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Protesters Gather To Keep Undocumented Familes Out; Italian Authorities Release Dramatic New Underwater Footage Of Costa Concordia; Veterans Charity Group Raising Millions Of Dollars That Is Not Going To Vets; New Rules Allow Colorado Residents To Apply For Recreational Marijuana License
Aired July 05, 2014 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
UNIDENTIFIED FEMALE: I said, Lily, run like a girl. And she ran but not as fast as she normally runs. And I asked her about it and she sort of, even at six, in her mind, boys run faster, throw harder, are stronger than girls. So I feel like I have a lot of gender stereotype work to do in my own household!
FREDRICKA WHITFIELD, CNN ANCHOR, NEWSROOM: Lots of work to do.
UNIDENTIFIED FEMALE: Yes.
WHITFIELD: All right. Thanks, Kelly. Keep us posted on that.
UNIDENTIFIED FEMALE: I sure will.
WHITFIELD: All right. That is going to do it for this girl, once a tomboy. I'm Fredricka Whitfield. And NEWSROOM continues right now.
Hi, Ana! How are you? Good to see you. You're putting on the frequent flyer miles. I just saw you in Atlanta yesterday.
ANA CABRERA, CNN HOT: Jet-setting. What can I say? Head back to Denver on Monday but it is fun to get around for sure.
Thanks, Fred.
WHITFIELD: Good to see you. Have a great fourth weekend.
CABRERA: You too.
And you are in the CNN NEWSROOM.
Good Afternoon, I'm Ana Cabrera. Don Lemon has the day off. Thanks so much for joining me on a holiday marking the birth of the nation of immigrants.
Protesters gather to keep undocumented families out. A flight of illegal immigrants arrived late yesterday in San Diego, the second from Texas this week. It's not clear if any of the passengers were headed to the town of Murrieta. But demonstrators were once again out in that town demanding those arriving illegally follows the laws into the U.S. But their outcry was turned by other protesters calling for compassion. (BEGIN VIDEO CLIP)
DARA GLANZER, ANTI-IMMIGRANT PROTESTER: In progress, European came here in droves in 1800s and up to the 1900s and now when we have this crises happening in other place and they are trying to come through the borders, suddenly it's different because we have these divisions based on race, based on language and based on --
JASON WOOLLEY, MURRIETA, CALIFORNIA RESIDENT: We are not going to stand it. That's just how it is. There is thousands and millions of other people who have done the right way. But for people to just come in here and ask to for a free hand-out, that is my money.
(END VIDEO CLIP)
CABRERA: Well, now, the U.S. is moving illegal immigrants to other areas to help handle the crisis at the Texas border as many as 80,000 children, many from Central America, are expected to try to enter this year mistakenly believing they will be allowed in.
The U.S. and Iraqi government are both checking out an online video that reportedly shows the man who leads the violence extremist group that is charging through Iraq. This is the video. It is not independently confirmed, but the people who posted it say this is Abu Bark al-Baghdadi, the man is leading prayers here at a mosque in Mosul and urging people there to join what he is now called the Islamic state that has been Syria and Iraq.
CNN's Arwa Damon is in Baghdad.
(BEGIN VIDEOTAPE)
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: The video identifying the man as being the Khalif Ibrahim (ph) and that is how Abu Bakr al-Bagdad (ph), the leader of ISIS, the Islamic State in Iraq and Syria is now known ever since the terrorist organization declared that Islamic calla fit extending all the way from (INAUDIBLE) to Aleppo, angering many Muslims.
(END VIDEO CLIP)
CABRERA: Now, this storm in taking place any Iraq second largest city, the first city to fall to ISIS last month and one of its stores old month.
Not much is known about the group's leader. Apart from that he once belonged to Al Qaeda and spent four years at an American-run prison in Iraq. Now, his large and well-funded militant group ISIS has been taking over towns in Iraq and claims to have killed hundreds of people.
Now this is Kabul, the capital of Afghanistan. Police say about 400 trucks filled with gasoline and oil have been burning for several hours. No official word on what started this enormous fire but the Taliban released a statement saying they attacked a parking depot used by trucks that brings fuels and supplies to NATO troops throughout Afghanistan.
Really, sad story out of Philadelphia this afternoon. A fire tore through a block of row houses early this morning and now four children are dead. It happened between 2:00 and 3:00 in the morning. Firefighters could not stop the fire from spreading from house-to- house. The victims now identified as a 1-month-old baby, 4-year-old boy and 4-year-old twin girls. Several other people were taken to the hospital.
And in Indianapolis early today somebody started shooting in a crowd of people going from bar-to-bar. Nobody died, but seven people were wounded and one is in critical condition. Police say they have one person in custody. No word yet on the circumstances behind this shooting.
