Sunday, July 24, 2011

The Future of Pot

Keith Humphreys has an interesting item up, reminding everyone that nationwide marijuana legalization would lead to a pot industry that would probably look a lot like the tobacco industry or the processed food industry, with a handful of large companies employing white-shoe lobbyists to fight taxes and regulations. Indeed, estimated domestic spending on pot is just over half our current spending on tobacco, and legalization would almost certainly drive up the spending on pot. While that's almost certainly the end game, one wonders if we'd see an intermediate period where no major food or tobacco producer wanted to be the first one to dive headfirst into selling weed.

Four Loko
Instead, we might have a period of experimentation where smaller, "edgier" companies rush to fill the niche, similar to the energy drink and alcoholic energy drink crazes. Eventually the majors would decide they wanted in on the action, but I suspect we'd see a bunch of bit players jostling for market share before being acquired by Coke, MillerCoors, Annheuser-Busch-Inbev, Philip Morris, etc.

(cc photo by flicker user Aaron Plewke)
Post a Comment