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Séminaire d’économie de Bordeaux

« Legal Weed: The Blunt Realities of Cannabis Economics »

Around the world, cannabis “legalization” hasn’t lived up to the hype. Investors are reeling, tax collections are below projections, and people are pointing fingers. On the business side, companies have shut down, farms have failed, workers have lost their jobs, and consumers face high prices. Why has legal weed failed to deliver on many of its promises?

This general survey presentation gives a broad and accessible overview of the problems faced by the legal weed industry in the many states that have embarked upon various forms of the legalization experiment. The idea is to take on the euphoric claims about cannabis markets with straight dope and a full dose of economic reality.

This is not a technical paper, but rather a frank, fact-filled, entertaining presentation aimed at a general audience of agricultural economists across fields who may not have any exposure to the legal cannabis industry but may be interested in its progress, future potential, and ability to contribute to local and national economic production and become a bona fide part of agricultural economics.

In this presentation, I offer the unadulterated facts about the new legal segment of one of the world’s oldest industries. I offer a summary of the main questions, analyses, and conclusion in my recently published book on cannabis economics, co-authored with Daniel Sumner, entitled “Can Legal Weed Win?” (University of California Press, 2022).

I draw upon data and anecdotes from our own experience working with California cannabis regulators since 2016. I explain why many cannabis businesses and some aspects of legalization fail to measure up, while others occasionally get it right.

The stories I tell stretch from before America’s first medical weed dispensaries opened in 1996 through the short-term boom in legal consumption that happened during COVID-19 lockdowns. The presentation is peppered with unexpected insights about how cannabis markets can thrive, how regulators get the laws right or wrong, and what might happen to legal and illegal cannabis markets going forward.