drugs can pose dangerous health risks.14
What would you do?
Chances are, the potential to have a high quality of life during the last months of
your life would be worth the risk of using an alternative drug. It is to say for humans,
having autonomy over our destiny is so fundamentally valuable to us that often times we
put ourselves at risk, or willingly assume potential health dangers. Although it may seem
irrational to choose an unapproved alternative medicine over that which is federally
approved, if you take into consideration the great value we put on having choice, the
decision makes sense. Thus, patients assuming health risks to choose an alternative
medicine understands this choice and the alternative as more beneficial, or more valuable
than conventional medication alone.
4. The Impact of Marijuana as a Medical Alternative
I. Medical Marijuana Programs and Laws
In the United States, the idea of using marijuana as an alternative to synthetic
medicine was first put into state law in 1996 when California passed Proposition 215, or
the Compassionate Use Act, which was the first bill to allow access to medical marijuana
for patients suffering from certain diseases, as recommended by a physician.15
Although
this was the first state law that legalized medical cannabis, it was not the first time
marijuana was to be used as medicine. In fact, in 1976, the government began the
Compassionate Investigational New Drug program (IND), which allowed a limited
number of patients (15 in total) to receive marijuana approved by the government to treat
their ailments.16

14
Mixing
drugs
and
herbal
remedies
may
pose
a
major
health
risk,
Global
Mail

http://www.theglobeandmail.com/life/health-‐and-‐fitness/health/mixing-‐drugs-‐and-‐herbal-‐
remedies-‐may-‐pose-‐a-‐major-‐health-‐risk-‐researchers-‐warn/article4854590/

15
Proposition
215,
California
Department
of
Public
Health

https://www.cdph.ca.gov/programs/MMP/Pages/CompassionateUseact.aspx

16
Recipients
of
Legal
Medical
Cannabis,
provided
by
the
U.S.
government
under
the

Investigational
New
Drug
Program
(Compassionate
Access
I.N.D.)

http://www.medicalcannabis.com/patients-‐care-‐givers/federal-‐ind-‐patients/

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8

Since Proposition 215 in California, twenty-two more states and the District of
Columbia have followed suit to allow access to marijuana for medical purposes. In
addition, seventeen states have Limited Legalization of marijuana allowing access to low
THC, high CBD oil products and over twenty states have decriminalized the possession
of small reasonable amounts of marijuana. In total, 40 out of 50 states have some form of
marijuana legalization. Moreover, as of September 14, 2015, four states had pending
medical marijuana legislation tabled until 2016.17
For a map illustrating the medical
marijuana laws in the United States, see Appendix, Section 8.2, Item 8.2C.
II. Conditions Treatable with Medical Marijuana
Marijuana is cited as being able to help patients treat multiple life-altering
conditions, namely, Arthritis, Cancer, Crohn’s Disease, Epilepsy, HIV/AIDS and
Multiple Sclerosis (MS).18
For more information on these conditions, medical studies
and effects of medical marijuana, see Appendix, Section 8.1, Conditions Treatable
with Medical Marijuana. For a chart summarizing the previously mentioned conditions
as well as how medical marijuana helps, see Appendix, Section 8.2, Item 8.2D.
5. The Impact of Medical Marijuana Legalization on Society
Opponents of marijuana argue that legalizing the drug for medical use creates
many costs for society; often claiming that the costs far outweigh any benefit medical
marijuana may pose. The social costs alleged are that the legalization of medical
marijuana results in increased adolescent use, increased depression and suicide rates and
increases in violent crimes.
5.1 Adolescent Use
Since medical marijuana had been legalized in portions of the United States, the
relationship between state policy and adolescent use has been a controversial topic.

17
States
with
Pending
Legislation

http://medicalmarijuana.procon.org/view.resource.php?resourceID=002481

18
Illnesses
Treatable
with
Medical
Cannabis

http://www.unitedpatientsgroup.com/resources/illnesses-‐treatable

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9

Many opponents cite that state policy in favor of medical marijuana sends the wrong
message to adolescents, causing them to view the drug as something accepted or allowed
for recreational use.19
This in effect causes adolescent use of the drug to increase
dramatically.
Despite these claims, many empirical studies have been completed that suggest
otherwise. A recent study published in the June of 2015 issue of the Lancet Psychiatry
Journal uses 24 years of data to examine the relationship between US medical marijuana
state laws and adolescent use in those states. After analyzing data from 1,098,270
adolescents, they suggest that although adolescent use seems to be high in states that
legalize medical marijuana, the passage of such laws does not increase adolescent use of
marijuana.20
Many others studies, such as that of E.K
Choo
et
al.,
indicate that the
legalization of medical marijuana has little to no effect on adolescent use.21
A 2012 study
by Harper et Al. even suggests that the opposite may happen and adolescent use slightly
decreases as states legalize medical marijuana.22
5.2 Depression and Suicide
Many opponents of the legalization of medical marijuana believe that more use of
the drug leads to depression, which can eventually lead one to commit suicide. They
assert that consistent use of marijuana makes it harder for users to experience dopamine,

