A growth industry our political elites hate

by: Eric B.

Mon Sep 24, 2012 at 10:24:42 AM EDT

A couple of weeks ago, Skubick had an online column about how Rick Jones so hates the medical marijuana law that he wants to put it back on the ballot during an off-election year because he's confident that the state's electorate, if given the opportunity, would ban medical marijuana. Among other things, it explains why some of the stuff that really ought to be addressed by a simple statute is being promoted this year as necessary amendments to the constitution. In years past, you would expect elected government to take seriously such a strong statement on behalf of the electorate. Medical marijuana, however, has prompted a different reaction, one that suggests that our political elite isn't interested in really hearing the opinions of the great unwashed.

The Bridge had a pretty good article last week on the positive economic news coming from the 2008 ballot question.

Iron Labs LLC is a marijuana testing firm. Based in Walled Lake, it employs three full-time “cannascientists.”

The “cannascientists” put submitted samples of medical marijuana under a microscope and, through gas chromatography, they note impurities and the levels of four different cannabinoids and THC, the active ingredients in the cannabis plant.

Research and development always leads to the creation of high-skill, high-wage jobs, which is supposed to be a good thing.

But, let's take this a step further ... the entire thing originally led to a market that acted as markets are supposed to act in a free market system. Someone had goods, someone else wanted them, and they facilitated amongst themselves the trade of goods for money. And, to satisfy demand within the market, now you've got companies paying scientists to conduct research ... and probably paying them above-average salaries to do it.

The story mentions a Mt. Pleasant dispensary that was closed after the attorney general skipped the legislative process and convinced the appellate court that markets have to be created by act of government and don't just happen organically (I wonder what generations of students of Adam Smith would say about this). I interviewed the guy for a story in the spring, and during the course of our conversation, he led slide that thanks to trade in a good suddenly made legal (and a good that, according to the article, the attorney general doesn't dispute ought to be made available), he paid more in sales tax from his dispensary than he did from his Biggby coffee franchise. 

If you're a free market fellow, this is a cautionary tale of what happens when government attempts to suppress markets, as is the case here. They still exist, and exist in the purest form (the people I've met who are the best raw business people, with the keenest understanding of local market pressures and supply and demand, are all drug dealers). Government, however, spends a good deal of resources trying to get rid of them, while the benefits of that markets' fruit -- tax revenue and research and development into improving products -- are lost to the black market.