Brock Lorber

More About: Drug War

The Real Reasons Prop 19 Failed

Many, many theories have been floated about the failure of Prop 19 in California. The issue didn't resonate with older voters. Republicans (i.e. social conservatives) had the enthusiasm that Democrats didn't. Employers didn't want to be hobbled by employment termination restrictions. A state chock full of barracks lawyers don't want their state's laws to contravene federal law. Stoners don't vote. Cannabis is already de facto legalized. And, so on.

There may be a little truth in all of those things. But, all of them miss the fundamental reasons why Prop 19, a ballot measure to tax and regulate cannabis, failed: taxes and regulations are bad.

There really is nothing more to it than that. Taxes are bad and bureaucratic processes lead to bureaucratic results.

The regulation piece was a non-starter. Oh, sure, people like to regulate other people's behavior, but they don't want regulations on their own behavior beyond that which they currently self-impose.

So, a typical cannabis consumer isn't going to vote for restrictions on the wide consumer choices they already have. A typical cannabis supplier or farmer isn't going to vote for restrictions on their current business model. And, a typical non-user isn't going to vote for a proposition that, in their minds, will de-regulate the behavior of others.

We are left, then, with the reality that only a non-typical voter (irrational, even, depending on the point of reference) would vote for Prop 19 based solely on the regulation portion.

We need look no further than California's Prop 215, legalizing the production, distribution, and possession of cannabis for medical reasons, and the resulting 14-year bureaucratic and law enforcement morass, to see exactly why regulation (that is, to make regular) does anything but.

The tax piece is a bit more tricky. Both Prop 19 proponents and its opponents completely missed the target when handling this issue.

The vast majority of the wholesale cost and something approaching 100% of the retail cost of cannabis is a risk premium. It's a weed that grows wild in the ditches and forests of the Midwest, for god's sake. Any significant costs associated with cannabis cultivation, distribution, and sales are attributable solely to risk. It's this risk that makes cannabis California's #1 cash crop.

Everything else, the cost of law enforcement, the cost of incarceration, the cost of eradication, the environmental costs, the overburdened courts, the violence, the asset seizures, the property crimes, and the constant threat of having to defend yourself from spurious legal and criminal attacks, are symptoms of, and captured in, the risk premium.

No matter how you cut it, a tax on cannabis is an additional cost. It was the task of Prop 19's proponents to convince voters that legalization would reduce the risk premium to the extent that the additional tax would be completely or more than offset. Prop 19's opponents, however, merely had to convince voters that the risk premium would not be reduced, not be reduced enough to offset the tax, or worse, it would increase.

Both sides failed miserably.

They failed because they focused arguments on the symptoms, not the risk premium itself. Indeed, proponents positively ran away from arguments that the risk premium would be reduced, and the opponents were unable to make a coherent estimate of legalization's effect on the risk premium period.

Let's be crystal clear, here. Prop 19's opponents had nothing. Zip, zero, zilch, nada. No supporting facts (in many cases outright lies), no data beyond cherry-picked stats and unsupported conclusions, no coherent arguments, no logic, nothing. Opponents could do nothing but trot out the same, old, tired, conflicting canards that have been debunked and dealt with for decades.

Yet, Prop 19 proponents were unable to make a convincing case for risk premium reduction even to me, the world's biggest non-using opponent of prohibitions of any type.

I think that each and every one of the 3.3 million yes votes on Prop 19 was based on a belief that the risk premium would be reduced to the point where the tax would be at least or more than offset. I know there is a large chunk of no voters who did not share that belief and thus voted no even though they may support decriminalization.

I believe the latter group of voters join the non-voters as the only correct individuals in the matter of Prop 19.

Prop 19 would only have reduced the risk for a select group: people who come into regular contact with law enforcement while carrying cannabis in their pockets or visible in their vehicle. Prop 19 would certainly not have reduced risk for the rest of us, rather most definitely would have increased the risk.

The risk from marijuana prohibition for the rest of us comes almost exclusively from law enforcement and the criminal justice system. Prop 19 did not address that risk. Rather than defunding law enforcement and the criminal justice system to the extent those resources would no longer be required, Prop 19 would have supplemented them with the tax on sales of marijuana.

Rather than reduce drug prohibition-related crime, which is only marginally due to marijuana prohibition, Prop 19 would have increased it, as those supplemented law enforcement resources would increase the risk premium on the controlled substances that are at the heart of the drug crime.

Net net, Prop 19 would have increased the harm, violence, and risk of drug prohibition by shifting resources from the low-hanging fruit of the cannabis bush and concentrating them in other areas. Prop 19's proponents refused to address this eventuality, relying on some fanciful government propensity to defund itself.

The Governator just signed a marijuana decrim bill, so the resources that supported the criminal justice system and law enforcement have been reduced, right? No! Schwarzenegger signed that bill merely to slow expected budget increases (that's the third derivative of budget with respect to time, for those keeping score at home).

Prop 19 did not fail due to voter sentiment, voter apathy, or lack of money promoting it. Prop 19 failed because it was bad, bad, bad. Any successors to Prop 19 will continue to fail as long as taxes and regulations are proposed and the drug prohibition apparatus that is the root cause of the harm is left unaddressed.

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