Marijuana regulation: There are many options

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Marijuana regulation: There are many options

27 November 2015
Beau Kilmer

Q: Recreational marijuana markets arrived in the United States after a relatively long experience with medical marijuana. Does it make sense to have an intermediate stage between prohibition and legalization for recreational purposes?

A: There are a number of supply options between marijuana prohibition and for-profit commercial legalization (see figure below from Options and Issues Regarding Marijuana Legalization). Since removing prohibition and allowing large-scale production and retail sales is new, no one knows how this is going to play out. One of the concerns in the U.S. is that jurisdictions moving to the commercial model may eventually decide that they would like to try something else; however, it will be hard to make changes with a growing industry and powerful lobbyists. Jurisdictions could instead start with middle-ground options and give them a try before committing to the commercial model. In addition, policymakers may also want to consider including sunset clauses which would give them the ability to change course without getting locked into a particular regime.

Q: In general terms, what are the policy goals that should be pursued when setting up the rules for a legal marijuana market?

A: Policy preferences will be shaped by values of the decision makers. For example, most libertarians will prefer options with fewer regulations while those unhappy with the status quo but worried about an increase in marijuana misuse and dependence because of the advertising and price declines associated with commercialization may be more open to a government monopoly on supply (which is very different from the proposal recently rejected in Ohio. German Lopez has a nice explainer on this issue here).

Based on my research collaborations as well as interactions with policymakers contemplating, designing, or actually implementing marijuana legalization, I’ve identified 10 policy design choices that will largely shape whether legalization ends up being good or bad for public health (which all conveniently begin with the letter P): Production, profit motive, promotion, prevention, policing and enforcement, penalties, potency, purity, price and permanency.

I can’t say enough about the importance of price (shapes consumption, revenues, and the size of the black market), but I wish more people would discuss the last P, permanency. I do worry about jurisdictions locking themselves into supply architectures that they may eventually regret.

Q: In general terms, what are the policy goals that should be pursued when setting up the rules for a legal marijuana market?

A: Policy preferences will be shaped by values of the decision makers. For example, most libertarians will prefer options with fewer regulations while those unhappy with the status quo but worried about an increase in marijuana misuse and dependence because of the advertising and price declines associated with commercialization may be more open to a government monopoly on supply (which is very different from the proposal recently rejected in Ohio. German Lopez has a nice explainer on this issue here).

Based on my research collaborations as well as interactions with policymakers contemplating, designing, or actually implementing marijuana legalization, I’ve identified 10 policy design choices that will largely shape whether legalization ends up being good or bad for public health (which all conveniently begin with the letter P): Production, profit motive, promotion, prevention, policing and enforcement, penalties, potency, purity, price and permanency.

I can’t say enough about the importance of price (shapes consumption, revenues, and the size of the black market), but I wish more people would discuss the last P, permanency. I do worry about jurisdictions locking themselves into supply architectures that they may eventually regret.

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