Statehouse Headliners: Legal pot would invite RICO challenge, net-metering contributes to rate hike

By Guy Page

Legalizing marijuana in Vermont could attract shady operators and make Vermonters ‘guinea pigs’ in the ongoing legal experiment over state and federal jurisdiction, legal experts said last week.

The panel discussion hosted by the Vermont Lawyers Chapter of the Federalist Society for Law & Public Policy Studies was held Aug. 16 at the Courtyard Marriott in Burlington and featured the following experts: Jonathan Adler, law professor at Case Western Reserve in Ohio; Sen. Peg Flory (Rutland), a practicing attorney with many years of judicial system oversight as a legislator; Mary Beth Buchanan, an NYC-based white collar crime expert; and Chloe White, a lawyer with the Vermont ACLU.

Like heroin and cocaine, marijuana is a Schedule 1 ‘controlled substance’ under federal law: illegal to possess or sell because it is harmful and has no accepted medical use. The ‘Cole Memo’ issued by an assistant attorney general during the Obama administration advises “legal” states the U.S. government will take no action, providing no significant harm is done. Yet this arrangement posed significant practical problems even during the Obama administration, and may pose even more under the current administration, the audience of about 50 lawyers, lobbyists, and advocates heard. These problems include:

No banking. Banks can’t, or at least won’t, do business with the “legal” marijuana industry. Their federal charters oblige them to obey all federal law. Therefore virtually all transactions, including sales and payroll, occur in cash, virtual “bitcoin,” or some other non-banking method. No credit card or checking account transactions are permitted. Banks are even unwilling to locate ATMs outside of marijuana sales outlets, because it implies participation in a federally-prohibited act.

Shady leadership. The federal prohibition discourages investment and participation not only from banks, but by most upstanding, law-abiding, risk-averse business interests. “You are encouraging this industry to be dominated by people who are most willing to not follow federal law,” Prof. Adler said, several times characterizing this group of people as ‘shady’.

RICO. The federal Racketeering and Corrupt Influences (RICO) law of 1970 allows a private citizen to sue if they are being harmed by the commission of a federal felony. For example, someone claiming harm due to a neighbor’s marijuana consumption and sale could bring suit in federal court. “That’s a huge club,” Prof. Adler said. It furthers limits the range of people willing to invest in this industry.

Housing discrimination. State laws that permit personal marijuana possession and consumption in homes may become discriminatory and harmful if the federal government in response bans marijuana in its housing projects, withdraws housing subsidies, or calls in federal loans.

Risk to federal funding. The federal government wouldn’t need DEA agents to make arrests, it could enforce federal law simply by threatening to withhold federal funding — which it has already done, to force Vermont to follow federal law for the age of legal drinking, Sen. Flory said.

“Unfortunately, there are no clear answers,” Sen. Flory said. “Oh, there are clear answers if you don’t mind being a guinea pig coming before the feds.” Ms. White of the ACLU, which supports legalization, conceded the problems raised by federal law and said the best solution would be its repeal.

And speaking of legislators — Statehouse Headliners has not heard back from any of the three state senators on the Act 250 review commission asked to comment (see SHH, last week) on how the creation of an energy-intensive industry like indoor marijuana cultivation will impact the state’s energy conservation goals.

Net metering blamed for as one reason for proposed 2018 GMP rate hike

The growth of high-cost, net-metered solar power is one of three reasons cited for Green Mountain Power’s proposed 2018 rate increase of more than five percent.

The rate increase, proposed for January 2018, is due to increased costs (rounded to whole numbers) in metering (1%), transmission (3%) and “capacity” costs (2%), spokesperson Kristin Carlson told Statehouse Headliners. The proposal is before the Vermont Public Utilities Commission, formerly known as the Public Service Board.

Vermont utilities are required by law to pay about 18 cents per kilowatt/hour for all “net metered” electricity created by approved solar power generators. This fixed high price and other incentives have spurred Vermont’s solar power construction boom at a time when the market rate for power hovers around five cents. Not only GMP customers are feeling the pain: as reported in several recent SHH, small municipal power & light departments across Vermont are objecting to buying expensive output from bigger and bigger solar power installations.

