Will the Government Screw Up Marijuana Legalization?

Readers of The Libertarian Republic are well aware of all the problems government causes, including all the problems associated with cannabis prohibition. But if we know anything else about the government, it’s that they never really stop causing problems; if anything, they simply shift the problem causing to other areas.

Take cannabis legalization, for example. A fantastic thing, something many of us have been working on and advocating for years. We are finally on the precipice of seeing all that hard work pay off. Bringing liberty to millions, liberty that was stolen from them/us so many decades ago. Sure, you have no real choices for your political representatives and the NSA knows what size underwear you have on, but at least you’ll be able to smoke some weed legally to forget about all the problems the government is causing you!

But no one believes this regained liberty won’t come at a price; namely, that the government is going to be intimately involved in the re-legalization of cannabis. This means taxes and regulations, the two things government does best.

Excessive regulations and taxes will only serve to keep cannabis consumers buying from the market they are used to: the black market. And if the black market survives intact, one of the major advantages of legalization is squandered.

A recent report out of Washington shows an estimated breakdown of the various markets roughly a year and a half after voters in that state legalized cannabis for recreational purposes. While 37% of the state’s cannabis was sold to legal medical marijuana patients and 35% was sold in recreational stores, roughly 28% of sales came from the black market. While the black market number is impossible to nail down with any certainty, the estimate shows a glaring problem with things as they currently stand.

To be fair, 2 years ago the black market percentage was much higher in Washington and 20 years ago it was 100%; much progress has been made. But if we take the 28% as a good estimate then we have to admit that it is still much too high.

More legal supply will, in theory, take more market share from the black market, but this depends on local and state government keeping the taxes low and regulations to a minimum. Most businesses will pass on the costs of the taxes and regulations to the consumer, raising the price of legal marijuana. If the legal price gets too high in relation to the black market price, consumers won’t make the switch. They’ll keep their “guy” and his familiar supply and lower prices.

The bottom line is that too many regulations and too much taxation can easily cripple the legal marijuana market, in any state, and on a federal level as well (because we all know that federal legalization will come will federal taxes and regulations).

Don’t let the government destroy the legalization they have fought so hard against. Do not let them snatch victory from the jaws of defeat.