The Case for Drug Regulation

By Mary Jane Borden

Note: This post was written on September 19, 2001, just days after 9/11.

The tragedy that unfolded the morning of September 11, 2001, shook America to its core. Surely we will look back upon that day, that moment in time, as the turning point on which everything changed. Nothing will ever be the same. We have a new, faceless enemy, one whose thinking is foreign to us, who is able to strike strategic targets leaving few foot prints, and who can wreak massive havoc in mere minutes. This enemy has no geographic boundaries and few demographics. It’s only common thread appears to be a deep-rooted hatred of the United States, based somewhat on our past sins in their eyes and somewhat on their resentment of our individual freedoms.

Dealing effectively with this new enemy requires a new way of thinking and new tactics. Perhaps all of our conclusions rendered before September 11 need to be reevaluated in this new light. One conclusion requiring reexamination must be the “War on Drugs.” We must think seriously about ending the drug war for three fundamental reasons. While each of these reasons alone is powerful justification, they become even more compelling when evaluated together.

1.) Proceeds from the drug war fund terrorists. All illegal drugs are different and vary in source of origin and profit potential for terrorists. While gang-related, international marijuana distribution networks do exist, marijuana still tends to be a “mom and pop,” “homegrown” operation simply because the barriers of entry to the market are exceedingly low and because the end-result needs little or no refining to achieve finished product. However, both heroin and cocaine (and, of course, a host of other illegal drugs from Ecstasy to methamphetamine) require additional processing beyond the plant phase to render sellable product. This raises the barrier to market entry and increases the time and expense necessary to create finished product. This is why, with the exception of marijuana, the sale and distribution of illegal drugs require the cooperation of organized crime, rogue states (like Afghanistan), or countries with significant anti-government insurgency groups (like Columbia’s FARC).

Whereas the proceeds from marijuana transactions stand a good chance of going to “mom and pop,” clearly large sums of money are flowing to organized crime, rogue states, and anti-government insurgency groups. While this money may simply be funding big planes, fancy cars, or large estates or reinvested operationally in new equipment and technology, a significant chunk also flows to terrorists, particularly in Afghanistan, one of the largest worldwide sources of opium.

For example, last July, the Taliban announced with great fervor that it was eradicating all opium poppies from Afghanistan, and a visit from international inspectors confirmed this to be true. However, further study indicated the Taliban actually stockpiled what they earlier destroyed in the hope that world prices would rise. A five-member UN panel that monitors the UN arms embargo on the Taliban rendered this chilling conclusion several months before September 11: the Taliban was using proceeds from the sale of its stockpile to “finance the training of terrorists and support the operations of extremists in neighboring countries and beyond.”

2.) The drug war incorrectly identifies the enemy. Years of political posturing, legislation, police action, and media reporting have painted drug users and dealers as “enemies of the state.” The war on them has resulted in over two million people in U.S. prisons, a disproportionate number being people of color. We may have simplistically thought that if we arrested, drug tested, and applied enough “zero tolerance,” the bad guys could easily be identified and eliminated. But as it turns out, the intelligence apparatus put in place to identify and eliminate bad guys completely missed the mark on September 11.

For example, two weeks before the September 11 catastrophe, approximately fifty agents from the FBI and Michigan State police raided and ultimately shot and killed two men who became known for holding events that advocated the legalization of marijuana on their rural Rainbow Farm in southern Michigan. Even before this raid took place, significant time and money was spent monitoring the Rainbow Farm and creating the case which ultimately led to the raid. The two men certainly may not have been guiltless, but with 20/20 hindsight, was this the best use of law enforcement? While agents raided the Rainbow Farm that advocated for a plant that kills few if any, terrorists were putting the finishing touches on a plan that would almost instantly annihilate 5,000+ people.

To further illustrate how the enemy was misidentified, one U.S. general, when asked by Dan Rather why U.S. Airforce jets did not intercept the airliners after they strayed from their flight plans, responded that, since the end of the Cold War, fighter jets have been more geared toward interdicting drug shipments. The airliners simply weren’t considered a military threat.

As a final irony, to reward the Afghanis for eliminating their opium crop the United States paid the Taliban about $40 million last spring. The enemy was not only misidentified; they profited in two ways from our ignorance: the sale of illegal drugs themselves and our reward for eradicating them.

3.) To fight the “War on Terrorism” the U.S will need additional sources of funding. The War on Drugs already costs the United States $20 billion per year, with an approximate $10 billion spent on battling marijuana alone.

