‘For the bureaucrat, the world is a mere object to be manipulated by him’
– Karl Marx

After successful experiments in Uruguay and parts of the USA, the relegalisation of cannabis in Britain is no longer a distant dream and the Liberal Democrats should be applauded for spelling out what a post-prohibition cannabis market could look like. It is only a shame that they have allowed their blueprint to be shaped by regulation junkies like David Nutt and Steve Rolles (of Transform) who would restrict the sale of Sherbet Fountains to pharmacists if they were given the opportunity.

It would be an overstatement to say that the Lib Dems’ proposal for a legal market makes one appreciate the joys of prohibition, but their report – A framework for a regulated market for cannabis in the UK (hereafter Rolles et al.) – comes close. It starts with the explicit assumption that alcohol and tobacco are massively under-regulated and goes on to assume that big business is bad, that advertising is coercive and that the current level of cannabis consumption is optimal.

Above all, it assumes that ‘drug use should be primarily a health issue, not a criminal justice one’. This is a such common refrain from groups like Transform that it often goes unchallenged, but the reality is that for the vast majority of cannabis users, smoking dope is not a health issue and never will be. Similarly, for the vast majority of drinkers, alcohol is not a health issue. These are recreational products for adult consumers and should be treated as such. We are being presented with a false dichotomy when the only alternative to criminalisation is medicalisation.

Chocolate Frogs (Source: Flickr - Robert Couse-Baker)
Chocolate frogs. Could do with plain packaging. (Source: Flickr – Robert Couse-Baker)

For Rolles et al., cannabis is a Bad Thing and the fewer people who smoke it the better. Drug dealers are also a Bad Thing, however, and their plan is to replace them with benign government and all-knowing regulators. To that end, they call for the creation of a ‘Cannabis Regulatory Authority’ to ‘license the production of a fixed volume of specified products’ for licensed retailers. These retailers would not be able to advertise or create any brands because ‘plain packaging should be mandatory for all retail cannabis, with standardised non-branded designs along the lines of prescription pharmaceuticals’. Resin would remain illegal, as would edible cannabis, and there would be no Amsterdam-style coffee shops.

Products would not only be labelled with ‘mandated information and warnings about key health risks’ but would be sold in ‘re-sealable childproof containers’ with ‘more detailed health information […] on printed inserts […] similar to those that accompany all prescription medicines.’ A eighth of weed in a plastic bag from a man in a pub suddenly seems glamorous.

As if that weren’t enough, retailers would not be able to set their own prices because the government would introduce ‘either direct price fixing, or maximum and minimum price controls’. In other words, in the unlikely event of a Lib Dem government, the state will decide how much cannabis can be commercially produced, where it can be sold, what its packaging will look like, what can be said about it and how much it can be sold for. This is a market in the loosest sense of the word. Indeed, it is barely a market at all. It is medical regulation supplemented by a grab bag of hare-brained ‘denormalisation’ policies devised by anti-smoking fanatics and temperance crusaders, namely minimum pricing, advertising bans and plain packaging. In a further borrowing from tobacco control, Rolles et al. also recommend that shopkeepers be forced to keep their products behind shutters.

Flying Saucers. To be kept under the counter or behind shutters. (Source: Flickr - Stuart Webster)
Flying saucers. To be kept under the counter or behind shutters. (Source: Flickr – Stuart Webster)

It could be argued that this heavy-handed bureaucracy would be worthwhile if it stamps out the illicit trade, but that is doubtful. The Soviet-style idea of having a government agency dictating how much cannabis can be produced is likely to lead to Soviet-style shortages and the lucrative black markets that inevitably accompany them. Even if government quotas do not lead to under- or over-supply, Rolles et al. envisage the state setting the price of cannabis ‘at or near current illicit market prices’ because they don’t want consumption to rise. You don’t have to be a genius to work out how the black market will react to this. Prices will fall and demand for illicit products will grow.

Hampered by its inability to use the price mechanism, the legal cannabis industry could respond by taking advantage of its ability to produce quality, tailor-made joints in attractive packages with trusted brand names, but Rolles et al. would allow none of this. Only loose cannabis would be available on the basis that pre-rolled joints containing weed and tobacco would somehow promote tobacco smoking. Everybody knows that most users will roll their joints with tobacco anyway but when you are this deep down the ‘public health’ rabbit hole such realities can never be acknowledged.

Rolles et al. recoil at the prospect of businesses making big profits from cannabis (they prefer a cuddly cottage industry and ‘cannabis social clubs’) and yet the combination of legalisation and a state-mandated minimum price is a guarantee of rich pickings for somebody. They claim to be uninterested in using cannabis as a cash cow for government – because ‘taxation policy should be subservient to public health’, natch – but ultimately decide that it would be better to hand dope smokers’ money to the state than to industry. Or – as they put it – ‘tax revenue should, as the default position, be preferred over what would be potentially inordinate profit margins for commercial entities’. And so, having slashed production costs, the state will not reduce the cost to consumers but will instead take the excess profits for itself. Rolles et al. estimate these to be between £500 million and £1 billion per annum.

Bah! Humbugs.
Humbugs.

Preoccupied with regulating cannabis from a ‘public health point of view‘, Rolles et al. are attempting the impossible. They want to wipe out the black market without lowering prices and without increasing consumption. These goals are mutually exclusive. Drug relegalisation will – and should – reduce prices substantially. Other things being equal, lower prices can be expected to lead to greater consumption, especially since the threat of prosecution will have been removed. If prices are kept artificially high by the government, the black market will survive and thrive, as has happened in the supposedly ‘under-regulated’ world of tobacco.

The implicit assumption in the Lib Dems’ report is that both cannabis prices and cannabis consumption are currently optimal, but there is no reason to think this is true from a health perspective, let alone from a social or economic perspective. Rolles et al. never spell out what health risks are presented by dope smoking but the clear implication is that from a public health perspective, the optimal level of cannabis consumption is zero (in which case rigorously enforced prohibition may be the least bad option). But the socially optimal level of cannabis consumption is simply the amount of cannabis adults choose to consume in a free market after being informed of the fairly trivial health risks and after paying enough tax to offset the fairly trivial externalities.

There is a straightforward liberal argument to made for drug legalisation which you might expect the Liberal Democrats, of all parties, to be capable of making. Instead they have turned to technocrats from the fundamentally illiberal world of ‘public health’ to make a case that quickly collapses under the weight of its internal inconsistencies and which is divorced from basic economics. I deplore the fact that cannabis is illegal, but if the Lib Dems’ vision of a grey, medicalised, command-control tax grab is the alternative then prohibition suddenly loses its sting.

Christopher Snowdon is an author, journalist and research fellow at the Institute of Economic Affairs. Tweets @cjsnowdon

Read our interview with Professor Harry Sumnall, on why public health should form the basis for cannabis regulation.

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