Washington state legalizes and regulates pot. Former Microsoft exec wants to invest. What’s a regulator to do?

Washington state voters have passed an initiative to legalize pot. The federal government still bans it, but there’s apparently enough legal grey area that some big rollers want to become the Starbucks of pot. Local growers aren’t happy about that, and economists are debating whether it’s a good idea too. Turns out that’s a tricky issue.

Mike Konczal has the details:

Unlike Colorado, which has passed a bill to expand its medical marijuana industry and make pot legally available to everyone, Washington is folding pot under regulations for the liquor industry. As such, the Washington Liquor Board has regulatory control over the new marijuana industry.

Hmm. So your move Liquor board. Are you going to restrict the way you dole out licences to give the little guy a chance?

As with the tobacco industry, voters don’t want firms marketing and selling pot to underage users. And public health officials are concerned about companies marketing to “problem users” who would like to quit or reduce their usage but find themselves unable to.

If that’s the case, then perhaps having pot dealers with large market power is a good idea.

So I guess a few near monopolistic big guys might now be so terrible. Except, no wait, Konzal has the counter-arguments on that too. If you let someone make monopolist level profits then they can eventually make so much money that they can pressure regulators to loosen up rules on them, and let them dodge more taxes. This is pretty much what the alcohol industry already does. On top of that, they gain a huge incentive to get people properly addicted, because all those future sales come back to them, not any competitors.

Really, read the whole thing, it’s very well written and thought out.

 

But what about from the consumer perspective? People often say that they want unique local shops, and bemoan the bland uniformity of the soulless corporate omnipresence. They’ll even tell you so, in no uncertain terms, right in between using Starbucks wifi to buy stuff on Amazon, and popping out to stock the fridge at Tesco. We may think that local is a virtue, but if we acted like it then there wouldn’t be enough chains left to be worth bemoaning.

The thing about the big chains is that they get big by getting their customer experience right – from the tidy aesthetic to the surly teenager at the checkout who isn’t paid enough to raise the price of your goods any further. Sure they don’t feel as genuine, but on balance  people vote with their feet in favour of that being a lesser evil.

So from a consumer point of view it may not be exactly what we admit wanting, but it’s what we keep on choosing… which means a lot of us really must want it after all.

 

I have more sympathy for the employees. There is a difference between owning, running, staffing your own project, and getting paid (even the same amount of money) to look after someone else’s. Yes there are lots of people who are happy to take a job, and have someone else provide the structure and make most of the tough choices (I’m one of them – thanks MBS), but there are also lots of people who feel alienated from being just a cog in a big machine, who are perfectly capable, with a little on-the-job experience, of running their own small business. That’s what used to happen to many people as they inherited the family store front, or opened their own shop. You can still do that now, but it’s tougher, as you have to compete against slick corporate competition, and low prices from economically efficient box-store warehouses. There is a reason that high streets are shrinking (not doomed, but shrinking), and it isn’t because the regular people who run them suddenly got stupider or lazier.

But that is a problem that no amount of pot will fix, regulated or otherwise.

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