Sanchez hits Harris’ record on mortgage settlement …

Good morning. TGIF. As Election Day gets closer, the race for Senate becomes more interesting — a stark contrast from the summer, when the race was deemed a snoozefest.

Loretta Sanchez on Thursday attacked Kamala Harris’ record on the 2012 mortgage crisis settlement, saying it was not the major accomplishment the state’s attorney general claims.

The two Democrats are running for the state’s open U.S. Senate seat. With the election rapidly approaching, and lagging in both fundraising and polling, the Orange County congresswoman has increasingly been on the attack, even calling for another debate, which the Harris campaign quickly rejected.

Harris has said throughout the campaign that she’d played a key role in the settlement negotiation with the banks that won around $20 billion for California homeowners. But, citing multiple media reports, Sanchez said Harris did not lead in the talks, deferring to New York and Delaware, was not tough enough on banks and failed to protect the settlement from being raided by the state government.

“Despite pledging to get tough on the banks, Kamala Harris did not lead the charge as she claims and never filed charges against a single bank,” Sanchez said in a statement. “That is why consumer groups have criticized Ms. Harris for her failure to follow-up on the mortgage settlement.” 

CalWatchdog has more. 

In other news:

• If Harris is taking the high road at all, it’s at least partially because she has POTUS on her side. President Barack Obama stars in a new Harris campaign ad, touting her accomplishments, according to The Sacramento Bee.

• “So what happens if California voters decide to legalize recreational marijuana on Nov. 8? Would a legal marijuana market cut into the profits of the Mexican drug cartels enough to cripple them? Or would it make it easier for traffickers to grow pot in the United States under the shadow of legitimacy? The answers are a game of speculation, experts acknowledge. … One thing the experts do agree on: The battle over drugs at our border will rage on regardless.” The San Diego Union-Tribune has more.

• “Political donors have spent a record $450 million on 17 statewide November ballot initiatives in California, beating the state’s own record for the most spent on propositions appearing on state ballots in a single year, campaign reports filed Thursday show.” The San Jose Mercury News/AP has more.

• “California voters have a decision to make on the general election ballot: approve $9 billion dollars in bonds for school and community college construction projects and modernization, or reject it to avoid adding to the state debt,” reports Capital Public Radio.

Legislature:

• Gone till December.

Gov. Brown: 

• At a Yale class reunion. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @ReThinkDefense

City College of SF ballot measure shows financial woes not gone yet

Good morning. TGIF. We’ve heard plenty recently about statewide ballot measures, but there’s a seemingly endless amount of local measures.

In fact, the City College of San Francisco is hoping to double down on a measure passed just a few years ago. In 2012, CCSF persuaded voters to adopt a $79 parcel tax to stave off bankruptcy.

Now the school — the largest based on enrollment in the California Community College system — is once again coming to voters for help, seeking to increase the annual parcel tax to $99 and move back its sunset from 2021 to 2032.

Measure B requires two-thirds’ voter support. If adopted, it would provide $19 million a year, up from the present $15 million.

The selling points for the measure build off the idea that the community college has turned the corner from its recent problems with the Accrediting Commission for Community and Junior Colleges, which has voiced concerns since 2011 that the college has few internal financial controls, has spent money in unfocused ways and has provided inadequate student services.

But Measure B critics offer evidence that undercuts the assertion that the college’s biggest problems are mostly behind it.

CalWatchdog has more.

In other news:

• “In a move that foreshadows sweeping statewide reductions in the amount of river water available for human needs, California regulators on Thursday proposed a stark set of cutbacks to cities and farms that receive water from the San Joaquin River and its tributaries. To protect endangered fish at critical parts of their life cycle, regulators proposed leaving hundreds of thousands of additional acre-feet of water in the San Joaquin River system.” The Sacramento Bee has more. 
• “If marijuana is legalized, where would $1 billion in pot money go?” The Orange County Register has the answer. 
• The Los Angeles Times has a decent deep dive into the debate over the impacts of the new law giving additional overtime pay for farmworkers. One report estimates that in “the worst-case scenarios … farmworker wages could fall by about $1.5 billion, jobs could decrease by 35,000 to 78,000 and agricultural production could see an almost $8 billion drop in a one-year period, assuming full implementation of the new law. In its best-case scenario, which assumes all farm operations are profitable and competitive enough to absorb the overtime costs, wage earnings could increase by about $2,200 per worker.”
• “The Fair Political Practices Commission approved a $55,000 settlement deal Thursday with Tina Baca Del Rio, a Commerce councilwoman who failed to file numerous financial disclosure forms with the state and used her campaign fund to cover expenses for her kitchen remodel,” reports The Sacramento Bee.

Legislature:

• Gone ’til December.

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @PeterDeMarco22

However, this optimism may be premature. Polls show younger voters, including Republicans, are strongly predisposed to support proposals such as the Nov. 8 ballot measure. But voters who haven’t made up their minds may be dismayed upon learning what’s happened in Colorado since voters there approved pot legalization in 2012.

