updates throughout the day, just by going to aljazeera.com, and remember ali velshi has a special report on america's middle class, rebuilding the dream, starts tonight at 7:00 p.m. eastern time on real moneyny with ali velshi. ♪ two states have made the recreational use of marijuana legal and legalized the production for recreational use but the authorities back in washington still consider both a crime. the careful walk through the new legal landscape is the "inside story." ♪ hello i'm ray and americans

attitudes about marijuana have changed a lot since the worst days of the drug war. they have come to think of the drug has more benign and less dangerous than cocaine, heroin or meth, but the federal government still classifies marijuana as a narcotic that can land its producers, sellers and users in jail. their is money seized and property impounded. now the two states, washington and colorado, have legalized marijuana for both medical and recreational use, how can state law, revenue collection, law enforcement be made to mesh with the federal code? it's a question that will only grow more pressing as more states consider a change. another win for legal weed this week. tuesday florida supreme court guaranteed a spot on november's ballot to determine if marijuana could be used for medicine purposes. advocates presented nearly 700,000 signatures necessary for

a ballot question. but opponents challenged its language in court. >> this particular initiative has nothing to do with medicine and not tightly restricted and wide open. it would allow pretty much anybody to use to treat any condition whatsoever. >> reporter: the legislation's language specifies that medical marijuana can only be used in, quote, debilitating diseases. like cancer, aids and parkinson's. >> the fact that morphine is addictive and deadly does not keep it out of the hands of suffering and the supposed fear of abuse by some can no longer justify the denial of the medicine benefits. >> reporter: florida is only the latest state looking at marijuana use. 18 states in the district of columbia currently allow marijuana for medicine purposes. two states, washington and colorado, allowed legal recreational use starting this month but even in colorado tensions are still high on dealing with legalization. monday colorado supreme court

agreed to review the case of quadriplegic brandon coats fired and they say marijuana use is not covered under a law that protects an individual's rights outside the workplace. in washington state there is another point of friction on marijuana legalization, driving under the influence of marijuana is illegal there, just as it is with alcohol. but determining a user's condition is harder. because traces of the drug remain in one's system long after use. how to deal with newly-legal recreational marijuana and existing laws like those governing driving lay in the hands of the state's liquor control board and swimming in uncharted waters and silent on a state issue president obama made this comment about marijuana to the new yorker magazine earlier this week, i view it as a bad habit and vice, not very

different from the cigarettes that i smoked as a young person up through a big chunk of my adult life. i don't think it is more dangerous than alcohol. and he said i've told my daughters i think it's a bad idea. a waste of time, not very healthy. washington and colorado are pioneers in the new world of weed. and in some ways directly contrasting federal law. one big factor of the federal and state marijuana conversation is also green, money. last week attorney general eric holder spoke about dispensary and bank relationships. >> businesses that are recognized by state government generating cash as a result of the sale of a product and you don't want huge amounts of cash in these places, they want to be able to use the banking system and so we will be issuing some regulations i think very soon. >> reporter: at the moment it's illegal for some banks to accept deposits or offer other services

like loans and lines of credit to marijuana providers. even if it's legal in their state. >> there is a public safety component to this. huge amounts of cash, substantial amounts of cash just lying around with no place for it to be appropriately deposited is something that would worry me from a law enforcement perspective. >> reporter: colorado projected close to 600 million in combined wholesale and retail marijuana sales for 2014. 70 million of that will be tax revenue. of which about half will be used to build schools. ♪ now that recreational marijuana use is legal in two states, how will the federal government act? what about dissenting counties and cities within these states? just what does it mean for a black market industry to become legal? the nuts and bolts of marijuana legalization in colorado and

washington state, with us to discuss the new legal landscape are from seattle, alison holcomb, the civil liberties and leader of i-502 the ballot that legalized marijuana in washington state and jonathan seagal at georgia washington law school and former attorney at the u.s. department of justice and specializes in the relations and jonathan calkins and professor after carnegie molon and talked about marijuana legalization and let me start with you in pittsburgh, this is not a single variable problem, is it, when something has been illegal for a long time and a lot of government resources have been dedicated to enforcing that, it's not as easy as just throwing a switch and saying, no, you can do it now, is it? >> no, you are exactly right. there is a lot of complexity.

