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Photo of Matt M. McClenahen
Photo of Matt M. McClenahen

Will Marijuana Legalization Squeeze Out the Little Guy?

On Behalf of | May 13, 2013 | Uncategorized

Marijuana legalization, or more correctly stated, re-legalization, appears to be inevitable, due to simple demographic math. Each year, more supporters of legal marijuana reach voting age, while more aging prohibitionists die off. A 2013 Pew Research Center Poll revealed that for the first time since the question was asked, a majority of Americans now favor legalizing marijuana. A whopping 65% of 18 to 32 year olds now support ending Prohibition. Thus, the question is not if, but rather, when and under what circumstances marijuana will be legalized.

If you think that the coming, legal cannabusiness will be dominated by socially conscious, hippy collectives, think again. Legalized marijuana will be a multi-billion dollar industry, and corporate American will do what it can to rig the game in its favor. I anticipate big business lobbying for significant barriers to entry, which only it can afford. For example, various licenses and fees could price the little guy out of the market. Onerous, bureaucratic regulations could accomplish the goal of making it nearly impossible for small businesses to comply with them.

The companies, which will best be situated to rake in profits from legal cannabis, are Philip Morris, Reynolds America and Lorillard, often collectively referred to as “Big Tobacco.” If you can efficiently process and distribute one smokable plant, you can do the same with any other smokable plant. The big three tobacco companies likely have plans for the end of Prohibition as well thought out and detailed as any military contingency plans housed within the walls of the Pentagon.

I don’t think there is anything we can do to prevent Big Tobacco from dominating cannabis production and distribution, but the new marijuana regulation laws should leave some room for small businesses to operate. If fees and licenses are excessively high, then the black market cannabis market will continue to operate. After all, it is considerably easier to grow a plant, which originally evolved with no help from humans, than it is to brew beer or distill spirits. One of the biggest benefits from the end of Prohibition will be increased tax revenues, and any lingering black market will reduce this much needed tax revenue.

Matt McClenahen is a criminal defense attorney in State College, PA, who has represented countless victims of Cannabis Prohibition over the years.

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