19
Marijuana
legalization
'not
sending
a
good
message,'
drug
czar
says,
The
Oregonian

http://www.oregonlive.com/health/index.ssf/2013/01/white_house_drug_czar_stops_in_1.htm
l

20
Deborah
Hasin
et
al.
“Medical
marijuana
laws
and
adolescent
marijuana
use
in
the
USA
from

1991
to
2014:
results
from
annual,
repeated
cross-‐sectional
surveys”
The
Lancet
Psychiatry.
2.7

(2015)
601-‐608.

21
E.K
Choo
et
al.
“The
Impact
of
State
Medical
Marijuana
Legislation
on
Adolescent
Marijuana

Use.”
Journal
of
Adolescent
Health.
55
(2014)
160-‐166.

22
Harper
et
al.
“Do
Medical
Marijuana
Laws
Increase
Marijuana
Use?
Replication
Study
and

Extension.”
The
Official
Journal
of
the
American
College
of
Epidemiology.

22.3
(2012)
207-‐212

White
10

which can lead to the feeling of lethargy and apathy further leading to depression.23
Studies have been done that suggest that the use of marijuana may be associated with
depression, increased suicidal thoughts and suicide attempts.24
However, these claims
may be difficult to measure due to potential confounding factors such as personality.25
A study published in December 2014 that looks specifically at the association
between the legalization of medical marijuana and completed suicides. This study uses
state-level suicide data from the National Vital Statistics System’s Mortality Detail Files
from 1990-2007 and regression analysis to examine the relationship between the
legalization of medical marijuana and suicides per 100,000 people. After accounting for
economic circumstances, state laws and state-specific time trends, the study finds the
relationship between suicides and medical marijuana legalization not statistically
significant. Moreover, the study finds that legalization has a negative relationship with
the suicides of men between the ages of 20-29 and 30-39 years old with a reduction in
suicide rates by 10.8% and 9.4%, respectively. There also appears to be a negative but
less dramatic relationship with respect to women.26
5.3 Violent Crime and Property Crime
Another popular argument against legalizing marijuana for medical use is that
legalized marijuana in any form leads to more crime, and in particular higher violent
crime and property crime rates. They also argue that dispensaries and home cultivators

23
Smoking
Cannabis
DOES
increase
the
risk
of
anxiety
and
depression,
Daily
Mail

http://www.dailymail.co.uk/health/article-‐2691837/Smoking-‐cannabis-‐DOES-‐increase-‐risk-‐
anxiety-‐depression.html

24
Marijuana
Myths
and
Facts,
Office
of
National
Drug
Control
Policy

https://www.ncjrs.gov/ondcppubs/publications/pdf/marijuana_myths_facts.pdf

25
Van
Ours
J.
et
al.
“Cannabis
use
and
mental
health
problems.”

Journal
of
Applied
Econometrics.

(2011)
26.7
1137-‐1156.

26
Anderson
et
al.
“Medical
Marijuana
Laws
and
Suicides
by
Gender
and
Age.”
American
Journal

of
Public
Health.
(2014)
104.12
2369-‐2376

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11

will become victims of robbery and burglary.27
This means that if medical marijuana and
dispensaries were legalized, the amount of violent crime and property crime in a specific
area would increase. However, contrary to this idea, studies have suggested that the
presence of medical marijuana might actually decrease violent crime and property crime
rates.28
A 2014 study published in the Journal PLoS ONE used FBI U.S. state panel data
to analyze the murder, rape, assault, robbery, burglary, larceny and auto theft rates in all
50 states between the years 1990 and 2006. During this 16-year span, 11 states legalized
medical marijuana: Alaska (1998), California (1996), Hawaii (2000), Maine (1999),
Montana (2004), Nevada (2000), Oregon (1998), Rhode Island (2006), Vermont (2004)
and Washington (1998). After analyzing the crime rates in each state before and after
legalizing medical marijuana, the research concludes that there is no increase in crime
rates resulting from medical marijuana legalization, and in fact, there is evidence that
suggest violent crimes such as homicide and assault may decrease.29
6. The Impact of Medical Marijuana Legalization on the Economy
Many opponents of marijuana suggest that such a large policy change would
result in more economic costs rather than benefits. In order to help examine this claim,
we investigate how the legalization of medical marijuana affects local job activity as well
as police department expenses. We examine the implications of this policy change on
banks and the liability they face if engaged in activities in violation of federal law as well
as how the inconsistency between state and federal law affects medical marijuana
dispensaries.
6.1 Job Creation

