While Colorado’s regulatory rules have been finalized, although there will be tweaks needed as the market changes and matures, Washington State is still in the research phase, gathering information before the first wave of rules are announced. In addition to the Washington State Liquor Control Commission’s survey of cannabis consumers, the state also has a confidential survey for marijuana growers.
Establishing proper rules and regulations of the cannabis industry may be almost as important as passing legalization measures in the first place. Improper regulations can create a backlash among voters, setting the movement back and erasing decades upon decades of work. Regulatory schemes that are too burdensome so that licensed retailers can’t compete with the prices of underground market dealers can deprive the state of the funding necessary to adequately regulate and monitor the marketplace. Of course, ensuring that licensed and regulated cannabis retailers don’t sell to minors is of the utmost importance.
The Washington Post recently detailed the complications that have arisen in Washington State and the outside forces that can impact the state’s regulatory structure:
It’s important to get these issues right because they interact with the three background constraints on this new market. The first is the black market, while the second is the legal medical marijuana market. For some reason, the medical marijuana market won’t be taxed, while the new legal market will be taxed around 25 percent. (The black market is, of course, not taxed at all.)
Note that if the price goes too high, or if the location restrictions prove too inconvenient, pot consumers might just stick with medical marijuana or the black market. State lawmakers are currently trying to get the medical marijuana market folded under the same regulations that the Liquor Board is creating for the legal pot market, and Mark Kleiman notes that police may need to escalate crackdowns on illegal distribution as they legalize the market.
A third constraint is the federal government, which enforces laws that still make pot illegal. If legalization is seen as a disaster, it is possible that the federal government will move to shut down the process by preempting state law. But even if it doesn’t, background laws will probably hurt the scale and efficiency of pot retailers.
Please pass along the consumer and cultivator surveys. Of course, Washington residents are preferred, but the regulators can use all of the good information and evidence available to help ensure a healthy cannabis industry. A successful cannabis industry in Washington and Colorado may be just as important as the text of future legalization measures and the campaign funds backing them.