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OPINION: Most of the comments on the referendum on the legalization of cannabis come from a social and public health point of view. However, given that the proposed legislation aims to legalize practically everything related to the cannabis business, except its commercial marketing, a comment on its likely results based on a commercial and marketing perspective is timely.
When proposed legislation is analyzed through the lens of a business analyst, there is considerable scope for concern about the consequences of its introduction for the public good.
These concerns can be divided into two groups, those arising from the behavior of current extra-legal operators in the industry and those arising from the behavior of new entrants in a legalized industry.
There seems to be a rather naive expectation that the current industry will simply “go away” if the Cannabis Legalization and Control Bill becomes law. Marketing theory indicates that the illegal cannabis industry itself can do this over a period of time, as the distribution of illegal products requires a pyramid-shaped sales network based on large numbers of people that is labor intensive and therefore it is generally well paid due to the personal risks involved.
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The legal industry will have structurally lower costs and should be able to reduce the high prices required to maintain the illegal network as a viable business.
However, marketing theory has another powerful concept known as “core competence.” This means that you should focus on doing what you are naturally good at.
Today’s illegal industry employs thousands of people and presumably pays those who are good at it quite well. These people will not leave, but they would have to move on somehow.
As media articles, dramas, and documentaries consistently suggest that the core competencies of the illegal drug trade include a variety of unusual and interesting business practices, current headlines may find it difficult to apply these skills to the legal industry. of cannabis, or any other legal industry for that. to import.
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Given the nature of these alternatives, the net negative social impact of this is likely to be significant, writes Robert Hamlin.
Therefore, they will be looking quite sensibly to replace this lost income by doing what they are good at: distributing illegal materials. They can choose … synthetic cannabinoids, methamphetamine, prostitution, etc.
All of these sectors are likely to experience an influx of capital alongside highly trained and motivated staff, which will drive increased activity and revenue as a result of cannabis legalization.
Given the nature of these alternatives, the net negative social impact of this is likely to be significant. It may be an unsavory notion, but the illegal cannabis industry keeps a large section of the criminal community happy and paid for in the sale of what supporters of this legalization claim to be a harmless and readily available substance. Is it such a bad idea to keep it that way?
An unfortunate feature of the proposed bill also virtually guarantees the misconduct of any legal participant. This is the requirement that cannabis retailers only sell cannabis.
Within a capitalist society, companies seek and strive to grow; this is how our economy works. The bill’s requirements dictate that legal cannabis retailers can only grow by stimulating demand for cannabis, which means promoting and marketing it. However, that same bill also dedicates almost all of its content to the objective of preventing the same activity.
Thus, legal cannabis retailers can only grow through the bill’s anti-marketing provisions, and they will surely try to do so. The pressure can be applied on several levels, all of which would cost the taxpayer a fortune:
1) Pressure on the bill. While it is a complex document that seeks to cover all angles, smart, well-funded attorneys will look for loopholes within its vast fabric. They will surely meet and cannabis promotion will trickle through them.
2) Pressure on authority. The bill must be executed by an independent authority. These agencies have a miserable track record around the world for being captured by the industries they are supposed to control. There’s a lot of money at stake here, and he’s just a small authority, so the capture is a very plausible scenario. A captured authority would not have the will to enforce the bill, which would be widely flouted as a result.
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RNZ’s The Detail podcast explores the active ingredient in marijuana, THC, and asks how psychoactive drugs compare to alcohol.
3) Pressure on the judiciary. Even if the authority seeks enforcement, there is still a need for the judiciary to impose penalties for infractions that could not be treated simply as a cost of doing business. This would require a reestablishment of the current judicial mindset on cannabis which may not occur.
It can be argued that the impact of the proposed legislation on business behavior will lead to considerably more use of both cannabis and other illegal drugs, as well as a significant increase in enforcement costs.
Given this, I personally will not vote in favor.
Robert Hamlin is Senior Lecturer in the Department of Marketing at the University of Otago