If no planes had ever struck the World Trade Center or Pentagon, the United States would have found itself in a state of economic uncertainty. A recession had been brewing for almost a year. Most of the rest of the developed world has been in its the midst at some point over the past five years. It was our turn. In addition, the Bush administration and Congress implemented a trillion-dollar, multi-year tax cut at the end of August. Not more than a week before the terrorist attack, the Congressional Budget Office reported that the national surplus had shrunk dramatically. The economic slowdown combined with the dwindling surplus made the politically unpopular tapping of Social Security trust fund a possible reality.

Then terrorists brutally attacked the U.S. Less than three days later, Congress doubled President Bush’s $20 billion request for aid, offering up $40 billion to fight terrorism and rebuild that which was destroyed. Next, they allocated $17 billion to help up the airline industry recover from the catastrophe. In the excitement and grief of the moment, we forgot that, basically, we don’t have the money. The fervor of the moment will eventually wear off and tax increases will likely become as unpopular and politically treacherous as ever.

It can be said that there are two ways to make money: raise income or lower expenses. In a country with a weakened economy, raising income in the form of tax revenue may be as fruitful as bleeding a turnip. The only alternative will be to cut spending. What should we cut? Education? Healthcare?
Environmental cleanup? The “War on Drugs”? If this is truly a war, than all options must be on the table, including ending the drug war.

But eliminating drug war spending might not be enough. During a recession as people lose their jobs, tax revenue will decline. Even if the U.S. immediately stopped spending $20 billion to fight the “War on Drugs” and cut many other “sacred cows,” we still may not arrive at the breakeven point where revenue equals expenses. An economic stimulus is in order, something that will both generate additional tax revenue and encourage greater economic activity. This is why the distribution channels for what are now illegal drugs must be regulated.

Selling drugs through regulated channels allows them to be taxed, with tax going to the government rather than organized crime, rogue states, or anti-government insurgents. However, simply gaining more tax revenue won’t stimulate the economy. One long-overlooked product, hemp, must be legitimized.

Hemp has a myriad of uses from building materials to medicine. Perhaps these recent events serve as one more illustration as to why we need to end our dependence on Middle Eastern oil. This past summer a modified Mercedes Benz traveled across the United States and Canada fueled essentially by distilled hemp. Hemp can be used to make cloth, rope, lubricants, plastics, and a host of other products now produced from fossil fuels. Gearing up these industries generates economic growth and creates jobs which, in turn, translates into ever greater tax revenue.

In summary, the United States has reached a turning point and will now move into a future that can’t necessarily be programmed by the past. Obviously, we must fight the “War on Terrorism, but our other war, the “War on Drugs,” must be reevaluated because it, in part, funds terrorism; like race and ethnicity, misidentifies the enemy; and simply costs too much. Additional reasons to modify traditional drug war tactics include:

4.) enlisting the cooperation with authorities of the nearly six million regular drug users by ending their fear of arrest and prosecution,

5.) bringing troubled users closer to vitally needed treatment programs by routing them a system that less legally threatening,

6.) controlling a major means of transmitting the AIDS virus and other infectious diseases, and

7.) doing what we do best: applying principles of freedom and liberty to create free or regulated markets.

Everything changed on September 11, 2001. Politicians and statesmen of the future will be judged by how they responded in the aftermath of that terrorist attack. If they fall back to pre-September 11 rhetoric and rules, while ignoring new strategies and thinking, we may again miss the next terrorist attack that could unfortunately wreak even more havoc. If we pursue with the same rigor old drug war tactics, we risk losing the freedoms we value and becoming more like our attackers. Essentially, they win.

Americans should not be lulled into thinking that terrorism began and ended with the World Trade Center and Pentagon attacks. We may well catch and punish the perpetrators, and we may implement procedures and methods that more easily detect would-be bad guys. Our adversaries have no geographic boundaries and few demographics. What they have is an intense, fanatic desire that may be with us for years to come. Because we are now watching and waiting, they will need to be even more clever, cunning, and insidious than ever before. This will require money. The best way to counter terrorism is to eliminate their source of funding. The best way to eliminate funding is to end the “War on Drugs.”

Appendix A: A plan for ending the War on Drugs internationally.

1.    Within the next six months, the United States should convene a meeting of its allies in the “War on Terrorism” with the specific purpose of addressing drug trafficking. All ideas should be openly debated, but significant focus should be given to setting a worldwide-regulated system of production and distribution for what are now illegal drugs.

