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Want to Learn Why You are Concerned About a Marijuana Oligopoly? Right this way….

This is a post about marijuana, corporate greed and the definition of an oligopoly, because you need to know at least two of the three.

If you believe the sweeping reforms across Canada and the United States that are resulting in legalization of weed are solely because your government is interested in personal freedoms, you are extremely naïve.  This is as much about satisfying corporate interests as it is giving freedom to the people.   It is only a matter of time until legalization is wide spread and, while the armies of weed smokers will rejoice with their new found freedoms, this is not just about them.  It is also about the corporations who will look to manipulate the government to give themselves advantages that maximize their profits.

There is a vote in Ohio tomorrow to allow the legalization of marijuana for personal consumption, including provisions that allow people to grow their own small quantity. The organization behind the initiative is called ResponsibleOhio.  The initiative is called Yes on 3, representing its place on the ballot.  – Side note for my Canadian friends.  In the US elections the ballots can include other things than just the government representative you are voting for.  When you vote you don’t just pick a person but also select a position on several initiatives that have garnered enough support to be on the ballot – ResponsibleOhio’s website makes the pitch for why their initiative should pass. It includes plans for taxation and restrictions on consumption in public.  On the surface it appears that it is an plan “by the people for the people” and the website uses the word “FREEDOM” (in my head I say that like Mel Gibson at the end of Braveheart) and talks about the business opportunities that will arise and the tax income it will generate.  So what can be wrong with that?

Legalized Weed? Sounds acceptable. What’s the rub?

Getting an initiative on the ballot does not, in itself, require government support.  It only needs enough support from the people.  So if you get the required signatures you can have anything on the ballot even if it doesn’t have a legislative backing behind it. It is basically a way to get the government to consider a law (or amendment to the law or the constituion) to support the cause you are putting forward.  Ultimately, if an initiative passes, the government has to shape the laws that go around it. The expectation is, if Initiative 3 passes, the State of Ohio will craft legislation that legalizes marijuana based on the conditions voted on by the people.

In so many ways ResponsibleOhio has tried to represent itself as looking out for the people of Ohio.  Even the name suggests that this is just a common sense plan to legalize marijuana. Increased tax income, controlled supply, legalization of something that people already accept.  Why not support it?  Perhaps, if this was something that was created by the people to support the people, it would make sense.  As you can guess, it is not.  It is an organization that is created by a bunch of rich speculators to create a market condition that furthers their own business interest.

The backers behind Initiative 3 are not a collective uprising of the dope smoking public. They are a group of savvy investors that have decided to get into the for-legal-drug-profit business and want to create a market condition that is supported by the public but is intend to maximize their profits by limiting the number of companies that are allowed to legally supply marijuana in Ohio.  Of course limiting the number of companies that are allowed to supply means that they will be able to work in a limitedly competitive market.

Specifically, Initiative 3 limits the number of suppliers to 10 and explicitly states the parcels of land that it can be grown on. Would you be surprised that those same parcels of land are owned by the people that created and promote Initiative 3? Would it surprise you that these investors are colluding to ensure that only they can profit and, no matter how much demand grows, they are the only ones allowed by law to provide weed?  You shouldn’t be.

So, What the Eff is an Oligopoly?

What the backers of ResponsibleOhio are looking to create is an oligopoly.  We all know what a monopoly is.  One seller, many buyers. As it turns out there are other “-opolies” type things you need to know.

  • One buyer, several sellers – Monopsony.  This would exist if you are building a house and you have several bidders competing for your business
  • Few buyers, several sellers – Oligopsony. Kind of like the monopsony but a few more buyers.
  • Few sellers, several buyers – Oligopoly.  This is the market condition being proposed by ResponsibleOhio.  Creating a market where the are only a select number of companies allowed to supply and a massive market they are providing to.

There are situations where oligopolies actually make sense.  Consider smartphone providers.  You have a few billion people wanting a phone and only a handful of companies that manufacture them.  Anyone who can capture a large market share can control the price and generate huge profits. In this case the companies compete with each other to stay ahead with innovation and marketing to entice the public to buy their product.  They have to stay on top of the market or they will lose their place (remember when Nokia and Blackberry were invincible?  They actually weren’t.)

The problem with ResponsibleOhio’s proposal is that the need to drive innovation does not exist with marijuana.  This is a product literally anyone who has the ability to care for a plant can produce.  From the public’s perspective there is no advantage to having a oligopoly. With a product like weed what benefit does the general public get from limiting the number of suppliers? By contrast the benefit would be from as many government sanctioned and monitored companies as possible.  More competition means lower prices. What ResponsibleOhio wants with Yes on 3 is to create the illusion of being a publically supported plan and for everyone to ride the wave of legalization, all the while getting legislation approved that ensures that they profit at the cost of the people that they pretended they supported in the first place.

Corporatizing is Inevitable Because We Are Lazy 

Let’s be frank about how lazy we are. Corporations own our other bad habits.  If you smoke, drink or eat food you give the majority of your pay cheque to people who provide you a product that you could produce yourself if you put the effort into it.  If you had the time and ambition you could grow your own food, brew/distill your own booze and nurture your own tobacco plants.  Normal tobacco and alcohol laws limit the amount that you can produce to dissuade you from selling it. But by most laws you should never run out of these things if you create your own.

Of course we don’t do that.  We are too busy or too lazy to do that. We are satisfied with the quality and convenience that we get from going to a local store to buy things ready made for us.  Therefore we have granted the corporations that produce these products the right to profit by providing us with these things. We have, in essence, allowed these companies to create a oligopoly the way that the smartphone companies have.  That is our sloth that has allowed them to profit.

Ultimately, the same will happen with weed.  It is only a matter of time until it is fully legalized and readily available. That is when we will allow the corporations to take control.

So If It’s Inevitable Why Do We Care?

I think the Buckeyes have this covered. The issue of the source and motivation behind Initiative 3 has been exposed and another competing initiative has been proposed to deny ResponsibleOhio their mandated oligopoly. The uphill battle the other initiative faces is the perception that they are fighting the legalization of marijuana, when in fact they are trying to stop it from being controlled by the corporations.

For everyone else outside of Ohio the issue they are facing with Initiative 3 presents an interesting challenge that all other jurisdictions will have to confront going forward.  The marijuana supply will ultimately belong to the corporations because that is the nature of society and consumerism; we will ultimately hand over control to them on our terms.  However, we collectively have to fight for the freedoms that are supposed to be at the heart of this change. Stop the corporate interference that is intended only to benefit them under the disguise of being for the people.   If they are truly legalizing weed because it should be a right of the people then make the laws such that it grants those rights.


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This entry was posted on November 2, 2015 by in Marijuana, Rants and tagged , , , , .
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