Interstate Cannabis Legalization: Mind the Trap

Abstract

We expand the analysis related to the issues brought up in the recent paper, "Legalization Without Disruption: Why Congress Should Let States Restrict Interstate Commerce Marijuana" by Scott Bloomberg and Robert A. Mikos. Their paper essentially argues that Congress should suspend the Dormant Commerce Clause (DCC) and allow different states to restrict interstate commerce for marijuana (and cannabis, more broadly) use. We believe that this will create a number of different disruptions and unintended consequences associated with the public choice literature. In particular, the temporary suspension of the DCC will create monopoly rents, create further rent-seeking opportunities, and lead to underground market issues similar to what we currently see with the cigarette market. In other words, the DCC, rather than an "arcane" institution, actually provides important constraints on states' ability to regulate commerce in a manner which helps special interests at the expense of the public.

Keywords: P48, H77, L88, L51, I18

JEL Classification: P48, H77, L88, L51, I18