Mark Kleiman proposes making it legal to grow, share, and consume cannabis, but not to sell it.

To the consumer, developing a bad habit is bad news. To the marketing executive, it’s the whole point of the exercise. For any potentially addictive commodity or activity, the minority that gets stuck with a bad habit consumes the majority of the product. So the entire marketing effort is devoted to cultivating and maintaining the people whose use is a problem to them and a gold mine to the industry.

Take alcohol, for example. Divide the population into deciles by annual drinking volume. The top decile starts at four drinks a day, averaged year-round. That group consumes half of all the alcohol sold. The next decile does from two to four drinks a day. Those folks sop up the next thirty percent. Casual drinkers – people who have two drinks a day or less – take up only 20% of the total volume. The booze companies cannot afford to have their customers “drink in moderation.”

Some questions come to mind:

  1. Would it be legal to sell the seeds?  If not, how could anybody get them?  If so, has the problem (assuming there is one) really been solved?
  2. The economics of the problem boil down to which market structure minimizes the private incentive to boost demand, say via marketing.  If we outlawed the sale of tobacco but allowed the sale of grow-your-own-tobacco kits would we see more or less marketing?  The less competitive the market the more each individual seller gains from a boost in generic demand.  Should we expect the market for growing kits to be more competitive than the market for the final product?
  3. If we are going to ban something, why not advertising?  Seems more direct and arguably a Pareto improvement if advertising acts as rent-seeking between producers and creates “artificial” demand as the premise of the policy seems to be.