27
Crime
is
up
in
Colorado,
Huffington
Post

http://www.huffingtonpost.com/kevin-‐a-‐sabet-‐phd/crime-‐is-‐up-‐in-‐colorado-‐
w_b_5663046.html

28
Study:
Marijuana
Legalization
Doesn’t
Increase
Crime,
MSNBC

http://www.msnbc.com/all/does-‐marijuana-‐lower-‐the-‐crime-‐rate

29
Morris
et
al.

“The
Effect
of
Medical
Marijuana
Laws
on
Crime:
Evidence
from
State
Panel
Data,

1990-‐2006.”
PLoS
ONE
(2014)
9.3

White
12

One is the benefits associated with legalized medical marijuana is legal job
creation. It is to say that many marijuana jobs already exist, however until the drug is
legalized in some form, the jobs remain in the black market.30
Throughout the United
States, it is estimated the medical marijuana industry has created close to 175,000 new
jobs.31
In Arizona alone, medical marijuana legalization is associated with an estimated
1,500 direct jobs for marijuana growers and dispensary employees as well as up to 5,000
indirect jobs in places like grocery stores.32
In Colorado, almost 10,000 direct jobs have
been created from the medical and recreational marijuana industries.33
6.2 Fewer Arrests and Cost Savings for Police Departments in MMS
Opponents of medical marijuana often cite that legalizing the drug associated with
higher law enforcement costs due to unseen consequences of legalization.34
However,
many studies suggest that legalizing medical marijuana is associated with lower costs in
law enforcement. According to 2010 American Civil Liberties Report, the United States
as a whole spends around $3.2 billion on enforcing marijuana enforcement laws and
Nebraska in particular is ranked number 13 among states and the District of Columbia in
spending per capita on enforcement for marijuana possession with a annual spending

30
Economic
Benefits
of
Regulation,
Halcyon
Organics

https://halcyonorganics.com/economic-‐benefits-‐of-‐regulation/

31
Marijuana
Jobs
Higher
Than
Estimated,
The
Street

http://www.thestreet.com/story/12659355/1/marijuana-‐jobs-‐higher-‐than-‐estimated.html

32
Study:
Medical
marijuana
will
create
1,500
jobs
in
Arizona,
Cronkite
News

http://cronkitenewsonline.com/2013/04/study-‐medical-‐marijuana-‐will-‐create-‐1500-‐jobs-‐in-‐
arizona/

33
Legal
marijuana
created
thousands
of
jobs
in
Colorado,
Vox

http://www.vox.com/2014/5/20/5734394/legal-‐marijuana-‐created-‐thousands-‐of-‐jobs-‐in-‐
colorado

34
Alaska
police
chiefs
say
legalizing
marijuana
will
increase
funding,
Alaska
Dispatch
News

http://www.adn.com/article/20140618/alaska-‐police-‐chiefs-‐say-‐legalizing-‐marijuana-‐will-‐
increase-‐funding-‐training-‐needs

White
13

equal to about $13 million.35
Moreover, during the year 2010, nearly 73% of all drug
arrests in Nebraska were for marijuana possession. It is also worth noting that according
to this 2010 report, Nebraska has the third highest arrest rate behind DC and New York at
417 arrests per 100,000 people as well as the highest black arrest rate at 1,699 black
arrests per 100,000 people.36
For a chart comparing Nebraska’s arrest rates with those of
D.C., New York, Maryland and Illinois, see Appendix, Section 8.2, Item 8.2E. Due to
the large amount of money spent on enforcing marijuana possession laws in Nebraska,
legalizing medical marijuana could result in a decrease in marijuana possession arrests
and decrease in enforcement costs.
6.3 Marijuana and Banks
One of the big questions associated with legalizing medical marijuana is the,
“Where do medical marijuana dispensaries deposit money?” Although medical
marijuana may be legalized in certain states, marijuana is still considered an illegal
Schedule I drug according to the Controlled Substance Act on the federal level. This
means, if a bank takes money from medical marijuana operations, it is engaged in
violation of federal law, classifying it as a money launderer. This could not only cause
large fines to be imposed upon the bank, but also substantial consequences could be
handed to bank employees, officers and directors. Depending on the amount of
marijuana involved, 5-20 years of prison may be involved.37
Fearing prosecution and
breaking federal law, banks have shut down marijuana-related accounts and refuse to
give loans to marijuana businesses.
6.4 Marijuana Dispensaries

