The right (and wrong) way to legalize cannabis

How to build a legal marijuana system that’s convenient, protects public health and keeps commercial forces in check


 
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A bag of marijuana is held up at a medical marijuana dispensary in Vancouver on Friday May 1, 2015. The City of Vancouver has become the first in Canada to regulate illegal marijuana dispensaries, despite strong warnings from the federal government. THE CANADIAN PRESS/Darryl Dyck

A bag of marijuana is held up at a medical marijuana dispensary in Vancouver on Friday May 1, 2015. The City of Vancouver has become the first in Canada to regulate illegal marijuana dispensaries, despite strong warnings from the federal government. THE CANADIAN PRESS/Darryl Dyck

The Trudeau government’s proposal to legalize cannabis will no doubt generate heated debate. The question of how to legalize is likely to receive less attention. But it is no less important; the consequences of legalization will depend strongly on details that neither side of the larger debate has given much attention.

The potential benefits of legalization include: increasing personal liberty; gains to consumers in convenience and in product variety and safety (via chemical testing and accurate labelling); and substantially shrinking a multi-billion-dollar illicit market and the associated enforcement efforts and punishments. (Statistics Canada reports more than 20,000 cannabis-related convictions per year; about one-third of those lead to custodial sentences, with a median length of 30 days.)

The primary risk of legalization is increased problematic use (“cannabis use disorder,” in medical terminology) and the resulting damage to consumers, and their families, friends and co-workers. Leakage from the adult market may also increase use among adolescents—especially if prices fall dramatically—creating risks to academic performance and psychological and emotional development.  The growing share of cannabis users who report smoking every day—now about one-quarter of Canadian past-month users—demonstrates the risk of developing problem use.

These can be thought of as the arguments for, and against, any legalization of cannabis. But they can also be thought of as design criteria for a new system of legal availability: how can we provide convenient access for adults who want to use in moderation while minimizing the harms from cannabis use disorder and from use by adolescents?

The commercial model of cannabis legalization adopted in Washington State, Colorado and Oregon performs well in terms of liberty, consumer satisfaction and shrinking the illicit trade, but is likely to be much less satisfactory when it comes to controlling problem use. After all, frequent high-dose users—those most at risk for cannabis use disorder—are the most valuable customers of the cannabis trade, whether licit or illicit.  The marketing (and lobbying) strategies of a cannabis industry will therefore focus on attracting such customers and inducing them to consume more and more of the product, and on converting moderate users into problem users. In this respect cannabis is like alcohol, tobacco and gambling: all of those industries have commercial motives for getting their customers hooked.

Over the past two decades, the cannabis market has shifted increasingly toward material with very high concentrations of THC, the primary intoxicating agent. That raises the risk of acute bad experiences, and may also increase the prevalence of problem use. Since per-gram prices have been steady over that period, the price of getting stoned has been falling.

Even at today’s illicit price, cannabis is a remarkably cheap intoxicant: something like a dollar per hour of intoxication, which makes it cheaper than beer. The price is too low to matter much to most casual users. But very heavy users, for whom cannabis is a significant personal budget item, and younger users, who tend to have less available cash, are likely to use more cannabis as the price falls.

When cannabis growers and dealers are no longer forced to hide their activities and pay their workers premium wages to induce them to accept legal risk, the price of cannabis drops dramatically. This is already evident in falling wholesale prices in Washington and Colorado. Once the market is mature, generic, unbranded legal cannabis may very well sell for one-tenth the current price of the illegal product, making commercialized legalization an unattractive policy from a public-health viewpoint.  Yes, there will be high-end product as well, but what matters is the price per hour of intoxication at the low end of the price spectrum.

A sensible cannabis-legalization plan would prevent the growth of substance use disorder as much as possible by: keeping prices high (through production controls, taxes, or public monopoly); banning persuasive advertising by restricting marketing communications to factual statements about the chemical content of the product; and offering consumers convenient ways of checking their own impulses when those impulses conflict with their judgment about their long-term interests, for example by allowing customers to set monthly purchase quotas for themselves.  Of course any policy that really put a dent in problem use would also put a dent in industry revenues, so we should expect the industry to oppose such policies, as we have already seen in the United States.

That struggle between commercial logic and the public interest will define the new politics of legal cannabis. As the new government proceeds to draft a new system of laws, it should keep in mind the need to prevent the cannabis industry from acquiring excessive political influence.

One approach would be to make the sale of cannabis a state monopoly rather than relying on private-sector retailers; as Premier Kathleen Wynne has proposed for Ontario. The stores could easily administer user-set quotas, and contracts with growers could include a ban on advertising.

