Report Calls On Congress To Avoid Proliferation Of Cannabis Monopolies When Considering Legalization

While the majority of US residents support federal cannabis legalization and those involved in the industry would be ecstatic to see the reform, new insights reveal some concerns about it. Parabola Center for Law and Policy, a nonprofit think tank of legal professionals and drug policy experts released a report Wednesday. “How to Federally Legalize Cannabis Without Violating the Constitution or Undermining Equity and Justice.”

The report outlines concerns that federal marijuana legalization would wipe out current state markets and replace them with a national monopoly. The Parabola Center offers a blueprint for Congress aimed at protecting nearly 10,000 small businesses that make up most of the legal market across the U.S. and the hundreds of thousands of jobs they provide.

Interstate Commerce Protections And Gradual Implementation Are Key

According to the non-profit, the focus should be on interstate commerce protections for small businesses to avoid a national monopoly. 

"Excitement for federal legalization is mounting because state programs have led to good jobs and a lot of progress toward our goals of equity and justice," stated Shaleen Title, founder and director of the Parabola Center. "But flipping a switch to federally legalize marijuana would end all of that progress. Gradual implementation that protects small businesses and workers is the fairest option for everyone."

See Also: Schumer Petitions For Federal Marijuana Legalization Amid Progress On Cannabis Banking Bill

Report Highlights - Blueprint For Congress

The Parabola Center proposes three constitutional policy solutions and model language to protect equity and justice efforts and preserve the progress cannabis-legal states have made.

Suggestions include: 

• Explicitly allowing existing state cannabis laws to operate as designed and without disruption;

• Allowing bonafide social equity businesses, small businesses, and worker-owned businesses to engage in interstate commerce first; 

• Limiting harmful impact by large corporations by preventing excessive consolidation through mergers and acquisitions, and establishing anti-monopoly provisions.

Our new report, hot off the press today, provides a proposed solution to the problem that federal legalization would likely wipe out state marijuana markets and replace them with a national monopoly.

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— Parabola Center (@ParabolaCenter) October 25, 2023

 “Without protection for small businesses, a shift from fragmented intrastate markets to one large intrastate market through the end of federal prohibition and the demise of interstate barriers will likely lead to consolidation of the cannabis industry and a monopolization of the market by large cannabis companies,” the report reads. “Additionally, large corporations currently operating in other areas will enter the cannabis market once the risks and constraints of federal prohibition are removed.”

The paper further explains that around 9,900 small pot companies account for 60% of total cannabis sales, whereas the six biggest cannabis companies combined own around 20% of the cannabis market. In the case of federal reform, more consolidation activities would happen leading to a monopolized marijuana market.

The report is authored by Tamar Todd, an attorney with vast experience in drug policy, who is a lecturer at U.C. Berkeley Law School where she teaches about cannabis law and policy.

Photo: Benzinga edit with images by LOGAN WEAVER | @LGNWVR and Matthew Brodeur via Unsplash