The Alternate Reality Of Legalized Medical Marijuana

Maryland legalized medical marijuana years ago, and the first dispensaries opened on Friday, December 1. They promptly ran out of inventory.

According to the Washington Post, “Five of seven licensed dispensaries that have opened since Friday said they have completely or almost run out of flower—the raw part of the marijuana plant that is smoked or vaporized—and have limited supplies of other cannabis products. The other two stores are limiting sales to a small group of preregistered patients.”

This was expected and has become a common occurrence when a dispensary system is launched. It will take about three months before licensed cultivators can begin to fully meet demand.

Isn’t it odd, though, that marijuana is widely available throughout Maryland, its surrounding states and the rest of the country and yet patients, who need it for medical purposes, are not able to buy it?

There are only 10 licensed dispensaries in the state but plenty of marijuana on the market.

What’s the problem?

The problem is the nature of the laws that legalize marijuana. There is plenty of marijuana in the state of Maryland, but all that marijuana is illegal marijuana. The problem is that there is a shortage of legal marijuana, marijuana grown by a limited number of licensed cultivators under strict regulations (designed, in part, to make sure that legal marijuana does not end up on the illegal market).

The problem is that laws that legalize marijuana make growing and accessing marijuana unnecessarily complex. Cue howls of protest from advocacy and trade groups—all of which will explain that regulatory complications are vitally necessary to gain the passage of legalization measures. They are, absolutely, right. But that doesn’t negate the reality that such rules often contradict common sense.

Marijuana legalization creates its own form of reality, an alternative reality, in which legal marijuana is complex, complicated and ultimately profitable.

It’s obvious to any rational observer—the complexity and the complications are necessary to make it profitable. It’s part of a grand compromise—the state will stop arresting people for marijuana offenses in exchange for a strict regulatory structure and a piece of the action (also known as taxes). But that doesn’t mean it’s efficient, effective or economically rational.

Given enough time, legal marijuana markets may become efficient and effective. Whether or not they are economically rational in the long run remains to be seen. Can the legal market deliver marijuana at a better price than the illegal market?

Most modern regulatory structures for legal marijuana are based on the idea of artificial scarcity—the idea that government should keep marijuana expensive to minimize consumption and optimize tax revenue. Controlling supply helps inflate prices. But, prohibition fails because it is unable to control production—and legal markets face the same challenge. It’s not hard to grow marijuana.

An alternative approach to controlled supply is advanced by this author and Michael Kennedy in “Let it grow—the open market solution to marijuana control,” published in the Harm Reduction Journal.

“Let it Grow” argues that the public interest is best served by a wide-open, competitive market.

Licensed growers in Maryland are increasing production, and they will soon produce sufficient quantities to stock the state’s legal dispensaries. That’s not the point. The temporary situation of a medical marijuana shortage in Maryland illustrates a fundamental problem, in only for a few months.

The problem is that the public, the industry and the government are being drawn into an alternate and artificial reality in which cannabis is deemed a scarce industrial commodity instead of a commonly and widely grown plant.

Complicated regulations may be a political necessity. But there comes a time, there will often come a time, when common sense must intrude. It needs to be said, over and over: just let it grow!