35
Nebraska
ranks
high
in
marijuana-‐related
arrest
rates,
The
Daily
Nebraskan

http://www.dailynebraskan.com/endowment/nebraska-‐ranks-‐high-‐in-‐marijuana-‐related-‐
arrest-‐rates/article_7b6b6a92-‐e70d-‐11e4-‐9d68-‐279676632c95.html

36
The
War
on
Marijuana,
American
Civil
Liberties
Union

https://www.aclu.org/files/assets/aclu-‐thewaronmarijuana-‐rel2.pdf

37
Marijuana
Money
Is
Still
A
Pot
Of
Trouble
For
Banks,
Forbes

http://www.forbes.com/sites/jacobsullum/2014/09/18/local-‐banks-‐terrified-‐by-‐friendly-‐
neighborhood-‐marijuana-‐merchants/

White
14

Since the majority of financial institutions will not take money from medical
marijuana dispensaries because of the inconsistency in marijuana state and federal law,
dispensaries often operate cash-only businesses.

This means their money has to be held
in safes. 38
Not only do these legal inconsistencies cause a cash-only business practice,
but they also result in more danger and higher costs for the dispensaries. A 2009 report
from the Denver Police Department estimated that almost 17% of marijuana retail shops
had been robbed or burglarized that year. Although this percentage is lower than that of
liquor stores (20%) or banks (34%), it is still a constant threat.39
As a result, dispensaries
are investing in armed security services to protect their multi-thousand dollar deposit
deliveries to various safes and to state offices to pay taxes.40
This legal inconsistency
does not only increase medical marijuana dispensary expenses, but also it effectively
hinders the legitimacy of a legal medical marijuana business.
7. Conclusion
In conclusion, states are legalizing medical marijuana for the potential benefits it
may hold for people suffering with conditions such as arthritis, cancer, Crohn’s Disease,
epilepsy, HIV/AIDS and multiple sclerosis. Opponents of this policy change believe that
the medical, societal and economic costs of legalizing medical marijuana far outweigh its
benefits. However, as shown through a plethora of studies, clinical trials and academic
papers, the costs of legalizing medical marijuana may be effectively overstated in our
society. Much of the research suggests that marijuana’s benefits may in fact hold more
medical, societal and economic benefits than what has been commonly acknowledged.

38
Banking
for
Pot
Industry
Hits
a
Roadblock,
NY
Times

http://www.nytimes.com/2015/07/31/business/dealbook/federal-‐reserve-‐denies-‐credit-‐
union-‐for-‐cannabis.html

39
Robber
Gangs
Terrorize
Colorado
Pot
Shops,
NBC
News

http://www.nbcnews.com/storyline/legal-‐pot/high-‐crimes-‐robber-‐gangs-‐terrorize-‐colorado-‐
pot-‐shops-‐n20111

40
The
First
Bank
of
Bud,
NY
Times

http://www.nytimes.com/2015/02/08/business/marijuana-‐industry-‐in-‐colorado-‐eager-‐for-‐
its-‐own-‐bank-‐waits-‐on-‐the-‐fed.html?_r=0

White
15

Moreover, understanding the historical anomaly of the drug’s illegality will help
one be better informed of the implications of the drug’s current Schedule I status in the
United States. Marijuana is not a new medicine in the United States as the drug was once
commonly sold in pharmacies across the nation during the ninetieth century. Although it
was once publically used and sold, the criminalization of marijuana was a failed
experiment based on the culmination anti-immigrant fear mongering and the association
of immigrants and racial minorities with marijuana. This failed experiment to rid society
of the artificially created ills caused by that association was not without consequences.
As a result of this experiment, countless Americans and Nebraskans have been
unable to access marijuana for medical purposes. Despite this, throughout the last few
decades, marijuana has begun to make its way back into society for such purposes. It
began with state decriminalization of the drug during the 1970’s. Around this same time,
in 1976, the government started the Compassionate Investigational New Drug program
(IND), which allowed a limited number of patients to receive marijuana to treat their
medical conditions. Later, in 1996, California passed Proposition 215, or Compassionate
Use Act, which was the first state bill to allow statewide medical marijuana use. Since
Proposition 215, 22 more states and D.C. have passed similar legislation. In addition, 17
states that have passed limited legalization laws. The evidence on medical marijuana is
clear. 40 out of 50 states have taken an activist role on medical marijuana, and as a
result, their residents have experienced numerous medical benefits. At this time,
Nebraska must make a decision on its medical marijuana policy; no decision does have
consequences.

