Small Marijuana Growers Squeezed Out by Legalization and Regulation

It ’s often been noted that regulations can imposelarger relative costs on small businesses and can serve toprotect incumbent firms from new competitors. Goldman Sachs CEO Lloyd Blankfeinnoted that new regulations created a “moat” around his firm:That all industries are being disrupted to some extent by new entrants coming in from technology. We, again, being, you know, technology-oriented ourselves, try to disrupt ourselves and try to figure out what ’s the new thing, and come up with new platforms, new forms of distribution, new products. But in some ways, and there are some parts of our business, where it ’s very hard for outside entrants to come in, disrupt our business, simply because we’re so regulated. You’ll hear people in our industry talk about the regulation. And they talk about it, you know, with a sigh: Look at the burdens of regulation. But in some cases,the burdensome regulation acts as a bit of a moat around our business.TheWashington Post reports on a new example: the legalized marijuana market in California. Libertarians have longurged the legalization of marijuana and other drugs. Certainly I expect better results from a legal regime where people are not arrested for buying, selling, or using marijuana. But governments can ’t just repeal laws and stop arresting people; instead, they prefer to set up a regime of taxes and regulation. And that’s having an effect on the small marijuana growers in the state’s “Emerald Triangle.” As Sc...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs