More commercialized models of cannabis regulation in the United States are providing valuable insights. However, thinking about cannabis policy should not be limited to US experiences given the range of less commercialized policy options that are possible, and being explored elsewhere.
Cannabis legalization is arguably the most significant and rapidly evolving issue in drug policy today but, despite the increased attention devoted to the topic, legalization is still often treated as if it were a policy end–point, rather than the mere process that it is (namely, of making something illegal, legal). Caulkins & Kilmer [1] remind us that what comes after legalization is the critical issue; all legal products are subject to at least some degree of regulation, and the details of how that regulation is designed is key towhether legalization produces better outcomes than continued prohibition.
Prices are of particular concern in a newly legal cannabis market. Legalization is likely to lead to a dramatic reduction in production costs which, in the absence of state interventions in the market, will translate into retail prices far lower than current illicit-market levels. This, in turn, is likely to trigger an increase in consumption, even if the extent of such an increase remains largely speculative [2]. Even if regulated products are safer, this could still mean an increase in health harms. Policymakers seeking to legalize prudently must therefore use some mechanism to raise prices artificially and prevent levels of use from rising too high.
As Caulkins & Kilmer note, the cannabis tax regimes administered in US legalization states currently fall well short of making up this price gap. Although they may face political obstacles in the United States—where in many places there is deep-seated hostility to state intervention
—there are other measures that can be effective in this regard, and merit consideration both in the United States and other jurisdictions exploring cannabis regulation.
Minimum unit pricing (MUP) is one option. Econometric modelling of the impact of MUP for alcohol suggests that it would reduce alcohol consumption and related harms, with heavier drinkers most affected [3]. MUP for alcohol has been approved in Scotland, although has not yet been
implemented due to a legal challenge from the drinks industry [4].
Direct price-fixing is another obvious way of mitigating against a fall in cannabis prices and subsequent increase in use. Having designed its nascent legal cannabis market along similar lines to Borland’s[5]‘regulated market model for tobacco, the Uruguayan government will have a monopoly on the trade [6], enabling it to directly set cannabis prices at, or marginally under, prices found on the country’s existing illicit market [7]. This is a cautious measure , designed to provide at least some financial incentive for legal purchases (and thereby deprive the illicit market of trade), while at the same time moderate any price-related impacts on levels of use.
Looking at other aspects of a legal cannabis market, Caulkins & Kilmer highlight that Uruguay’s ban on all cannabis advertising and promotion is unlikely to be feasible in the United States because of laws guaranteeing so-called’ commercial free speech’ [8]. However, it is important to recognize that many other countries will be far more amenable to restrictive controls of the kind Uruguay has imposed. Hence, the same logic that has informed moves to legalize cannabis in the United States is likely to result in
markedly different cannabis regulation models when applied in Europe or Latin America, for example. The cultural, legal and political environment in which legal cannabis markets are developed is key.
However, that is not to say there is no scope to halt the march of commercialization—and the public health costs that tend to come with it—in the United States. Caulkins & Kilmer mention the possibility that states could place cannabis production and supply under the control of non-commercial entities such as ‘for-benefit’ corporations; and if the conflict between federal law and state law on
cannabis can be negotiated, then a state monopoly may also be viable in the longer term.
It is therefore important not to allow thinking about regulatory designs for future legal cannabis markets be dominated by those that have already been established in the United States. More cautious alternatives exist, are feasible, and should be considered. Unlike with alcohol and tobacco, with regard to cannabis regulation we have, for now, what is effectively a clean slate: we do not have to retrofit well-established commercial markets
with tighter controls, in the face of industry resistance. It is up to policymakers to take advantage of this situation.
with tighter controls, in the face of industry resistance. It is up to policymakers to take advantage of this situation.
Declaration of interests
Both authors are employed by Transform Drug Policy Foundation—a UK-registered charity with a campaigning remit focusing on drug policy and law reform, specifically including establishing a just and effective system of regulation for currently illegal or unregulated drugs. No financial or other conflicts of interest declared.
Keywords Cannabis, commercialization, drug policy, legalisation, markets, regulation.
&
Transform Drug Policy Foundation, Bristol, UK
E-mail: steve@tdpf.or g .uk
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