June 10, 2014 | Cannabis legalization is moving from “if” to “when”, which brings up a variety of questions and issues never broached in a public forum under prohibition. As regulations emerge around the production, manufacturing, packaging and distribution of cannabis in both medical and commercial environments, we are suddenly recognizing that these debates are not new, nor are they unique to the cannabis industry. In fact, many of the considerations for cannabis regulations are already a large part of our societal discourse. Perhaps most obvious is the relationship between cannabis cultivation and the ever growing tension between small farmers and “Big Agriculture”. A May 24, 2014 article in the New York Times titled When Cannabis Goes Corporate discusses how, in Canada, the federal government recently made it illegal for individual patients and small farmers to grow medical cannabis. Subsequently, they created a complex, capital-intensive regulatory framework that only allows large-scale corporate producers to operate legally. All of this in an attempt to rein in what was referred to as a “free-for-all” of thousands of smaller producers scattered across the county. Why should Americans care about this and what does it mean for the broader issue of crop production here at home?
Economics. Creating a regulatory framework that only supports a few large corporations hurts the U.S. economy as a whole by stifling small business and innovation within the cannabis industry. Competition makes industries stronger. By creating a new paradigm that avoids competition Canada has done the country, the industry, and the consumer a disservice. When competition is limited, ultimately it’s the consumer that loses when they’re offered less choice, and higher prices. Second, while laws limiting competition are often justified by arguing that they are “increasing public safety” or “reducing chaos” they are really just the product of a lobbying effort on the part of the big firms. They want a market advantage written into law so they can stop hiring new talent, stop innovating, and stop fighting to win customers by shutting down their competition. Economists refer to this as “rent seeking” and while exact numbers are virtually impossible to estimate, most economists agree that laws like this are one of the biggest drags on the US economy and one of the most important factors increasing economic inequality. Oligopolies serve to protect and benefit the rich. With the burgeoning cannabis industry we have an opportunity to start off on a different foot and we should take full advantage of that. In doing so, we will help the consumer and the US economy by creating future opportunities for tomorrow’s small farmers.
By Amanda Reiman
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