It has been more than two years since the Costa Concordia crew ship sank on which the ship of Italy and killing people. And now, Italian authorities have just released some dramatic new underwater footage of the ocean liner.
Matthew Chance has a look.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): These are remarkable new images of the stricken Costa Concordia. Italian police released the footage recorded by their divers giving us an unprecedented glimpse of the sunken ocean liner. Its giant hole, twice the size of the titanic, struck rocks of the Italian coast in 2012 with 4,200 passengers and crew on board, 32 of them lost their lives.
Inside the ship, the divers record an eerie snapshot of that horror. Through the murky water, smashed doors and seating areas can be made out even a bar or reception desk. What was meant to be a pleasure cruise that turned into a nightmare.
Finally, the divers reached the ship's ornate central atrium some of which is above the water's line. An attempt will be made to refloat the vessel and tow it to ship but with the ship's Italian captain accused of causing this wreck an abandoning the ship, controversy surrounding the sunken Costa Concordia are set to remain.
Matthew Chance, CNN, London.
(END VIDEOTAPE)
CABRERA: Well, the first hurricane of the Atlantic season came and went. And really didn't do much more than change some plans for a lot of people this holiday weekend. The outer banks of North Carolina took the worst of it when Arthur was at its strongest. The storm pushed water over roads and knocked out power to more than 40,000 homes. That power is mostly restored now. But no deaths, no serious injuries, and people who live on the outer banks are reporting just minor damage -- broken windows and high water. The general consensus, it could have been worse. Now take a look. This is what is left of hurricane Arthur, a post-
tropical storm dumping rain on the country's northeast and Canadian Maritimes. Officials are telling people to stay out of the ocean still because of possible rip currents.
Marijuana now legal for more than just medical reasons in two different states. But that freedom to enjoy it is causing some serious concerns about the health and safety of others. There is also this fact. While some are free to enjoy a joint, others are locked up for it. We are tackling the business of pot in depth coming up in about 20 minutes.
But first, a veterans charity group is raising millions of dollars and hardly any of it is actually going to vets themselves.
(BEGIN VIDEO CLIP)
DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: Here is the question. At 64 million dollars raised over three years.
UNIDENTIFIED FEMALE: Thank you so much.
GRIFFIN: And none of the money has gone to any veterans. Ma'am? Ma'am?
(END VIDEO CLIP)
CABRERA: CNN's Drew Griffin has had a lot of doors slammed in his face investigating this story over the years. But now this charity faces a record breaking fine.
(COMMERCIAL BREAK)
CABRERA: Keeping them honest, a huge historic fined levy than the veteran charity fraud case. This is a story busted wide open by CNN in our investigated units. The Disabled Veterans National Foundation claimed to help disabled veterans but it donated thousands of coconut M&Ms instead giving something genuine. And that more than $100 million in donation that have been going into the pockets of private fundraisers instead of helping vets.
Now, the New York attorney general says enough is enough and it is all because of reporting by CNN and our senior investigative correspondent Drew Griffin. Take a look.
(BEGIN VIDEOTAPE)
GRIFFIN (voice-over): It is one of the largest settlements ever recorded by the New York attorney general's office for deceptive charitable fundraising. The disabled veterans national foundation chief private fund-raiser Quadriga Art has agreed to page huge fines, change the way it does business and possibly set a new and much more transparent course for charities across the nation.
Attorney general Eric Schneiderman calls it despicable and Quadriaga quote "despicable" in how it has deceived the mostly old and gullible out of hundreds of millions of dollars.
ERIC SCHNEIDERMAN, NEW YORK STATE ATTORNEY GENERAL: Some of these pleas that were put out by Quadriga were heart wrenching that they were helping some poor particular veteran get a car and get a better life. And we have now learned through our investigation in some cases the stories were totally fabricated that the foundation should never help the veterans that they used in their ads.
GRIFFIN: Quadriga will pay $9.7 million dollars fine and it will forgive nearly $13 million in debt still owed it by the disabled veterans national foundation.
All right. So now, you're getting back to me. Is there going to be an interview?
CNN has been chasing Quadriga and the disabled veterans national foundation for years. Ever since we found out these two groups, one a company, one a charity, have been taking your generous donations to our nation's disabled veterans and pocketing almost all of the money.
We are doing a story on Quadriga Arts and we're with CNN.
Quadriga, the investigation discovered at almost total control over the charity. In effect, a charity was a front for Quadriga's profit driven scheme.
SCHNEIDERMAN: They got folks up to setup the charity going. They used their counsel to advise the charity and they entered into a contract which enable Quadriga to control the flow of funds they, Quadriga, put up the money for the direct world campaign, but then it had total control in discretion over the funds going in.
GRIFFIN: Out of a total of $116 million raised by the charity over the years $104 million of it went to the direct mail fund-raiser according to New York State. And most of the donations that it made called gifts in kind like those coconut M&Ms were useless to veterans.