White
16

8. Appendix
8.1 Conditions Treatable with Medical Marijuana
Marijuana is cited as being able to help patients treat multiple life-altering
conditions, namely, Arthritis, Cancer, Crohn’s Disease, Epilepsy, HIV/AIDS and
Multiple Sclerosis (MS).41
This information is continued from Section 4, Conditions
Treatable with Medical Marijuana.
I. Arthritis
Over 336,000 Nebraskans are affected by Arthritis according to the Arthritis
Foundation of Nebraska.42
This means over 17% of Nebraska residents are affected by
this condition. Arthritis refers to over 100 different types of joint pain and diseases that
cause moderate to severe pain, swelling and stiffness.43
Two common types of arthritis
are rheumatoid arthritis and osteoarthritis.44
A 2014 study published in the Journal of Rheumatology examined the
relationship between cannabinoids, and specifically two cannabinoid receptors (CB1 and
CB2) and rheumatoid arthritis. The study concludes that marijuana may be able to fight
inflammation of the joints by activating the CB2 receptor pathways. These pathways
were found to be high within the joint tissue of arthritis patients.45
II. Cancer

41
Illnesses
Treatable
with
Medical
Cannabis

http://www.unitedpatientsgroup.com/resources/illnesses-‐treatable

42
Nebraskans
Affected
by
Arthritis,
Nebraska
Arthritis
Foundation

http://www.arthritis.org/nebraska/

43
What
Is
Arthritis?,
Nebraska
Arthritis
Foundation

http://www.arthritis.org/about-‐arthritis/understanding-‐arthritis/what-‐is-‐arthritis.php

44
Arthritis
and
Medical
Marijuana,
Americans
for
Safe
Access

http://www.safeaccessnow.org/arthritis_booklet#arthritis

45
Huan
Gui
et
al.
“Expression
of
cannabinoid
receptor
2
and
its
inhibitory
effects
on
synovial

fibroblasts
in
rheumatoid
arthritis.”
Journal
of
Rheumatology
53
(2014):

doi:10.1093/rheumatology/ket447

White
17

According to 2012 data from Center for Disease Control and Prevention (CDC),
8,953 Nebraska residents were living with cancer.46
Today, one of the most common
ways to treat cancer is with chemotherapy, which includes the use of a number of strong
drugs to kill the cancer cells.47
Unfortunately, chemotherapy comes with a number of
side effects such as Nausea, vomiting, appetite loss, hair loss and bone marrow change,
which can lead to uneasiness and pain for cancer patients.
Medical marijuana is believed to help alleviate the side effects that come with
chemotherapy. A 2015 study published in the Clinical Pharmacology and Therapeutics
Journal finds that marijuana can help cure the nausea and vomiting associated with
chemotherapy treatment. In a systematic review including 1,366 patients, cannabinoids
were found to be much more effective than other antiemetic medications, meaning
cannabinoids were better are treating nausea and vomiting related to chemotherapy.
According to this review, the NNT, or number needed to treat one person was six to treat
nausea and eight to control vomiting.48
After analyzing 23 randomized clinical trials that
compared cannabinoids with placebo and other antiemetic drugs, another 2015 study
concluded, “Cannabis-based medications may be useful for treating refractory
chemotherapy-induced nausea and vomiting.49
”
III. Crohn’s Disease

46
Cancer
Incidence
Counts
by
U.S.
Census
Region
and
Division,
State
and
Metro
Area.

https://nccd.cdc.gov/USCS/cancersbystateandregion.aspx?Year=2012&Variable1=Nebraska

47
Chemotherapy,
American
Cancer
Society

http://www.cancer.org/treatment/treatmentsandsideeffects/treatmenttypes/chemotherapy/i
ndex

48
Abrams
and
Guzman.
“Cannabis
in
Cancer
Care.”

Clinical Pharmacology and Therapeutics

(2015)
97.6
575-‐586

49
Smith,
Azariah,
Lavender,
Stoner,
Bettiol.
“Cannabinoids
for
nausea
and
vomiting
in
adults

with
cancer
receiving
chemotherapy.”
Cochrane
Database
of
Systematic
Reviews.
(2015)
11.
DOI:

10.1002/14651858.CD009464.pub2.

White
18

Approximately 780,000 Americans live with Crohn’s Disease, one of the most
common inflammatory bowel diseases (IBDs) in the United States.50
Symptoms
associated with this disease include the inflammation of the gastrointestinal tract (GI
tract), chronic abdominal pain and even loss of appetite.51
Studies show medical marijuana can help alleviate the symptoms associated with
Crohn’s Disease and IBDs. A 2012 observation study by Lahat A et al. finds that IBD
patients using marijuana experienced a higher quality of life and weight gain.52
A 2013
survey study of 292 IBD patients completed by Ravikoff Allegretti et al. finds around
16% patients in the US have used cannabis to self-medicate symptoms such as abdominal
pain, appetite loss and nausea. The majority of these patients indicate that marijuana
helps alleviate pain and nausea.53
A 2013 clinical trial finds that patients who used THC-rich cannabis received
significant clinical benefits without side effects. 21 patients who did not respond to
traditional therapy were chosen for the clinical trial and were randomly assigned to a
group. Over the course of eight weeks, eleven patients received cannabis in the form of
cigarettes and ten received placebo. The study group was noted as having “significantly
less pain, improved appetite and a higher satisfaction from the treatment.” In addition, a
clinical response was observed in 10 of 11 cannabis group subjects and 5 of 11 of those
subjects achieved complete remission.54

