The profit motive and medical marijuana in North Carolina

Here are comments on North Carolina SB711 sent to Senators on the Health Committee.

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John D. Rockefeller, Jr., was a Baptist teetotaler who opposed alcohol and a Republican businessman who liked the profit motive.  When prohibition was repealed in 1933, Rockefeller didn’t want profit-maximizers retailing liquor.  For health and temperance, he said, let the states themselves sell liquor—and that’s the North Carolina way.  

This bill would let just 10 big companies sell medical cannabis.  If the recreational kind is legalized, those companies will say, “Hooray,” and line up to control the recreational market.  That’s the profit motive.

There’s a more restrictive way than SB711, proven in Canada: Sell medical cannabis only through government retailers—online only, delivered to the patient’s door.  No glitzy storefronts, no marketing to tempt the weak.  No lawsuits claiming cartoons and advertising are protected free speech under the North Carolina Constitution.

Marijuana sellers will say state-run sales are a nonstarter because marijuana is federally illegal, but that’s a diversion.  The federal government simply doesn’t care.  The State of Louisiana has been openly growing and selling marijuana for years – with impunity.  The federal government hasn’t batted an eye.

How about the voters?  In a 2013 North Carolina poll, state marijuana sales beat private sales by 3-to-1.  The full poll with cross-tabs is at https://newtax.files.wordpress.com/2013/03/nc-marijuana-polling-march-2013.pdf.

Sure, if state sales are inept and bureaucratic, the illegal market will step up.  But the kind of licensing proposed in SB711 creates a host of problems.  Medicine will be delayed as folks who didn’t get licenses go to court to protest.  Out-of-state interests will go to court to say the bill’s residence restrictions are unconstitutional.  Winning licensees will go to court to say the bill’s advertising rules improperly restrict free speech under the North Carolina Constitution.  Winning licensees may “flip” valuable licenses for huge sums – and shareholders in winning corporate licensees may “flip” their ownership interests to new shareholders – all for huge windfalls.  And naturally enough, winning licensees will aim to maximize sales and profits.

State sales are no easy answer, but they can be safe, quiet, and restrictive.  The profit motive has its place, but for marijuana, maybe North Carolina can restrict it.

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Thank you for this opportunity, and for listening to me and others.