November 4, 2015 9:31AM

Ohio’s Issue 3: The Runt of the Marijuana Crop

By nearly a 2 to 1 margin, Ohio's Issue 3 has failed. It may be just as well. Jacob Sullum writes at Reason:

[I]t's not clear whether the rejection of Issue 3 reflects general resistance to legalization or opposition to the initiative's most controversial feature: a cannabis cultivation cartel that would have limited commercial production to 10 sites controlled by the initiative's financial backers. The ballot description highlighted that aspect of the initiative, saying Issue 3 "grants a monopoly for the commercial production and sale of marijuana for recreational and medicinal purposes" and would "endow exclusive rights for commercial marijuana growth, cultivation, and extraction to self-designated landowners who own ten predetermined parcels of land."

This is nothing like the model that prevailed in Colorado, and that seems to be working well so far.

Establishing a permanent commercial pot cartel has no clear public policy rationale. It appears rather to have been an instance of shameless self-dealing by individuals who hoped to extract rents based on the public's anxiety about change. Even – and I don't say this lightly – even a state monopoly on commercial sales might have been better, in that the rents would have gone to a public purpose, rather than to some well-connected speculators, who ought not to profit from a law written specifically to favor them. Indeed, such laws are not properly called laws at all; they are privileges – private laws, rather than public ones, and as such they come under grave suspicion.

The problem, then, is not corporatization. Love it or hate it, we're neck deep in corporatization already. Few would object to it now, I would think, particularly given that Issue 3's backers did (grudgingly) relent and allow personal cultivation. The trouble is not corporatization; it's when only a self-selected handful of corporations even get a chance to enter the market, and when all others are excluded by law forever, presumably by means of the same awful Drug War apparatus we've always known.

What should a legal marijuana market look like? It's a little early to tell. Colorado's experiment is still developing, and its market may not yet be mature. What's called for is flexibility in business design, as well as rapid response by state governments to any genuine problems that might arise. (Will they? Maybe!) We don't really know what consumers are going to want yet, including whether that may vary regionally or over time, and what negative externalities their choices might or might not produce. Establishing a cartel would have been exactly the wrong move.