“This Bud’s For You”

Mark Kleiman at Ta-Nehisi’s place:

Two items on my list of drug-policy reforms drew the most flak in comments:  the abolition of the minimum legal  drinking age and the non-commercial legalization of cannabis.

Note that the drinking-age idea was paired with a tenfold increase in alcohol taxes to about a dollar a drink, roughly doubling the retail price of alcohol. That, plus a zero-tolerance policy on drinking and driving for teenagers, would get you most of the benefits of the current 21-year-old MLDA (and lots of benefits the MLDA can’t provide) without making tens of millions of teenagers into scofflaws.  It’s a good general principle that a law that’s widely broken is a bad law, and 90% of American 18-year-olds have sampled alcohol, despite the laws against it.
On the cannabis front, my plea is for a “grow-your-own” policy: consumers would be allowed to cultivate pot for their own use, to give it away, or to join small consumer-owned co-ops to produce the stuff for them. No commercial sales.
“Why not?” demanded several outraged commenters. Why allow use but not sale?
Two words provide the gist of the answer:  marketing and lobbying. A legal cannabis industry, like the legal beer industry, the legal tobacco industry, the legal fast-food and junk-food industries, and the legal gambling industry, would do everything in its power to expand its sales, including taking political action to weaken whatever regulations and minimize whatever taxes were imposed.

Reihan Salam:

In Kleiman’s view, commercial sales would create a powerful marketing and lobbying machine that would encourage cannabis consumption. On paternalistic grounds, Kleiman is concerned about the public health consequences of a dramatic expansion of cannabis consumption. Given that decriminalization would already lower the effective price of cannabis, this strikes me as a legitimate concern:

To the consumer, developing a bad habit is bad news. To the marketing executive, it’s the whole point of the exercise. For any potentially addictive commodity or activity, the minority that gets stuck with a bad habit consumes the majority of the product. So the entire marketing effort is devoted to cultivating and maintaining the people whose use is a problem to them and a gold mine to the industry.Take alcohol, for example. Divide the population into deciles by annual drinking volume. The top decile starts at four drinks a day, averaged year-round. That group consumes half of all the alcohol sold. The next decile does from two to four drinks a day. Those folks sop up the next thirty percent. Casual drinkers – people who have two drinks a day or less – take up only 20% of the total volume. The booze companies cannot afford to have their customers “drink in moderation.”

Because distillers are dependent on “problem drinkers,” they deploy an effective, well-funded lobby to stymie efforts to reduce alcohol consumption and indeed to permit the emergence of potential substitutes or complements to traditional wines and spirits, hence the ban on breathable alcohol. Though cannabis consumption is less dangerous than binge drinking, the impact of full-blown legalization is unpredictable:

The rate of problem use among cannabis users is lower than the rate of problem drinking among drinkers (lifetime risk of about 10% v. lifetime risk of at least 15%) but that’s under conditions of illegality and high price. The risks of chronic heavy cannabis use aren’t as dramatic as the risks of chronic heavy drinking – the stuff doesn’t kill neurons or rot your liver, and generates less crazy behavior than beer – but that doesn’t make those risks negligible. Ask any parent whose fifteen-year-old has decided that cannabis is more fun than geometry. Of the 10% of cannabis smokers who become heavy daily smokers for a while, the median duration of the first spell of heavy use (not counting the risks of relapse) is 44 months. That’s not a small chunk to take out a lifetime, especially a young lifetime.

Kleiman is a frank paternalist, and his arguments are potentially discomfiting for those of us of a libertarian bent. But as a prudential first step, I think he’s right to prefer non-commercial legalization.

Kleiman is wrong on many fronts, but mainly he’s wrong because most people who want to smoke pot don’t want to grow it. They want to buy it. And all these people spending money to grow their own aren’t going to give it away to everyone for free, which leaves us with a demand to fill but not nearly the level of supply needed to fill it. The only thing standing between that demand and the supply shortage would be the government. Which, naturally, leads to black markets, drug dealers, confiscation of property by police departments, drug raids, shooting deaths and so forth. Not too far a cry from where we’re at now.

So we have a choice: create a legal market or a new black market.

One of these two markets will exist no matter what we do, because people are going to smoke pot one way or another. The laws we have now don’t prevent this. Allowing home growing but not commercial sales won’t either. Nothing will. This is one vice that isn’t going anywhere and doesn’t really need “America’s marketing geniuses” in order to peddle.

Kleiman thinks all the companies selling marijuana will be like the Big Tobacco companies, with a fierce lobbying arm and a huge monopoly over the market, preying mercilessly on helpless consumers. But that’s not going to happen if we just legalize marijuana and don’t set up regulations which grant these big companies de facto monopolies to begin with. Small growers, like small brewers, will do just fine. And no, we won’t have a bunch of crazed cannabis users at the mercy of Marijuana Inc. Some people will smoke too much pot, but plenty of people already do and many of them quit before their lives are ruined.

