Do we want big business to take over Cannabis?

Two weeks ago, Jamen Shively, a former Microsoft executive, organised a press conference to launch his brand. His goal is to become the world leader in his area, as powerful and famous as Coca Cola or Starbucks. But we are not talking about selling a common product such as food or cars. Jamen Shively wants to create the first US brand making profit from selling medical and recreational marijuana.

This 45 years old businessman had never tried marijuana until last year. It is reported that he fell in love with it: “Especially in the medical realm, I’ve gone from entrepreneur to advocate to activist”, he said seriously.

In reality, he seems to be genuinely more interested in the potential profits than in the advantages of medical marijuana. Talking about the cannabis $200 billion global market, he said: “We would be happy if we get 40% of it worldwide”. His project seems to be possible since he can start his business in the states of Colorado and Washington that have legalised the recreational use of Cannabis and in the twenty or so states that allow medical marijuana use.

Is this Cannabis open market and extreme liberalisation desirable? Do we have to let the famous “invisible hand” (you know? the one that every economic student has heard about but no one come across actually) do its job?

The capitalist mechanism is obvious: to be viable and make profit, a business has to sell more and even more. It needs to be attractive, to advertise, to target new customers and to shout from the rooftops that its product is the best. Profit motive is the mind set of business and growing of sales is its watchword. Is that what we want for our cannabis market? There seem to be a conflict here between the public good that would want to limit and strictly regulate cannabis selling and the business interests.

Of course, regulations will be implemented in Colorado in order to limit a little the freedom of the market. The regulation regarding this retailing system is currently being discussed. Marijuana retailers will have to apply for license before being able to sell it legally. It seems that the Colorado State will be able to limit the number of retail marijuana business shops and overall production for the industry as a whole. But will the state really limit it? Moreover, no prevention measures seem to be in progress concerning the responsibility those shops should have towards the customers at risk, contrary to the Uruguayan law that is planning a coherent reform regarding cannabis market regulation including the strengthening of education and health systems. Apart from the protection of kids, advertisement seems not to be limited in any way.

Maybe you think Colorado regulations will be tight enough to impede excesses? This is underestimating the business capacity to take advantage of those regulatory loopholes and to lobby in order to smash the strict regulations they want to get rid of! Moreover, don’t count on business to waste time on harm reduction measures such as prevention towards drug users that seem at risk..

An alternative exists and seems more relevant.

In France, Daniel Vaillant, a former minister and MP from the left wing, suggested, in a French parliamentary report two years ago, the implementation in France of another model. After interviewing policemen, judges, sociologists, medical experts and drug users, he suggested that France should create a state monopoly for Marijuana. This state institution would control every aspect of the market, from the growing to the selling of Cannabis.

France has a long tradition of state monopoly: until 1971, France had one for cigarettes before the common market forced it to stop its monopoly over production and selling of tobacco.
This model could easily apply for Cannabis. Uruguay is seriously considering implementing a system very similar to the French model: a bill is currently being discussed in the Deputy Chamber about it. This draft is about creating a State monopoly for cannabis production, processing and selling and strengthening the education and health policies related to drugs.

In Sweden, the only retail store allowed to sell alcoholic beverages that contain more than 3.5% of alcohol is the Systembolaget, the state-run liquor stores. An official Swedish report entitled “If Retail Alcohol Sales in Sweden were privatized, what would be the Potential Consequences?” found out that if sales of alcohol were authorized in grocery shops, consumption would rise by 29%.  Moreover, “it seems very likely that a privatization of the Swedish alcohol retail market would contribute to a significant increase in alcohol-related harms among particularly vulnerable groups as young people and heavy drinkers”.
Here is a concrete illustration of the underlying consequences of free market when it is implemented for a drug, in Swedish case for alcohol. Those consequences are likely to happen in a cannabis free market like the USA.

Our dear “invisible hand” has two goals: Profit and Business Development, not Public Health and Harm Reduction. In order to impede the excesses of the “Budweiser of Bud” that Jamen Shively is dreaming of, let’s admit that there are important tasks that our State can accomplish better than private interests could and let’s trust the French model for once!