If a state cannabis monopoly starts doing business and then runs into trouble because of federal illegality, states have considered having a backup commercial system spring into being. I asked Gemini A.I. to remind me of their ideas. Here’s the answer:
In both Pennsylvania and New Hampshire, the debate over a state-run “monopoly” led to the development of a specific “safety valve” or “trigger” mechanism. This plan was designed to automatically switch the state to a private commercial system if the state-run model was struck down in court or deemed a violation of federal law.
The state most associated with this “Plan B” is New Hampshire.
The “Default to Private” Trigger
The core concern for lawmakers was that if the state directly employed people to sell cannabis, those employees could be prosecuted by the federal government for drug trafficking. To mitigate this risk, legislation (specifically HB 1633) included a unique contingency:
- Phase 1 (The Franchise Model): The state would first attempt to run the industry through a “Franchise Model.” The New Hampshire Liquor Commission would act as the franchisor, controlling the branding and prices, but private “franchisees” would handle the actual product and sales.
- The Legal Challenge: Lawmakers knew this might be challenged as “preempted” by federal law (specifically the Controlled Substances Act) because the state would be too deeply involved in the commerce of a Schedule I drug.
- The “Plan B” Trigger: The bill contained a “severability” or “contingency” clause. If a court ruled that the state-run franchise model was unconstitutional or illegal, the law wouldn’t just vanish. Instead, it would automatically trigger a transition to a standard commercial licensing model, similar to Vermont or Massachusetts, where private businesses are simply licensed and taxed by the state.
Pennsylvania’s Version
In Pennsylvania, the discussion surrounding HB 1200 followed a similar logic. While the bill proposed a monopoly run by the Pennsylvania Liquor Control Board (PLCB), critics and some proponents discussed an “agency” backup:
- The Agency Model: If the state could not legally own the stores, it would pivot to an “Agency Store” model (used in some rural parts of the state for liquor), where private businesses sell the state’s inventory for a commission.
- The “Dual-Use” Fallback: A major point of contention was the “backup” role of existing medical marijuana dispensaries. If the state-store rollout failed or was legally blocked, the “Plan B” was to allow the existing medical infrastructure to immediately begin adult-use sales to ensure the market didn’t collapse or stay underground.
Summary of the “Backup Plan” Logic
| Feature | State Monopoly (Plan A) | Commercial Backup (Plan B) |
| Retailer | State-run or State-franchised stores. | Privately owned dispensaries. |
| Legal Basis | Direct state involvement in drug sales. | State acts only as a regulator/taxer. |
| The Trigger | Implementation of the bill. | A court ruling or federal “cease and desist.” |
| Goal | Maximum state control and revenue. | Legal safety and market continuity. |
The Center for New Revenue 