September 2017 – “Pot of Gold” Redefined

by Justice William W. Bedsworth

Years ago I went to see Arlo Guthrie at the Hollywood Bowl. It was a terrific concert, highlighted by Arlo telling the audience—through a somewhat hazy atmosphere generated by a few in the audience who were surreptitiously smoking pot—“There’s two ways of looking at the drug problem: There’s them that say there’s too much drugs and them that say what there is ain’t good enough.”

I’m sure both those positions and a few others were bandied about in the governing agencies of the State of Nevada when they encountered the situation my morning newspaper referred to as “Nevada Faces Pot Shortage.”

As you might imagine, I spent several seconds trying to figure out what mistake had been made by the journalists who wrote that headline. What kind of “shortage” could they be facing? Clearly the headline could not mean what it seemed to say.

So what should it have said? Was there an incorrect word somewhere?

“Nevada Faces Water Shortage”? That would make sense, but how would you mistakenly insert “pot” for “water” in the headline?

“Nevada Faces Potato Shortage”? Harder to figure, but at least easily explicable in terms of missing letters.

“Nevada Restaurants Face Pot Shortage”? Possible, but . . . ah hell, Beds, stop speculating and read the story!

So that’s what I did, if for no other reason than to confound those members of the appellate bar who doubt my ability to read.

But the first sentence was even more mystifying: “Nevada officials have declared a state of emergency over marijuana: There’s not enough of it.”

Honest. That’s what it said. In a newspaper not known for its sense of humor. To my amazement, the headline meant just what it said.

Seems Nevada legalized marijuana this year, but can’t keep up with the demand. Two weeks after it became “over the counter” instead of “under the toilet tank,” retailers began running out of Maui Wowie, Purple Haze, Black Magic Kush, and brownie mix.1

And why should Nevada care about this? Because Nevada’s legalization included taxing marijuana—10% on sellers and 15% on growers.

You take the estimated million dollars a day Nevada pot shops did in the first four days of sales, multiply it by a number of your choice to reflect the 365-day year, and you can see that the state has a great interest in there being enough of this taxable stuff to go around.2

“You want better schools? Light up a doobie!” Maybe not the most inspiring political slogan ever, but one more based in fact than most.

So the state of Nevada has come up with a third way of viewing the drug problem: There’s not enough marijuana to satisfy Nevada’s demand.3

And why is that? Why is there not enough pot? Are there not enough growers? Did they have a bad crop? Are they concerned about the federal government showing up and saying, “Ahem, marihuana4 is illegal, don’tcha know?”

No, none of those things, although that last is still a perplexing complication.

What’s happened to Nevada is a classic case of The Doctrine of Unintended Consequences.5 While lawyers and politicians are quite familiar with the Doctrine of Unintended Consequences—it goes back to John Locke and Adam Smith, for crying out loud—term limits and populist distrust of “the system” has resulted in lawyers and politicians being replaced in legislatures by bandleaders, businessmen, and billionaires.

They are apparently not as familiar with it.6

What happened in Nevada is that backers of marijuana legalization realized the addition of a brand new drug of choice could take a healthy bite out of the liquor industry. So to dampen their opposition, the legalization legislation7 was written to provide that for the first eighteen months of legalized pot sales, only licensed wholesale alcohol distributors would be allowed to transport it from the cultivators to the dispensaries.8

In the immortal words of the Guinness Brothers, “Brilliant!” We pick the pocket of the liquor industry and then give them a monopoly with which to refill it. Whoever came up with that idea looked like a shoo-in for a Nobel.

Until the unintended consequences showed up. Seems the taxpaying growers have tons of marijuana ready to be delivered to exuberant taxpaying retailers with tons of salivating consumers . . . but they have zero trucks licensed to deliver it.


“The state Department of Taxation, which regulates marijuana, said it had received about a half a dozen applications from alcohol distributors but that NONE had so far met the state licensing requirements, WHICH INCLUDE BACKGROUND CHECKS AND SECURITY PROTOCOLS.”9

Nevada red tape was blocking the delivery of Panama Red. They had to run background checks to find out if the guys licensed to truck vodka and bourbon could be trusted with indica and sativa.

So, short of strapping the stuff to the backs of burros and hoping like hell they couldn’t crane their necks around far enough to eat it, there was no way to get the state’s newest tax bonanza to market. There goes the Nobel.

The Nevada Department of Taxation tried to loosen the applicable regulations, only to have a superior court judge say they couldn’t do it and still comply with state law—kind of a sine qua non for public agencies. So they appealed to the State Supreme Court.10

But anyone who’s ever tried to explain appellate time consumption to a client knows what that’s like. And with that much tax money going up in smoke,11 Nevada was not willing to sit on its hands in the Supreme Court waiting room.

So here’s what it said in my paper three days later: “Nevada has approved an emergency regulation aimed at solving a marijuana shortage by expanding who is allowed to transport the drug from cultivation facilities to retail dispensaries.”

An emergency regulation. I’m not sure what it takes to enact an emergency tax regulation in Nevada, but I’m sure it’s tougher than adjusting your brownie recipe to accommodate the new “secret” ingredient.

Not that they had much choice. As the chairman of the Tax Commission put it, “This is such an important time in the state of Nevada’s existence.”

So here’s the long strange trip we’ve made in the last fifty years. We’ve gone from Woody Guthrie’s kid joking about illegal drugs to a bunch of pot-smoking outdoor concert-goers all of whom tittered nervously about being found out . . . to the State of Nevada perceiving an existential emergency in its inability to get enough pot into the hands of enough tokers to generate enough taxes to pay its bills.

It must be very hard to write satire these days.

Editor’s note: Two days after submitting this column, Justice Bedsworth reported receiving an email—on his court email account—offering to sell him marijuana gummies. His response: “Dang. Time to sell the brownie mix stock.”


  1. (1) Okay, I made up the brownie mix part. I don’t even know if they sell brownie mix in pot shops. But I would if it were my pot shop.
  2. (2) Not to mention the presumably booming sales taxes on snack foods and pizza that typically accompany its use. And brownie mix; don’t forget brownie mix.
  3. (3) I’ll leave it to you to figure out how this fits into Arlo’s Theorem.
  4. (4) Older federal cases spelled the word with an “h.” I’m not sure when they switched to our spelling; Canada has only begun spelling it with a “j” in the last decade. (This concludes the MCLE portion of today’s column.)
  5. (5) Closely related to Murphy’s Law, The Doctrine of Unintended Consequences essentially says that no matter how good your intentions, there will be blowback you never saw coming.
  6. (6) We appellate types spend a lot of time trying to figure out whether the consequences of legislation were unintended by the legislature or were fully understood and disregarded. We often have to try to discern whether they didn’t see this particular result coming or they saw it coming and were perfectly alright with it.
  7. (7) I loved typing that phrase.
  8. (8) Near as I can determine, they are “pot shops” to opponents of legalization and “dispensaries” to proponents.
  9. (9) I added the caps. My newspaper rarely shouts.
  10. (10) Nevada has no intermediate courts of appeal. Poor devils.
  11. (11) Or, more accurately, not going up in smoke.


William W. Bedsworth is an Associate Justice of the California Court of Appeal. He writes this column to get it out of his system. He can be contacted at william.bedsworth@jud.ca.gov. And look for his new book, Lawyers, Gubs, and Monkeys, through Amazon and Vandeplas Publishing.