The Many Ways Legalization Could Look – Types of Marijuana Legalization

Cannabis legalisation rally.

People supporting cannabis legalisation.

The United States is experiencing a state by state cannabis legalization trend

Currently, 33 US (United States of America) states and the District of Columbia have legalized medical marijuana. The recreational use of cannabis is legal in ten states – Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington – and the District of Columbia. As of July 1, 2018, adults in Vermont, who are at least 21 years of age, have been allowed possess and grow small amounts of marijuana legally or illegally. Most recently, Michigan voters approved the purchase, possession, and use of recreational marijuana for people 21 years or older.

In short, the United States’ legal marijuana market is growing on a yearly basis.


Estimated grow of the cannabis market in the U.S.A. by 2025
Source

Although the United States seems to have developed a legalization trend as pressure for adoption increased among lagging jurisdictions, medical marijuana and recreational marijuana are still hot debates. Generally, the debate around medical marijuana is about how states implement the law around it. On the other hand, the debate around recreational marijuana is more binary. Marijuana advocates argue that legalization will reduce the crime rate, violence and the size of drug cartels in the country; while opponents claim that legalization will make the industry market drugs more imprudently. However, policy experts say there are many more options when it comes to marijuana legalization.



Types/Options for Marijuana Legalization

COMMONLY DISCUSSED OPTIONS


Prohibit But Decrease Sanctions

Many people support legalization, not because they want easy access to a broader range of marijuana products, but because they’re troubled by the increasing marijuana crime rate and its impact on youth applying for student loans, jobs or public housing.

For these types of supporters, one option is to follow President Bill Clinton’s slogan for welfare reform, to “mend prohibition, but not end it.” Vermont has already followed that mantra. The state decriminalized possession of up to 1 oz. (Ounce) of cannabis, reduced the sanction to a $200 fine and $147 surcharges for the first offense, and is providing access to medical marijuana for people with debilitating medical diseases.



Standard Commercial Model

Regulate marijuana using the standard alcohol-style commercial model with some additional rules specific to it. Some of these rules relate to:

  • Who can use;
  • Quality control & packaging;
  • Industry structure;
  • Product selection; and
  • Retail operations.

This approach lets the market evolve to maximize production efficiency and make products appealing to consumers. Also, the size and scope of the market should be subject to remaining within the regulatory parameters.


MIDDLE GROUND OPTIONS



Allow Adults to Grow Their Own

Colorado allows the unlicensed growing of cannabis at home for adults, while Washington State prohibits home growing of recreational marijuana. The preferred option might depend on a state’s aspiration for taxation. High tax rates provide an incentive to grow one’s own, thereby placing some limits on potential tax revenue.

This approach generates little revenue for the government and can lead to illegal commercial production if the limits on home production are too high. But those who care enough about avoiding illicit activities can enjoy growing and using their own marijuana.



Communal Own-Grow and Distribution

This approach follows the Buyer’s Club Model in which people join a cannabis club, grow their own marijuana, and sell it at a cost to other club members. Unlike the grow-your-own model, this approach seems to undercut a significant and meaningful segment of the illegal market.



Locally Controlled Retail Sales

The majority of marijuana arrests in the United States are for possession, mostly for small quantities. Thus, legalizing retail sales, possession, and use, might reduce criminal sanctioning significantly, if not eliminate it. This approach follows the famous Dutch coffee-shop system that helped the Netherlands grapple with drug tourism and crime.

This model restricts the retail selling of marijuana to shops that meet certain criteria, such as a limit on the amount sold and bans on most forms of traditional advertising, established by the local government.



Government-Operated Supply Chain

Given the wealth of studies suggesting positive results of alcohol monopoly, the idea of direct control of the supply chain of cannabis seems great. If the state itself operates the supply chain, it could help control regulatory violations by an independent, private, or unlawful company. It will give private firms no incentives to spend their money on promoting consumption of the government’s product.

The government could directly control signage and point-of-sale displays, instead of merely issuing constitutionally questionable regulations of those practices. Government-controlled monopoly will also control price collapse. It will innovate the ways to drive down production costs. Competitive pressure would force firms to pass along those savings to consumers as lower prices.



Public Authority

Under the public-authority model, the public authority, similar to for-profit organizations, would possess or distribute cannabis instead of the state. The state would set policy and appoint members of the public authority. This type of cannabis legalization might prove no more offensive to federal interests than the actions of a state hiring regulators, issuing licenses, collecting taxes, etc.



Allow only Nonprofit Organizations to Sell

Jurisdictions may grant licensing to only nonprofit organizations to sell marijuana with specific requirements and eligibility criteria. However, this model doesn’t guarantee that the industry will not try to exert political influence or increase revenue.

 Also, it could slow the growth of the cannabis market as nonprofit organizations raise capital mainly from loans. Banks might be reluctant to grant commercial loans, causing these organizations to seek loans from private individuals.



Allow only For-Benefits Companies to Sell

This structure serves as a hybrid between the nonprofit and commercial options. It limits participation in the marijuana market to companies concerned with improving environmental and social conditions, in addition to making profits. Jurisdictions finding the monopoly, public-authority, or nonprofit model unfeasible may explore the for-benefit option.



Grant Licenses to Very Few Monitored for-profits

If commercial free market or other middle-ground options would not serve social interests, or are not politically viable, find some way to get for-profit businesses to serve the public interest. This structure comes with the challenge of insulating the regulatory agencies from industry influence. It also presents challenges in structuring incentives to make companies comply with regulations voluntarily and empowering regulators with big sticks. Limiting the number of licensees make it easy to monitor behavior and nudge prices in a useful direction.

THE EXTREME OPTIONS

There are two possible types of marijuana legalization in this category. First is maintaining prohibition and increasing sanction. The discussion has have already moved from this position with decriminalization.

The second option is to remove all of the state’s marijuana laws from the books and implement only the regulations that apply to any article of commerce. This option has received huge attention in marijuana debates. In 2012, the Committee for a Safer Michigan took an initiative to eliminate Michigan’s prohibition without any regulatory structure to replace it. Though the effort failed, it drove interest in this option.

The following table provides a quick one-page summary of the many options to legalize cannabis



Why is understanding legalization in different states so important?

Understanding marijuana legalization is important for businesses, consumers, and everyone in between. This is because understanding the cannabis legalization approach of different states in the US helps other states planning their marijuana legalization policy realize what it takes to legalize cannabis, along with its outcomes. In other words, implemented approaches in states where cannabis has been legalized serve as helpful lessons to states looking forward to decriminalize pot. Consumers should understand the legalization in different states in order to avoid violating strict regulations and heavy penalties resulting from law violations.



Concluding Thoughts

There are many possible options for implementing cannabis legalization, each with its benefits, drawbacks, and approaches. Of all these options, the prohibition and the standard commercial models take up most of the discussions regarding policy debates.

 More and more state legislatures are getting involved in cannabis legalization. Considering all these options is vital to realizing the right approach in legalizing marijuana. Each state’s government must understand the possible applications and outcomes of these laws and choose the best structure that fits their state’s legislature. The legalization model should not only bring in economic benefits and reduce the crime rate, but also should primarily focus on improving public health and addressing safety concerns.