Ignore Big Marijuana

Byron Tau penned a piece for Politico over the weekend about a new opponent of marijuana legalization: Big Marijuana. Yup, you read that correctly. Big Marijuana refers to the industry of medical marijuana growers that exist in states around the country. These growers partake in a risky business, since growing and selling weed is still federally illegal even if it’s legal in various states. That means that the Feds could raid a dispensary at any time. It’s a constant risk. So on a national scale, medical marijuana growers and supporters of full legalization are unified in their support for federal legalization. On a state level though, the two groups are starting to butt heads. Here’s Tau (emphasis mine):

Medical marijuana is a billion-dollar industry — legal in 18 states, including California, Nevada, Oregon and Maine — and like any entrenched business, it’s fighting to keep what it has and shut out competitors. Dispensary owners, trade associations and groups representing the industry are deeply concerned — and in some cases actively fighting — ballot initiatives and legislation that could wreck their business model.

From the point of view of dispensary owners, legalization laws — depending on how they’re written — can have little immediate upside and offer plenty of reasons for concern. For one, their businesses — still illegal under federal law — benefit from exclusive monopolies on the right to sell legal pot, but state measures still don’t end the risks of an FBI raid or Internal Revenue Service audit. Meanwhile, those same federal laws that prohibit growing, selling and using keep pot prices high.

I’m in favor of marijuana legalization, but there are also some decent arguments against it. David Frum has written a lot in opposition to legalization and while I don’t find his arguments convincing enough to favor our current system, they also are not worth dismissing. What is worth dismissing is any argument from Big Marijuana against legalization.

This is rent-seeking in its purest form. Medical marijuana growers love their monopoly in the industry and don’t want to see competitors eat away at their profits. They also feel like they’ve taken on excessive risk over the past years in selling a federally illegal product and deserve for their industry to have stricter barriers to entry to compensate themselves for their risk-taking. This is entirely wrong. The compensation they received from their risk taking was the monopoly power they enjoyed and the profits that came with it.

So now they’re joining forces with the anti-pot crowd to oppose legislation that would make the drug legal in Maine and other states. In Colorado, the ballot measure that legalized weed this past November included a clause that gave medical marijuana dispensaries the right to receive a license to convert their shops into recreational stores before anyone else entered the market. This is also absurd. Medical marijuana dispensaries already have the supply lines and business experience that new entrants don’t have. They don’t need any extra protection from the state.

I hope people don’t take Big Marijuana’s arguments seriously. Like any other trade group, they are simply looking out for their bottom line and not for the interests of the general public. If you want to find reasons to oppose legalization, go read Frum and other writers on it. But please ignore Big Marijuana.


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