Marijuana, Liberty and Paragliding

Written by Jimmy Mengel
Posted September 28, 2018 at 8:00PM

Yesterday, I brought you part one of my series with Governor Gary Johnson — third-party presidential candidate and current nominee for the U.S. Senate.

We talked about everything from political discord to mutual understanding and had some headier conversations about politics and life in general. You can read that here.

But since this is an investment newsletter, I want to spend today sharing our conversation about marijuana. It’s clearly been a hot topic in the investment and political worlds, and Gov. Johnson is uniquely qualified to discuss it…

He was one of the first major political figures in the United States to call for legalization of marijuana.

He served as the CEO for Cannabis Sativa from 2012 to 2016. He is now an advisor to the investment fund CB1 Capital, which “specializes in the supply chain of cannabinoid-based wellness solutions, products and therapies that address a wide range of unmet medical conditions.”

He’s made hundreds of thousands of dollars in the cannabis industry.

But his reasons for being so interested in cannabis are far more profound than money…

Governor Johnson has personally found respite in medical marijuana use after an outrageous injury...

Now, Gary Johnson is no stranger to incredible adventures. He’s climbed the highest mountain on each continent: The Seven Summits. He competed in the Ironman World Championship. He skis 100 times a year. He’s done the Continental Divide mountain bike race — an almost 3,000-mile trek from Canada to New Mexico.

But he met his match when paragliding in Hawaii.

While in Maui, Gov. Johnson was gliding high and enjoying the view when he was caught in a tree. He said the tree basically turned his paraglider into a “slingshot” that fired him directly into the ground — fracturing vertebrae, breaking ribs, and actually shaving 1 1⁄2 inches from his height.

He used medical marijuana to quell the pain…

“It’s the worst pain I’ve ever felt. Rather than using painkillers, which I have used on occasion before, I did smoke pot, as a result of having broken my back, blowing out both of my knees, breaking ribs, really taking about three years to recover.”

Here’s our chat about marijuana legalization, and what he would do about it as the swing vote in the Senate...

I left off yesterday asking about the common ground we all hold as voters and U.S. citizens. Gov. Gary Johnson told me “Whether it's liberal or conservative, (the idea is to) not give a damn as long as whatever you do with your life doesn't adversely affect mine."

Let's pick up there...

Jimmy Mengel: One thing important thing for voters, and I think as far as your senate campaign goes, you've been consistent. So as governor, that's exactly how it played out, right?

Gov. Gary Johnson: Well, yeah, there's no surprise here. The positions that I held as governor remain so today. We change positions and we change positions because I think we become better informed. I changed my mind completely on the death penalty. I was a death penalty advocate, and this is going to sound really crazy, but I was a death penalty advocate until I realized that the government makes mistakes on the death penalty. I know that that just sounds probably crazy because of course they make mistakes.

Jimmy Mengel: Well that's a very important thing to make a mistake on.

Gov. Gary Johnson: It's very important, especially if you happen to be one of those, and the mistakes maybe as high as eight percent.

Jimmy Mengel: Is that what changed your mind on the death penalty?

Gov. Gary Johnson: What changed my mind on the death penalty was, was that Texas has like a two-year appeal for death penalty and that's it, that's the max. After two years, you are sentenced to death. So in New Mexico, so we had a death penalty case in New Mexico, first one in, I don't know, 20 years. It was a heinous crime and the perpetrator admitted to it and wanted to be put to death. So as governor, this was happening when I was governor. I submitted legislation or I supported legislation that would have limited death penalty appeals to two years, same as Texas.

But in New Mexico, there was a very high-profile case. It was the Vagos Motorcycle Gang that had killed a gay man, William Velten, and it was very highly publicized. And there were three of them. There was an eyewitness that claimed that the three did it. They were all sentenced to death. And about 10 years after they were sentenced to death, there was someone who confessed, an eye witness after 10 years said that she really didn't witness it. They reconvened a trial and they were, the conviction stood. And then it moved out to 12 years and someone confessed to a priest on the east coast that they had committed the murder.

Jimmy Mengel: So none of these three people.

Gov. Gary Johnson: None of these three people, but this was like 12 years after they were sitting on death row. And the person who confessed new details of the murder that had never been publicized, I mean is one of those, did you really commit the murder. Well, how about this fact, how about, and conclusively proved that this guy did commit the murders, and they were released from prison after having served those many years. If my legislation would have passed, I would have been responsible for the three of them having been put to death.

