consultants are sandburs

Monday, May 04, 2015

Might conservative drum beaters focus upon private sector vs public sector provision of goods and services per the marijuana industrial complex management effort now happening in Washington State?

First, readers can debate whether there is a "marijuana industrial complex," since so far it has been a cottage industry at retail, given drug laws now changing.

But if there is big money on the table, there will be big players, and there have been reported stories about CIA drug trafficking ties from time to time, so arguably there always were big players, just not at retail.

Most recently, Puerto Rico has joined the legalization move as part of the trend. The beat goes on.

With that preamble, what have conservatives to argue from Washington State's transition from illegal, (but not prosecuted medical marijuana suppliers with a host of them meeting demand and setting pricing according to market forces), to legalization with retail outlets constrained to deal legally with only one official legal grown weed wholesale seller, the Washington State Liquor Control Board, with a lottery allotment process implemented to ration projected retail siting?

When the State runs supply chains, they cannot help but be efficient, right?

This link.

In fairness, the Seattle Times report headlines a "rocky start" to legal pot sales; i.e., without any long term forecast or attention. Yet, it appears the government's will in Washington is to shut down the existing medical marijuana distribution network and market mechanism, with its established market suppliers and consumers, in order to implement the new system not by open access retailing by those who are already experienced retail participants, but by a license quota allotment set by lottery device, to create an outlet-bottlenecked retail market. Surely a lottery approach is favorable to political cronyism in allotment of opportunity, but why demand that retail outlets be scarce instead of plentiful - or at least as plentiful as an unconstrained free market might set an equilibrium level of outlet sites?

Even if that disturbance-of-supply scenario was not intended, the early signs are that it is how it will be. Existing market participants quelled. Absence of a free market. All that, like what, licensing plumbers and doctors, where specialized skill is a factor absent in small scale mom-and-pop retailing.

The appearance is that a few large scale retail outlets might be more easily regulated, with that being the determinative goal. So, do it that way and wedge the mom-and-pop medical pot suppliers away to allow "economies of scale" as a "side effect" of regulatory efficiency consideration. Really. Also, since the medical marijuana suppliers in Seattle went unprosecuted, as tolerated lawbreakers, there seems a mentality at play that lawbreakers should not be rewarded, so stiff them out of the deal and do things - Our Way, Big Brother setting ways and means.

As with the TPP, advocates of doing it the way things are unfolding in Washington's regularized transition from illegality to highly regulated mainstream commerce, officials seem to be saying, "Shut up. Don't complain. We know what is best. What we are proposing, how we'd do it -- It's goooood for you."

BOTTOM LINE: If you are legislating the transitioning from illegal marijuana to legal, what policy and procedural methods are best, and how will that play out in terms of state-to-state differences, and initial transitional uncertainty?

Relevant here but also relevant re TPP (and its trade rule standardization efforts serving to aid mega-size international commerce players by lessening the future sovereignty of individual participating nations to regulate their internal commerce), is the question of whether one prepackaged way of doing things might fail to yield a single necessarily optimal outcome.

Is standardization always the best way to go?

This link, and for the nutshell version, Wikipedia, here. In light of that, if you accept the premises Brandies formulated, Mark Dayton's approach of holding off the decision via one more study has arguable merit. It's his own little laboratory of democracy approach, regardless of how other states might decide; and by who Mark Dayton is in things and by the veto pen he holds, it is how things in Minnesota, short term, shall be done.

In summary from the Seattle reporting, it appears things will be done one way there, with an expectation those already selling will want to continue, licensed for retail operation or not, and the unlicensed segment just might offer consumers a better product/price opportunity than the licensed ones. That would result in either one of two possibilities, stepped up enforcement once licensed outlets are operational; or changing the rules. What's your guess on which way Washington State might move, and what might that presage for other states, Minnesota included?

For those having affection of American Enterprise Institute, this link, to a "laboratories of democracy" exposition of an anti-federalism viewpoint from the far, but not far, far right. From AEI, what else would you expect? Pro-big-government argument? Look elsewhere for that. It is not AEI's sthick.

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