Pot expert: CA bill “horrible” policy, but … I’ll support it

posted at 4:01 pm on July 2, 2016 by Ed Morrissey

Earlier this week, legalization activists succeeded in getting a recreational-marijuana referendum on California’s ballot, and voters will likely pass it in November. Not every supporter of legalization is cheering, however. One of the people behind Washington’s legalization effort calls the California proposal a “horrible, awful, very bad, no-good drug policy” … but Mark Kleiman still supports it anyway. Kind of, anyway:

The Sean Parker/Gavin Newsom Adult Use of Marijuana Act has now qualified for the California Ballot this November. The measure – 62 pages of legal prose – has many provisions, but only a few of them are directly relevant to what seems to me ought to be the central goal here: making cannabis available for moderate use by adults while minimizing the growth of cannabis use disorder and preventing an increase in the number of adolescent users or a fall in the median age at first use (now 15-16). …

The key provisions in terms of preventing substance use disorder are the ones dealing with production, taxation, and marketing. All of those provisions favor the expansion of the market at the expense of public health. Unlimited production guarantees that farmgate prices will settle down at something below $1 per gram; add to that 33 cents in excise and a 15% sales tax, and the result will be prices  substantially lower than those in Washington State, where some stores now offer highly potent cannabis (claimed to be 18% THC by weight) for $95/ounce. That’s less, in inflation-adjusted terms, than my college classmates were paying around 1970. And today’s material is about 4-6 times as strong as what they were buying then.

To put it differently: A typical joint contains about 0.4 gram of cannabis. $95/oz. is $3.50/gm. So a joint of “Uncle Ike’s Budget Bud” in Seattle has about $1.40 worth of cannabis in it. At 18% THC – aka “one-hit weed” – that should get three naïve users wrecked out of their gourds (if you’ll allow me the use of technical terminology) for about three hours each. That comes to about 15 cents per stoned hour, making cannabis far more cost-effective than even very cheap beer on a per-hour basis.

Kleiman also sounds an alarm over the protection and enrichment of established players in the “cannabis industry.” (Thirty-six years ago while in high school, I never thought I’d write an essay that included those two words in combination.) Kleiman doesn’t specify the provisions nor the players he means, but that sounds a bit like the concerns that torpedoed a legalization bill in Ohio, which essentially set up a government-limited and protected cartel for marijuana production. Perhaps Kleiman or others can follow up on just how much this benefits established players, and how much it locks out prospective entrants into the market.

However, a quasi-monopoly would artificially keep prices higher, which seems to be Kleiman’s aim. His issue with the bill is that it will cause such a collapse in prices that it would wipe out the illicit market — a social good, Kleiman agrees — but would encourage more widespread and more intense use. Daily use among previous users has increased by 40% nationally, even with prices at three times the level of “Budget Bud” in Washington, which adopted Kleiman’s proposal. Half of all daily or near-daily users “meet the diagnostic criteria for cannabis use disorder,” Kleiman notes, which involves interference with relationships and an inability to cut back or stop. The California law would eventually price “Budget Bud” at a third of Washington’s current price, and make the cheap-high problem exponentially worse.

Of course, this prompts the obvious question: What did legalization supporters expect? Removing the prohibition on marijuana doesn’t just cut out the law-enforcement avoidance costs — it incentivizes production on both a personal and industrial scale. That will produce more supply, likely vast amounts of it, which either means that demand will have to increase or prices will drop sharply … and in this case, it looks like some of both. It’s basic economics.

Some may take the connoisseur approach and imbibe only the higher-quality, upper-scale cannabis offerings, just as some prefer craft beers and fine wine, or perhaps an occasional 30-year-old Scotch. Many people, however, stock up on Pabst Blue Ribbon and Bud Light (pardon the pun) and consume it regularly. Gallo and Rossi made a fortune on jug-wine sales to a similar consumer set. The people for whom this attraction works most are those who don’t have a lot of money to spend — the young people that Kleiman rightly notes as at risk in this proposal.

Kleiman faults Congress and Governor Jerry Brown for being “stuck in 1980” and allowing bad policy by default. It’s difficult, though, to see how one can craft an open and legal market for an intoxicant that doesn’t produce these incentives. The argument for legalization, after all, has been that marijuana doesn’t have any more harmful effects than alcohol (and is, in fact, less toxic). If that’s the case, then why shouldn’t marijuana have its own market? And if it’s not the case, then why are we discussing legalization at all?

In his defense, the Washington Post’s Christopher Ingraham reports that Kleiman does have a suggestion for an alternative:

Kleiman’s criticism is significant, given the respect he commands in drug policy circles and his reputation as a radical centrist on marijuana issues. Many of the contemporary arguments against marijuana legalization seem like throwbacks of decades past, grounded in dubious argumentsmisuse of statistics and the occasional outright falsehood.

But Kleiman comes at the issue from a data-driven public health perspective. He’s less opposed to legalization per se than he is to the fully commercialized markets springing up in Colorado and elsewhere. He says that a truly ideal policy might look like what we currently have in Washington D.C., where growing and giving pot is legal but selling it is not. He points out that there are a host of other legalization options between prohibition and commercialization that policymakers could consider.

The problem with the DC model is rather obvious. How does one police giving but not selling? How can one determine whether a quid has been exchanged for some pro quo — if not cash, then material, sexual relations, bed and board, etc? That would require law-enforcement intervention at no less an intrusive level than in the current prohibition.

In a retail setting, the transactions are above board. In the “giving” market, it’s easy to quickly see a barter or black market arise that creates the same kinds of ills that prohibition produces. Allowing personal production might alleviate that somewhat, but in the long run it won’t be much more sustainable than the “existing unworkable quasi-legalization in the form of a corrupt ‘medical marijuana’ system” Kleiman (correctly) derides.

And again, if the argument is that marijuana isn’t a dangerous intoxicant, at or below the danger level for alcohol, then Kleiman’s proposal is still just another form of irrational prohibition — and if not, then it’s a dangerous back door to widespread and unstoppable use. Little short of an open and legitimate market will eliminate the social costs of prohibition, especially the infringement on civil rights and the massive expenditures on the war on marijuana that has done little to curtail it as a black-market commodity. Without alleviating those, the status quo would be preferable, or even the status quo ante before California’s 1993 legalization of “medical marijuana.”

Perhaps Kleiman sees that too. Ingraham asks Kleiman if he’ll support the California bill anyway:

Given all his concerns, I asked Kleiman whether he’d still vote for the California measure over the status quo. “Yes,” he said, “unless there were some prospect of something better as an alternative.”

Practically speaking, there really isn’t much of an alternative to propose, except along the margins. Either states have to choose to make marijuana a legal commodity, or choose to keep the prohibitions in place.


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