Jimmy Mengel: It's two years in terms of appeals and the court system?

Gov. Gary Johnson: Put a cap on that. Right. And when you hear from me, when I heard that it costs more money to keep a person on death row than it does to lock them up for the rest of their lives, initially, that made me angry that attorneys would be making that much money off of keeping someone who should be subjected to the death penalty alive. Then you find out something like the Vagos Motorcycle Gang.

What price do you put on them having been kept alive by attorneys? Well, it becomes priceless...

Jimmy Mengel: Well, its a life.

Gov. Gary Johnson: Why not lock a person up for the rest of their lives costing less money than attorneys involved. And if there has been a mistake made, maybe the mistake could be remedied.

Jimmy Mengel: I'm glad you brought that up because I find that extremely interesting. The prison industrial complex, let's get to that in a second, but what is the libertarian approach to the privatizing prison system? Are you going to set something up where you don't have this rinse and repeat type thing with prisoners and lawyers spending 20 years going through appeals?

Gov. Gary Johnson: I privatized half the prison system in New Mexico. When I took office we had about 600 prisoners housed out of state. The privatization of the prisons was two thirds the cost of public prisons. New Mexico was under a consent decree because of riots that had occurred in the 80s. So the federal courts were running the prisons in New Mexico. What people are not aware of is there is literally an army of lawyers in every single state that follow the prison system. And if you think that you can get away with the delivery of less goods and services than what is being offered by the public sector or with the rights of prisoners, guess again. Point is, is that with this scrutiny of the army of lawyers, with the scrutiny of the federal court system, we were able to privatize half the state's prisons for two thirds of the cost. 66 cents as opposed to a dollar. If that isn't good government, I don't know what is. And the federal courts vacated the consent decree because we had now fulfilled the obligation to fix the prison system.

Jimmy Mengel: So that's an interesting thing about libertarianism and I think this is a kind of a weird dichotomy. So, you're for having less people in prison?

Gov. Gary Johnson: Yes.

Jimmy Mengel: But wouldn't privatizing and incentivizing corporations to incarcerate people for their own profit, wouldn't that put more people in prison than what we're already doing?

Gov. Gary Johnson: Well, I never saw that. And not to say that that hasn't happened and not to say that there haven't been incidents of that. But I just get back to any time you can offer the same goods and services for two thirds of the cost, why wouldn't you do that? To me, that's good government.

Jimmy Mengel: Let's spin off on that. Speaking of putting a lot of people in prison.

Gov. Gary Johnson: You know we have more people in prison, numbers-wise, than communist China.

Jimmy Mengel: I have heard that.

Gov. Gary Johnson: It's staggering. On a per capita basis, we're way out ahead having more people in prison. I think the majority of that are our drug laws and I've been working very hard since 1999 to reduce the number of people in jail because of drug-related crime.



Jimmy Mengel: Well, that's exactly where I want to go with this. I know very well that you are one of the most outspoken advocates for legalizing marijuana at the very least.

Gov. Gary Johnson: Yes.

Jimmy Mengel: Drug policy in general. What were people telling you in 1999 when you were trying to do this?

Gov. Gary Johnson: Well, amazingly, and I didn't go into this with my eyes closed, I really believed that this was going to be a fallout that was going to have 85 percent of the population against me on this. I believed that the phone calls and emails into the governor's office was going to be 85 to 15 negative. I really thought that, not being blind to this.

First of all, the volume of faxes, phone calls, emails, and letters into the governor's office quadrupled overnight. And the number was 95 to five positive.

Jimmy Mengel: Interesting.

Gov. Gary Johnson: Very interesting.

Jimmy Mengel: Did you see the national polls, what people say but when it actually happens?

Gov. Gary Johnson: When it actually happens it's oh my gosh, somebody actually called out the emperor for wearing no clothes.

Jimmy Mengel: New Mexico is not recreationally legal now. And you've been in the marijuana business. What do you see happening with federal legislation with Schedule 1 drugs and as a senator, that seems like to be the major thing that needs to be done in order to roll that out across the country.

Gov. Gary Johnson: I think there are three things that I am going to promote as U.S. senator that are needed when it comes to marijuana laws. One is to de-schedule marijuana as a Class one narcotic, which would straighten out the banking issues and it would allow for research into marijuana, something that currently really is not being done because it's a Class one narcotic and nobody wants to jump through those hoops to actually be able to research marijuana.

