City councils are apt to worry about different kinds of drug crime than Congress. But the new attention from both ends of the political pecking order comes from a single source: the legal and regulatory uncertainty surrounding the burgeoning marijuana economy.

City power struggles

It’s a phenomenon playing out conspicuously in the county of San Luis Obispo. There, cities have moved to keep out pot dispensaries. Arroyo Grande, which passed its ban in 2008, added a supplementary ban four years later on so-called “mobile dispensaries,” the door-to-door marijuana delivery services that frequently, but not always, operate in compliance with California’s medical marijuana rules.

Mobile dispensaries are undeterred, however, provoking a fresh pot controversy in nearby Paso Robles. The Paso Robles City Council deadlocked, killing a plan to ratchet up from brick-and-mortal prohibitions on dispensaries to a ban like Arroyo Grande’s.

Proponents of the measure invoked a staff report to argue that delivery services posed a “current and immediate threat” to the health and safety of city residents on account of violent crimes seen linked to medical marijuana, according to the San Luis Obispo Tribune.

Angry residents, however, lambasted the City Council for what they characterized as the summary and one-sided nature of the report. At least one resident found it bitterly ironic that the mobile dispensary ban arose from the city’s surprise when a delivery operator sought to apply for a business license.

The ordeal marks the second time the City Council attempted to stamp out pot delivery, with Paso Robles Mayor Duane Picanco citing the federal illegality of marijuana as the reason for his support.

Federal changes also playing out

Yet marijuana law is also plagued by uncertainty, confusion and concern at the federal level. While California localities struggle to agree on mobile dispensaries, an influential California legislator is pushing forward on rules meant to reduce drug crime in a different way.

Earlier this year, the Treasury and Justice Departments issued guidelines meant to calm bank fears of criminal prosecution for working with marijuana-related businesses legalized by state law. But, as the Wall Street Journal reported, the quasi-regulatory guidance left lenders even more uncertain; banks worried the federal government didn’t really guarantee legal safety instead adding “burdensome new requirements that they screen customers for marijuana ties.” As a result, the Journal concluded, “banks have become even more uneasy about accepting marijuana money, pushing state-licensed pot businesses deeper into a financial netherworld.”

Into that bureaucratic morass stepped Rep. Dana Rohrabacher, the Huntington Beach Republican with a strong libertarian streak on drugs and other civil liberties issues. Just last month, Rohrabacher led enough Republicans to help pass a House bill that would bar federal pot prosecutions in excess of state law. This month, the congressman advanced a new piece of legislation — an amendment devised to defund any action by Treasury to penalize banks serving state-legal marijuana businesses.

On July 16, Rorhabacher helped muster enough votes to pass that bill, too. He was joined in sponsoring the legislation by Representatives Barbara Lee, an Oakland Demcrat; Denny Heck, D-Wash.; and Ed Perlmutter, D-Colo.

Bipartisan push to protect state pot laws

The vote is not just a landmark in federal drug legislation. It also confirms the instrumental role of bipartisan California legislators in successfully driving bipartisan votes on marijuana law.

Despite the dramatic changes, the Senate must still adopt a similar approach to drug reform in order for Rohrabacher and Lee’s agenda to advance. Bipartisan efforts along those lines are afoot, but wrangling behind closed doors has sidelined one proposed bill. Last month, Senators Rand Paul, R-Ky., and Cory Booker, D-N.J., introduced an amendment that would block the Department of Justice and the Drug Enforcement Administration from investigating Americans complying with their state’s marijuana laws.

Residents of Los Angeles know that “medical” marijuana shops are not the only gray-market business that’s experienced a recent boom. In a city with a taste for pleasure and an enterprising working class, “massage” parlors are apt to have a significant presence — and L.A. is no exception.

To an even greater degree than pot shops, massage parlors offer policymakers a challenge: how to let legitimate legal businesses flourish, without also turning a blind eye to the unlicensed and unregulated sale of sexual encounters. Statewide, the issue is receiving renewed attention, thanks to the expiration this year of a 2008 law intended to solve the puzzle.

As Californians consider how to move forward, they’re coming to realize just how inadequate and ineffective the expired rules quickly became. Even more important, however, is that they — and all Americans — grasp why the ’08 law failed. Though massage law may not strike most people as a perfect example of the perils of bad governance, California’s return to the regulatory drawing board reveals that it is.

As The Sacramento Bee reports, the League of California Cities is pushing Sacramento lawmakers to return to an approach the 2008 law rejected — one in which local regulators had the authority to apply their own varying ordinances to the massage parlor business. Frustrated municipalities “say the 2008 law has left them ill-equipped to handle” the spread of massage parlors that’s growing across the state.

Failure of universal standards was predictable

How did the soon-to-expire law fail so badly to meet expectations? The answer closely fits a pattern that critics of bad legislation have long argued against. Especially in California, policymakers’ conventional wisdom adopts the same posture to any regulatory opportunity: first, sweep in with new, universal standards; second, create a new official body given full control over their enforcement and administration. Then, the logic goes, policymakers can sit back and watch the new regime efficiently work its magic.

With the massage industry, as any other, the result of this kind of policymaking is decidedly less than magical. To be sure, it works like a charm — just not in the virtuous way legislators had hoped.

Policymaking at the national level shows time and again how big business interests in any industry lobby hard to secure and protect centralized regulatory standards, which are easier to navigate, “capture,” and, in some circumstances, work around. As is now par for the legislative course, California’s massage industry came out strongly in favor of universal rules controlled by a single government entity. Sure enough, under the 2008 law, local ordinances were replaced by a “state nonprofit” called the California Massage Therapy Council, which oversaw workers’ education, screening and certification.

But instead of ushering in a new era of clear, strong and judicious enforcement, the rules laid down by the 2008 law favored the massage industry. On the one hand, standardized permitting helps prevent rogue masseurs or masseuses from skipping from one town to the next. On the other, since the permitting system applies to individual workers, parlor proprietors who violate the law can repeatedly avoid punishment.

Massage parlors not like other businesses

The current law’s taste for uniformity, meanwhile, has stuck localities with a mandate to treat massage parlors the same way as any other businesses, despite the fact that so few other businesses are breeding grounds for illegal sexual commerce. That helps violators continue the very kinds of practices that centrally enforced standards were supposed to do away with.

That’s why California cities like San Gabriel are already getting started on new municipal regulations that would replace the misbegotten statewide regime.

Of course, if cities and counties manage to wrest regulatory control back from Sacramento, controversy is inevitable. There will always be some activists for whom a city may come down too hard or too soft on massage parlors. For a few, the ultimate solution to the challenge is to legalize prostitution.

In the meanwhile, however, California’s circuitous path back to diversity in local regulation has plenty to teach Americans about the limitations of standardized, top-down regulations. From Oregon to Ohio, massage law is making headlines. In an era when the Internet is creating a new realm of possibility for consensual sexual transactions, the use and abuse of massage parlors is a case study in the false promise of laws forged by big industries and big-government regulators.