Detroit Delays Legal Cannabis Sales, More Flawed Decision-Making

Michigan became one of the newest states to fully legalize cannabis, on December 1, 2019. In many respects, it epitomizes why cannabis legalization is failing (or at best, making very slow progress) in many U.S. states.

Michigan has learned very little from states (like California) that have failed miserably in creating the framework for a healthy legal cannabis industry that can phase out the cannabis black market.

One of the primary arguments for legalizing cannabis is to eliminate the sale of unlicensed, unregulated, uninspected black market cannabis. When a new jurisdiction legalizes cannabis, the politicians always claim that “eliminating the black market” is one of their top priorities.

Then they create a regulatory framework that cripples the legal industry.

Here Michigan’s state government and its local governments are guilty of making both an old mistake and a new mistake.
The old mistake was when the state government allowed local governments to “opt out” of legalization. This is a mistake made by almost all U.S. states.

In Michigan, roughly 80% of local governments have chosen to block legal sales – at least initially. In California, nearly 80% of local governments continue to block legal cannabis sales more than two years after full legalization commenced.

How do you eliminate the cannabis black market when 80% of cities/counties are blocking the sales of legal cannabis? You can’t. The black market still controls roughly 75% of sales in California.

Local governments can’t “ban cannabis”, because the cannabis black market is omnipresent. They can only block legal cannabis sales and force their residents to buy unregulated/uninspected cannabis products.

In short, there is no rational reason why local governments should be able to block legal cannabis sales (in cannabis legal states). U.S. cities have experienced only positive benefits from cannabis legalization. Michigan’s state government should not have allowed local governments to block legal cannabis operations.

Conversely, in Illinois, the most recent state to fully legalize cannabis (January 1, 2020), roughly 60% of local governments are already allowing legal cannabis sales.

The result? Illinois is selling more cannabis in a day than Michigan sells in a week – with comparable populations.

Detroit, Michigan’s largest population hub, just voted to further delay legal cannabis sales. This is to give Detroit’s city council enough time to make the new mistake that is undermining the U.S. legal cannabis industry.

What is this new mistake?

Like many U.S. governments, Detroit wants the (private sector) legal cannabis industry to pay for all the government sins of cannabis Prohibition.
 

Detroit’s (legal) “weed industry” didn’t exist when Detroit and other U.S. jurisdictions were persecuting Americans with anti-cannabis laws that should have never been on the books.

Detroit’s cannabis industry didn’t exist when Detroit’s police were (in particular) persecuting members of minority groups with these flawed anti-cannabis laws.

So why must the city’s cannabis industry be treated as some form of legalized charity to advance a “social equity” agenda?

For example, U.S. Big Banks have been caught (again and again) discriminating against minority groups in order to badly gouge them on loans and other transactions.

Has Detroit passed legislation “to identify ways to reduce the financial barriers of entry and eliminate the structural obstacles that many urban cities are seeking to resolve among communities of color” so that more minorities are employed in banking?

Of course not. And these were/are crimes committed directly by the Big Banks against African Americans.
 

Is Tate proposing that U.S. banks operating in Detroit “take their dollars back to the community”? Of course not.

Is Tate proposing that U.S. banks also “properly reflect the demographic of the city” with respect to their hiring practices? Of course not.

Unlike U.S. banks, legal cannabis companies are guilty of no crimes. But the legal cannabis industry is going to be obstructed and restricted by Detroit’s government with “social equity provisions” that will further undermine the industry.

The effect of this misguided policy-making is that even once Detroit legalizes cannabis sales, the legal industry will under-perform.

Because of over-regulation and over-taxation, even many well-funded cannabis companies are unable to generate enough operational efficiencies to compete with the cannabis black market.

How will all the mom-and-pop cannabis stores envisioned by Detroit (owned/operated by members of minority groups) compete with the cannabis black market?

For one thing, they will have to approach U.S. banks for capital – the same U.S. banks that consistently rip-off members of minority groups. It would be comical, if it weren’t such tragically flawed policy-making.

Should members of U.S. minority groups receive assistance in overcoming the legal/economic effects from the government’s persecution of Americans via cannabis Prohibition?

Yes.

They should receive government assistance for these government crimes. And this government assistance should come out of general tax revenues.

All Americans are responsible for voting in the governments that persecuted some Americans with anti-cannabis laws. All Americans must pay for the compensation.

The U.S. legal cannabis industry is not some organized charity. Guilt-ridden U.S. politicians should not be expecting the industry to pay for their own crimes.