It is when the regime is first being designed that the public health interest has the best chance. Later, public attention will shift, but industry lobbying efforts will remain focused on dismantling effective controls.

Cannabis legalization doesn’t have to be bad for the public health. But if we’re not careful, it will be.

Mark Kleiman is Professor of Public Policy at New York University’s Marron Institute. Jonathan Caulkins is the Stever Professor of Operations Research and Public Policy at Carnegie Mellon’s Heinz College. They are two of the authors of Marijuana Legalization: What Everyone Needs to Know (Oxford University Press).


 

The right (and wrong) way to legalize cannabis

  1. So what’s this? Reefer Madness: The Legalization Variant. 1) A government monopoly is a terrible idea, 2) “Cannabis use disorder” is more of a fiction than a reality, 3) Cannabis is in no way similar to alcohol and should not be lumped into the same category and 4) Why are Americans telling Canadians how we should draw up our legislation?

    • Hi: Re: #4). Good point. Their book is for Americans, not Canadians. Most Americans don’t even know where Canada is and our system of government is entirely different from theirs.

  2. Kleiman’s error: drugs don’t cause addiction. I can drink all the whiskey I like, it will never cause me problems. An alcoholic can’t have one drink! Alcohol is not the cause! Allowing greater access will have no effect on rates of addiction.

    • It appears that you consider addiction as something strictly inherent to the individual. That the chemical effects of drugs are not causing addiction. Simply put, that anyone can take heroin and only a few will get addicted.

      Correct me if I’m misunderstanding your comment, but if I’m not mistaken then: this is pure bullshit and there’s a load of scientific evidence that will demonstrate that some drugs cause addiction.

      Your example with whiskey, or alcohol in general, is not relevant: not all drugs have the same propensity to addiction.

  3. If Kleiman’s theory is correct, then increasing the price on addictive substances is an immoral tax on mental illness. We should make drugs as cheap and available as possible and treat mental illness with healthcare, not financial punishment.

  4. Many false assumptions in this article. Cannabis is much safer than alcohol, and it should be promoted as such. Encouraging people to switch from alcohol to cannabis is a responsible choice. So cannabis needs to be advertised so it can properly compete with the more dangerous substances.

    Also, defining all regular cannabis users as problem users is wildly incorrect. Considering the wide-ranging benefits of medical cannabis, many if not most of the daily users are likely suffering from an ailment, diagnosed or not.

    Legal cannabis needs to be cheap, plentiful and high-quality, in order to compete with alcohol and maximize the benefits of this plant. Anything else is simply a continuation of prohibition, but under a different name.

    • Many users drink and smoke, then their blasted. With this legalization this will happen much more often. You think the police are in your face now when driving, wait till they legalize the crap and see what happens.

  5. That may be a ‘medical marijuana dispensary’ somewhere but it’s populated with a number of un-professional ingestion devices called ‘bongs’ and it looks like the proprietor is related to Uncle Creepy – or is badly in need of a mani- (perhaps pedi-) cure.

    And, by the way, that isn’t “a bag of marijuana”, it’s three bags of marijuana.

    If we’re going to have this discussion let’s not do it stoned?

    • I found this article very interesting.
      I do volunteer work at an addiction treatment centre and there is a growing number of clients who come for treatment for marijuana addiction. Their reasons they give for seeking treatment: spending an inordinate amount of their income on pot; concerns that they might injure or kill someone while high on pot while driving a vehicle; becoming lethargic about almost everything; and, in some cases, becoming severely paranoid.
      19% of the general population is prone to addiction and about half of those become addicted to drugs and/or alcohol. If you believe, as I do, that there is a segment of the general population who will not touch marijuana if it is illegal but will if it isn’t, about 10% of those users will become addicted and add to a serious issue we already experience.
      Assuming the government proceeds with legalizing marijuana, I believe it is paramount that they develop a standard for impairment such as the 0.08 which exists for alcohol. That has removed subjectivity for a DUI related to alcohol by involved law enforcement officers and the same is needed for marijuana.
      The idea of monthly purchase quotas is interesting. However, if this was done for marijuana one would think the same should be done for alcohol.
      Last, I hope the government does put an extremely high tax on marijuana for recreational use if it becomes legal-good for government coffers and good to reduce consumption.

    • Hi,

      There are many marijuana dispensaries, in different places, and very few of them are combined with “head shops”; at least in Vancouver at this time. Head shops are stand alone: They have a different and much less expensive business licence.

      I don’t understand the idea of a “professional” marijuana user; although it sounds interesting. Getting paid to get high? All day every day? The line up for that job application would probably extend well down the street.