A better idea would be to simply not regulate out home growers from the market which is a legitimate concern. Setting up laws which prevent home growing will crowd out home growers and make big corporations much more powerful. Simply opening up the market to both will create a much more level playing field. I think it will actually be extremely difficult for big corporations to compete with local growers – economies of scale be damned, pot smokers enjoy the quality of their product too much – but at least that competition will exist.

Kleiman in the comments to Kain’s post:

It’s really tiresome to be criticized for view you don’t hold. Here’s what I wrote (emphasis added for the hard-of-reading):

On the cannabis front, my plea is for a “grow-your-own” policy: consumers would be allowed to cultivate pot for their own use, to give it away, or to join small consumer-owned co-ops to produce the stuff for them. No commercial sales.

So no, I don’t propose making everyone who wants to smoke pot grow his own garden; you could always join a co-op, or get yours from a friend who either belongs to one or grows the stuff. Given the high costs of running an illegal business, the black market just couldn’t compete with the legal co-ops.

Now, if someone wants to criticize that proposal, go ahead. But all the “anti-prohibitionists” seem to prefer pounding on a straw man.

Kain responds:

There are several things wrong with this.

First, it creates at best a gray market. You can grow it, smoke it, and join a co-op to help produce it, but you can’t sell it to whoever you want or buy it from whoever you want. This is very fuzzy. Can you think of any other product like this? I can’t, and I don’t think Americans would take to the idea very well (what, I can’t buy bread at the store, I have to make it myself? What the hell is a co-op?) or that our regulatory apparatus would be up to enforcing it (not to mention the potential for regulatory capture at the local and state level). Furthermore, this strikes me as little more than Kleiman’s own preferred version of Capitalism Lite – a sort of throwback to distributism – Chestertonian in its romanticism, but not terribly practical.

Second, no matter how you spin this, consumers of marijuana under Kleiman’s rules would also have to be producers of marijuana – if not directly, then indirectly through a co-operative. Rather than casually purchasing pot whenever they wanted, they would have to make a commitment to either A) grow the stuff, or B) become involved with a group of people growing the stuff. If anything, this works against Kleiman’s paternalist instincts. Where Kleiman seeks to protect the consumer from the big marijuana corporations, he ends up making consumers more financially vested in the product, and thus more bound to its success, use, and so forth. Probably not the best idea when you’re attempting to keep use of the product to a minimum. This would be like forcing drinkers to have a financial stake in whatever alcohol they were consuming. And a lot of people just don’t want that. They want the freedom to choose to simply buy the stuff at a store or, if there’s no co-op nearby and nobody growing, then from a dealer.

Which brings us to point number three. I don’t think co-ops would actually spell the end of the illicit marijuana trade unless the co-ops were allowed to scale up to the point where basically they were operating as commercial businesses. So either you lose the idyllic co-operative-only market or you sustain the demand for the black market.

And last, there is simply nothing in this argument that makes it necessary. The problem with pot is that it’s illegal, not anything inherent with the drug – at least no more so than alcohol (and probably a lot less). If pot becomes legal I hope we don’t regulate out home growers or local co-operatives. That would be a disaster and a travesty. Imagine doing to the wine industry what was done to the beer industry for so long. Imagine the Budweiser of bud – and that all legal marijuana was so lifeless. But preventing commercial sale of anything that has a high consumer demand is just asking for trouble, even if you provide avenues for that demand to be met. Those avenues are simply unnecessary when an open market could exist instead. If we really want to curtail marijuana usage, legalize it and then tax the hell out of it. At least people will be able to buy it and consume it safely.

Adam Serwer at The American Prospect:

I think Kain is missing at least part of Kleiman’s point. The whole idea behind decriminalizing marijuana possession is to eliminate the “black market cycle of violence”; since people wouldn’t necessarily be dependent on dealers, dealers would have a hard time plying a lucrative trade, and paramilitary SWAT teams wouldn’t be shooting dogs and old ladies trying to get at the hidden cannabis stash of a 72 year-old with cataracts.

Second, while I’m not quite sure where I stand on the choice between legalization and criminalization, I do think that marijuana abuse is a relatively minor problem. I’d like to preserve that status quo while eliminating the draconian penalties and absurd amount of law-enforcement resources devoted to preventing people from toking. But I think Kain is being a bit to dismissive in arguing that there would be no adverse consequences from the mass marketing of marijuana. It seems entirely possible to me that commercializing the drug could create a problem where none really exists — businesses have to make a profit; someone growing their own doesn’t. A world where a smaller, less profitable illicit market that continues to exist looks a lot like our own without the outsize penalties and adverse consequences of over-enforcement. I’m not sure what a world with a fully commercialized marijuana industry that profits from turning people into potheads looks like, but it makes me nervous.

Ezra Klein

Patrick Appel at Sully’s place:

Kleiman has been beating this drum for a long time. I don’t have a problem with “grow your own” in theory but worry that prohibiting commercial cannabis will sustain the black-market. What are the other unintended consequences?

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