Here’s a story from NPR about CO’s and WA’s ballot measures to legalize marajuana for recreational use. Seems as if both states are polling as if legalizing pot will pass.

What kinds of people oppose this? Well, one not surprising group that opposes this – the group of opponents prominently featured in the NPR article for both CO and WA – are medical marajuana businesses. Say what? Shouldn’t this group support legalization? After all, they had their own legalization problems a few years ago and now the move is for even more widespread access to their product.

By keeping marajuana illegal in all but a small number of instances – medical instances – those who can legally do so have a massive sell-side advantage. They control all the product and people can only get it from them. There is an artificial – read: caused by an arbitrary law – shortage of producers/suppliers. Of course they don’t want marajuana to become more widespread – their margins will shrink.

As is often (always?) the case with commercial regulation, once a producer wrangles a law that allows them (narrowly interpreted to mean the specific business in question) to sell their product, they try very hard to ensure that nobody else can sell the product. So it is with licensing laws where once finds that existing license holders are loathe to any attempts to reduce or eliminate licensing requirements.

It’s disgusting and it often turns into cronyism because the incentive for the few that have the license to keep the laws strict is very big, but the “pain” for the many others that might want to loosen the law is dispersed. And so it is that big money gets into political campaigns. And it all starts with government having too much control over free trade amongst individuals.

-JD Cross