Medical Marijuana Money – Making Senate Bill 711 More Cautious

With medical marijuana, there’s a lot of money on the table.  In the first 40 months of medical-only legalization in Maryland, a billion dollars’ worth of medical marijuana has been sold.  Last week, a single medical marijuana license there sold for $8 million. In that light, SB711’s $10,000 annual fee for licenses in the out years seems awfully small.  

Unleashing the power of the free market to innovate — that’s almost always what we want.  But not when it comes to intoxicants.  John D. Rockefeller, Jr., a Baptist teetotaler and a leading prohibitionist, hated alcohol as much as some supporters of SB711 say they hate marijuana intoxication.  But in 1933, he knew prohibition was dying, and urged retail sale of alcohol by states as he warned, “the private profit motive . . . makes inevitable the stimulation of sales.”  

Marijuana sellers should meet demand – not stimulate it.  A state agency won’t use marketing gimmicks, or push the limits on advertising restrictions.  If for-profit sellers are licensed, they can argue that North Carolina’s Constitution allows advertising as commercial free speech – and sue to invalidate any regulation that stands in their way. 

Canada has shown the safest way to legalize medical marijuana – sales by government agencies, for delivery only.  If you want conservative and restrictive, that’s the gold standard.  

State sales produce the most long-run revenue for the state, and they are the only sure way to keep the money in North Carolina.  SB711 says only North Carolina residents can get licenses.  But on June 21, a U.S. District Court in Missouri blocked that state’s resident ownership requirement as unconstitutional.  So SB711 would create lawsuits by wealthy out-of-state interests saying it, too, is unconstitutional – plus lawsuits by disappointed North Carolina license applicants.  

States can sell cannabis even though the drug is federally illegal.  The proof is in the State of Louisiana, which has been openly growing and selling cannabis, via state land-grant universities LSU and HBCU Southern University, for years.  The federal government has looked the other way.  The worst imaginable outcome is that the federal government would say “Cease and Desist” – and even that won’t happen. 

Sure, state sales have actual downsides.  State sales take time and money to set up.  If the state isn’t nimble, the illegal market will step up.  State sales of medical marijuana may convey a seal of approval and give government a vested interest in selling more.  Long-time marijuana advocates don’t trust government to get anything right.  But a state seller can set prices to make medicine affordable – rather than seeking to maximize profits.

One thing’s for sure:  If profit-seekers start retailing marijuana in North Carolina, they’ll never stop.  And they’ll push for more.  

Pat Oglesby, MBA, JD; Founder, The Center for New Revenue, 1830 North Lakeshore Drive, Chapel Hill, NC, 27514; po@newrevenue.org; 919-619-8838.  N.C. Bar License 7944.  Born Kinston, NC, 1947.  Bio at https://newrevenue.org/pat-oglesby-cv-2/.  Links at [here].   July 13, 2021

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