Federal Legalization of Cannabis in the US Could Do More Harm Than Good?

The country-wide legalization of the substance could prove disruptive to the nascent sector in the ‘green’ states
27 September 2021
2 min read
Federal Legalization of Cannabis in the US Could Do More Harm Than Good?

While legislators are considering two bills that would end the decades-long prohibition of cannabis in the United States, it’s unwelcome news for some of the stakeholders. There is traditional opposition to the reform from many police organizations, as well as healthcare professionals. But even some cannabusiness owners in the states that have already created a legal cannabis market feel uneasiness.

The two main concerns that opponents traditionally voice are the impact of legalization on public health and the situation with the crime. And now a third issue seems to emerge — of whether the existing cannabis markets won’t go under as soon as interstate commerce is allowed and big corporations take over.

Cannabis Legalization and Crime Statistics

The art of cherry-picking data has long allowed both the advocates of the reform and those who think marijuana is a dangerous drug to find evidence to support their stance. However, the dispassionate analysis shows that the passing of legalization laws hardly affects crime rates at all.

Thus, the Cato Institute, found that in the eight years since Colorado and Washington state were the first to legalize cannabis in 2012, crime rates in these and other states remained practically the same. Some saw a slight decrease, others an increase, but there was no correlation with cannabis legality.

Road traffic safety seems to be another matter altogether since the number of fatal crashes where the drivers had THC in their systems showed an increase both shortly before the legalization and after it. However, the critics point out that a positive test doesn’t necessarily mean impairment because cannabis metabolites are traceable in the body for at least several days after consumption. And much longer in heavy users.

Nevertheless, the impact of cannabis on traffic safety remains a contentious issue and a part of every debate.

Small Businesses Feel Threatened

An unexpected opposition to the lifting of federal prohibition comes from cannabis entrepreneurs who operate in the ‘green’ states. They are accustomed to the environment where interstate commerce is prohibited and there is no nationwide competition.

Understandably, some states, like California or Oregon, would benefit from the opportunity to sell their product all over the country because their climate and lax regulations give local producers a competitive edge. Oregon has even amended its laws in such a way that local businesses will be ready to go national the same day as the federal ban is lifted.

But the neighboring Washington state or Alaska fear that cheaper products from other states will put the local growers out of business. Colorado has similar fears, and the state authorities decided to allow more outdoor cultivation to make the in-state cannabis industry more competitive.

Interestingly, the black market players had similar concerns when states were first mulling over the possibility of legalization. There were reports that street dealers consistently voted against any such measures. Nevertheless, their fears are yet to materialize as the legal market and the black market seem to coexist quite peacefully. At least, so far.

And those stakeholders who feel threatened by the prospects of cheaper products and bigger firms coming from the neighboring states should think about what global legalization would mean for their business. If or when it happens, there would be dozens of countries with better climates, cheaper workforce, and lower taxes than any state in the US.

Competition is good, even if it means that there are losers as well as winners. We have to accept this and also embrace the fact that disruptive technologies and policies emerge all the time now. We can try to slow them down with restrictions and regulations, but at the end of the day, progress always wins.

 

27 September 2021
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