      Although I don’t know for sure (I don’t even know how to roll a joint) I think you’re talking about an inhalation device, and quite frankly, take your pick. There are many different styles and types including the bong you mention. From what I understand the safest inhalation devices are vaporizers.

      Regarding ingestion devices, that sounds like, “put that brownie, cookie, muffin or “treat”, in in your mouth; chew it, and swallow.”

      It seems the only accurate thing about your post is that you can see that there were three bags; so good for you.

      Mr. Brian Leslie Engler

      • this comment was posted accidentally before it was properly edited.

        • this reply is to “Whatmeworry” and was posted accidentally

    • Hi,

      There are many marijuana dispensaries, in different places, and very few of them are combined with “head shops”; at least in Vancouver at this time. Head shops are typically stand alone from any kind of dispensary: They have a different and much less expensive business licence.

      So, my take on it is that a very clever somebody (whose hand you don’t like and who’s face we can’t even see) walked into a headshop with three baggies; may have taken a “selfie” of his hand knowing the bongs were in the background; turned around and walked out. Sure, its misleading and you bought it hook line and sinker.

      I don’t understand the idea of a “professional” marijuana user; although it sounds interesting. Getting paid to get high? All day every day? The line up for that job application would probably extend well down the street.

      Although I don’t know for sure (I don’t even know how to roll a joint) I think you’re talking about an inhalation device, and quite frankly, take your pick. There are many different styles and types including the bong(s) you mention which appear blurred in the background of the picture. From what I understand the safest inhalation devices are vaporizers.

      Regarding ingestion devices, that sounds like, “Put that brownie, cookie, muffin or “treat”, in your mouth; take a bite, chew it, and swallow.”

      It seems the only accurate thing about your post is that you can see that the hand in the foreground is holding three baggies; so good for you.

      Mr. Brian Leslie Engler

  6. We’ve seen how this works in Ontario with alternative energy.

    The friends of the Liberals, particularly Bay Street financiers, get rich on sweetheart deals, and everyone else pays.

  7. The licensed producers under the MMPR sell at similar prices to the black market and are forbidden from advertising. So much for the author’s theory that cannabis needs to be controlled from seed to sale by a government monopoly. Unlike American businesses, Canadian businesses have no right to free speech (advertizing).

    Cannabis potency is not the problem. In fact, the more potent the cannabis, the less is consumed. Smoking one dab is not as bad for one’s lungs as smoking two joints of schwag. The problem is strains which are high in THC but low in CBD, the sort of strains that black marketeers prefer to grow.

    Lower prices *might* encourage chronic consumers (less than 5 per cent of consumers) who are short of cash, and disinclined to grow their own, to consume more. However, lower prices will be more effective at undermining the black market, and lower the stakes and profits for the cannabis industry, and thus their ability to lobby and incentives to attract chronic consumers. The parsley industry is relatively benign, in part, because parsley is cheap.

    • Hi;

      Regarding the black market: If marijuana is legalized and regulated, the black market will cease to exist along with its beneficiaries. When legal marijuana producers no longer need to fear having their equipment and assets confiscated (proceeds of crime) or face criminal charges (production, trafficking) this gives them a huge competitive advantage over the “racketeers”.

      This does not necessarily mean that there won’t be any racketeers. It does mean that the racketeers would need to sell at higher prices to mitigate their risk of loss, making them completely financially uncompetitive in the long run, especially if they are in jail.

      Mr. Brian Leslie Engler

  8. Decriminalize it will be sufficient and have it available as a medical treatment.

  9. Doesn’t this idea seem fair? Tax and regulate ALL VICES at a rate commensurate to their actual fiscal impact on society.

    Example: Add up the impact that alcohol consumption and abuse has on rescue personnel, police and jails, social services, hospital services, and general government support services. Once we have this amount quantified simply apply a tax on all booze sales at a rate sufficient to cover the damage it does to society as a whole. Apply this same logic to all vices. If there is a negative impact on society from vice consumption then let the sales of that vice carry the freight in tax.

    In the final analysis I believe we will find the impact from cannabis consumption (with not a single overdose death in all medical history and virtually no history of traffic issues) to be relatively low by comparison to serial killers like alcohol, tobacco and pharmaceutical drugs which directly kill over 650,000 people annually in the USA.

    Legalize it, regulate it, TAX it!

      • You are confounding correlation (a very weak one at that) with causation. Marijuana-related* deaths increased, however total traffic fatalities have not increased, indicating that marijuana is probably not the cause of these deaths, but rather they had thc metabolites in the blood at the moment of death, so they included it as a “marijuana-related” fatality. Marijuana can be detected for up to 30 days in the body after last use – it certainely doesn’t mean that a person is impaired if such a metabolite is found in blood or urine.

