A group of ambitious capitalists in Ohio, under the name of ResponsibleOhio, want to amend the state constitution to give them control of the legal marijuana market in the state.
The group has proposed that marijuana be legalized in Ohio in a three-tiered commercial system consisting of retail outlets, manufacturers of cannabis products and a limited number of wholesalers—that is, them. Only them. The amendment is designed to limit wholesale grow facilities to 10 specific sites owned and operated by the financial backers of ResponsibleOhio.
Oh, wait, personal cultivation would be okay. According to their website, “You are allowed up to four plants per household (there is no set limit on how many non-flowering plants you can have) and eight ounces of useable product at a time.”
“You are allowed…”
This one comment sums up all that is wrong with this proposal.
Think about that. Allowed by whom? By the cartel, that’s who. ResponsibleOhio wants to take over the marijuana business and use criminal law to enforce a constitutionally mandated monopoly.
ResponsibleOhio argues that they are not establishing a monopoly because their 10 grow facilities will have to “compete with each other on price and quality, which is the exact opposite of a monopoly. There is no coordination between them, they will be trying to make money by selling the best goods at the best prices to stores, dispensaries and manufacturers.”
The proper description, then, is oligopoly—the control of a closed market by a few firms, commonly referred to as a cartel.
Economic terminology aside, there are a few obvious problems with this proposal. But the most prominent of them concerns the way it further corrupts criminal law to serve private economic interests.
Consider this scenario. An individual grows 12 flowering plants, and sells some of the harvest. They have broken the law.
But what is the purpose of that law?
The purpose of the law is now to prevent anyone from competing with the cartel’s 10 licensed wholesale grow facilities, on any scale whatsoever.
The progressive movement in American politics has served to respond to corporate excess, to balance the self-serving actions of greedy industrialists with concern for the interests of consumers and the general public. The campaign of ResponsibleOhio is just the opposite of this; the government is being used to advance private interests at public expense.
This is bad public policy.
The public interest in ending marijuana prohibition is to put an end to the illegal and unregulated market of marijuana cultivation and sales. A closed market, such as the cultivation oligopoly proposed by ResponsibleOhio, will not achieve this objective. Criminal law has been unable to restrict cultivation activity—how can anyone argue that any sort of closed market can successfully monopolize marijuana cultivation?
Why does ResponsibleOhio want to restrict cultivation to 10 sites?
It is because they have promised a profitable return to the financial backers behind this greedy initiative. Restricting production is a classic way to keep prices high, and high prices means high profits. They can dress this up anyway they want, but the bottom line is that is a scheme to corner the market and maximize the return on their collective investment.
This is an anti-competitive racket, yes, a racket, and it won’t work because high prices invite lower priced competition.
And it is small scale growers who will provide such competition, regardless of Ohio law, the Ohio Constitution and the best efforts of ResponsibleOhio to corner the market. As such, this may make a lot of money for these private interests, but the public interest in shutting down the illegal market will not be served.
There will be no closed markets. Today’s marijuana users and growers will not allow it.