2.    Not all of what are now illegal drugs should be regulated. Some should remain illegal. The group should address the regulation of at least the “big three:” marijuana, heroin, and cocaine. Ecstasy regulation could also be considered.

3.    Within a prescribed period of time, each country should implement a system of its own choosing, determining a.) which drugs to regulate. b.) how production should be regulated (by private companies or only by state-owned organizations). c.) through what outlets these drugs should be sold. Let’s say hammering this out takes a year.

4.    Another year should be allocated to implementing the plans and another six months should be devoted to a “grace period” in which drug users and dealers get used to this new system and during which the kinks in it can be worked out.

5.    After two-and-a-half to three years, these systems should be fully implemented and the profits from formerly illegal drugs should begin into the treasuries of their respective countries.

6.    No country will be required to participate in this plan, but those who choose not to should be monitored by the UN to ensure that they aren’t undercutting legal markets, thereby funneling income to terrorists.

Appendix B: A plan for ending the War on Drugs within the U.S.

1.    The United States should fully participate in all discussions about ending the “War on Drugs” with the United Nations and its allies in the “War on Terrorism.” We should not stack the deck only with certain politically-motivated solutions.

2.    In accordance with Generally Accepted Accounting Procedures (GAAP), a system should be established to track the flow of money for what are now illegal drugs from the individual transaction up to gross sales. This establishes audit trails to follow where the money goes. All sales should be subject to applicable local, state, and federal taxes.

3.    Not all of what are now illegal drugs should necessarily be subject to regulation. Essentially, we should concentrate on those that currently account for the most illegal sales: marijuana, heroin, and cocaine (and possibly Ecstasy). If the experience of other countries that have regulated drugs (e.g. Netherlands) holds true, a drop in overall drug usage may occur over time. If other drugs become attractive offerings of organized crime achieving a prescribed level of estimated sales volume, then these should be considered for regulation, too.

4.   It should be recognized that not all of what are now illegal drugs are not the same. Systems developed for “soft” drugs like marijuana should be granted greater production, distribution, and marketing liberty than those for “hard” drugs.

5.   Each state can decide upon its own venue through which drug sales can occur. Some may choose the pharmacy model, others the “State store” model, and others private vendors. Each state would be responsible for regulating these outlets, but would be required to adhere to Federal requirements.

6.   The production of hard drugs should be business of private companies, not the Federal government. These businesses should be tightly regulated and subject to rigorous, unscheduled audits. The current infrastructure of the DEA would oversee these businesses.

7.    Corporations producing hard drugs should be viewed somewhat like public utilities without the geographic constraints. They can sell stock, but would be forbidden from conducting product or delivery-system improvement research and development. They also would be prohibited from engaging in competitive marketing or promotional advertising.

8.   Pricing for hard drugs should be created using econometric models. These models should be based on the assumption that a price set too low might increase usage, but a price set too high, might again provide an incentive for illegal sales. The goal of pricing will not be to necessarily discourage use, but to discourage illegal, unregulated markets that might generate untraceable revenue.

9.    During the time when this present system is being established, current law would remain in effect. After the system is implemented, drug users would be granted a six-month grace period during which non-regulated transactions would receive no punishment.

10.   After full implementation of the regulated system, any transaction outside of it would be dealt with harshly, perhaps even more harshly than now, under the assumption that illegal sales fund terrorists. Laws regarding asset forfeiture would remain in place to further punish any sales outside the system.

11.    The system for “soft” drugs like marijuana would be more closely modeled on those presently in place for alcohol and tobacco, although advertising should be regulated to disallow any unsubstantiated medical claims. To make therapeutic claims, marijuana should be subject to the same clinical trial process as any other drug.

12.    Individuals should be allowed to grow approximately twenty plants for personal use. Any greater amount would constitute a “farm” which would require a growing license. States can establish methods for implementing this license and regulating production.

13.    Within the next six months all regulations which prohibit the importation of hemp should lifted. States who have already passed legislation on hemp research should be immediately given the green light to proceed. States should regulate the production of hemp in the same way they oversee other agricultural crops. Jurisdiction over hemp production should be shifted away from the DEA.

14.    Companies and governmental entities could continue drug testing, and apply it as they see fit within the scope of current Constitutional law. However, they will need to understand that drug testing won’t necessarily uncover terrorists, nor protect them when they have failed to identify a terrorist threat.