New York governor Kathy Hochul recently announced the creation of a $200 million fund to invest in marijuana dispensaries to be operated by minorities who suffered under New York’s war on marijuana. The state’s lieutenant governor, Antonio Delgado, says, “It is incumbent upon us to create a socially responsible cannabis industry … that ensures jobs and opportunity for minorities who have long been subject to unfair (cannabis) enforcement.”
The reality is that, after spending decades gathering power and money by waging war on marijuana users, politicians have now found a way to amass power and money by making amends to marijuana users.
Suppose the goal is to compensate people whose lives and families the state destroyed under the marijuana laws. Why provide money to run dispensaries? Only a fraction of those victims can run businesses, and only a fraction of that fraction is available to run these particular businesses. A better solution would be to reimburse victims for the time that New York kept them locked up and let each decide for himself what to do with the money.
But this investment initiative is about “creating jobs,” says the governor. Creating jobs that generate more value than they consume is hard and isn’t something at which politicians excel. Creating jobs with net value requires convincing consumers to hand over their money voluntarily by offering them something in exchange that they like even better. Pulling that off almost always requires keeping government far away from decision-makers, not entrenching it in a framework of licensing, oversight boards and political appointments.
Cutting checks to drug war victims would be better but wouldn’t serve politicians’ and bureaucrats’ interests — and that’s what this effort is really about. Marijuana dispensaries will generate hundreds of millions of dollars in licensing fees and taxes. That money will swell bureaucrats’ budgets and give politicians favors to hand out. But when it comes to compensating victims of the war on marijuana, something is better than nothing, right?
Not so fast.
According to state senator Liz Krueger, the investment fund and its overseer, the Cannabis Advisory Board, will create “a legal cannabis market rooted in social equity.” Ignoring the fact that even proponents can’t agree on a logically consistent definition of “social equity,” a market rooted in anything other than profit and fair competition will, at best, fail. Why? Because competing markets that are rooted in profit and competition will take it to the cleaners.
At worst, to persist despite its inability to compete, a social equity-based market must limp along as a perpetual ward of the state. And that worst-case scenario is exactly what politicians want. Politicians will have built a gold mine creating the marijuana industry to be a ward of the state. There will be decades of funding to hand out to favored players, and appointments to oversight boards to bestow on those who can sway voters and fund campaigns. The best way to create such an industry is to give it a goal — any goal — other than self-sufficiency. Social equity is a perfect contender as it can mean many things while simultaneously meaning nothing.
We should applaud New York’s politicians for wanting to make amends for the decades and billions they spent destroying the lives and families of those who worked in the cannabis industry. But politicians’ sudden moral awakening would be much more believable if their efforts sought to deliver maximum benefit to their victims rather than a maximum benefit to the political class under the guise of helping those victims.
