Wednesday, May 29, 2019
The title of this post is the title of this paper recently posted to SSRN authored by Jonathan R. Elsner, who just recently graduated from The Ohio State University Moritz College of Law. This paper is now the fifth of an on-going series of student papers supported by Drug Enforcement and Policy Center. (The first four papers in this series are linked below.) Here is this latest paper's abstract:
As cannabis prohibition comes to an end in the United States, federal and state governments must decide how to regulate its cultivation, distribution, and sales. One particular option, supported by some alcohol wholesalers and distributors, is a regulatory system based on that of the alcohol industry, whereby the government mandates a distribution system consisting of three mutually exclusive tiers: manufacturers, distributors, and retailers. This paper, however, argues against creating a regulatory framework for the nascent adult-use cannabis industry modeled after the government-mandated, three-tier distribution system established for alcohol post-Prohibition as it inherently stifles innovation and quality.
Essentially, the three-tier distribution system creates an unnatural layer of government-mandated middlemen, distributors and wholesalers, who perpetuate market inefficiencies that benefit themselves, along with large corporations, to the detriment of consumers and small-to-medium-sized businesses. The beer industry, now dominated by two breweries offering largely undifferentiated products, provides a cautionary tale regarding the effects of the three-tier distribution system to those developing the regulatory structure for the adult-use cannabis industry.
Prior student papers in this series:
- "The Canna(business) of Higher Education"
- "Marijuana Banking in New York and Around the US: 'Swim at Your Own Risk'"
- "Intellectual Property Survey: Cannabis Plant Types, Methods of Extraction, IP Protection, and One Patent That Could Ruin It All"
- "Marijuana in the Workplace: Distinguishing Between On-Duty and Off-Duty Consumption"