Tossing off some thoughts in advance of the North Carolina Advisory Council on Cannabis Market Structure Subcommittee meeting.
I’m all for state monopoly retailing for cannabis, as noted below.
But I’ll start with possible objections:
Old time marijuana consumers distrust government and will stay with the black market rather than buy from a government store.
Revenue for the administrative infrastructure comes in late long after much work is needed
Government enterprise is not flexible and will have trouble competing with the black market
Not for Paul – Canadian experience won’t help:
Sales are federally illegal
Incumbent retailers are politically powerful and won’t let North Carolina do it
It doesn’t eliminate the need to pick growers and producers somehow and with great difficulty, unless we adopt the Cherokee model of seed to sail vertical inter integration and a government entity
++++
Here are some arguments for it:
- Public Health & Safety: A state-run system ensures uniform testing for heavy metals, pesticides, and accurate THC dosing. It eliminates the risk of “gas station” products that may be mislabeled or contaminated.
- Revenue Generation: Much like the ABC stores, a state monopoly would allow North Carolina to capture 100% of the retail markup. These funds can be earmarked for state priorities like education, infrastructure, or addiction recovery programs.
- Strict Age Verification: State-run stores are typically more consistent in enforcing age limits (21+) compared to thousands of independent smoke shops or convenience stores.
- Limiting Promotion: A monopoly model limits the number of retail locations and allows the state to strictly control packaging (no “candy-like” branding) and advertising.
Also, government retailing can adjust prices nimbly to compete with the black market; taxes are hard to change.
And there’s a one-way ratchet: It’s easy to switch from government retailing to private; it’s very hard to shut down existing private state-approve licensees.
The Center for New Revenue 