Stigler and Proposition 19

California’s Proposition 19, if passed in the November election, will ‘legalize, tax, and regulate’ the production, sale, and use of recreational marijuana in the state. Regulation will vary between municipalities, but, in general, growers will be able to set up legal businesses, and restrictions on growing for personal recreational use will be lessened. Opponents of the bill can be divided into several groups with different motivations. The law enforcement and prison industry favor the status quo where they receive large amounts of federal funding for the ‘War on Drugs.’ Non-profit ‘public interest’ groups argue that legalization will have negative effects on society. Marijuana’s competitors, the wine, beer, and liquor industries have opposed the proposition and contributed significantly to the campaign against it, because, if passed, it will increase competition for their products.

Two additional groups that oppose Proposition 19 are already in the marijuana business. These are the large (illegal) commercial producers and the legal medical marijuana dispensaries. While this may seem counterintuitive to many people that marijuana producers support prohibition, this is in line with Stigler’s theory that, if possible, industries will seek government regulation that limits entry into their industry, decreasing competition and allowing them to keep prices high. It is difficult for criminal marijuana producers to make a public interest argument, or lobby the government or the public successfully. However the medical marijuana producers have publicly come out in opposition of the bill with the ‘public interest’ argument that the way the bill is currently written will decrease access to medical marijuana for patients who really need it. This article from The Huffington Post argues that the bill will have no affect on the availability of medical marijuana to the sick and elderly, and shows that the language of the bill contains special provisions to prevent it. Some of the more prominent figures opposing Proposition 19, such as Mary Rathburn and Dennis Peron, are same people who wrote and supported Proposition 215 that legalized medical marijuana. They are also the owners of some of the largest medical marijuana dispensaries in the state.