How the Profit Motive is Killing Marijuana Home Grow Rights

I happened upon this story on my local FOX channel here in Portland about recreational marijuana sellers complaining about losing customers to the “black market.” A local shop owner says there’s “tens of millions [of dollars]” of marijuana sales happening in the unregulated market that are hurting the bottom line of shops like his.

Naturally, the story gets around to placing a large share of the blame on “medical marijuana card holders, who end up with extra product, and are willing to part with it for a nominal fee.”

“I think it’s a well-agreed to assumption that a lot of illegal product that’s diverted from the Oregon market is coming from the medical side,” said Mark Pettinger, a spokesman for the Oregon Liquor Control Commission, which regulates the sale of recreational marijuana.

I wonder how anybody didn’t see that coming.

They talk about the “medical side” and the “recreational side,” as if these were separate and distinct markets. They’re not. Marijuana is fungible. To paraphrase the Bard, “What’s in a name? that which we call a bud by any other name would smell as sweet.” I, as a non-medical consumer, will get just as much satisfaction, if not more, from smoking a medical bud as I do smoking a recreational bud.

So, we began by allowing the sick and disabled people the right to cultivate 3 mature plants, which we increased to 6 mature plants, which can produce up to ten-or-fifteen pounds of marijuana apiece if you’re growing Southern Oregon trees, or even 8 to 16 ounces apiece for a modest indoor Portland grow.

Then we told these sick and disabled people, who are often living on retirement and/or disability checks that don’t cover the rising costs of living, that they can only possess 24 ounces of marijuana from their 6-plant harvests. But whatever you do, sick and disabled people struggling to pay the bills, don’t sell any of that marijuana, even to other sick and disabled people!

Of course they’re selling their excess! Wouldn’t you?

This doesn’t even consider how many purchases that are happening in the pot shops where a medical cardholder, be they patient or caregiver, is making straw purchases for recreational buyers so they don’t have to pay 20 percent more in taxes. That doesn’t harm the pot shop owner, but it is reducing the tax haul for the city and state of that pot shop.

When marijuana is totally prohibited, the enemy is the profit motive enjoyed by pharma, prisons, cops, and other industries that would suffer under legalization. But as we legalize marijuana, the enemy is the profit motive still – the profit states want in high marijuana taxes, the profit pot shop owners and cannabis growers want in legal sales, and the profit pharma seeks in moving cannabinoid medicines through the FDA approval process.

Legalization’s first profit-enemy was the illegal marijuana sellers and cannabis growers who opposed the initiatives that legalized the first recreational marijuana states. They knew they couldn’t compete with well-capitalized growers, economies of scale, and enormous selection that legalization would bring. They fought legalization to protect the prohibition profit margin.

After legalization, those sellers and growers fight to survive in that margin between illicit production cost and legitimate taxed prices. Their efforts lead to news stories like the one above, where state officials mull ways of cracking down on those illegal sales.

Those crackdowns almost always lead to severe restrictions on the sick and disabled people in the medical marijuana programs. Total plant counts are reduced and options for selling excess are limited.

Meanwhile, states want that sweet marijuana tax money. They began by setting absurdly high tax rates far above what’s needed to regulate the system, in hopes of generating profit. They fail to understand that sin taxes on cigarettes and alcohol work because growing tobacco and distilling alcohol are enormously difficult tasks for most people and, even with the taxes, smokes and booze are reasonably cheap. Sin taxes on marijuana are destined to fail because cannabis is simply too easy to cultivate.

That then leads to states curtailing or ending the right of people to cultivate their own cannabis. Arizona in 2010 began the move by denying home grow rights to any medical marijuana patient living within 25 miles of a dispensary, which proponents argued was to “guarantee a market for the dispensaries so they are viable.”

Since then, every state that has passed a medical marijuana law has either kept cultivation illegal or restricted it so severely you need to demonstrate “hardship” and/or live 25-to-40 miles away from a dispensary to cultivate cannabis at home. Nevada, which had allowed home grow, passed a law in 2013 to create a 25-mile rule like Arizona’s. Now, with 29 medical marijuana states, more of those states deny home grow rights than allow them.

Another profit-enemy of home grow legalization is the pharmaceutical industry, which is working to get its pharmaceutical cannabinoid preparations on pharmacy shelves. Their influence has led to six of the most recent medical marijuana states to ban not just cultivation of cannabis, but smoking of marijuana as well. After all, if you’re accustomed to going to a special building to buy a bottle of non-smokable cannabis medicine, it’s much easier to transition you to buying Big Pharma’s bottle from a pharmacy.

On the recreational side, in 2012 Washington infamously legalized possession while maintaining the illegality of cultivation. Thankfully, most states have passed laws allowing home cultivation, but these are the low-hanging fruit states with the greatest support for marijuana. Nevada, echoing its 2013 medical law, created legalization that bans home cultivation within 25 miles of a pot shop. As New Jersey and Rhode Island contemplate legalization through their legislatures, home grow rights are off the table.

We are in a tenuous time for legalization. After Michigan gets legal in 2018 (we hope), the pro-marijuana states with initiative power are mostly done. Legalization will have to proceed through legislatures that want big marijuana tax profits, lobbied by health care industries to protect those profits by banning home grow, then protected once established by legal cannabis growers and marijuana retailers who don’t want unregulated competition. Diversion, through medical programs or old-fashioned bootlegging, won’t be seen as a failure owing to too much regulation, inspections, testing, and taxation, but as a failure of regulators to crack down hard enough on the illegal market.