Each year, more and more states continue to legalize medical and even recreational marijuana use for their residents. But the drug remains illegal at the federal level, and conflicts abound, confusing consumers, businesses, and law enforcement alike. John Oliver shared some thoughts this week about how we got into this mess, and how we can get out.
1. When — and why — marijuana became illegal
Marijuana was totally legal at the start of the 20th century, as Oliver points out. That changed at the federal level a little more than 50 years ago, in 1970, when President Richard Nixon signed the Controlled Substances Act into law.
“Naturally,” Oliver notes, “it was Richard Nixon, the Mozart of racially-motivated lawmaking, who targeted [marijuana] in his war on drugs, for reasons that he was open about in conversations that he inexplicably recorded.”
Given the disparate impact of drug laws particularly on African-American communities by the 21st century, you might be surprised which particular racial group Nixon was targeting, however: Oliver then plays a clip of Nixon, in his own words, blaming the push to legalize marijuana exclusively on “the Jews.”
2. Legally, marijuana’s still worse than meth or cocaine.
The Controlled Substances Act sets up groups of drugs, or “Schedules,” classified from most bad to least bad.
As we’ve covered before, marijuana sits right at the top of the list, as a Schedule I drug, the highest classification there is.
Heroin is also classified as a Schedule I drug — but, as Oliver notes, drugs like cocaine and methamphetamine don’t even get that distinction. They’re at Schedule II, a step down.
Many would find that assertion questionable at best, and Oliver is right there with you: “Marijuana is not a Schedule I drug any more than a hedgehog is an apex predator,” he notes.
3. Businesses need banks.
Federal law and state law clash hard when it comes to all the money that marijuana growers and sellers make.
“Legal marijuana businesses have struggled to get bank accounts, because at the federal level, they are still seen as criminal enterprises,” Olver notes. So if banks took their deposits, that could be seen as money laundering.”
So the businesses do everything in cash. Great, huge piles of cash. They use cash for payroll, for taxes, for everything — which is awkward to say the least, and doesn’t exactly scream “legitimate enterprise” to most folks.
“That is a shitty way to be forced to do business,” Oliver dryly notes. “On the suspicious scale, ‘cash-stuffed envelopes’ rank somewhere between ‘unfurled hundreds dusted in white powder’ and ‘a wad of damp ones containing a single pubic hair.'”
This has been a problem for years, as marijuana businesses slowly become legal around the country. For example, dealers in Oregon, Colorado, and Washington have to go through a complicated process to safely and legally pay their taxes in cash. It’s even more complicated for an entrepreneur who wants to grow a multi-state business, and after another wave of states voted to legalize marijuana use in 2016, Sen. Elizabeth Warren and others called on the Treasury Department to make it easier for legal marijuana businesses to do banking.
4. Federal tax code is actually kind of bonkers.
Marijuana businesses absolutely have to pay both their state and federal taxes. And as Oliver notes, this isn’t just because they’re businesses — it’s because our actual federal tax laws require you to report income from illegal activities.
The tax code, “even has provisions like, ‘If you receive a bribe, include it in your income’ and ‘If you steal property, you must report its fair market value,’ Oliver notes.”
Oliver is not making this up; you can read it yourself in IRS publication 17 [PDF], which specifies that, “Income from illegal activities, such as money from dealing illegal drugs, must be included in your income … if from your self-employment activity.”
The guide also helpfully includes information about when you do or don’t have to include a Pulitzer or Nobel prize in your taxable income. Just in case.
As Oliver points out, though, while marijuana businesses have a tax liability, they can’t take any deductions. In a clip, one marijuana business owner tells local media that his business’s tax burden could be higher than any profit his business could possibly make before Oliver notes that if you sell marijuana, your tax burden could be basically double that of any other kind of business.
5. It can be confusing, to say the least, for a consumer.
Oliver points to the story of one medical marijuana user profiled on CNBC, who had a legal medical marijuana use card from his state of residence but still was fired from his job after failing a drug test.
“Did you think because you had a medical marijuana card that you had license to go ahead and use it?” the reporter asks.
The man replies basically, well, yeah, who wouldn’t? “I was under the impression that we had passed a law and made it legal,” he reasonably replies, what with having had the actual state-issued license to do so.
“It’s frankly understandable that he thought he was doing nothing wrong,” Oliver observes. “The state had given him a license to use medical marijuana legally … and also he couldn’t turn to the Amercans with Disabilities Act for help, because that is a federal law and it doesn’t protect marijuana use.”
It’s frustrating, Oliver notes. “That’s like driving exactly the speed limit, then getting pulled over by a cop who tells you, ‘Sorry, the federal speed limit is three, and the legal age to drive is 62, and also, you have to be drunk. Surprise, you’re f**king under arrest now!'”
6. Scientists want to study marijuana better, but can’t.
Federal agencies want better scientific, peer-reviewed research on hand before they consider reclassifying marijuana, and scientists would love to give it to them.
But they can’t. Why? Because the feds restrict their access to the very substance they want to study.
There is one sole source of government-sanctioned marijuana, Oliver notes, who works for the University of Mississippi.
Researchers need to wait for years to get studies approved by three different agencies, even while individuals — like combat veterans — anecdotally continue to report that it can be extraordinarily useful for assisting with symptoms of PTSD and other conditions.
“For all the talk you hear about marijuana being a gateway drug,” Oliver says, in the case of one veteran’s testimony, “that gateway led to peaceful sleep, rigorous exercise, and community service. Pretty nice f**king gate, it turns out! Nice one to walk through if you get the chance!”
7. Under federal law, doctors can’t actually prescribe medical marijuana.
Several states have some kind of work-around for this, Oliver notes — but that continues to leave anyone at a federal hospital or federal medical care, like every single veteran in the VA system, high (…or not, as the case may be) and dry.
Federal law prohibits VA doctors from even mentioning marijuana, regardless of state law where they are and regardless of their own professional medical opinion about its potential use and benefits in a given case.
8. This may well get worse before it gets better.
The Obama administration, Oliver notes, stopped making it a priority to enforce federal anti-marijuana laws on folks legally using marijuana in states where it’s okay — at the state level — to do so.
Oliver refers to this policy as, “I’m not going to hassle you about this unless you make me,” an easing-off that isn’t the same as legalization, but that looks the other way when possible.
But those guidelines aren’t permanent — and new Attorney General Jeff Sessions really, really hates marijuana, and always has.
“Federal laws desperately need to be brought up to date,” Oliver concludes, and points out that Congress, which has formed a cannabis caucus, seems to agree.
“If even an 83-year-old Republican from Alaska has come around on this issue,” Oliver notes, showing a photo of Alaska Rep. Don Young, “then it’s probably time for our laws to catch up.”
There’s a whole slate of new marijuana laws being proposed right now, Oliver notes.
“And all of this, I know, is a lot of work — which is why we should really start right now.”