Cannabis Capitalism

Abstract

Federal law treats cannabis as contraband, but more than 30 states allow it to be sold for medical or recreational use. The industry has a unique, quasi-legal status that poses legal, political, and commercial challenges for member businesses. States with legalized cannabis use allow parties to own the means of production and sale, but supervise the industry by using traditional regulatory tools such as licensing, product quality testing, and taxation. Yet, those supply-side regulations are not likely to control the harms that cannabis overuse can generate. Like alcohol and tobacco, marijuana is a consumer good that can harm individual users and third parties. Supply-side restrictions are also necessary to limit the number of people who overly consume marijuana. States should assume responsibility for the sale of that product, just as many already do in the case of alcohol. States should also decline to advertise their own sales of cannabis. Finally, Congress should require states to assume those responsibilities as a condition of revising the federal Controlled Substances Act to lift the federal ban on cannabis sales.

Keywords: Cannabis, Marijuana, Cannabis regulation, Marijuana regulation, Tenth Amendment, Marijuana as an addictive drug, Advertising restrictions,