and it's further complicated by the fact that nobody has ever done this before, no modern jurisdiction had ever legalized a large skull commercial production and distribution, all that had been legalized anywhere else is personal possession and use or in the case of the netherlands retail sale of 5 grams, uncharted territory and things to be worked out. >> guidance from prohibition and making something legal again that once had been made illegal? >> yes and no. precisely because nobody has ever done this particular thing before, we of course look all over to try to find historical analogs but it's circumstantial evidence and what you try to do actually is act almost like an nba student who is trying to build a business model for a business proposel and understand

what the industry will look like in the new terrain. >> reporter: when you were drafting the proposal that ended up with this new law did you have to anticipate some of these very questions? >> absolutely. we knew if and when initiative 502 passed everything that was authorizing under washington state law would continue to technically be illegal under federal law and part of the law was to craft something so thoughtful and careful the federal government would give us permission to go forward. >> reporter: so give me some specifics. how would you at least not attract the ire of the federal government as we figure out steps forward in what really is a social experiment for washington and colorado? >> well, a few things that we suspect of the federal government would be concerned about were how close marijuana stores would be to youth-sensitive areas like schools and playgrounds and parked and how tightly would the

marijuana be controlled so we would not have to worry too much of it seems in states where it's not legal or getting in the hands of young people. also how well would we do in taking the marijuana out of the black market, under mining, the illicit market and bringing it under regulation. >> reporter: is there a gray area that lives somewhere between the written law and the discretion of both law enforcement and people in positions of high responsibility like the attorney general? >> oh, yes, i mean marijuana is still illegal under federal law in every state. so people who use marijuana or sell it or produce it in colorado today are breaking federal law. but the department of justice has determined that it is not a federal priority to enforce the marijuana laws against people who are doing things that are legal as a matter of state law so long as federal interests are not threatened.

and they identified the federal interest as some of the things the previous guests mentioned like keeping marijuana out of the hands of minors, keeping it from going to other states and making sure that the profits don't go to criminal enterprises. >> reporter: but this is a matter of policy, of this administration, a new president will raise his or her hand in january 2017. could they simply reverse all those policies and begin a tougher reading of the federal statute? >> as a legal matter, yes. i mean there might be political obstacles to doing that but as a legal matter the next president could change the policy. the current president could change the policy and indeed the policy does not prevent the federal government from bringing prosecutions even in colorado. it just says it's not a priority. >> reporter: professor calkins if we were to go to washington state you and i and there is to

fairly large municipalities on the border of idaho and spokane and what happens when you step over a border and what is in washington does it become illegal when you take the step and do you worry about the money that changes hands in order for someone to posses marijuana? >> well, the law changes as soon as you go across the border. what doesn't change is dramatically would be price or supply. it will be a real challenge to try to prevent the market conditions that exist in washington state or colorado from affecting market condescriptions elsewhere. particularly because even before passage, washington was a big exporter of marijuana. it produced purely black market marijuana for export to other states and that continues. it will be possible perhapses

that the i 502 stores are not exporting but the existing black market was already serving the rest of the country and the rest of the country still is a black market. so, yeah, it's very hard to draw walls or put walls around state borders for purposes of commerce. >> reporter: alison you mentioned trying to craft a new law with that in mind, not having it leak into states where it is still illegal and how do you do that? >> well, you can construct tight security systems and tight tracking systems, systems similar to the way we track pharmaceutical drugs and fund enforcement of the systems to make sure there are adequate watch keepers and that's what we did with the initiative 502, we made sure with the taxes we were generating this new revenue that we are dedicating a lot of that to enforcement of the law as well as to strategies for preventing use, use and treating

it and doing education and research, a lot of the beneficial goals we would hope responsible marijuana measures would include. >> reporter: we will take a short break now and when we come back we will dig deeper into the question of money. a lot of the new laws to discourage the use of drugs in this country have had to do with the movement and changing of hands of money, this is "inside story." down the confusing financial speak and make it real.

