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Legalized Marijuana Falls Prey to Busybody Regulators

By: Rachel Rodriguez - Sep 14, 2015, 11:33 am
Despite nominal legalization of marijuana production and trade, pervasive bureaucracy and regulation, along with federal prohibition, mean the battle for liberalization is far from over. (<a href="https://commons.wikimedia.org/wiki/File:Marijuana.jpg" target="_blank">Wikimedia Commons</a>)
Despite nominal legalization of marijuana production and trade, pervasive bureaucracy and regulation, along with federal prohibition, mean the battle for liberalization is far from over. (Wikimedia Commons)

On the surface, marijuana advocates are enjoying success across the United States. But amid the liberalization lies a spider’s web that competes with prohibition in generating harm: the regulatory state.

A new documentary out from VICE News examines the highs and lows of the sprouting marijuana industry, with specific attention given to Colorado. Inside America’s Billion-Dollar Weed Business: the Grass Is Greener demonstrates the wasted time, money, and stress that pioneers in this market face, despite nominal legalization at the state level.

Colorado’s Amendment 64, passed on November 6, 2012, was a ballot initiative that legalized the recreational use of marijuana, along with its cultivation, manufacture, and sale. While a few states in the country have enacted some form of legalization, Colorado offers an important testing ground, since it accounts for one-third of the $2.7 billion US weed market in the United States.

Despite popular support for the law and a massive consumer base, those trying to generate profits an in above-board manner with marijuana still face crippling obstacles. Dan Skye, editor-in-chief of High Times Magazine has stated that “the Colorado industry has been incredibly patient with this bureaucracy. They have new rules thrown at them monthly. It drives them crazy.”

The Marijuana Enforcement Division (MED) is the state agency in Colorado that directly regulates the industry, from licensing to policy. They go to great lengths to monitor sales to “ensure public safety,” but in doing so impede businesses from accessing the capital necessary to begin or continue working.

“You have to have big money in the game just to get a license… You don’t have the slow growth opportunity like other small businesses do,” explains Andy Williams, CEO of Medicine Man.

And since marijuana is still illegal at the federal level, and financial institutions are regulated by the federal government, all these companies are struggling to function as normal businesses. The owners cannot open corporate bank accounts, can only use cash, and cannot take out loans to expand as other growing businesses would.

Most who are unfamiliar with the cannabis market probably believe that growers have it made in Colorado with their state legalization. However, with the costly legal environment, keen US investors are not flocking to the state of Colorado, but to Canada.

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Canada legalized medical marijuana at the federal level in 2013 and has allowed 25 larg-scale producers to operate in the country. While their government still makes it difficult for competition to enter the market, their stability with federal approval makes it easier to generate profits, in comparison to the fragmented system in the United States.

And to what on the US side of the border? Drug prohibition has been a demonstrable failure and burden on our society. The US federal government spends approximately $51 billion annually to regulate various recreational substances and imprisoned 1.5 million people in 2013 for non-violent drug charges. It is no mystery how we hold the highest incarceration rate in the world with 22 percent of the world’s inmates.

With an estimated 19.8 million people regularly using marijuana in the United States, we must question whether both prohibition and such tight regulation are morally right. These laws foment corruption in our police force and place minorities and a desperate underclass in a vulnerable position. Trivial drug charges make it difficult for people to obtain jobs, and the violence between government forces and individuals dealing on the black market makes our country more dangerous.

VICE perfectly highlights how government bureaucrats do not necessarily “protect” the citizens they tax. The video makes evident that they are not making any positive impact on the businessmen who grow and dispense marijuana, nor on the consumers who want to buy the product — yet they remain hellbent on intervening at every single step in the process.

Yes, marijuana legalization at the state level is a step towards civility. But let’s not kid ourselves; there is still a long way to go towards rolling back the nanny state, as this documentary makes clear.

Editor’s note: this article includes a correction to clarify that the Canadian legalization applied only to medical marijuana.

Rachel Rodriguez Rachel Rodriguez

Rachel Rodriguez is an intern at the PanAm Post. She has a fiery passion for economics and hopes to inspire every reader to take a closer look at the outcomes of government policy. Follow @freedomf0x.