The Colorado experience seems likely to have eventually made its way into the California debate, but the recent chance seating of Assembly Speaker Kevin de León next to Colorado Gov. John Hickenlooper on a cross-country flight accelerated its entry. De León, a Los Angeles Democrat with statewide ambitions, told the Los Angeles Times last week that the “comprehensive” briefing he had gotten on what happened in Colorado left him so concerned he was unsure how he would vote on Proposition 64.

Colorado report depicts wide range of social ills

A 166-page report assessing how the Rocky Mountain State had been affected by state marijuana policies was released in September 2015. It found sharp increases in driving under the influence of drugs; increases in traffic deaths related to stoned drivers; a spike in marijuana users aged 12 to 17; a sharp increase in marijuana-related emergency room visits; and a huge surge in the number of children under 5 who had been exposed to marijuana in their homes. The document also found evidence that Colorado had become a marijuana exporter, with volume growers taking their crop to other states.

Plainly, what’s happened in Colorado offers rich fodder for anti-Proposition 64 ballot arguments. There is now a legal fight in the works over opponents’ proposed language.

The Colorado report is also a great source of TV attack ads — if the No on Proposition 64 has deep enough pockets to launch such a campaign.

Fearful that California’s legalization of marijuana would set a precedent for the nation, a group leery of Proposition 64 has emerged as its leading critic. Known as the Smart Approaches to Marijuana, it was founded in 2013 by former Rhode Island Rep. Patrick Kennedy; David Frum, former speech writer for President George W. Bush; and Kevin Sabet, a UC Berkeley alumnus who was the leading opponent of drug legalization or normalization within the Obama administration.

In a recent Los Angeles Times article, Sabet expressed confidence that the anti-Proposition 64 campaign will be well-funded.

But as is often the case with ballot measures in California, one side or the other has a billionaire paying most of the bills. The key advocate behind Proposition 64 is Silicon Valley billionaire Sean Parker, who has already given $9.2 million to qualify the measure and to set up a campaign organization on its behalf. At this point, the No on 64 side has no similar figure.

Battles over credibility loom

What’s more, Sabet’s emergence as a face of the anti-64 campaign could actually galvanize Prop. 64’s supporters.  In some progressive circles, he’s seen as an enemy of balanced, honest debate about drug use in modern America. A 2013 Rolling Stone article depicted him as the “biggest enemy” of pot legalization — a pretend reformer who is a “prohibitionist” at heart.

Dr. Sunil Kumar Aggarwal, a New York City physician who has written about marijuana’s potential as a pain reliever in the Clinical Journal of Pain, has charged Sabet with exaggerating marijuana’s addictive qualities and cherry-picking information to mislead journalists on many fronts, such as the alleged correlation between marijuana use and lower IQs. 

Sabet says that legalization supporters have their own credibility gaps, starting with a refusal to acknowledge how detrimental marijuana use is for teenagers and a refusal to admit that marijuana today is far more powerful than it was a generation ago.

California’s Proposition 64 shares its number with the Colorado pot measure approved in 2012. 

Striking a balance

“The Control, Regulate and Tax Cannabis Act of 2016 would allow people 21 and over to possess and cultivate limited amounts of marijuana and it would set up legal marijuana commerce overseen by a pair of new state agencies, the California Cannabis Commission and the Office of Cannabis Regulatory Affairs,” as Alternet reported. The law was crafted, according to ReformCA, “to comport with the guidelines laid down by pro-legalization Lt. Gov. Gavin Newsom’s Blue Ribbon Commission on Marijuana Policy and to complement the statewide medical marijuana regulation scheme approved last month by the legislature.”

Newsom, off to an early start in his campaign to succeed Gov. Jerry Brown in 2018, labored to find a middle path with the commission’s proposals. As CalWatchdog noted previously, Newsom’s panel put forth “a suite of policy prescriptions likely to leave many Californians with diminished hopes as well. Rejecting the notion of a free market for pot, the authors pushed for central regulatory oversight, standards for licensing and training, and rules barring youths from entering shops and purchasing certain types of product such as so-called edibles.”

ReformCA’s parent organization, the Coalition for Cannabis Policy Reform, was the driving force behind the initiative. Chairwoman Dale Sky Jones, who also runs Oaksterdam University — “the first college in the country for the study of cannabis” — has amassed a list of supporters from California’s variegated pro-marijuana constituency; “Americans for Safe Access, the Emerald Growers Assn., Greater Los Angeles Collective Alliance and the Council on Responsible Cannabis Regulation” have all signed on, according to the Los Angeles Times.

A fractious field

But ReformCA hasn’t managed to unite the pro-pot community completely. After the LA Weekly reported that ‘the coalition includes NORML, the Drug Policy Alliance and Marijuana Policy Project,’ ReformCA had those organizations removed from its website,” the Weekly reported. “The Drug Policy Alliance, one of the biggest players in marijuana politics, might go its own way. It’s preparing its own language for circulation that could be filed later this month if DPA principals aren’t happy with other initiatives being prepared.”