SCHNEIDERMAN: The abuses here really span the whole gamut of abuses you can see in a charitable organization and why this is such an interesting case because they were falsifying the value of the gifts in kind. They were sending things that no disabled veteran needed like M&Ms chef's hats.
GRIFFIN: As a result of the settlement the DVNF founding board members including its founder Priscilla Wilkewitz are being removed from the charity.
Its executive director has already left and the charity is banned from doing any business with Quadriga Art for three years. And in addition to its huge fine and forgiven debt, Quadriga Art itself and its president Mark Shuloff must now fully disclose its fund-raising costs up front so would-be charities understand just how much of the donated money your donated money Quadriga will take for itself.
SCHNEIDERMAN: The donors, intent in this case, was to help disabled veterans and to take money that are people are trying to spend to help disabled veterans just to feed your own overhead and the payer executives office Quadriga did here is pretty despicable.
GRIFFIN: Quadriga art which is a family company announced that an uncle who helped run the company Tommy Shuloff (ph) has resigned. His nephew is running the company, Mark Shuloff, and he released this statement saying we have taken responsibility for the mistakes that were made. We deeply apologize for our actions and have taken steps to ensure that this situation will never occur again.
As for the disabled veterans national foundation, there are their four founding members have been separated from that organization. And now they have released a statement as well saying this is very significant and positive step for the disabled veterans national foundation. That, they say, will enable to improve the services we deliver and increased transparency with our loyal donors.
Drew Griffin, CNN, Atlanta.
(END VIDEOTAPE)
CABRERA: If you have a tip for CNN's investigative team, go to CNN.com/investigate.
We are going to dig deeper into this issue. Do you know where your money ends up after you donate? From the charities we just took a look at to none other than the Red Cross. Why are charities under scrutiny and what are they doing with the money they received? A fund-raising expert is going to join us next with advice on what you should ask before donating to charity.
(COMMERCIAL BREAK)
CABRERA: If you donate for charity, what really happens to your money? Consider superstorm Sandy. Generous people sent more than $300 million to the Red Cross after Sandy demolished parts of the northeast. And now the Red Cross is refusing to publicly reveal exactly how it spent those sandy donations.
Investigative journalism group, ProPublica, asked the Red Cross for Sandy details. But ProPublica report quote "the charity has hired a fancy law firm to fight a public request we filed with New York State arguing that information about its Sandy activities is a trade secret. Why does Red Cross want to keep secrets about sandy spending?"
Well, joining me now is Doug White, a nonprofit expert who directs Columbia University fundraising management program.
Doug, thanks so much for coming to talk about this.
DOUG WHITE, NONPROFIT EXPERT/DIRECTOR, COLUMBIA UNIVERSITY FUNDRAISING MANAGEMENT PROGRAM: It is my pleasure.
CABRERA: So, we hear a trade secret? Why is the Red Cross being so secretive about its Sandy spending?
WHITE: Your question is as good as any on that one because I do not understand that. It's a public charity. In fact, it's largely funded directly through Congress. About five percent of its budget comes from Congress directly. But it's also publicly funded in the sense that our donations are tax deductible. So it is a public charity. And the public has right to know what is going on in all charities. And particularly the Red Cross because it is so venerated in our see society. It is so important. And to hear that they are hiding behind the trade secrets idea, it does not make sense to me at all. It is not in the spirit of a public charity.
CABRERA: And so, many of us send to the Red Cross because we feel they are a trusted organization. But when you don't see that transparency, it does make you question what they are doing and their intensions. And I do know that they have given some breakdown of where that money was spent saying food and shelter for a certain chunk, individual case work for a certain chunk, housing and community assistance and relief items. But you say we should see more details?
WHITE: Charities tend to think that they are doing the job of transparency by giving broad outlines and what is required by the IRS and Congress. And that is not the idea behind what a charity should be all about.
What you just recited, the broadest of all categories. But that doesn't tell us what happened to the Sandy money. And then on top of that, they say they are hiding behind a trade secret. Well, that is just not true. They do not have that right. I'm not an attorney, but I will say that as a person interested in who studies charities, they do not have the right to say that and get away with it. And it's up to us people like you to make sure that doesn't happen.
CABRERA: I do want to read you something that the Red Cross sent. This is a letter that they sent to New York's attorney general, some of the info on it Sandy spending. So here is the Red Cross explaining why this letter that they sent to the attorney general is private.
So, quote, "we sought to keep confidential a small part of the letter send to the A.G. that provided proprietary information important to maintaining our ability to raise funds and fulfill our mission."
Doug, does that make sense to you?
WHITE: No. They also wanted to redact the phrase American Red Cross. That tells you something about what they are trying to hide. Now, that doesn't make any sense to me at all.
