War on Drugs

Will California Let Marijuana Businesses Grow Big Enough 'to overly influence the regulatory process'?

Remain calm, politicians. All is well.



An unintentionally hilarious progress report from California's Blue Ribbon Commission on Marijuana Policy illustrates the difficulties politicians face as they try to break to harness a product and an industry that has thrived quite nicely without them, thank you. Chaired by Lieutenant Governor Gavin Newsom, the report agonizes over the already well-established and well-accepted trade in marijuana that thrives on the fringes of the allowed medical marijuana business, or else completely under the table. In anticipation of a likely successful 2016 ballot measure to legalize pot for recreational use in emulation of legal changes in Colrado, Washington, and elsewhere, the Commission report discusses regulatory, tax, and legal considerations with all of the gravity of a youthful Kevin Bacon in a ROTC uniform screaming "remain calm" just before disappearing under the feet of a heedless mob.

There's plenty in the report over which to chuckle, but a discussion of how to keep marijuana businesses from growing powerful enough to contend on an equal level with regulators is particularly amusing (to me, anyway). The report acknowledges "It is likely that the current illegal market has many operations at the full range of scale, from small to very large," but then muses over just how large businesses should be allowed to get out in the open.

Keeping marijuana businesses small increases the cost of inspections (due to more numerous sites to be inspected), but also may yield smaller operations which can less easily marshal the resources necessary to overly influence the regulatory process. Allowing large corporate entities makes regulatory inspection easier, but raises risks of regulatory capture.

Oh, so we're going to sculpt the industry to the proper shape, are we? Perhaps the "very large" existing illegal operations will cooperatively downsize so as to avoid accumulating too much political clout.

Keep in mind that Newsom, who now has his eyes on the governor's office, is a wholly owned creature of the teachers unions who lashes out even at fellow Democrats who challenge their malevolent influence over education policy and reform. Those teachers unions somehow gained regulatory capture over California politics without recourse to the "large corporate entities" that so trouble the pol who benefits from organized labor support. Just sayin'.

Elsewhere, the report acknowledges the likelihood that slapping high taxes on pot "can contribute to the continued operation of a large-scale illicit market." Regulations on just who could participate in a newly legalized industry also "could drive some actors into the illicit market."

Overall, the report reads like what it is: An effort by people accustomed to exercising control to get a handle on something that's already largely out of their reach.

Remain calm, Gavin. All is well.