How Should State and Local Governments Respond to Illegal Retail Cannabis?

By Howard Husock

• The legalization of cannabis, rather than sidelining the black market, has fueled it, providing cover to illicit cannabis enterprises that often undercut the legal market on price and accessibility.

• State policies, such as high or complex cannabis taxes, scant issuance of licenses for legal operation, and widespread local “opt-outs,” play a key role in keeping the legal market from outcompeting illegal alternatives.

• The treatment of alcohol and cigarettes may be better models: States should allow legal retail to proliferate to minimize the advantages illicit operators now enjoy.

• At the same time, as with tobacco, public health authorities should mount education campaigns to minimize marijuana use, in light of its demonstrated dangers.

Washington, DC: American Enterprise Institute, 2024. 1113p.