By Orrin J.H. Johnson
Starting a new business venture is a scary thing. Even under the best of circumstances, it’s a huge gamble with a million unanswered questions that can really only be answered by trial and error. Do I have enough product to meet demand? Is there enough demand for my product? Am I charging too much, or maybe not enough? Will I be able to pay myself back for everything I sank into it before I could even open my doors? Can I compete with others already in the industry?
And then there is the government to contend with, even in the most realistically business-friendly regulatory environment. Am I getting the proper business license? Am I setting aside enough for my taxes? Is my establishment in a place where it’s allowed to be with respect to zoning? Did I hang the right posters in the breakroom? Did I file the right paperwork, and was I supposed to do it with the city, county, state, or all of the above? Should I hire a lawyer to make sure everything is kosher? (Let me help with this one: Yes. Yes, you should.)
So now imagine, on top of all of that, that the government has decided arbitrarily that there can only be X number of your type of business in town, that you need to seriously invest in your startup before you can even credibly apply for a license, and that when you do apply, you have no realistic way of knowing whether the government will let you continue to operate. Imagine further that it sure looks as if the already-wealthy and previously politically connected seem to be getting not just one but many of those available licenses, and while you’ve met the standards to get one, it still seems to be out of your grasp for reasons that seem arbitrary and even capricious.
Such a situation is intolerable. It flies in the face of the American promise – that with grit and perseverance, you can build your business and compete in an open market where the playing field is the same for you and your competitors. It is also an insult to consumers who ought to decide for themselves how many of any single type of business they should have to choose from. And it undermines faith in the fundamental notions that all similarly situated people should be treated equally under the law, or that government licensing isn’t just a pretext to stifle competition on behalf of the well-connected few.
Fortunately, most businesses don’t have to deal with such a situation. We don’t have central economic planners telling us how many restaurants is too many for our community — or doctors, or lawyers, or tattoo shops, or clothing boutiques. If there are more grocery stores than a neighborhood can support, one or more won’t be profitable and will close, and meanwhile the government doesn’t prevent us from growing our own tomatoes. We don’t need or want government bureaucrats to decide these things for us, and whenever they try to anyhow, they inevitably screw it up.
We do have some pretty dumb, anti-freedom rules for a few industries, like car dealerships, trash collectors, and alcohol distributors. Nevada has always confused being libertine with being libertarian. But the regulations pertaining to the marijuana industry are probably the worst. Limiting the number of businesses? Some businesses getting half a dozen licenses, while others get none? Announcing that meeting legal standards to open your business isn’t enough? The appearance of unfairness and impropriety when you see how well-connected the successful license applicant are?
It’s absurd and offensive. This, by the way, is what a centrally managed socialist economy would look for every industry. And I can’t believe anyone would actually advocate for more of this type of nonsense. I’m glad to see failed license applicants aggressively suing the state over it, and I hope they prevail.
Either marijuana is legal under state law, or it’s not. Anyone in Nevada who wants to grow and/or sell marijuana and who can meet whatever safety standards apply should be able to do so, relying on the equal protection of our laws in their entrepreneurship. Their businesses should succeed or fail not because some government bureaucrat made an arbitrary decision about which shop had a better floor plan or whether the color of the skin of one or more of the business owners was the right color, but because they operate legally and satisfy enough customers. If community leaders worry about a vice industry in their neighborhoods, well, that’s why God invented zoning regulations – concerns with vice are not a good enough excuse to arbitrarily limit the number of businesses themselves.
The irony is that this sort of protectionist nonsense will only hurt the industry as a whole, including those who think they’re protecting themselves. Look at the taxi industry, one of the most absurdly protected and cartel-ish out there. They’re dying off because someone found a better way. Even gaming and prostitution in Nevada would be better off with more freedom. For the pot industry, expensive regulation has only strengthened the black market for the drug – motivated entrepreneurs will always find a way.
I voted against the legalization of marijuana, because I thought the social costs would outweigh the benefits. But as I was outvoted, let’s get the most out of the benefits. Let’s stop these stupid, anti-competition, anti-freedom regulations and unleash the market forces to maximize tax revenue, jobs, tourist attractions and consumer choice.
With more and more states legalizing pot and competing with us, and plenty of need for public funds in education and other sectors, it’s past time to let the marijuana industry grow to its full potential. And maybe that will show our lawmakers that other industries are better off with freer and fairer markets as well.
Orrin Johnson has been writing and commenting on Nevada and national politics since 2007. He started with an independent blog, First Principles, and was a regular columnist for the Reno Gazette-Journal from 2015-2016. By day, he is a criminal defense attorney in Reno. Follow him on Twitter @orrinjohnson, or contact him at firstname.lastname@example.org.