If you follow the legal marijuana industry in any detail, you know that the latest hot topic of the day is equity. Proponents of legal marijuana, largely getting what they want in state after state, are now turning their attentions to social justice. But stop and think about it. In a free market economy, can the cannabis industry ever be truly equitable?
To those in favor of such a concept, equity is accomplished by:
- giving licensing preference to people convicted of marijuana crimes
- giving additional preference to certain minority groups
- incentivizing entrepreneurs to open businesses in underserved neighborhoods
- forcing businesses to serve underserved areas at their own expense.
The idea of marijuana industry equity is an honorable one built on our collective sense of justice and fairness. But it is not reality. It cannot be reality if we hope to maintain a free market system.
Total Equity Isn’t Possible
The only way to achieve the current vision of marijuana industry equity is through government force and coercion. Before you decide that’s a good thing, step back and define equity. If you are honest about it, you will have to admit that equity achieved through force and coercion is only equity for those who benefit. It is inequity to those who are forced and coerced.
By the way, this is why total equity is not possible. We can dream about it all day long. We can talk about it on social media until we are blue in the face. Our politicians can give speeches about it in the run up to every campaign. But implementing it is another story.
The dirty little secret about equity is that it relies heavily on all things being fair. But nothing in life is fair. No two people are exactly alike, so their circumstances aren’t identical either. No two people have the same advantages and disadvantages. No two people have an equal shot at anything. In short, there will always be winners and losers.
Forced Equity Ruins Things
History offers plenty of lessons illustrating what happens when equity is forced upon people. It never ends well. In fact, forced equity has a habit of ruining things. It also has a name, by the way. Forced equity is socialism in some contexts and communism in others.
What happens when you force equity on an economy? Here’s just a small sampling:
- Supply dwindles
- Prices increase
- Quality suffers
- Regulation interferes
- Access is rationed.
There is little doubt that cannabis prices are high, easy access is limited, and services like home delivery are sketchy. But trying to implement fixes by way of force and coercion is only going to make things worse.
Free Markets Take Time
One of the reasons marijuana equity is such a hot topic right now is as simple as the reality that free markets take time to do what they do. State-legal marijuana is still relatively new. It is going to take a while before free markets catch up.
In Utah, where Beehive Farmacy serves medical cannabis patients in Brigham City and Salt Lake City, prices are higher than most patients care to pay. Likewise for the legal market in California. But guess what? California’s black market – a market driven by free market principles – makes illicit cannabis incredibly accessible at a fraction of the price.
This isn’t to say that the black market is preferable. It’s simply to say that when government isn’t involved, buyers and sellers all get what they want. On the other hand, government can only force and coerce. Look around see the results. They explain why true marijuana equity isn’t possible.