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Regulate Cannabis Like Alcohol and End the Federal-State Conflict

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The Wine and Spirits Wholesalers of America, the lobbying organization for alcohol distributors, recently became the first alcohol industry association to advocate for cannabis legalization and policy path to end the state and federal conflict. This is good news as the industry association is one of the most powerful in Congress!

But it also comes at a cost and I personally have major reservations about their incentives and proposal. The alcohol distributors want to establish a mandatory independent three-tiered system for cannabis as is required for alcohol and also in Nevada’s adult-use and Michigan’s medical cannabis industries. This system means that alcohol distributors get to take a significant cut of profits for transporting the product from cultivation to manufacturing or dispensing.

It’s a clear example of what economists call “rent-seeking”, whereby a select group lobbies to give them control over an industry or market sector without adding substantive value. Distribution logistics will always be an important part of any business that sells a retail commodity, but as we know every time we drive down the highway and see a Safeway or Walmart truck, sometimes it’s advantageous for a large company to integrate that activity into their supply chain.

Going forward, it will be vital that we establish initial state markets without the need for a mandatory three-tiered system (the only adult-use market that requires it is Nevada) to set the norm across the nation prior to legalization. I can imagine a system where interstate trade eventually requires independent distributors, and that may be a reasonable compromise, but such a policy change is also likely to be a number of years down the road and occur after an initial federal legal framework based on deference to state cannabis laws.



Marijuana Use Will No Longer Be Prosecuted In Manhattan

New York’s political establishment is clearly and deliberately preparing for legalization. First, it was the state Democratic Party endorsing legalization, then the Governor’s task force report recommending full legalization, taxation, and regulation. Now the Manhattan DA will no longer prosecute small-scale cannabis cases. Although this move applies to just one portion of just one city, it will affect millions of people in one of the most politically trendsetting regions of our country. To justify the move they are discussing the issue in ways that many of us feel in our hearts. It’s morally reprehensible to give someone a criminal record and provides no public safety benefit to prosecuting low-level cannabis offenses.



Cananbis economist, andrew livingston, vicente sederberg

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