Abstract
Since Colorado and Washington have legalized the recreational use and sale of marijuana in 2012, the past decade has witnessed an increasing number of states legalizing the drug due to rapidly growing public support. The 2022 ballot initiatives in Maryland and Missouri led them to join the group of states endorsing recreational marijuana legalization. As of now, 21 states, along with Washington, D.C., and Guam, have acted to legalize recreational marijuana. However, despite the rising trend of recreational marijuana legalization, the future of legal marijuana remains puzzling.
In the book “Can Legal Weed Win?: The Blunt Realities of Cannabis Economics,” Goldstein and Sumner, two economists at UC Davis, aim to provide their insights into the uncertain future of the legal marijuana market. Drawing on piles of statistical data and their experience working with California cannabis regulators, Goldstein and Sumner explain the economics of marijuana step by step, from the past to the future, and explore why legal marijuana has failed to develop as initially expected. The authors also provide some regulatory strategies that could help the legal marijuana market survive the competition.
The monograph is written in plain English and is well-organized into eight chapters that provide comprehensive information. To reinforce key takeaway messages, the authors strategically present five conclusions, each dispelling a different misconception about legal marijuana. While Goldstein and Sumner may present a dismal outlook on the battle between legal and illegal marijuana, they still provide readers with comprehensive information and opportunities for improvement.
The first chapter describes various terms used in the field of “weed,” such as Cannabis, Marijuana, Cannabis Sativa, Cannabis Indica, and industrial hemp. The authors consistently use the term “weed” throughout the book. Additionally, the authors provide brief overviews of recreational marijuana, the medicalization of marijuana, weed prohibitions, and the formation of the North American legal weed market. Then, chapter two delves into the impact of legalization, dividing the weed market into legal and illegal segments. The authors point out that since there is little difference in product effect between legal and illegal marijuana, the market is hostile to legal marijuana. Consumers generally seek the best price-quality combination available in the market. Goldstein and Sumner explore the competition between the two markets, utilizing the substitution effect and the law of supply and demand. Through the introduction of the first two chapters, readers can quickly understand this book's two core concepts: weed and the economics of weed.
In chapter three, Goldstein and Sumner examine legal weed's economic challenges. They provide several reasons to explain why weed is expensive, including farming, manufacturing, distribution, license application, taxes, and risk premiums. Legal weed is far costlier than illegal weed, often costing twice as much after taxes in most areas of North America. However, they also highlight some advantages of legalization, such as product diversification and premiumization, which can attract consumers despite limited opportunities for the legal marijuana market to grow. They further explore whether the government should consider canceling the prohibition of marijuana-tobacco hybrids and permitting cannabis and alcohol consumption in the same place, even at outdoor parties, to enhance consumers’ interest based on social activity.
Chapter Four focuses on finding the cheapest legal marijuana in the United States. Goldstein and Sumner draw on a large data set from Weedmaps, a leading marijuana retail portal in the United States, to collect retail prices. In addition, they use data from Cannabis Benchmarks for wholesale farm prices for weed. Through data observation, they summarize general patterns and anomalies among states in the United States. The chapter also discusses a specific state, Oklahoma, a medical-only state with a high per capita density of marijuana retailers, and why it has a more competitive legal weed market.
Chapter Five centers on California, the first state in the United States to legalize the medical use of marijuana. By reviewing the legalization story in California, the authors provide readers with a glimpse of the miniature of the legalization trend and its related development history. The weed story of California is followed by chapter six, in which Goldstein, one of the authors, recounts his interview with Sabrina, who has worked in the National Organization for the Reform of Marijuana Laws (NORML) for a long time. Sabrina's experiences reinforce the authors’ point that illegal weed is much cheaper and more accessible than legal weed. Additionally, they mention another significant effect caused by recreational marijuana legalization: a rapid increase in marijuana-related crimes. In chapter seven, Goldstein and Sumner imagine what the legal weed market might look like in 2050. They prophesize four long-run changes in the future weed market, two related to laws and regulations and the other two relevant to technological developments. Then, the authors summarize five takeaways about the legal weed market in 2050. In my opinion, these three chapters respectively represent the past development, present observations, and future expectations of the legal weed market, although they may not seem connected at first glance.
Finally, the authors discuss four potential survival strategies to help legal weed thrive in chapter eight. They suggest methods such as imposing local standards to enhance barriers to imports, developing individual regions as premium weed brands, cultivating a sense of community to create a following for local marijuana, and requiring origin labeling to raise awareness among local buyers.
In sum, this book explores the legal weed market economically. It analyzes how legalization was formulated, the challenges, and what might happen. I highly recommend this monograph to scholars and professionals in the field of drug policy. Furthermore, this book would be a perfect fit for students attending introductory courses in criminal justice, law, public policy, and political science to understand the trends of weed legalization. As the authors hoped in the preface, this book can help readers understand the economics of weed and contribute to making informed judgments about the future of legal marijuana.