Jimmy Mengel: In other words, they'll get shut down by the government.

Gov. Gary Johnson: That they'll get shut down by the government. Number two is drug testing. Drug testing right now, there are thousands of people losing their jobs because they test positive for marijuana. The government needs to establish impairment. But what people need to understand is a drug test for marijuana does not test for impairment. It simply test for the presence of THC, which can exist months after the last time you've consumed any marijuana. So it's terribly unfair.

And then lastly, there needs to be a process set up to pardon those that have been convicted on marijuana crimes. We're talking now about maybe 10 million Americans who are felons, but because of marijuana conviction and the fact that they are felons, they would otherwise be tax-paying, law-abiding citizens. After the prohibition of alcohol was repealed, there was a process for pardoning those convicted of alcohol-related crime.

Jimmy Mengel: And you think same thing should exist now.

Gov. Gary Johnson: Same thing should exist right now for marijuana related crime. There are still people in federal prison doing life sentences for having sold large amounts of marijuana on numerous occasions or even one occasion but those people are, the makeup of more than 50 percent of federal prison fits the following profile. Selling drugs, selling small amounts of drugs on numerous occasions. Mandatory sentencing, federal law.

Jimmy Mengel: Yeah. I was talking to a fellow the other day in Baltimore. He had one marijuana charge when he was a teenager and from there he couldn't get jobs, he couldn't really do much of anything. It followed him around and turned out, you have to live on the street. You have to go to jail. You go back and forth. And then that's it. Nobody gives you a chance.

Gov. Gary Johnson: Families broken up, inability to get a job.

Jimmy Mengel: From one very minor thing.

Gov. Gary Johnson: This is a reparation that needs to be made for those that have fallen victim to the war on drugs. These are the victims of the war on drugs. 90 percent of the drug problem is prohibition related, not use related. The issue, look, and that's not to discount the issues surrounding abuse of drugs, but that should be our focus.

Jimmy Mengel: No, I think that's very important. On the other hand, if we were to better regulate marijuana or legalize marijuana, as a governor, a state needs jobs, right? How's the job process? Like you're bringing in American jobs, you're doing it in a new economy that hasn't existed. Why aren't people talking about that in regards to marijuana?

Gov. Gary Johnson: Why aren't they talking about that? In New Mexico, I believe that it would result in 30,000 jobs. You don't have to really question that because our surrounding states, Colorado, Colorado has probably created 100,000 jobs because they were the first to do it. Nobody's going to catch up with Colorado when it comes to marijuana.

Jimmy Mengel: People are moving there just to do that.

Gov. Gary Johnson: Just look at Colorado, look at Washington state, Oregon, now California, Nevada. It's not a made up number when you talk about 30,000 jobs in New Mexico.

Jimmy Mengel: And I've read up upwards of a billion dollars in tax revenue for California. I struggle to find out why federally, even if people are against marijuana, the writing's on the wall. Like what in the world are you doing holding up all of these things when you couldn't be putting people to work for nice paying American jobs. A lot of the things that Donald Trump ran for president on, like why isn't this like number one, no brainer.

Gov. Gary Johnson: I completely agree. I have not had, personally, I have not had a drink of alcohol for 31 years. Now, for anybody that drinks themselves into oblivion every night, have at it. As long as you don't get behind the wheel of a car, as long as you don't put anybody else in harm's way. But for me, marijuana has always been about health and wellness and I find marijuana as such a safer alternative to everything else that's out there and that starts with alcohol.

I have been open about my occasional use of marijuana.

Jimmy Mengel: I don't think there's like any price to be paid for that. If you compare it to alcohol, obviously, just run the numbers, it's ridiculous.

Gov. Gary Johnson: Well, it is. I have always maintained that legalizing marijuana will lead to less substance abuse, overall substance abuse because marijuana is so much safer than everything else that's out there starting with alcohol.

I'll bring you even more of my conversations with Governor Johnson next week. In the meantime, if you are interested in helping Gary get these messages out, you can learn more here.

Godspeed,
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Jimmy Mengel

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Jimmy is a managing editor for Outsider Club and the investment director of the personal finance advisory, The Crow's Nest, and cannabis stocks advisory, The Marijuana Manifesto. For more on Jimmy, check out his editor's page.

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Investing in Marijuana Without Getting Burned