Though cannabis legalization has been a positive development overall, in many places, the black market still exists to one degree or another, albeit much less so than when cannabis was illegal. Nowhere else is this more true than in New York, whose uniquely arcane, difficult, and disastrously sluggish rollout of cannabis licenses statewide has led to a massive proliferation of unlicensed weed shops, especially in NYC where such shops outnumber licensed ones by a whopping 250 to one. So how does one solve such a bedeviling problem?
Enter Rear Admiral Luther E. Gregory. In the 1930s, Prohibition was repealed, and Washington State along with other states were now faced with the task of shutting down the well-established bootleggers and speakeasies that persisted even after Repeal. Admiral Gregory was asked to head the state's Liquor Control Board, and given carte blanche to come up with a solution, one which worked surprisingly well in fact:
- End Prohibition, first of all.
- Give amnesty and issue licenses to anyone willing to play by the state's rules, whether former bootleggers or otherwise.
- Set the alcohol taxes as low as possible at first, the lowest in the country in fact.
- Punish sellers who don't play by the rules, with an iron fist--i.e. blacklisting scofflaws from ever selling liquor in the state again.
- After holding down alcohol taxes for three years, abruptly raise taxes to the point where they're now the highest in the nation.
Problem solved. The legal market proved to be competitive with what was left of the black market, and drinkers overwhelmingly preferred the former over the latter, driving the latter out of business. And the black market never came back even after raising taxes dramatically. Looking back, it should have been so obvious indeed.
Substitute "cannabis" for "alcohol", and there is literally no reason whatsoever why this strategy would not work in this day and age. And instead of holding down taxes for three years, merely one or two years should be sufficient to get the same results, even if the hike is automatically scheduled. Doing so would minimize the greatest risk of the strategy, namely, that the fledgling legal cannabis industry would then become so powerful that they would resist and successfully quash any attempt to raise taxes in the future. They would not become that powerful in just a year or two, and probably not for several years, but the black market could be easily quashed in that timeframe all the same. But most importantly, cut the ridiculous red tape and, and make cannabis licenses easier and cheaper to get, particularly for the current gray market shops.
Now over to you, New York. Remember, the cart does NOT go before the horse.
