Several states are advancing adult-use cannabis legalization efforts, but Pennsylvania Governor Tom Wolf is again promoting a unique approach to a recreational marijuana market: state-run marijuana distribution. A recent article in PoliticoPro (subscription required) dives into the issue and provides great context and analysis on whether this proposal is feasible and its chances to succeed.
While the idea may seem far-fetched at first, it’s important to remember that 17 states, including Pennsylvania, currently have some type of monopoly on alcohol sales. The Pennsylvania Liquor Control Board’s authority could potentially be expanded to govern recreational cannabis sales as well. Further, Canadian provinces and Uruguay have implemented government-run marijuana distribution. Eliminating private companies from marijuana sales could be a huge boost to the state’s economy, remove any First Amendment concerns if lawmakers want to limit or ban advertising on cannabis products, and foster more cooperation from banks.
That said, there are several concerns with the state-run model. As an initial matter, it would require government employees to distribute a federally illegal substance, which seems dicey. And the empirical evidence from Canada to date is less than ideal—New Brunswick was losing so much money that it sought last year to have a private operator take over marijuana distribution. The measure also faces a climate where state-run alcohol sales are falling out of favor; legislators in Pennsylvania have made several efforts in recent years to privatize alcohol sales.
State-run cannabis distribution is a creative proposal and an interesting concept to explore. But it seems unlikely to go beyond that any time soon. Please check out our blog for developments affecting the cannabis industry and subscribe for updates.
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