What Happens When a Country Legalizes

Speaking at the Hemp Future Conference in Reykjavik, Iceland was one of the highlights of 2024 for me. I was invited to talk about what happens when a country legalizes cannabis—a broad and deep topic, and one of my favorites to explore. 

Over the past decade, through my work with Bhang and New Holland Group, I’ve been figuratively planting the seeds of our industry worldwide.

My career has given me a front-row seat to what happens when countries legalize medicinal cannabis, and there’s a common story that tends to play out. It starts like this: 

  • 📜 Lawmakers build cannabis markets designed to generate tax revenue, rather than profitable businesses that continue to bolster their economies and improve their citizens’ wellness.

  • 🌱 Regulators underestimate consumer demand and the initial supply is insufficient which causes the illicit market to grow in tandem with the newly legalized market.

  • 🛑 Market expands to meet demand, increasing cannabis production that is bottlenecked by NIMBYism and local restrictions on cannabis retailers.

  • 🥦 Newly legalized, licensed businesses struggle to compete with the preexisting illicit market.

  • 📉Cultivators lower prices to clear unsold inventory, leading to price crashes, shrinking margins and a rise in receiverships and bankruptcies. The “race to the bottom” kicks into full swing.

  • 🤜🏼 🤛🏼 Price parity is finally achieved between the legal market and the illicit market and consumers consistently choose legal products out of safety concerns

I’ve spent the last decade watching this story play out over and over again as an operator and leader in the global cannabis and hemp industries. 

If you feel like you’re in a late-night infomercial right now, insisting that there *has* to be a better way—you’re right. Medical cannabis and adult-use markets don’t have to work like this.

There is a lot that European countries like Germany, Spain, and Iceland can learn as they join the growing number of states and nations that have legalized hemp and medical cannabis. 

Good legalization measures require both the cultural liberalism of progressives and the deregulatory zeal and economic sensibilities of fiscal conservatives. Instead of driving the unlicensed market with high taxes and excessive regulation, lawmakers should focus on the harm-reduction benefits of legalization. This means prioritizing safety, accessibility, and market growth to create jobs, reduce violent crime and improve public health outcomes. The states and nations benefit from relieving their overburdened criminal justice systems allowing them to reallocate the resources targeting victimless cannabis crimes to targeting crimes like murder, rape and burglary.

The adult-use framework for alcohol and tobacco already exists. There is no need to reinvent that legislative wheel. Put the regulatory guardrails at the manufacturing level where you can ensure safe products are available to consumers and then open the road for sales to capture market data and tax revenue. What do you think about this cycle? What are the best ways to break it and create better outcomes for the cannabis industry? I'd love to hear your thoughts!!

Ciera Krinke

At Digital Box Designs we specialize in all things Squarespace web design, and optimize your site through thoughtful and strategic copywriting and search engine optimization.

https://digitalboxdesigns.com/
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