“The DPA initiative, then, could end up being one of three serious proposals to tax and regulate recreational marijuana for those older than 21 in California. The other two could include one from Silicon Valley billionaire Sean Parker, multiple sources confirmed, and the one from ReformCA.”

In some pro-legalization circles, Parker has become something of a savior figure. Unlike the others jockeying to pass marijuana reform, he has money. “Reform CA ($167,000 annual budget in 2014), NORML ($312,000 in 2012, the most recent filings), and Americans for Safe Access (which was $182,000 in debt in 2012, according to income statements filed earlier this year), are all broke,” SF Weekly noted. Parker, by contrast, “put $600 million of his reported $2.5 billion fortune in a philanthropic foundation this summer,” while recently he has brought on “Sacramento campaign veterans Gale Kaufman and Brian Brokaw, as well as former Newsom campaign insider Jason Kinney,” according to the SF Weekly’s anonymous sources.

The Weekly even suggested that Newsom’s own recent silence on the topic of pot legalization might indicate his unwillingness to endorse an initiative until Parker comes forward with one of his own.

Speedy timetables

If the Act were to become law, change would come swiftly. “Similar to Oregon’s model, the initiative would not give state regulators much time to drag their feet before providing consumers with an outlet to purchase legal weed,” High Times reported. The Office of Cannabis Regulation “would be forced to issue temporary licenses to the medical marijuana sector, so that recreational sales could begin as early as July 2017. Meanwhile, the state would be required to begin drafting definitive regulations for the new market in order to make it fully operational by the turn of 2018.”

As CalWatchdog.com previously reported, some in the marijuana business have been instrumental in pushing for a ballot initiative that would legalize recreational use. The company behind WeedMaps.com, for instance, recently contributed $1 million to one such effort. Now, similar startups seeking funding of their own have turned to the Valley’s VCs — and some startup incubators have opened up to the possibility.

Growing a market

Through new apps providing platforms that match supply with demand, customers and dispensary owners have quickly benefited “from the Silicon Valley-style normalization of the marijuana market,” Pacific Standard noted. “While companies like Leafly provide Yelp-style reviews of cannabis strains and dispensaries,” however, “fewer entrepreneurs are willing to deal closely with the product itself.”

One concern has been “scale,” the potential of a company to reach exponentially more users. Through one representative startup, GreenRush, users can “browse the dispensaries on the website, select the appropriate strain, and set a delivery time,” Pacific Standard observed. “An iOS app is, of course, in development, so you can buy straight from your couch without even having to touch a keyboard.” But in confirming that each purchaser has a medical marijuana card, GreenRush has accepted significant constraints on its customer base.

But David Hua, CEO of the ridesharing service Sidecar, told the Silicon Valley Business Journal that “the rapidly growing medical marijuana market promises to support a significant logistics business” even in the absence of uniform state and federal legality for the drug. “Drivers making cannabis deliveries via Sidecar must be medical marijuana card holders themselves, and they can only deliver to members of a particular cannabis cooperative of which they also are a member,” the Business Journal noted.

The perils of illegality

Another issue has revolved around pot’s patchy-at-best legal status. “A lot of venture capitalists smoke,” said one to the San Francisco Chronicle. “This is about legality. They don’t want to deal with (cannabis) until it’s fully legal. It’s not worth the risk.” The catch has been that VCs looking at marijuana risk have considered it differently from a user worried about getting caught breaking the law.

For starters, few Silicon Valley heavyweights have established reputations as prudish about drug use. In a dark irony, proximity to marijuana has not been closely associated with Silicon Valley’s drug problems, which have veered toward harder territory. “Drug abuse in the tech industry is growing against the backdrop of a national surge in heroin and prescription pain-pill abuse,” reported the San Jose Mercury News last year. “Treatment specialists say the over-prescribing of painkillers, like the opioid hydrocodone, has spawned a new crop of addicts — working professionals with college degrees, a description that fits many of the thousands of workers in corporate Silicon Valley.”

For investors, the key problem with legal prohibitions on marijuana has been their limitation of its market to cash — a problem other startups in tension with the law characteristically lack.

“While venture capitalists invest millions in Uber and Airbnb, which often operate in violation of local laws, they won’t invest in pot,” the Chronicle added. “Breaking a city’s ordinance means fines. Flaunting the federal government’s marijuana prohibition can get you a knock on the door from unsmiling men in dark suits. But valley investors are starting to grow less reluctant.”

Even a little interest could go a long way. Momentum has been steadily building in favor of marijuana use, in technology and culture, as well as in politics and law enforcement. In Silicon Valley, one small turn toward greater acceptance of recreational pot would probably have a gear-like effect on pot’s status in other areas, advancing the cause of legalization apace.