Type to search

Legalize It, But: The Perils Of The New Marijuana Market

Memo Pad Politics

Legalize It, But: The Perils Of The New Marijuana Market


A majority of Americans, and an overwhelming majority of those under 30, now support the legalization of marijuana. The change in public opinion, which has been building for years but has accelerated of late, is now generating policy changes. In 2012, voters in Colorado and Washington State endorsed initiatives legalizing not just the use of cannabis but also its commercial production and sale to anyone over the age of 21.

That goes further than the “medical marijuana” provisions that are now the law in 20 states. Non-medical retail sales started on January 1 in Colorado and will begin in early summer in Washington. Similar propositions are likely to be on the ballot in 2014 and 2016 in as many as a dozen other states, including Alaska, Arizona, California, Nevada, and Oregon, and a legalization bill just narrowly passed in the New Hampshire House of Representatives, the first time either chamber of any state legislature has voted for such a bill.

The state-by-state approach has generated some happy talk from both advocates and some neutral observers; Justice Louis Brandeis’s praise for states as the “laboratories of democracy” has been widely quoted. Given how much we don’t know about the consequences of legalization, there’s a reasonable case for starting somewhere, rather than everywhere. Even some who oppose legalization are moderately comforted by the fact that the federal government isn’t driving the process. “It’s best that this be done state by state,” said Pat Buchanan recently on The McLaughlin Group, “so you can have a national backlash if it doesn’t work out.”

But letting legalization unfold state by state, with the federal government a mostly helpless bystander, risks creating a monstrosity; Dr. Frankenstein also had a laboratory

Cannabis consumption, like alcohol consumption, follows the so-called 80/20 rule (sometimes called “Pareto’s Law”): 20 percent of the users account for 80 percent of the volume. So from the perspective of cannabis vendors, drug abuse isn’t the problem; it’s the target demographic. Since we can expect the legal cannabis industry to be financially dependent on dependent consumers, we can also expect that the industry’s marketing practices and lobbying agenda will be dedicated to creating and sustaining problem drug use patterns.

Cannabis, even as an illegal product, is already cheaper than beer as a means of getting intoxicated. As a legal product, it would be much, much cheaper, unless taxes or production limits keep prices high. That would matter most to juveniles and to heavy users: precisely the groups whose consumption we’d least like to see soaring.

The trick to legalizing marijuana, then, is to keep at bay the logic of the market—its tendency to create and exploit people with substance abuse disorders, and to facilitate drug heavy use with low prices. So far, the state-by-state, initiative-driven process doesn’t seem up to that challenge. The taxes are high as a percentage of price, but that won’t matter much if prices collapse under competitive pressure. The industry’s marketing efforts will be constrained only by rules against appealing explicitly to minors (rules that haven’t kept the beer companies from sponsoring “Extreme Fighting” on television). And there’s no guarantee that other states won’t create even looser systems.

What’s needed is federal legislation requiring states that legalize cannabis to structure their pot markets so as to prevent their capture by commercial interests. There are any number of ways to do that, so the legislation wouldn’t have to be overly prescriptive. States could, for instance, allow marijuana to be sold only through nonprofit outlets, or distributed via small consumer-owned co-ops. The most effective way, however, would be through a system of state-run retail stores.

There’s plenty of precedent for this: states from Utah to Pennsylvania to Alabama restrict hard liquor sales to state-operated or state-controlled outlets. Such “ABC” (“alcoholic beverage control”) stores date back to the end of Prohibition, and operationally they work fine. Similar “pot control” stores could work fine for marijuana, too. A “state store” system would also allow the states to control the pot supply chain. By contracting with many small growers, rather than a few giant ones, states could check the industry’s political power (concentrated industries are almost always more effective at lobbying than those comprised of many small companies) and maintain consumer choice by avoiding a beer-like oligopoly offering virtually interchangeable products.

Though legalization has made headway in states with strong initiative provisions in their Constitutions, it’s been slow going in other states in which legalization has to go through the legislature, where anti-pot law enforcement groups can easily block it. So it could be many years before legalization reaches the rest of the country or gets formal federal approval that removes the stigma of (even unpunished) law-breaking from cannabis users. Rather than wait, legalization advocates might be willing to accept something short of full commercialization; some of them actually prefer a noncommercial system. Meanwhile, those who have been opponents of legalization heretofore might—with the writing now on the wall—decide that a tightly regulated and potentially reversible system of legal availability is the least-bad outcome available.

The current political situation seems anomalous. Public opinion continues to move against cannabis prohibition, but no national-level figure of any standing is willing to speak out for change. That’s unlikely to last. Soon enough, candidates for president are going to be asked their positions on marijuana legalization. They’re going to need a good answer. I suggest something like this: “I’m not against all legalization; I’m against dumb legalization.”

Mark Kleiman is a professor of public policy at the University of California Los Angeles. He has consulted for the state of Washington on marijuana legalization. This post is adapted from a featured article in the current edition of The Washington Monthly

AFP Photo/Theo Stroomer



  1. eps62 March 6, 2014

    Keep the corporation’s out of pot!