CABRERA: Especially what you just mentioned, to redact the American Red Cross in the name of the organization altogether.
WHITE: I go to these fundraising conferences all the time. And people there are sharing ideas about how to fundraise. They are sharing ideas about how to better relate to their donors to say that our fundraising practices are a part of a trade secret idea? I wish they would say something about that because I would like to learn about that.
CABRERA: What you say is disheartening to so many of us, I think, because we donate thinking we are doing something in a much broader sense and being a part of a bigger community to help others. So if you can't trust an organization fully like at the Red Cross which is supposed to be so trustworthy, what do we need to do and what kind of research or information do we need to really vet before donating to any charity?
WHITE: I tell people that they should talk to the people at the charitable organization. Get a sense of how communicative they are and how forthright they are. Another way to look at a charity and see what they think is important to the public is to go to their Web site and find out what information they have.
Unfortunately, there's no real way to vet a charity. We have some watch dogs who look at financials but that's not the complete picture. But in addition to that, I need to also say that I don't think that the Red Cross is a, quote/unquote, "bad charity" or an untrustworthy charity. What I think needs to happen is we need more transparency. I do believe the Red Cross is probably doing a pretty darn good job. The problem is I would like to know that for a fact.
CABRERA: And you just want to see it all out there, all out in front, nothing to hide.
WHITE: Yes. And there shouldn't be a problem for that to happen.
CABRERA: All right. Well, Doug, thank you so much for joining us. We really appreciate your insight on this.
WHITE: My pleasure.
CABRERA: It has been six months since Colorado started selling recreational marijuana and while it's been a money making machine for businesses that sell it, intense hallucinations and other side effect, quite a few incidents have put into question just how safe pot really is.
Up next, an in-depth report on the business of pot in America.
(COMMERCIAL BREAK)
CABRERA: Recreational marijuana has reached a historic milestone. Six months ago this week, crowds lined up in Colorado to make the first legal purchases of recreational marijuana in the United States.
OK flash forward six months, a marijuana shortage in Washington State may rattle the debut of recreational pot sales there next week. But apparently in Colorado, there's plenty to go around.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: So you wanted a full ounce of this?
CABRERA (voice-over): A full six months after recreational pot sales became legal, Colorado is rolling in the dough. The state already collecting more than $11 million in retail marijuana taxes and fees.
How is business? TIM CULLEN, CO-OWNER, EVERGREEN APOTHECARY: It's still fantastic.
CABRERA: Lines outside dispensaries are gone but pot shop owners say business is still booming.
CULLEN: See about 10,000 people a month.
CABRERA: Ten thousand people, primary Coloradans?
CULLEN: I would still say about 20 percent of them are folks traveling from out of state.
CABRERA: With numbers like that, it made us wonder how many of those cannabis consumers hit the road high?
Colorado state patrol just started keeping track of the numbers. Since January, marijuana-related DUIs have accounted for just 10 to 15 percent of total DUI citations.
NATE REID, COLORADO STATE POLICE: Obviously alcohol is more readily available and more people that use alcohol.
CABRERA: Yet pot problems have emerged with marijuana edibles, especially with people eating too much too soon. Then getting hit hard with the psycho active side effects of THC.
DR. PAULA RIGGS, UNIVERSITY OF COLORADO: It's a slower onset but it lasts longer.
CABRERA: The issue has state regulators considering new rules for packaging and labeling.
CULLEN: The industry is small enough and nimble enough that people can adjust on the fly and make those changes without hiccups in productions.
CABRERA: Asked if cannabis is good for Colorado and the majority of the voters in the state say yes. A recent Quinnipiac survey shows 52 percent believe legalizing marijuana was a good move but 38 percent saying it was bad.
Marijuana advocates hope the outcome of Colorado's experiment will convince more states to follow suit.
(END VIDEOTAPE)
CABRERA: And now, new rules are allowing room for newcomers in Colorado's booming pot industry. Starting this week, in fact, any Colorado residents can apply for a recreational marijuana license. Plus owners of pot stores are no longer required to grow their own supply.
Joining me to discuss these different changes in the marijuana industry, here in New York alongside me is Robot Quarry, an attorney specializing in marijuana law and in Denver, Mason Tvert of the marijuana policy project, a key advocated and the push to legalize recreational pot. Thanks to both of you.
UNIDENTIFIED MALE: Good to be here.
CABRERA: All right, Mason, let's start with the impact of these new rules I just mentioned. Are we going to see more pot stores opening and more competition and possibly lower prices?
MASON TVERT, COMMUNICATIONS DIRECTOR, MARIJUANA POLICY PROJECT: Yes. You know, this is going to be a legal industry just like any other. And as more and more localities figure out how they want to let these businesses set themselves up and as more people realize that these are just businesses like others that are contributing to the community, providing a service that people want, a product that people want, we are going to see them continue to open and really it's not a big deal. Things are going very well with this.