Capacity costs are paid to power producers to maintain a stand-by ‘capacity’ to make power, either to meet high demand or compensate for lower-than-anticipated output from first-line generators. As a general rule, the cost of capacity power rises as output from reliable, base-load generation (such as Vermont Yankee, which closed in December 2014) declines.

Speaking of transmission — Gov. Phil Scott will be the keynote speaker Thursday, Sept. 7 at a luncheon open to all at the Woodstock Inn, on the Woodstock Green. The host of the meeting is the Consumer Liaison Group of ISO-New England, the regional grid operators. The topic of the meeting is Vermont and regional electricity transmission. Lunch begins at noon and is free, but pre-registration is required. A panel discussion and Gov. Scott’s speech will follow.

Vermont tuberculosis rate drops in 2016

The rate of active tuberculosis cases in Vermont dropped in 2016 from 2015, the Vermont Health Department confirmed to Statehouse Headliners this week.

Last year, Vermont Watchdog reported on the Vermont Department of Health’s efforts to treat residents with inactive, “latent” tuberculosis (TB) in an effort to reduce the incidence of active, symptomatic TB. Among the residents treated were immigrants from parts of the world where the incidence of TB, both active and latent, is higher than in the United States. About a third of the world’s population is estimated to have latent TB.

This week, Vermont Health Department spokesperson Ben Truman reported in response to our inquiry:

“Between 2003 and 2016, there were 82 cases of TB reported in the state. This is an average of 5.9 cases a year. Vermont is an extremely low incidence rate compared to the national average. In 2016, the national rate was 2.9 cases per 100,000. In Vermont that rate was 0.8 cases per 100,000 — down from 1.2 cases per 100,000 in 2015.”

An estimated 624,000 people live in Vermont. Based on these statistics, Vermont TB cases fell from seven or eight cases in 2015 to five in 2016. Truman added that high-risk profiles include (but are not limited to) children under age five, people with HIV, people with weakened immune systems, and individuals born outside the U.S.

Truman noted steps the VDH is taking to combat TB:

“The department’s TB Program routinely links healthcare providers with TB medical experts for consultation. We recently partnered with national experts at the New Jersey Medical School Global Tuberculosis Institute to provide a day-long training for Vermont clinicians. Participants included close to 50 clinicians and epidemiologists from across the state, representing multiple healthcare facilities. … Health Department nurses routinely provide case management and Directly Observed Therapy (DOT) for all active TB cases. Through DOT, a patient meets with a health care worker every day or several times a week. This helps patients successfully finish TB therapy as quickly as possible. Health Department nurses also work closely with community partners, including school nurses and the University of Vermont Medical Center Pediatrics, to provide DOT for pediatric LTBI patients.”

Vermont unemployment down in July

The Vermont unemployment rate dropped to 3.1% in July, down from 3.2% in June, the Vermont Department of Labor reported August 18. The national unemployment rate is 4.3%.

Statehouse Headliners is intended primarily to educate, not advocate. It is e-mailed to an ever-growing list of interested Vermonters, public officials and media. Guy Page is affiliated with the Vermont Energy Partnership, Divestment Facts, the Vermont Alliance for Ethical Healthcare and the Church at Prison.

Image courtesy of Michael Bielawski/TNR

One thought on “Statehouse Headliners: Legal pot would invite RICO challenge, net-metering contributes to rate hike

  1. Did they think there wouldn’t be any problems , what do our elected officials do? From what
    I see all they do is try an push there “Pet Projects” and this being one of them!! How about
    just a little due diligence.

    How about trying to fix the “State Debt” or maybe trying to fix our over Taxation in the state
    or maybe how about the drugs running rampant in our state!!

    What was I thinking , like maybe they would do their job??

    But all our elected officials can do is worry about “Pot legislation” it’s easier to appease to the
    pot heads than hard working tax paying Vermonters.

    Suggestion, if you need to raise money how about raising the fines for “texting” or using hand
    held devices while driving First offense $500, Second offense $1,000 and third offense well
    that should be it revoke your driving privileges. From what I see driving daily, I could raise

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