50
Inflammatory
Bowel
Disease,
Crohn's
&
Colitis
Foundation
of
America

http://www.ccfa.org/assets/pdfs/updatedibdfactbook.pdf

51
What
is
Crohn’s
Disease?,
Crohn's
&
Colitis
Foundation
of
America

http://www.ccfa.org/what-‐are-‐crohns-‐and-‐colitis/what-‐is-‐crohns-‐disease/

52
Lahat
A
et
al.
“Impact
of
cannabis
treatment
on
the
quality
of
life,
weight
and
clinical
disease

activity
in
inflammatory
bowel
disease
patients:
a
pilot
prospective
study.”
Digestion.
(2012)
85

1-‐8

53
Ravikoff
Allegretti
et
al.
“Marijuana
Use
Patterns
Among
Patients
with
Inflammatory
Bowel

Disease”
Inflamm
Bowel
Dis.

(2013)
19.13
2809-‐2814.

54
Naftali
et
al.
“Cannabis
Induces
a
Clinical
Response
in
Patients
With
Crohn’s
Disease:
A

Prospective
Placebo-‐Controlled
Study”
Clinical
Gastroenterology
and
Hepatology
(2013)
11

1276-‐1280.

White
19

IV. Epilepsy
Epilepsy, a neurological disorder, affects millions of Americans,55
and in
Nebraska, Epilepsy affects an estimated 25,000 residents.56
This condition causes
uncontrollable seizures or periods of unusual behavior, which can lead to loss of
consciousness.57
Epilepsy can be very traumatic and potentially dangerous for persons
and families affected by the disease, however many believe that marijuana may help
reduce the amount of seizures patients experience.
A 2004 study surveyed 136 epilepsy patients and found that 28 reported cannabis
use. The majority of these patients noted a drop in seizure occurrence and severity.58
A
2013 survey study of 19 severely epileptic children found that after receiving cannabis
extracts, two of the children became seizure free and 8 experienced a reduction in
frequency by 80%.59
A 2015 survey study of 75 parents with epileptic children in
Colorado found that one third of the children experienced more than a 50% reduction in
seizure occurrence after being treated with an oral cannabis extract.60
There have also
been a number of clinical trials, case series and case reports on cannabinoids and the
treatment of epilepsy. The current clinical evidence has been summarized by Friedman
and Devinsky. Many reports show significant improvements while some show little to no

55
Epilepsy
Statistics,
Epilepsy
Foundation

http://www.epilepsy.com/learn/epilepsy-‐statistics

56
Nebraskans
Affected
by
Epilepsy,
Nebraska
Walk
For
Epilepsy

http://www.nebraskaepilepsywalk.com/faf/home/default.asp?ievent=1134471

57
Overview
of
Epilepsy,
Mayo
Clinic

http://www.mayoclinic.org/diseases-‐conditions/epilepsy/home/ovc-‐20117206

58
Gross
et
al.

“Marijuana
use
and
epilepsy:
prevalence
in
patients
of
a
tertiary
care
epilepsy

center.”
Neurology
.2004
62
2095-‐2097

59
Porter
and
Jacobson.
“Report
of
a
parent
survey
of
cannabidiol-‐enriched
cannabis
use
in

pediatric
treatment-‐resistant
epilepsy.”
Epilepsy
Behav.
(2013)
29
574-‐577

60
Press
et
al.
“Parental
reporting
of
response
to
oral
cannabis
extracts
for
treatment
of

refractory
epilepsy.”
Epilepsy
Behav
(2015)
45
49-‐52.

White
20

improvement.61
In addition, data for a new clinical trial is currently being collected at
Denver Health Medical Center. Results should be available February 2016.62
V. HIV and AIDS
According to the HIV and AIDS Surveillance Program Summary Report by the
Department of Health and Human Services, there were 2,431 persons living with
HIV/AIDS in Nebraska.63
Side effects often associated with the treatment of HIV/AIDS
include: diarrhea, headaches, nausea, vomiting, nerve pain and appetite loss.64
These side
effects can lead to severe discomfort and pain for patients.
Studies have shown that medical marijuana helps patients undergoing HIV/AIDS
treatment and the symptoms associated with it. A 2005 cross-sectional anonymous
questionnaire study found out of 523 responses, almost one-third (27%, 143/523) of the
HIV patients reported using marijuana to treat their condition. 97% of patients noted an
improved appetite, 94% experienced improved muscle pain and 93% felt that their nausea
and anxiety improved.65
A 2007 double-blind placebo-controlled study finds that
compared with placebo, marijuana and marijuana derived dronabinol helped increase
daily caloric intake and body weight in HIV-positive patients. Marijuana was also
credited for improved ratings of sleep.66