CABRERA: That's at least your perspective.
Robert, I want to bring you into the conversation also. I know you work with several marijuana business owners. I remember, because I grew up in Colorado, being there when medical marijuana became the big thing and there were more medical marijuana dispensaries this Starbucks within a certain radius at one point. Eventually some of that kind of weeded itself out.
Do you see that this is going to be an issue in terms of the competition? How do current business owners feel about more people getting in the mix?
ROBERT CORRY, GENERAL COUNSEL, CLUB 64: Well, this industry needs more competition and it's going to get that soon. You know, we in Colorado, are blazing a new trail. It's very exciting. But, unfortunately, we have had to drag the government kicking and screaming into this. Our governor is not for this. The mayors of most of our major cities are not for this. And you know, thank God the voters have spoken.
But we are ahead of most other states. But the big problem is that it's still federally illegal and that permeates the entire industry against us.
CABRERA: But it created issues with banking, we know.
CORRY: It certainly has. And it makes banking difficult, employment issues are a problem with regard to federal illegality. The federal government is prosecuting people in Colorado who are licensed to sell marijuana by the state and local government. Those people are being prosecuted. That's a problem. And then there are still the prohibition industrial complex that still brings criminal prosecutions against citizens in Colorado in state court.
CABRERA: We just heard from Mason talking about how things are going pretty smoothly. You just bring up a number of point and areas that hovering to grow on, I guess you could say.
You follow the lawsuit, I know, just recently about the taxes arguing that people shouldn't have to pay this high tax when they purchase marijuana. We know there is the 15 percent excise tax which also gets rolled into the prices that people have to pay. There is the 10 percent sales tax for the state, plus additional local taxes.
You know, we pay taxes, anything we buy pretty much, so why not have taxes for recreational marijuana?
CORRY: The problem with these taxes is these are the highest taxes of any product in Colorado history ever. The other problem is we are trying to emerge from an underground market in marijuana. Obviously, there is an underground market, there always has been and there are probably always will be. And when you set these taxes that high, it creates more of an underground market.
So the promise of amendment 64 in Colorado was to shed the underground market. That is not happening because the taxes are an impediment of a true promise to amendment 64 in Colorado.
And then the big problem with the taxes, anyone who pays these taxes is incriminating himself under federal law. He is admitting to a federal crime by paying these taxes. And that is a problem. So we hope to get rid of these taxes and be taxed fairly like every other business in Colorado and not have to incriminate ourselves.
CABRERA: I speak to business owners in the pot industry who say they are still seeing plenty of customers, that this hasn't been a big problem, those taxes.
Mason, what is your take on that?
TVERT: Yes. I mean, different people, different opinions on what taxes would be too high or too low. But what it comes down to is our taxes were created by the voters of Colorado. And if we are going to respect the fact that the voters made marijuana legal, we have to on respect the fact that the voters wanted marijuana tax this particular rate. And if it does prove to be problematic I certainly agree that we need to readdress it.
As of right now, the underground market is starting to dwindle. We have Mexican drug cartels reporting that they are not even going to bother planting their crops this year because there is just less demand for illegal marijuana.
So regulating marijuana and taxing it is definitely proving to do what it was intended to get rid of that underground market and we expect to see that continue to happen.
CABRERA: I love that you are both marijuana advocates, yet have different opinions on this issue. And this conversation is going to continue after the break.
Up next, they have been around for years. They are becoming even more common, but those pot brownies or cookies could be highly potent and dangerous. Stay with us for more.
(COMMERCIAL BREAK) CABRERA: Colorado's pot market has just gotten a lot bigger. Starting this week, anyone can apply for a license to open a recreational marijuana business. But as the industry expands there are growing concerns about public safety, especially when it comes to those edible products. A pot brownie or cookie may contain nearly a dozen doses of marijuana. That's a lot. I live in Colorado. I've seen this firsthand.
Now, officials are trying to push some new restrictions because in some cases the consequences are deadly.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: How your Monday? Good?
CABRERA (voice-over): Six months ago, recreational pot sales caught fire in Colorado. Business has boomed but so have concerns about safety. A 19-year-old fell to his death from a balcony after eating a cannabis cookie. And this man is behind bars accused of shooting and killing his wife while reportedly high on pot and other drugs.
UNIDENTIFIED MALE: He told me he doesn't remember anything.
CABRERA: It's not clear what caused either of these incidents but a common link, marijuana edibles.
UNIDENTIFIED MALE: The edibles do have a different effect on people.
CABRERA: With edibles, it takes longer to feel the effects of THC, marijuana mind altering ingredient, which can lead to people eating too much too soon. The side effects can be serious including deliria and psychosis.