    1. disqus_ivSI3ByGmh March 7, 2014

      Right on, Man. I agree with you totally. Say, what were we talking about anyway? And you got any chips or other munchies? Tommy Chong, you are almost GOD!

      1. Mikey7a March 7, 2014

        Not missing the humor Disqus, but you sound exactly like the 16-17 yr old that needs to be protected. People going through the horrible side effects of Chemo, deserve the relief from debilitating nausea they must endure. I agree with eps62, let’s not let Phillip Morris, and RJ Reynolds Tobacco, corner this market.

  2. FredAppell March 6, 2014

    They’re making this much more difficult than it needs to be. The same laws that govern the liqueur industry should apply to pot. If they make this too complicated it will only increase the likelihood that pot will never be completely legal.

  3. charleo1 March 7, 2014

    So, the author says, “The trick to legalizing marijuana, then, is to keep at bay the logic of the market—its tendency to create and exploit people with substance abuse disorders” Which is a perfect description of what law enforcement, the courts, lawyers, mandatory drug rehabilitation clinics, and the probationary, add ons, have done for years. Or, rather the, “trick,” has been to keep marijuana illegal, and classify it as a class A narcotic. So the penalties surrounding it’s possession, use, or sales, can equal those of heroin, opium, meth amphetamines, cocaine, or crack. The results have been a smashing success for the businesses of law enforcement, jailers, prison builders, prisoner haulers, and handlers, and drug cartels. But, they have dealt a devastating blow to the futures of millions of kids. Not because of their drug use. But because of the felonies, that follow them around for life, and make them damaged goods, because they got caught. Otherwise, they might have become President! For the taxpayers, that foot the entire bill, it’s been a monstrous money pit from the beginning. And continues to draw hundreds of billions of hard to come by tax dollars. As our schools fall into deplorable disrepair. For the true addicts, there is one treatment bed, for every 100, or every 1000! We can’t build prisons, and expand our Police Departments, and Criminal Courts, and treatment centers. So let’s do whatever the law says, or the politicians say. Or what makes us feel better, and lock ’em up. And, while we’re at it, let’s give up some of our Constitutional Rights, and protections, in the interest of ever more, “get tough” laws, in a futile attempt ti win a battle that was lost before it began. The truth about the War on Drugs is, it isn’t a war on drugs at all. It’s a war on people. And, not all people are bearing the brunt of the war equally. As one could have guessed from the beginning, it’s victims are poor, are people of color, and they are often those most at risk of being left behind. Even minus the war on drugs. So the war, mirrors exactly the flaws in our justice system, and in the growing propensity of our society at large to discard, and marginalize. And the war on drugs, has had the consequence of magnifying all of these. So, whatever the social problems that are created by the decriminalization of pot, and there will be some. How could it possibly cause the damage, or cost the money, or the incalculable loss of human potential, of the wrongheaded approach we’ve chased down the rabbit hole for the last 50 years, over a weed?

    1. FredAppell March 7, 2014

      Wow charloe, you are never at a loss for words, thank goodness. I may be wrong but it seems to me that the article isn’t really as objective as it is pretending to be. It seems to be sending a warning of “be careful what you wish for”. The problem has it’s roots in misinformation, the stigma is so deeply ingrained that even today marijuana isn’t culturally acceptable. I’m appalled that our criminal justice system sees incarceration as a cash cow but is it really so surprising? Our system is dedicated to exploiting whatever it possibly can, it is what it is. what’s most shocking to me is the amount of people willfully ignoring the information that denounces all the lies. We may not see a national policy reversal of marijuana use until most of us get a grip on reality and really understand that it isn’t the dangerous
      drug people think it is, the current law still enjoys far too much support among the 0 tolerance crowd.

      1. charleo1 March 8, 2014

        Fred, we haven’t talked in a while. My fault entirely. I do hope all is going so well with you, and yours, that you’re having a hard time believing all the good fortune that’s coming your way! And you’re right. A lot of people need to get a grip when it comes to a lot of things they believe.
        The thing is, they’ve believed it for so long, they can’t
        remember why they believed it in the first place. But, it
        doesn’t seem to matter. They’re all invested in it now.
        And anyway, if they were to reconsider the thing, they might find they had made a mistake. And who wants to go to all that trouble, just to discover they’d been wrong all this time?

        1. FredAppell March 8, 2014

          Yes it’s been awhile but I don’t blame you, life gets busy for all of us and I figured that there’s many
          opportunities for us to talk. I appreciate the kind words
          and wish the same for you. Your statement above perfectly captures the essence of what I was trying to convey….it’s hard for me to wrap my brain around the notion of always believing the same thing without ever examining why. Maybe it’s pride or some other malady that inflicts them. Whatever it is, it’s deeply ingrained and it doesn’t leave them with much flexibility. All I know is, I would rather find out I was wrong about something, no matter how much time has gone by, than to keep believing in something false and continue being a fool because of it.

  4. Mark Welch March 8, 2014

    Freedom is messy. Freedom means being able to make stupid choices, because otherwise the wise alternatives aren’t genuine. Doing evil things to people “for their own good”, like regulating intoxicants so harshly that the black market becomes dominant, is the logic of prohibition and the nanny state. I’m surprised more conservatives aren’t awake to that reality.


Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.