        • From working at an addiction treatment centre all I can say is that ANYTHING which causes addiction, including misused addictive medications, alcohol, cigarettes and cannabis is not a
          good thing and should be very carefully regulated and managed and, if legally allowed, very heavily taxed to reduce usage.

  10. The author plays a very loose game when it comes to facts, for example…”Even at today’s illicit price, cannabis is a remarkably cheap intoxicant: something like a dollar per hour of intoxication, which makes it cheaper than beer.” Where did this estimate come from? Did Mark Kleiman simply just read articles on the internet or did he do any legwork in gathering together this compilation of myth based evidence?

    • Hi; In my neck of the woods (Vancouver) medical marijuana sells for between $8.00 – $12/14per gram, with most prices being $10.00 per gram. From personal conversation with responsible users who actually weigh their dosages, 1/10 of a gram of “stuff” is good for two – four hours depending on quality. So, if 1/10 of a gram costs $1.00 and can last for 2 – 4 hours, there goes your myth.

      If one is a recreational user even at $14.00 per gram, it is still cheaper than say a pint of beer at $5.00 a pint, if you can get a pint at that price.

      Best wishes and best regards,

      Mr. Brian Leslie Engler

  11. To put it bluntly; what the f@#k is “marijuana use disorder” and why is this the first time I have heard of it? Furthermore, why did Maclean’s editors decide to let the authors of this piece toss the phrase around with no in-article definition? I don’t consider ‘increased problem use’ to really be appropriate for what the authors protray as a medical definition. Is this terminology widespread and defined in any prominent journals/textbooks?

    But I guess Macleans was at the forfront of getting weed banned in Canada to begin with so I guess they’re standing with tradition?

    • Hi Hunkydory, and I sure hope that this is posted correctly.

      That’s the superstition part: Nobody knows what it means but it sure sounds good. It makes it sound like the authors have actually done some research and know what they are talking about. But they are playing on people’s irrational fears and their ignorance.

      In practice it probably means that anyone who uses marijuana is (mentally) disordered. . . . that devil weed!

      Notice that the word “addiction” is not used in the article. An addiction – like any disease – can actually be medically diagnosed and treated. People can and do recover from addictions.

      Noting the last sentence: “But if we’re not careful, it will be.”; “increased problem use” means any use at all, as it appears that the authors’ agenda is that any use at all will cause health problems.

      By the way, I always enjoy reading articles that propound the right way or wrong way to do anything; like the author is some kind of moral authority.

      By invoking the moral high ground they have already lost it.
      Then it is just a question of pointing our their errors (lack of morals) in this case.

      Best wishes and best regards,

      Mr.Brian Leslie Engler

    • I agree. What a bunch of bullshit. How about narrow minded disorder?

  12. Why would we treat the cannabis industry any different than we have the Canadian wine industry? We could have growers giving tours with tastings and big exports. This has the earmarks of a big industry for us. BC Gold and other fine products are well known commodities. Are we going to be hypocrites and pretend that cigarettes and booze are okay to sell widespread but we really need to monitor those cannabis sales? Hello??? People are making bear and wine using kits at home. That is okay but they can’t grow their own pot plants? How ridiculous.

    • Sorry for the typo…we do have big game hunting…bear vs. beer….

  13. Keep in mind marijuana is very easy to grow compared with as an example the machinery, time and distilling process needed for 12 year old scotch. So a high tax regime will probably cause many people to grow it and sell or give it away in a unrestricted manner. Also I also don’t think people would be comfortable with marijuana and alcohol sold in a same location. These dispensaries would be better handled by the private sector with the usual fines and punishments for serving under age. All things considered setting up a regulatory framework for this should not be too difficult.

  14. Keeping prices high, like they are in the dispensaries is not a good idea. As someone who smokes I will go to where I can get the best value. I find that I can get good weed for cheaper from a dealer. It’s just like cigarettes. Black market smokes are a third of the price. High prices create an underground economy.

  15. So Maclean’s advocates for the continuation of prohibition in a different form. Any time you restrict access to something you have prohibition. The people of Canada voted for legalization, no less. We are not children and do not wish to be treated as such. We must push for the right to grow your own. Only then will it be truly legal and readily accessible for all adults that want or need it. This plant is of great value to all who would choose to enjoy it. It is a great stress reliever and a good alternative to alcohol. We are only now really beginning to realize the enormous medical potential overall. The leaves are full of cannabinoids and many other beneficial components that could be used for juicing. This plant was put on this planet for the benefit of mankind and there should be no government restrictions placed on our ability to access it as easily as possible. That is our basic, constitutional, human right.

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