UNIDENTIFIED MALE: Everybody loves their chocolate.
CABRERA: And when it comes to tasty treats like candy or cookies, looks can be deceiving.
Here is your regular candy bar and here is one of those marijuana candy bars. You can see outside the package, they look practically the same. They smell almost the same. A lot of folks might eat one candy bar in one sitting, but that's what people are getting into trouble because this candy bar actually contains five doses of edible marijuana.
Would the average person know what one dose looks like? We put it to the test using a smaller but even more potent candy bar containing 100 milligrams of THC what is considered ten doses of marijuana.
How many serves do you think is in this?
UNIDENTIFIED FEMALE: I would have no idea. I know nothing about it.
UNIDENTIFIED FEMALE: I would say probably two? Two? Two serves?
UNIDENTIFIED MALE: The whole thing. CABRERA: The whole thing? You think this is one serving?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: My guess is it's probably pretty potent, maybe four?
CABRERA: Well, you're right. It is pretty potent. There are ten doses of marijuana in this small bar.
UNIDENTIFIED MALE: Wow. That's a lot.
CABRERA: This is actually ten doses of marijuana.
UNIDENTIFIED FEMALE: Oh, My! That's terrible!
CULLEN: I just think it takes a level of education to the consumer so that people are using them responsibly.
CABRERA: Adults aren't the only ones ending up in trouble. The children's hospital Colorado reports a surge of kids admitted after consuming edible pot. They have treated at least nine children since January, six who were critically ill.
UNIDENTIFIED MALE: There's basically like three doses in them.
CABRERA: State regulators are now looking into stricter requirements including better labeling and no more than one dose per package. Until then, industry insiders urge edible enthusiasts to consume with caution.
(END VIDEOTAPE)
CABRERA: This really is a serious issue and here is our panel now to talk about marijuana edibles and safety.
Mason, we will start again with you. Should pot store owners or the bud tenders as they call them offer marijuana edible guidance for these new would-be customers and pointing them to pot edibles for beginners?
TVERT: Absolutely. You know, we need to have these consumers educated about what these products are and how much they should consume. We also need to ensure that these products are accurately labeled and being sold at a reasonable and rational fashion as your piece pointed out, we are selling products that have up to a hundred milligrams of THC which is ten servings in a very small product. It is, really, it's not necessary. We could easily just limit the number of servings per unit and reduce the possibility of these types of incidents occurring.
CABRERA: I know that is one of the new requirements perhaps being considered to reduce the amount of servings that are packaged.
Robert, on the other side, you have liquor stores, right? Liquor store owners aren't necessarily required to tell the customer, hey, don't drink that whole bottle of vodka. So I mean, is that just a matter of people getting used to this new industry?
CORRY: That is part of it. But, you know, this is a consequence of the government spinning its wheels and passing pointless regulations and 90 percent of these regulations that regard marijuana are pointless. You can't be out of state to even own one percent of these. You can't be a convicted felon even though they are all committing felony violations of federal law, et cetera.
So the things that the government ought to have been regulating from the beginning, which is potency of edibles, that that is a legitimate government function. The government has dropped the ball on that. Because I do have sympathy for these people who are tourists and come to Colorado, if you buy one candy bar and it's wrapped up as one candy bar, it's pretty reasonable to assume that is one serving, right? I mean, you unwrap it and you eat it. It's a food item so you shouldn't have to rewrap it if it's sealed. So I do have some sympathy for that.
CABRERA: So you could understand the confusion?
CORRY: I do understand that. And the government, that is one of the few things the government should be doing and isn't doing because it's obsessed with these -- I mean, this industry is so overregulated, but the government is missing the boat. And, you know, part of me thinks that this is intentional. I mean, I think our governor of our state wants this industry to fail. He said that. I think the mayor of Denver wants this industry to fail and so they are --
CABRERA: Although they are making a lot of money off of this, so you can argue the other way.
I want to get Mason back into the conversation. You bring up a good point about the government and its involvement. We know U.S. attorney general Eric Holder basically has said we will allow this as long as marijuana isn't ending up in the hands of children, for example.
And we are seeing that happen, Mason, with children eating these marijuana edible sweets, a lot of them perhaps accidentally, six children critically ill in Colorado the last six months. How can Colorado keep kids safe specifically from marijuana edibles?
TVERT: Well, first, it's really important to point out that there was recently the department of revenue came out and announced that there has not been a single incidence of a marijuana product being sold to an under aged person from any of these new businesses. So it's been going very well when it comes to preventing sales to minors.
CABRERA: But it's ending up in their hands.
TVERT: Well, we see some circumstances in which some irresponsible parents are leaving it out, much like someone might leave out a bottle of wine or a gun or a boiling pot of water. And we need parents to be responsible.
