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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