Alcohol and Marijuana Work Together
In 1997, a hemp rope dating back to 26,900 BC was found in Czechoslovakia, making it the oldest known object to be associated with cannabis. Hemp, in both its material and plant forms has played an important role in humanity’s development. For thousands of years marijuana was not only legal, but also held important value among many cultures throughout history because of its commercial, medicinal, and spiritual value. It seems we have come full circle.
Along with other states, Nevada has approved marijuana medicinal use and will place a provision on the 2016 ballot to approve recreational adult use. Assuming the recreational measure passes, Nevada, with Las Vegas in particular, will become the cannabis capital of the world.
One thing that gives Las Vegas and the rest of the state an advantage is its move toward a three-tier system similar to that used by alcohol. As many in Congress and around the country debate and wonder how to best regulate the cannabis economy, Las Vegas has already found its way.
The three-tier system that the alcohol industry uses allows a separation of powers, if you will, among the producers, distributors, and retailers. It would be virtually impossible for government to deploy enough resources to oversee this market and the three-tier system solves the problem. In order for producers to gain access to retailers in the alcohol market they must meet the requirements of the distributors in terms of packaging, size, quality, labeling, etc. Only when the products meets the standards, which are passed down from the Alcohol Tobacco Tax and Trade Bureau (TTB) of the federal government, can the distributors represent the brand. The distributors play another important role by collecting excise taxes from retailers while providing a buffer for inventory, which means retailers do not have to have their capital tied up in storage of goods.
Las Vegas and Nevada are on the right track when encouraging a three-tier system for the cannabis economy. The first critical issue is consumer safety. Once packaging, labeling, and dosage standards are in place, the consumer safety issue is solved and business owners can grow their businesses. With the taxation function handled by cannabis distributors, the government can focus on crafting and refining a proper regulatory scheme. And in the end, jobs are created.
Some have voiced concerned about “lumping in” cannabis with the existing alcohol industry system. The two products and industries have too many differences to make this a possibility although there will be market segments where the two overlap. But the cannabis economy can learn a lot by reviewing the history of the alcohol industry. From the end of Prohibition to now, alcohol has become a significant economic driver in many economies and has done so responsibly while creating jobs and generating tax revenue for local and federal governments. There is no reason to think the cannabis economy cannot accomplish the same great achievements and growth with its own three-tier system in place.