61
Friedman
and
Devinsky.
“Cannabinoids
in
the
Treatment
of
Epilepsy.”
The
New
England

Journal
of
Medicine.
(2015)
373
1048-‐1058

62
Genetic
Analysis
Between
Charlotte's
Web
Responders
Versus
Non-‐
Responders
in
a
Dravet

Population

https://clinicaltrials.gov/ct2/show/results/NCT02229032?term=Dravet&rank=1

63HIV
and
AIDS
Report,
Department
of
Health
&
Human
Services
of
Nebraska

http://dhhs.ne.gov/publichealth/Documents/HIVSurveillanceProgramSummaryReportThrough
2014.pdf

64
HIV/AIDS
Drug
Side
Effects,
WebMD

http://www.webmd.com/hiv-‐aids/aids-‐hiv-‐medication-‐side-‐effects

65
Woolridge
et
al.
“Cannabis
Use
in
HIV
for
Pain
and
Other
Medical
Symptoms.”

Journal
of
Pain

and
Symptom
Management
(2005)
29.4
358-‐367

66
Haney
et
al.
“Dronabinol
and
Marijuana
in
HIV-‐Positive
Marijuana
Smokers.”

J
Acquir
Immune

Defic
Syndr”
(2007)
45.5
545-‐554

White
21

VI. Multiple Sclerosis
According to the University of Nebraska Medical Center, an estimated 1,600 to
1,800 Nebraska residents are currently living with Multiple Sclerosis (MS).67
MS is an
unpredictable and degenerative disease that attacks the central nervous system and is
often debilitating. It causes an array of symptoms that can include inflammation,
muscular weakness, chronic pain, depression and spasticity.68
This disease typically
shows up in people between the ages of 20 and 50, but can also occur in young children
and older adults.69
A 2006 placebo-controlled study found that MS patients who use cannabinoid extracts
experienced relief from pain, spasticity and bladder-related problems.70
A 2011 double
blind placebo-based study found that MS patients using an oral spray derived from
cannabis had a significant improvement in spasticity.71
A 2012 double blind placebo-
based study found that after twelve weeks of treatment with an oral based cannabis
extract. MS patients experienced a rate of relief from muscle stiffness almost twice as
high as compared to those who were on the placebo. The patients also cited relief in
body pain, spasms and sleep quality.72
A 2013 randomized placebo-controlled clinical
trial at the University of California at San Diego concluded, “Smoked cannabis was

67
Number
of
cases
in
Nebraska,
University
of
Nebraska
Medical
Center

http://www.unmc.edu/news.cfm?match=754

68
MS
Symptoms,
National
MS
Society

http://www.nationalmssociety.org/Symptoms-‐Diagnosis/MS-‐Symptoms

69
What
is
MS?,
National
MS
Society

http://www.nationalmssociety.org/What-‐is-‐MS/Who-‐Gets-‐MS

70
Wade
et
al.
“Long-‐term
use
of
cannabis-‐based
medicine
in
the
treatment
of
spasticity
and

other
symptoms
in
multiple
sclerosis.”

Multiple
Sclerosis
(2006)
12
639-‐645

71
Novotna,
et
al.
“A
randomized,
double-‐blind,
placebo-‐controlled,
parallel-‐group,
enriched-‐
design
study
of
nabiximols
(Sativex®),
as
add-‐on
therapy,
in
subjects
with
refractory
spasticity

caused
by
multiple
sclerosis.”
European
Journal
of
Neurology
(2011)
18
1122–1131.
72
Zajicek
et
al.
“Multiple
Sclerosis
and
Extract
of
Cannabis:
Results
of
MUSEC
trial”
J
Neurol

Neurosurg
Psychiatry
(2012)
83
1125-‐1132.

