One of the smartest things the Legislature did when passing the budget was how they tagged the funds from recreational marijuana. Rather than using the money for some vital program that would immediately become dependent on a new and unpredictable revenue source, the cash from the new excise tax is to be put in the state’s rainy day fund. This way, all of it is budgetary gravy, at least until we know what to expect.

That wise move paid off unexpectedly quickly when liquor distributors were able to block new marijuana regulations in court (at least for now) that would have allowed pot stores to start selling their product next month.

Ironically, this lawsuit was made possible by one of the stupidest things the Legislature did, which was to allow existing liquor distributors to not only meddle in, but control the marijuana market in the first place. As it stands, politically connected, pre-existing businesses get “first dibs” on marijuana sales licenses, allowing them to effectively prevent any would-be-competitors from challenging them on the open market.

Liquor distributors in Nevada epitomize the useless middleman in our “three tier” alcohol sales regulation scheme, which requires brewers and distillers to hire an outside company to truck kegs down the street to local bars. They are so inarguably useless that they would not exist without the government forcing productive businesses to patronize their services. If they added value to either producers or retailers, they wouldn’t need statutory protection. And in fact they are even worse than useless, retarding innovation and stemming natural economic growth. They are politician-protected parasites, and there is no rational basis to continue providing them legal sanction.

So why in the world did we allow liquor distributors to muscle in on the marijuana business in the first place? The fig leaf was that they have experience dealing with intoxicants, so it will help the weed stores smoothly enter the world of legal commerce. But this is the sort of argument you have to be drunk and/or stoned to make with a straight face – as long as the regulations themselves were written coherently, there’s no non-corrupt reason a marijuana startup shouldn’t be allowed to compete on equal footing with established distribution networks, or why manufacturers ought not be allowed to directly sell their own product.

Liquor distributors aren’t even bashful about their self-interested reasoning. As our own Michelle Rindels reported, “[The Independent Alcohol Distributors of Nevada, or IADON] fears that if marijuana companies are allowed to distribute, they’ll form vertically integrated businesses that self-distribute, and there will be no need to allow liquor distributors in.”

Well, guess what – there really is “no need” to allow liquor distributors in. And there certainly is no good public policy reason to require them to be part of this new industry, any more than there is a “need” to mandate that they keep a privileged place in our various alcohol industries.

The state is fighting back against IADON, as they should. But there is so much entrenched favoritism in that law in particular and in our statutes generally that the judge may well be forced to side with the liquor distributors. His job is to apply the law as it is, not as he might prefer it to be. So while the courtroom battlefront is an important one, it will not – or at least should not – be the end of the fight. If the laws are wrong or foolish or self-destructive or unequally applied, they ought to be changed.

As they system sits now, the government is still arguing they should be able to simply declare how many businesses of a certain type the market will bear. But that’s not the government’s job, and for good reason.

This is a golden opportunity for Attorney General Adam Laxalt as he runs for Governor. He can be a champion of the free market, for which there is a direct benefit to voters who like to smoke pot or drink wider varieties of locally crafted beer and wine. He could easily convince a lot of non-Republican voters who might not otherwise give him a look that free market advocates improve their daily lives. I don’t like populism on the left or the right, but it’s clearly in political vogue right now – so here’s a chance for Laxalt to take a stand in favor of The People against a small group of wealthy and well-connected industry leaders who are greedily gaming our political system for personal gain at public expense. (After the poor optics of the Burnett tape affair, this would be especially helpful to him going forward.)

Laxalt has been shy about embracing his economic or constitutional principles when marijuana has been at issue. It’s time for that to end.

I don’t like pot, and voted against its legalization. I get that being reflexively anti-drug is a traditionally conservative position, and not without reason. I don’t want a recreational marijuana store in every neighborhood or endless billboards “inadvertently” encouraging kids to get stoned along the highways we all drive in our family cars. We can use appropriate zoning regulations to accomplish this.

Nevadans voted to legalize marijuana’s recreational use, and nothing is going to roll that back. And while limiting the time, place, and manner marijuana can be distributed is of legitimate state interest, favoring one distributor over another, or any other regulations which as a practical matter serve only to arbitrarily protect one person’s business interests over that of his competitor’s is not. Moreover, it’s a great place to start in ridding ourselves of our nasty habit of economic protectionism in all sort of different industries.

Fighting for free markets – no matter the legal product – would be a political win for Laxalt, and an economic win for all of Nevada.



News Moderator: Ron Strider 420 MAGAZINE ®
Full Article: How Adam Laxalt can use legal marijuana to earn the governor’s mansion - The Nevada Independent
Author: Orrin J. H. Johnson
Contact: The Nevada Independent
Photo Credit: Northern Nevada Business Weekly
Website: The Nevada Independent