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resources behind every story. >> it is a scene of utter devastation. >> and follow it no matter where it leads - all the way to you. al jazeera america, take a new look at news. ♪ welcome back to "inside story," i'm ray and on this edition of the program we are talking about the brave new world where voters of a state say yes while their federal government still says no and the debate is over recreational marijuana and the industry that has sprung forth from the legalization in colorado and washington state

and professor seagall a lot of the new laws passed in the country have tried to throttle marijuana commerce and drug or illicit drug commerce making it tough to move money around and hide it and bank it and yet here we are as we heard attorney general holder saying earlier in the program, that they don't want people sitting around with big piles of money. are we going to have to evolve a system for threading our way through what money is licit and illicit. >> you cannot identify particular money so there is going to have to be some mechanism for making sure that you can identify the money because as was mentioned in the show's opening otherwise banks will be worried about taking it and as the attorney general said the department of justice will have to issue regulations that will give banks comfort and will

not be prosecuted for taking dirty money. >> reporter: how do you protect yourself if you are awared and a licensed seller in a state like colorado, would you be smart to if you have other corporate interests in effect wald them off? >> i would want a local subsidiary in the state and make sure the money was not moving to another state, into the parent corporation where some other state might try to say it's illicit money that can be forfeited. >> reporter: professor, had you anticipated questions like this and what did you advise washington? >> well, we anticipated them as a team, that particular question isn't my area of expertise but i think it's a great example of the complexity that comes along, the how do you provide banking services to an industry that is illegal under federal law, how do you judge impairment, there are a host of these. my guess is that the simplest

way to solve it is for a change in the federal statute just pertaining to the money laundering, that is the federal government doesn't have to legalized marijuana production to solve the problem, this can be changed just by changing the money laundering statutes. >> reporter: alison, is there a parallel in alcohol in this case where there are in many states authorized and unauthorized sellers and where perhaps in washington state and help me if i'm wrong, if you sell a bag of marijuana on your porch, that's probably still illegal, illegal as it ever was before and that's one way of, well, keeping things straight. >> that's right. it will continue to be a felony under washington state law for anybody who is not a licensed retailer to be selling marijuana to somebody else. so we still have quite a bit of criminal law enforcement that comes into play in establishing this new legal market.

however, i think a big factor that we all have to remember is that the overwhelming majority of people and even those currently marijuana users are really other than marijuana use being illegal law-abiding citizens and want to play by the rules and buy quality controls and legal market from a legal business owner who is paying his or her taxes to the community. so i think there is going to be a natural migration of the market that's currently being supplied by the illicit market to the new legal and regulated market. >> reporter: you are anticipating the illegal market and the problems that came up with, what, to dry up in a place like seattle? >> well, i think we have to be realistic and remember that washington and colorado passed these laws. when we repealed alcohol prohibition, there were two very different factors at play there. first, we had a fully legal industry in operation before alcohol prohibition. and when the repeal of alcohol

prohibition happened it was essentially nationwide at all once and that preexisting industry was able to start up again and compete with the black market nationwide and we are not there and the black market will be robust until states come on line and migrate the market towards the legal supply. >> reporter: if you are selling dope illegally in boise or portland, could you launder it in denver or seattle? >> well, that certainly is one of the concerns that the federal government has, that legal marijuana will seep into states where it's illegal and the memo from the department of justice tells the local u.s. attorneys to go ahead and prosecute if they feel that that is happening. and it also emphasizes that it's up to the state to have a robust system of enforcement and specifically says not just on paper but in actual practice, that prevents local, legal marijuana from going to another

state. >> reporter: like money is fungible so is marijuana too. >> yes, if you have some marijuana, you can't tell where it came from necessarily. >> reporter: we are going to take another break and when we return, we will talk a little bit about enforcement and the lifestyle problems that may accompany wider use of marijuana, stay with us, you are watching "inside story."

