The rejection of Ohio’s Issue 3 in November last year brought a contentious problem to the fore: how cannabis advocates envision the future of legalization in the United States. While the Ohioans for Medical Marijuana group brings new hope to the Buckeye State, it’s important to understand why Issue 3 failed, and to consider some of the larger issues surrounding legalization in a capitalist context.
What’s the issue with Issue 3?
While nine out of ten Ohioans support the legalization of medical marijuana, and a slight majority approve recreational use, Issue 3 failed dismally when the votes came in. Fears of monopolization are often cited as the main reason why Ohioans rejected the amendment.
ResponsibleOhio, the multi-million dollar group driving Issue 3, argued that these fears were unfounded, as the bill would have initially allowed ten grow sites (with the possibility for further sites to open at a later stage) that would’ve competed against each other for consumers’ business. Ohioans, however, felt differently – even though the bill also included a provision for citizens to grow up to four plants at home for non-commercial use, and to operate a store or dispensary.
However, limiting cultivation to ten grow sites would’ve benefited the wealthy backers of ResponsibleOhio. These investors – who raised a collective $36 million to bankroll the initiative – would’ve had exclusive rights to commercial cultivation, and thus stood to create an oligopoly (not monopoly), despite the provisions for citizens included in the amendment.
What are oligopolies?
Many industries begin with a number of competing businesses or suppliers. However, in a competitive market, the companies that cannot sustain themselves don’t just ‘go under’ – their business is typically subsumed or bought out by a competitor. Over time, what we see is market concentration: a few firms or companies come to own and control the majority of production, sales, and shares in a specific industry. This is, essentially, an oligopoly.
So, even though consumers are told that they have a wealth of choice when making purchases, their consumption is still limited to only a small number of businesses who retain power over the market. This isn’t hard to see when you think about other previously emergent industries like mobile phones or social media: where we used to have multiple brands or sites to choose from, we’re now resigned to a handful of tech producers and social networks. Even our supermarkets and network service providers run regional oligopolies. This is fine if we’re content with the services or products that oligopolies are providing, but it’s ironic given the rhetoric of ‘consumer choice’ that’s promoted in a free market system.
Did Ohioans see “Big Cannabis” as the next “Big Pharma”?
Cannabis is an emergent industry. As it’s decriminalized and legalized across the US, there are so many opportunities for entrepreneurs and established businesses to capitalize on cannabis’ many uses, and all the subsidiary products that follow.
But should we be worried that cannabis could be the next Big Pharma or Big Tobacco? Could we be facing the Monsanto-ization of cannabis? It’s certainly a possibility, and Ohioans’ rejection of Issue 3 speaks to this concern. While the amendment did include provisions to prevent collusion and vertical integration (a company’s ability to control every aspect of their business, from production to distribution to consumption), it’s not unrealistic to be wary of these promises. Over time, business regulations are often revoked or not enforced. The Telecommunications Act of 1996, for example, was meant to promote competition and private investment in the media industry, but rather “unleashed unprecedented deregulation and media consolidation” – which is why the majority of American media is now owned by six companies.
And when oligopolies have so much control over an industry, they can become powerful political lobbies that secure legislation in their favour, often making it difficult for small mom-and-pop businesses to enter the market, let alone compete.
These concerns may not be relevant right now, but they are worth considering – especially when citizens vote for cannabis’ legalization. We should be paying attention to how these bills and amendments are worded, their larger implications for who will have access to cannabis, its cultivation, and our ability to sell or share it, and whether or not legislature only benefits big corporations over private citizens and small businesses.