And as you said, there have been, you know, maybe a dozen or so incidents where people have accidentally ingested marijuana and that is the problem. That's what we need to be working on addressing. We need to be educating parents to keep these products away from young people, much like we talk about educating parents about keeping other products away from young people.
Ultimately we see hundreds, if not thousands, of young people going to on the emergency rooms in this state and around the country every single year for all sorts of accidental ingestions. Marijuana is something that we also need to be looking for. Fortunately, it's not as big of an issue as most other things but it is something we need to be keeping an eye on.
CABRERA: All right.
Thank you so much Mason and Robert.
Stay with us. We are going to continue the conversation while recreational marijuana use is now legal in Colorado and Washington and other states possessing the same amount of pot could land you in prison. And some are arguing that many drug laws in the U.S. target people based on their skin color. That's next.
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CABRERA: Colorado is cashing on in on pot. It's been six months since recreational marijuana has become legal and the state has collected more than $11 million in taxes and fees. But while pot is bringing in millions of revenue for Colorado, in most parts of the country it can still land you in jail. And reports show African- Americans are much more likely to be arrested for pot. So are U.S. drug laws applied differently to minorities?
Jim Clancy reports.
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JIM CLANCY, CNN CORRESPONDENT (voice-over): Glenda Clowers looks at the old photo and remembers worrying about her sons like any parent. But as her youngest, Jabari, grew into his 20s holding down steady jobs and staying out of trouble she took comfort.
GLENDA CLOWERS, MOTHER OF CONVICTED DRUG OFFENDER: I felt like a parent I did a good job and I was on my way with having a successful young man.
CLANCY: But today Jabari Clowers is 25 and sitting in Georgia jail convicted of possession and intent to distribute marijuana.
JABARI CLOWERS, CONVICTED DRUG OFFENDER (via phone): My life is destroyed.
CLANCY: He says he expects to serve two years of a six-year sentence.
Clowers is not the only young black man in prison because of his own bad choices. According to an ACLU report, black people are almost four times more likely to be arrested for marijuana possession than white people, although actual usage is about the same for both groups. The racial disparity is stunning according to an attorney who has worked to change America's marijuana laws.
MICHAEL KENNEDY, CRIMINAL DEFENSE ATTORNEY: Their only explanation for that is blatant racism.
CLANCY: Jabari talked to CNN on the phone. The first time offender only drove his friend to the convenience store. It was his friend, he said, who sold a pound of pot to the undercover agent.
J. CLOWERS: I just feel like, well, in Georgia, it's not legal, so we're getting treated like unfairly because you can do it in one spot but in another state, you can't.
CLANCY: The amount cited in Jabari's case exceeds legal limits in any state. The changing attitudes about marijuana have made buying and selling up to an ounce of the drug legal in Colorado and decriminalized in many others. As a result, a legal industry is starting to emerge.
MICHELLE ALEXANDER, LAW PSYCHOLOGIST, OHIO STATE UNIVERSITY: You know, I flick on the evening news these days, and when the subject turns to marijuana legalization, I see lots and lots of images of white people smoking marijuana, getting high, and white men, in particular, dreaming of getting rich quick, selling marijuana after decades of young black men and boys, in particular, being targeted and rounded up en masse. Locked up and then stripped of their basic civil and human rights for doing precisely the same thing.
CLANCY: But veteran prosecutors say there are clear differences.
SALLY YATES, U.S. ATTORNEY, NORTHERN DISTRICT OF GEORGIA: Don't make any mistake that illegal drugs are a real problem for our society. And you know, you can debate marijuana, but -- and the legalization in some states, but you know, the Mexican drug cartels are responsible for a tremendous amount of violence. It's caused a real problem for our society. So I'm certainly not going to be one here who's going to advocate that we should abandon our drug prosecution.
CLANCY: The FBI reports about 750,000 Americans were arrested for marijuana violations in 2012. Of those arrests, more than 87 percent were for simple marijuana possession.
But Yates says at the federal level, thousands of jail drug offenders may be eligible for early release if their convictions didn't include guns, violence, or organized crime under a new clemency initiative.
YATES: It's really designed, again, to focus on that lower-level, nonviolent drug offender who under prior laws and prior policies received very long sentences. Sometimes 10, 20, 30 years, sometimes even life.
CLANCY: Billions of dollars is spent enforcing marijuana laws each year. $1 billion more spent on keeping an estimated 40,000 marijuana offenders in jail. Contrast that with Colorado's $10.8 million in tax revenue in the first four months marijuana sales have been legal. But if real change is coming, Professor Alexander believes it has to be about more than just money. ALEXANDER; I don't think it's enough for us to just kind of, you
know, try to wash our hands of this and say, OK, we're done now locking millions of people in cages and stripping them of basic civil and human rights for using or selling marijuana. We're done, let's move on, let's make some money. I think we're going to have to think very carefully about how we got here and what can be done to repair the harm, the really unspeakable harm that has been done to so many families and communities in this country.