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♪ tal news exper welcome back to "inside story," i'm ray and a new nbc news wall street journal poll says 55% of americans favor efforts to legalize marijuana. today on our program we are taking a closer look at the complex issues in play when states say, yes, to pot. still with us from seattle, alison holcomb criminal director of the civil liberties union and jonathan a law professor at the georgia washington law school and we have professor of public

policy at carnegie mellen university. what happens when now there is another substance you have to worry about people using and then driving and part of the challenge being that there is no test that says reliable as let's say a breathalyzer for alcohol when it comes to thc in the system and trying to understand how long someone remains impaired after smoking. >> we do have a learning curve here when it comes to the impact of thc on driving. we do have some preliminary studies that suggest some guidelines for standards and those were the studies we looked at when we established a per se standard for active thc. when i talk about active thc it's important for a lot of people to understand that there is active thc that causes impairment and separately the inactive metabolize that shows up in workplace tests for example. our drug standard in washington

does not apply to that inactive standard but only to the active standard. >> reporter: now, in the case of alcohol, it's been said, well, my whole life i guess that it effects different people in different ways, different weights, different body types, different personal chemistry. is that the case with smoking marijuana, do we even know or do we have to have kind of a blanket ban just to capture all those variations? >> i think what -- when it comes to driving policy really what we decided with per se standards both in the context of marijuana use as well as with alcohol is that the risk that we take when we impair ourselves with any substance and get behind a to-ton piece of metal on our public highways, those risks are high enough that it justifies setting a standard that will hopefully deter someone who is maybe not sure if they are close to the line or not from getting

behind the wheel in the first place is really the policy we are trying to push with the per se standard. >> reporter: is this one of the tougher nuts, not when it comes to the sort of inside legal world, but when it comes to talking to the public about what is pulling down prohibition means? >> it's definitely a hard one to figure out. i think that the majority of the public, maybe not in washington state, but majority of the public around the country hasn't yet fully had to think through these things. so you sort of said in the past tense, i would turn it into the future tense, this is going to be one of the things that i think the public in general is going to be debating and worrying about in the coming years as legalization likely spreads to other states. >> reporter: now, professor seagall is there a federal role here because so much to do with highways and operating motor vehicles implicates the federal

government. i recall when states were moving their drinking ages from 18 to 21, the federal government finally said look we cannot regulate your drinking age but we can withhold federal highway funding if you don't move it to 21 so it's your choice. >> right, i think that is a good analogy, highway safety measures such as that would typically be a local matter and the role of the federal government at most is to provide incentives like highway money. >> reporter: and another very important federal role is in education and messaging around the use of substances like this. the federal government i'm sure will keep up with all the drug prevention and diversion strategies that it has tried over the last decades. but it's not going to make an exception of colorado and washington. will we have multiple voices in the culture about what to do with the substances? >> i think that is right, when

you have something legal under state law and illegal under federal law there will be somewhat different messages, the state of washington and colorado will have you know some conflicting incentives because they are going to be getting tax revenues from marijuana as a business at the same time they want to promote responsible use just as they would with alcohol. so they will be somewhat different messages and from a federal perspective it's just illegal and may get a different message from the federal government. >> alison are you still on the learning curve, discouraging use by some and being neutral on it in the case of adults? >> absolutely. i think this is probably the most important aspect of examining our marijuana law reform tactics is how are we going to approach the subject, how are we going to strike the right balance between no longer treating marijuana use as a crime but also not promoting its use especially to younger

people. >> reporter: and jonathan, tough to do? i mean do you think washington state, that you helped is on the way? >> yes. i think one of the really important things for people around the country to realize is there are many, many different ways of legalizing washington state and colorado are working on one, but the big question is who does the supplying, washington state and colorado chose to make it for-profit businesses. another state might make it non-profits and another state could go with coop model, there are a wide range of doing it and they have to work-up the learning curve and should look to learn from the first two states. >> reporter: said like a man who expects there will be other states and professors, thank you, alison, good to talk to you. >> thank you. >> reporter: and that brings us to the end of this edition of "inside story" and thanks for being with us, in washington i'm ray. ♪

>> welcome to al jazeera america. i'm del walters. here are the stories we are following for you. investigators try to determine what caused a kentucky house fire that's left at least nine people dead. most of them were children. after the storm: the blame game goes on in atlanta. and motorists are asked to pick up their abandoned cars. some non-violent drug offenders could get out of jail, thanks to the obama administration.