What Happens to Medical Marijuana in a Legalized Nation?
This election, we have five states that are medical marijuana states voting on marijuana legalization. What will happen to their medical marijuana programs if legalization passes?
For guidance, we can look to the first four states to legalize (and DC), which are also medical marijuana states.
Alaska and DC hadn’t much of a medical marijuana program to affect.
Colorado seems to have had little disturbance as it runs two parallel systems of medical and recreational marijuana markets, even to the point of a single building serving only medical customers on one side and only recreational customers on the other, from completely separate inventories of mostly the same products.
Oregon has experienced some cutbacks on the largest-sized medical gardens and imposition of new reporting requirements, as the state maintains two regulatory agencies but has somewhat merged the retail sales of cannabis products.
Washington has fared the worst, with severe reductions in patient cultivation and possession limits and a forced integration of the medical and recreational market into one regulatory system.
Unfortunately for reformers, the Washington example of single-market integration is going to be the one economics and politics eventually forces upon the other medical marijuana states that legalize.
GreenWave Advisors recently released a report on the future of the marijuana market that makes this logical conclusion:
“We note the beginning of what we characterize as a marijuana market metamorphosis as states with both legalized medical and recreational use evaluate the practicality of a merged regulatory regime. We see this effort presently in Washington, Oregon and Alaska and expect that Colorado will soon follow….
“Should California vote to legalize recreational use this November, we expect implementation of a combined regulated market as soon as 2018. A combined California market is significant, not only because of its sheer size (~55% of the U.S. market), but also it would mark the first state to implement regulations for a fully legal market without initial oversight of medical use purchases. This could serve as a catalyst for similar action in Nevada, Arizona, Massachusetts and Maine.”
But as more states legalize, any need to keep medical and recreational programs separate will begin to fade.
The reason medical marijuana even exists in the first place is in opposition to the prohibition on marijuana for everyone. Marijuana smokers and cannabis growers get searched, ticketed, fined, arrested, and imprisoned, so we created medical marijuana laws to provide the patients with an exception to arrest. In legal states, we only keep the separate regulations because limits for recreational consumers must be kept low enough to discourage diversion into illegal markets out-of-state, while patients need far more cannabis.
But if we were to cease searching, ticketing, fining, arresting, and imprisoning all cannabis consumers nationwide, then what would be the need for separate regulations and markets for the ones who are sick?
Medical marijuana is going to be impacted by legalization, no matter how the legalization is written, because legalization begins to undermine the entire purpose of having a medical marijuana law in the first place – protecting patients and their providers from cops.
If advocates for medical use of whole-plant cannabis want to ensure the best policies for patients, it’s time, then, to adjust to the reality that state governments are not going to support duplicate bureaucracies to regulate the same plant for two different classes of consumers. With legalization, all use of cannabis will be personal use, but medical needs will be met by “medically-endorsed” providers and patients will be granted greater possession and cultivation rights.
Eventually, in a fully-legalized nation, there is no worry about out-of-state diversion, aside from extreme tax differences that make smuggling profitable. Tobacco’s a prime example, where the low taxes in Virginia and North Carolina lead to vanloads of cigarette cartons being sold illegally to undercut the high taxes in Manhattan. But alcohol doesn’t seem to be smuggled much, even though Washington has taxes over $35 a gallon and Colorado’s taxes are a little about $2 a gallon.
With no overwhelming need to prevent diversion, what’s the point in mandating marijuana possession limits? RAND Corporation estimated that fully legal marijuana in California alone could be priced as low as $38 an ounce. Fully legal marijuana nationwide should drive the prices down to a few dollars per pound. At those prices, trying to sell off ounces is uneconomical as smuggling those six packs of Corona. So who would care if you were possessing enough to sell when there’s no market to sell to?
Or if tax-related diversion occurs, like the tobacco example, then there’s an incentive for states to equalize their tax rates.
No matter what we write into regulations to govern medical and recreational marijuana in our states, those regulations are going to change drastically as we evolve from separate states with limited tolerance of cannabis to an entire nation that embraces its hemp heritage.