Prioritize Marijuana Licenses for Past Offenders? No, Just Eliminate Licenses

Jeffrey Miron

As states ease their marijuana prohibitions, several are prioritizing licenses for individuals “disproportionately impacted” by prior drug laws. This mostly means those with a prior drug conviction. This issue arises because states limit the number of marijuana licenses. That is misguided. Government‐​created barriers to entry keep prices high, inconvenience consumers, and allow those who get licenses to earn outsized profits. In New York, for example, six months after the state started issuing licenses, only 12 dispensaries had opened. Similarly, licensing requirement plus high taxes in California have kept the underground market five times larger than the legal one (although this partially reflects federal prohibition). In Libertarian Land, government imposes few if any restrictions on starting a business, of any kind. That should apply to marijuana legalization.