CLANCY: Brenda Clowers can say something about that.
B. CLOWERS: Now you can say one state can make money and be prosperous, and another state a kid can go down his whole life and dreams just throw away from him.
CLANCY: Jim Clancy, CNN. Atlanta.
CABRERA: So what's ahead for the business of pot in the U.S.? Will more states legalize it for recreational use? Our conversation continues with our pot panel after a quick break.
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CABRERA: Legal marijuana is one of the fastest-growing industries in the U.S. If you can believe it, it's outpacing many technology and manufacturing sectors. Right now a second state is gearing up for its recreational pot initiation. Washington State is to make its debut next week. So what does the future hold for the business of pot?
Here's our panel, Mason Tvert with the Marijuana Policy Project and Robert Corry, an attorney who specializes in marijuana law.
Robert, I know you have a big interest in that last story we just heard about drug laws and sentences varying depending on your skin color. And you said what we're seeing in Colorado, this comes into play too.
CORRY: Big-time it does. Because in Colorado, we have a prohibition, a lifetime prohibition on anybody opening a marijuana store if you have a previous felony. So the young man from Georgia could not move to Colorado and open a store, ever. He's lifetime banned because he's got this previous felony. So this business that we have in Colorado is leaving people behind. Professor Alexander has it exactly right.
CABRERA: There's discrimination as a result, you say?
CORRY: There is and it's wrong. Because Martin Luther King said, until we're all free, nobody's free. So in this rush to capitalism, which is great, I'm all for freedom and free markets, but we shouldn't be leaving people out. And what it creates is an amateurish industry because we're artificially limiting it to state residents, as if Colorado is the only place with good businesspeople.
CABRERA: We see the national I guess thought about marijuana sort of changing, you know, the feeling about marijuana. Majority of people who have been polled recently, CNN polls, other polls, say they would support some kind of legalization of marijuana.
Do you think that, you know, I guess people going after those who are smoking pot or using pot in other states where recreational pot isn't legal is going to change, just given people's thoughts or mindset on this?
CORRY: I think so. I'm optimistic about America. I think freedom eventually prevails and this is about freedom. This is about limited government, you know. People ought to have the right to use marijuana on their own. We know that alcohol prohibition was a failed policy, we know that, everybody agree with that. So marijuana prohibition is the same thing. We just need to move in the appropriate directions.
CABRERA: Mason, where are we going? Which state do you think is most likely to legalize recreational marijuana next?
TVERT: Well, there's a measure on this November's ballot in Alaska that would be very similar to Colorado's law. We also expect to see similar measures on the ballots in a half dozen states over the next few years. California, Arizona, Maine, Massachusetts, Montana, and a number of other states are considering these laws through their legislatures, particularly in the northeast where Rhode Island, Maryland, Vermont, New Hampshire.
So, you know, Americans are fed up with prohibition. They recognize marijuana is safer than alcohol and they want to see it treated that way.
CABRERA: Recreation at marijuana is becoming a billion plus dollar industry. Do you expect, Mason, a ground-breaking, game-changing business leader to emerge? Who's the next Mark Zuckerberg or Steve Jobs of the marijuana industry?
TVERT: You know, I think that it's going to be 18 industries just like any other. It's not going to be a long time before we look back at it, we think, this really was a no-brainer, we should have done this a long time ago, just like we look back at alcohol prohibition. And now, everyone recognizes it was a massive failure. And they think of, you know, craft breweries in Colorado. We've got thousands upon thousands of people employed by craft brewers. Now we also have thousands upon thousands of people employed by marijuana businesses. And it's just -- it's really not going to be much different when we look back on it in the future.
CABRERA: Is the industry sustainable, Robert, or is this just the novelty and eventually it's going to wear off?
CORRY: I think the industry is very solid. The fundamentals are there. Because you have a product that millions of people want and there's the ability to create that product. The problem is that this industry literally hangs from a thread because if the federal government decided to stop its selective impotence and actually enforce the laws, then the entirety of the industry evaporates and that's a problem.
So really, the true solution lies with the United States Congress. Because the United States Congress must legalize marijuana, get the federal government out of the prohibition business, and take it off of schedule 1. Marijuana is scheduled as the most serious type of drug under federal law? That is insane. That is utterly insane.
CABRERA: A lot of conversation about what is going to happen with that next.
Mason, I want to give you -- I just got to wrap in my ears, it is going to give you one last word. Do you have one sentence you want to throw back out there?
TVERT: You know, everyone in this country is coming to realize that marijuana prohibition is just a big failure as alcohol prohibition.
