Bad Example: Cannabis Legalization in Ohio is the Monopolist’s Utopia

By on August 16, 2015

by Ezra Van Auken

Since the advocacy group ‘ResponsibleOhio’ handed in enough signatures to push cannabis legalization onto the ballot this November, the state of Ohio will get its first major swing at that sticky green stuff come vote time. The signatures didn’t come easy though, but the cannabis-centered policy group gathered a total of 320,000 signatures – putting them 15,000 more over the required 305,000 mark – a good sign for the marijuana movement in the mid-west.

Secretary of State Jon Husted confirmed Wednesday that ResponsibleOhio’s proposal will be drawn into a constitutional amendment for a statewide vote. Notably the most important section to ‘Issue 3’ would be the permitted legal right to adults, 21 and older, for buying, growing and most importantly, smoking cannabis. Here’s where the sticky part tri-comes into play, and by that I do not mean the buds part. Aside from private consumption, the ‘first’ legal commercial cannabis industry has issues.

The framers of ResponsibleOhio have created what outside advocates believe is a monopoly on the market of pot. Instead of passing an amendment that would authorize the dismissal of state action on cannabis, the advocacy group is pushing an amendment that would do the opposite. If passed, only ten state-licensed cannabis grow sites would be allowed in Ohio. ‘Coincidentally’ those ten individual sites will be owned by the investors of ResponsibleOhio – a oligopoly-monopolist move to cut cords with competition.

Don’t count out the taxes though, ResponsibleOhio’s plan would implement a 15% tax on cannabis sales among the monopoly group. In other words, today’s ending of the prohibition era and apparent win for ‘personal freedom’ comes with the expense of state-mandated businesses, a truly fascist invention, as well as increased taxation of pot sales. The future cartels of cannabis aren’t the drug lords of the south, they are the state-licensed businesses…thanks to the end of state-enforced prohibition.

Perhaps a picture of a snake eating itself would be a better understanding of the picture I am trying to create. When The State Weekly interviewed the spokesperson for ResponsibleOhio about the issue of state monopoly, the spokeswoman told TSW that they understand concerns, which is why they decided ten companies would be created as opposed to one. Cleveland.com reports, “The location of each indoor grow facility would be part of the Ohio Constitution if the issue passes.” According to ResponsibleOhio, the move to create more than one invested company will deflect any issue of monopolist price corruption or robbery.

RO’s spokesperson told TSW that the marijuana board council will also adjust its number of operating businesses and other controls based on the market’s demand. Speculations run though as ‘monopoly’ comes with a sense of incentive for the permitted kings to remain in control of commercial revenue. However, there’s no reason to feel worry, that’s what ResponsibleOhio said at least.

On one end of the bargain you have the ability to smoke a plant now without fear of being caged for it – so as long as you buy from a state-permitted seller or grow it state-properly yourself; on the other end you reduce the cannabis market to a new monopoly instead of eliminating the state entirely, which could prove to be a negative effect as we’ve seen in Colorado. Monopoly prices inflate costs, and create a black market for less expensive, ‘illegal’ cannabis sellers.

And as the spokesperson admitted to TSW, there will always be a black market as long as there is state intervention on the market – in any form. That has been the case in Colorado as well since the state legalization and regulation of cannabis. Denver’s CBS reported in May that ‘illegal’ cannabis sellers in the Four Corner state have moved from conventional selling to online markets. The black market sellers are using websites like Craigslist to advertise their delivery service, except there is a twist to the money exchange.

Instead of directly exchanging money for cannabis, the buyer is making a ‘cash donation’ to the seller, and then the seller trades the product over – an odd twist, but it doesn’t make the offense not ‘illegal’. The CBS affiliate reported that it was able to make trades with three illegal sellers in three hours. Black market growth in Colorado is increasing, and the blame is being placed on the taxation-regulation side which is forcing businesses to eat the price, or at least give the plate to the customers. 

The state of Washington isn’t much different either.

Writing in the Associated Press, Gene Johnson explains, “In Washington, the black market has exploded since voters legalized marijuana in 2012, with scores of legally dubious medical dispensaries opening and some pot delivery services brazenly advertising that they sell outside the legal system. In January 2015, there were over three-hundred illegal cannabis businesses in Seattle which were being sent letters of warning on getting a license or being forced to shut down. The AP also noted that the city of Tacoma was undergoing the closure of non-state licensed cannabis businesses.

So while logic has it that legalization of cannabis will end the Cannabis-Drug War, resulting in the end of the black market, it would seem that to be inaccurate when describing what is playing out in states like Washington and Colorado – where ‘illegal’ cannabis services like delivery pull-up and online transaction are flourishing. This shouldn’t come as surprise though, because as long as the state has forcible oversight on pot, the room for black markets will always exist.

And beside the economic consequence of the black market, the other issue is monopoly, which is what is taking place, especially in Ohio with the latest ballot push. Another Ohio ballot initiative is trying to put a seal on that monopoly power, that initiative is ‘Issue 2’. Cleveland.com wrote, Issue 2 would require future amendments that propose monopolies or oligopolies to be posed as two questions on the same ballot – first, to suspend the monopoly rules and second, to approve the measure.

While human freedom is trying to remain faithful to cannabis, it is stumbling at the marble footsteps on City Hall. At least now the cannabis producer-consumer can smoke in peace, knowing the state will not be kicking down their door; just don’t break the ‘law’ of selling ‘illegal’ pot or buying ‘illegal’ pot – oh, here we go again.

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