Otago Daily Times

Cannabis leg­is­la­tion raises pub­lic good con­cerns

There is just enough time be­fore the ref­er­en­dum to look at the prospect of le­gal­is­ing cannabis from the mar­keter’s per­spec­tive, Robert Ham­lin writes.

- Robert Ham­lin is a se­nior lec­turer in the depart­ment of mar­ket­ing at the Uni­ver­sity of Otago.

MOST com­ment about the cannabis le­gal­i­sa­tion ref­er­en­dum has come from a so­cial and pub­lic health point of view. How­ever, as the pro­posed leg­is­la­tion aims to le­galise pretty much ev­ery­thing about the cannabis busi­ness ex­cept the com­mer­cial mar­ket­ing of it, a commentary on its likely out­comes based on a com­mer­cial and mar­ket­ing per­spec­tive might be timely.

When the pro­posed leg­is­la­tion is looked at through the lens of a busi­ness an­a­lyst, there is con­sid­er­able scope for con­cern about what the con­se­quences of its in­tro­duc­tion would be for the pub­lic good.

These con­cerns can be broadly sep­a­rated into two groups: those that stem from the be­hav­iour of the in­dus­try’s cur­rent ex­trale­gal in­cum­bents, and those that stem from the be­hav­iour of new en­trants into a le­galised in­dus­try.

There ap­pears to be a rather naive ex­pec­ta­tion that the cur­rent in­dus­try will just ‘‘go away’’ if this Act passes into law. Mar­ket­ing the­ory does in­di­cate that the il­le­gal cannabis in­dus­try it­self may well do this over a pe­riod of time, as the dis­tri­bu­tion of il­le­gal goods re­quires a pyra­mi­dal sales net­work based on a large num­ber of in­di­vid­u­als that is both very labour in­ten­sive and usu­ally well re­mu­ner­ated due to the per­sonal risks in­volved.

The le­gal in­dus­try will have struc­turally lower costs, and should be able to un­der­cut the high prices that are re­quired to sus­tain the il­le­gal net­work as a vi­able busi­ness.

How­ever, mar­ket­ing the­ory has an­other pow­er­ful con­cept known as ‘‘core com­pe­tency’’. This means that you should fo­cus on do­ing what you are nat­u­rally good at.

The cur­rent il­le­gal in­dus­try em­ploys thou­sands of peo­ple, and pre­sum­ably pays quite well to those who are good at it. These peo­ple will not go away, but they would have to ‘‘move on’’ in some way.

As me­dia ar­ti­cles, dra­mas and doc­u­men­taries con­sis­tently sug­gest that the core com­pe­ten­cies of the il­le­gal drugs trade in­clude a range of un­usual and in­ter­est­ing busi­ness ‘‘mar­tial arts’’, its in­cum­bents may strug­gle to ap­ply these skills to the le­gal cannabis in­dus­try — or any other le­gal in­dus­try for that matter.

So they will quite sen­si­bly look to re­place this lost in­come by do­ing what they are good at — dis­tribut­ing il­le­gal ma­te­ri­als. They can take their pick: syn­thetic cannabi­noids, metham­phetamine and so on.

These sec­tors are likely to ex­pe­ri­ence an in­flux of cap­i­tal along with highly ca­pa­ble and mo­ti­vated per­son­nel, which will drive an in­crease in ac­tiv­ity and rev­enue as a re­sult of cannabis le­gal­i­sa­tion.

Given the na­ture of these al­ter­na­tives, the net neg­a­tive so­cial im­pact of this is likely to be sig­nif­i­cant. It is per­haps an un­pleas­ant no­tion, but the il­le­gal cannabis in­dus­try keeps a large sec­tor of the crim­i­nal com­mu­nity hap­pily and gain­fully em­ployed in ped­dling what sup­port­ers of this le­gal­i­sa­tion claim to be an in­nocu­ous and read­ily avail­able sub­stance. Is it such a bad idea to keep it that way?

One un­for­tu­nate fea­ture of the pro­posed Act vir­tu­ally also guar­an­tees the mis­be­haviour of any le­gal par­tic­i­pant. This is the re­quire­ment that cannabis re­tail­ers sell only cannabis.

Within a cap­i­tal­ist so­ci­ety, com­pa­nies seek and strive to grow — it’s how our econ­omy works. The Act’s re­quire­ments dic­tate that le­gal cannabis re­tail­ers can only grow by stim­u­lat­ing cannabis de­mand, which means pro­mot­ing and mar­ket­ing it. How­ever, that same Act also de­votes nearly all of its con­tent to the ob­jec­tive of pre­vent­ing that very ac­tiv­ity!

There­fore, le­gal cannabis re­tail­ers can only grow ‘‘through’’ the Act’s an­ti­mar­ket­ing pro­vi­sions, and this they will surely try to do.

Pres­sure may be ap­plied at sev­eral lev­els, all of which would cost the tax­payer a for­tune:

Pres­sure on the Act. While it is a com­plex doc­u­ment that seeks to cover all an­gles, clever and well­funded lawyers will look for loop­holes within its mas­sive fab­ric. These will surely be found, and cannabis pro­mo­tion will leak through them.

Pres­sure on the author­ity. The Act is to be en­forced by an in­de­pen­dent ‘‘author­ity’’. Such bod­ies have a mis­er­able track record world­wide for be­ing cap­tured by the in­dus­tries that they are sup­posed to con­trol. There is a lot of money at stake here, and it’s only a small author­ity, so cap­ture is a very plau­si­ble sce­nario. A cap­tured author­ity would have no will to en­force the Act, which would be widely flouted as an out­come.

Pres­sure on the ju­di­ciary. Even if the author­ity seeks en­force­ment, it is still nec­es­sary for the ju­di­ciary to im­pose penal­ties for in­fringe­ments that could not be treated sim­ply as a ‘‘cost of do­ing busi­ness’’. This would re­quire a re­set of the cur­rent ju­di­cial cannabis mind­set that may not be forth­com­ing.

It can be ar­gued that the im­pact of the pro­posed leg­is­la­tion on busi­ness be­hav­iour will lead to con­sid­er­ably in­creased con­sump­tion of both cannabis and other il­le­gal drugs, plus a sig­nif­i­cant in­crease in en­force­ment ex­pense. Given this, I per­son­ally won’t be vot­ing for it.

 ?? PHOTO: ODT FILES ?? The Act’s re­quire­ments dic­tate that le­gal cannabis re­tail­ers can only grow by stim­u­lat­ing cannabis de­mand, which means pro­mot­ing and mar­ket­ing it.
PHOTO: ODT FILES The Act’s re­quire­ments dic­tate that le­gal cannabis re­tail­ers can only grow by stim­u­lat­ing cannabis de­mand, which means pro­mot­ing and mar­ket­ing it.

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