White
22

superior to placebo in symptom and pain reduction in participants with treatment-
resistant spasticity.73
”
8.2 Charts, Graphs and Other Visual Representations
Item 8.2A illustrates Nebraska’s decriminalization policy on the possession of cannabis.
Marijuana Possession in Nebraska
Possession Penalty Incarceration Maximum Fine
Under 1 oz.
(1st Offense)
Citation None Up to $300
Under 1 oz.
(2nd Offense)
Citation Up to 5 days in jail, Class
IV misdemeanor
$400
Under 1 oz.
(3rd
Offense)
Class IIIA
misdemeanor
Up to 7 days in jail $500
Over 1 oz. Class IIIA
misdemeanor
3 months Up to $500
Over 1 lb. Class IV felony 5 years Up to $10,000

73
Corey-‐Bloom
et
al.
“Smoked
Cannabis
for
Spasticity
in
Multiple
Sclerosis:
A
Randomized,

Placebo-‐Controlled
Trial.”
CMAJ :
Canadian
Medical
Association
Journal
184.10
(2012):
1143–
1150

White
23

Item 8.2B is a chart detailing the three levels of marijuana legalization as described by
the National Conference of State Legislators.

Type of Legalization What does this
mean?
Participating States

Comprehensive
Legalization of
Medical Marijuana
1. Protection from criminal
penalties for using
marijuana for a medical
purpose;
2. Access to marijuana
through home
cultivation, dispensaries
or some other system
that is likely to be
implemented;
3. It allows a variety of
strains, including those
more than "low THC;"
and
4. It allows either smoking
or vaporization of some
kind of marijuana
products, plant material
or extract.

23 States and D.C.
1. Alaska (1998)
2. Arizona (2010)
3. California (1996)
4. Colorado (2000)
5. Connecticut (2012)
6. D.C. (2010)
7. Delaware (2011)
8. Hawaii (2000)
9. Illinois (2013)
10. Maine (1999)
11. Maryland (2014)
12. Massachusetts (2012)
13. Michigan (2008)
14. Minnesota (2014)
15. Montana (2004)
16. Nevada (2000)
17. New Hampshire (2013)
18. New Jersey (2010)
19. New Mexico (2007)
20. New York (2014)
21. Oregon (1998)
22. Rhode Island (2006)
23. Vermont (2004)
24. Washington (1998)
Limited Legalization
Low THC/high CBD
Cannabidiol
● Allows persons suffering
from certain conditions
to use “low THC, high
cannabidiol” products
for medicinal reasons or
as a legal defense

17 states (including
Louisiana, not shown in map)
have approved use of "low
THC, high cannabidiol (CBD)"
products for medical reasons
in limited situations or as a
legal defense.
Decriminalization of
Marijuana
● This generally means
certain small,
personalconsumption
amounts are a civil or
local infraction, not a
state crime (or are a
lowest misdemeanor
with no possibility of jail
time).
Twenty states and the District
of Columbia have
decriminalized small amounts
marijuana. Nebraska is one
of these states.
Source: National Conference of State Legislators

White
24

Item 8.2C is a map illustrating the medical marijuana laws in the United States. The
green states have comprehensive medical marijuana laws, the light blue states have
limited CBD legalization and the states filled with red diagonal lines are those with
pending medical marijuana legislation as of September 14, 2015.

White
25

Item 8.2D is a chart summarizing conditions treatable with medical marijuana and
Nebraskans affected.
Conditions What is it? Nebraskans Affected Symptoms/Side Effects
Treated
Arthritis Refers to over 100 different joint
pain diseases, Ex: rheumatoid and
osteoarthritis
Over 336,000 residents, or
over 17% of Nebraskans
Severe pain, stiffness,
inflammation
Cancer Many types of cancer, typically
treated with Chemotherapy
8,953 Nebraskans affected Chemo side effects: nausea,
vomiting, appetite loss, pain
Crohn’s Disease One of the most common
inflammatory bowel diseases (IBDs)
Appx. 780,000 Americans
(don’t have NE data)
Inflammation of GI tract,
abdominal pain, appetite loss
Epilepsy Neurological disorder that cause
uncontrollable seizures
Appx. 25,000 residents Seizures
HIV/AIDS A degenerative disease 2,431 persons in Nebraska Headaches, nausea, vomiting,
nerve pain, appetite loss
Multiple Sclerosis (MS) A disease that attacks central
nervous system, often debilitating
1,600-1,800 Nebraskans
residents affected
Inflammation, chronic pain,
depression, muscle spasticity

White
26

Item 8.2E is a chart that shows the top 5 states by marijuana possession arrest rate.
Nebraska is listed as number three with a rate of 417 per 100,000 people. It also
demonstrates the marijuana possession rate for black people. Nebraska is listed as
number one with an arrest rate of 1,677 per 100,000 people.

1489

1192

1699

790

1526

0

200

400

600

800

1000

1200

1400

1600

1800

D.C.
New
York
Nebraska
Maryland
Illinois

Top
5
States
by
Marijuana
Possesion
Arrest
Rate

(also
shown
Black
Arrest
Rate)

Arrest
Rate
(per
100,000

people)

Black
Arrest
Rate
(per

100,00
people)

Source:
June
2013
ACLU
Report

Political Economy of Medical Marijuana by Anthony White

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