Taking The High Road: Influential D.C. Think Tank Calls for Interstate Cannabis Commerce

The Cato Institute is hardly known as a bastion liberal groupthink, but the Koch-funded public policy research organization is rooted in principles of individual liberty, limited government, and the power of the free market.

Though these primarily-Libertarian ideals tend to fall short when trying to govern a global superpower of over 300 million people, they can often line up fairly close to individual issues concerning sovereign rights. As such, influential Cato thinktankers have become more and more aligned with the legal cannabis movement over the years, undoubtedly pushing it further ahead by way of their political sway in the nation’s capital.

In December of last year, smack dab in the middle of Trump’s Government Shutdown over border wall funding, we reported here on a scathing memo released by the Cato Institute, slamming the idea of using taxpayer money to build a monument. This is a core plank of Libertarianism – the whole anti-government spending meme – but it came this time with an added dose of snark as the paper laid out raw facts on how legalizing cannabis does far more for border security than any wall, fence, or moat full of sharks with frickin’ laser beams.

The attack on the current administration’s immigration policies opened up a new front in the never-ending battle of Trump vs. Everyone and now the Cato crew is back at it again, this time chastising the Feds for squashing interstate commerce for cannabis due to ongoing prohibition of the plant at the highest levels of our government.

In the paper titled ‘The Case for Allowing Interstate Trade Among Marijuana-Legal States’, Cato scribe Ilya Shapiro begins by building the undeniable case that America as a nation is moving toward the repeal of federal cannabis prohibition.

Though the Institute seems optimistic that such reform is inevitable, they caution that it must be done in a manner that respects the individual state markets that have been created out of necessity over the past several years.

But just as important as allowing the patchwork of state-level programs to operate autonomously, Cato scholars insist that interstate cannabis commerce must be included in federal reform, and must be gotten right if this rapidly growing economic sector is to reach its true potential.

Shapiro rightly points out that Oregon, who had a head start on most of the other 10 states that have legalized the recreational use of weed and has a favorable climate for growing it, is now sitting on an unsellable overstock of herb. Some estimates say that there is a full year’s supply of weed currently rotting in the state’s seed-to-sale tracking system. Some say it is several years’ worth.

Meanwhile, in the damn desert, the Nevada cannabis market has an inverted Supply & Demand curve with plenty of consumers ready to fork over their cold hard cash, but not enough locally produced products to satisfy the masses.

Now, we know some of you trap-stars have already mastered "interstate commerce" but your method is not what we're talking about ;)

The societal detriment here is twofold, according to Cato, as not only is consumer demand not being met, but the segmented system itself is encouraging well-funded corporate cannabis entities into the legal market, while shunning the legacy operators who grow bomb weed and make dope products from it, but for one reason or another have not been able to navigate all of the red tape to get legal and stay profitable.

The seed-to-sale vertical integration that we are seeing as an expensive but popular business model these days weakens the power of the buyer, as they will have fewer brands (ie. competition) to select from or switch to.

The lag we are getting from the Feds on top-down nationwide cannabis reform has put our country at least a lap behind nations like Canada and Israel who are shipping their product around the globe and are poaching hamstrung U.S.-based companies for pennies on the dollar to do big business outside of our borders.

As Shapiro says to conclude his piece, “It’s high time for the federal government to allow Americans to sell cannabis to Americans.”

Along with crucial issues like, expungement, social equity, home cultivation rights, public consumption rights, and others, interstate cannabis commerce must be a core plank in any discussion of federal cannabis reform.

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