Wisconsin Republicans propose state marijuana monopoly
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Wisconsin Republicans propose state marijuana monopoly

Wisconsin Republicans appear set to propose one of the most restrictive medical marijuana programs in the nation.

Wisconsin Assembly Republicans announced they are preparing legislation that would legalize marijuana for medical purposes, although it would only be available for sale at state-owned dispensaries. The bill’s language is not yet publicly available, although a bill analysis from legislative staff has been circulated. On the surface, this may seem like a positive advancement for medical marijuana legalization and access. Unfortunately, the legislation also proposes granting the state a monopoly over all retail sales of medical marijuana.

According to the bill analysis by the Wisconsin Legislative Reference Bureau, the proposal would allow individuals who suffer from a narrow range of qualifying conditions to obtain a state-issued medical card upon the recommendation of their doctor. With the card, an individual could purchase only non-smokable products containing marijuana that would be sold exclusively through five retail locations spread across the state. A patient could purchase no more than 30 days’ worth of inventory upon their first visit and up to 90 days’ worth upon subsequent visits. 

Wisconsinites would not be able to grow their own medical marijuana at home, but a registered caregiver could purchase medical marijuana products from a state-run dispensary on behalf of a patient if their relationship is documented in advance with the state. Further, the state would extend its prescription drug monitoring system that was designed to track physicians’ patterns of prescribing opioids to the medical marijuana market.

While Republicans propose to license private companies to cultivate and process marijuana into non-smokable goods, at least 80% of these companies’ officers and directors would need to be Wisconsin residents. Moreover, no officer or director could have been convicted of “any crime” in the 10 years preceding their application, regardless of its severity.

In sum, Wisconsin Republicans appear set to propose one of the most restrictive medical marijuana programs in the nation despite sharing a border with three states—Illinois, Michigan, and Minnesota—that already have fully recreational marijuana markets.

The Wisconsin medical marijuana proposal does have a few strong points. First, medical marijuana products would be exempt from sales tax. Second, local governments would not be able to regulate licensed marijuana facilities. High taxes and local bans have helped prop up illicit markets in some states.

Third, there appears to be no limit to the number of cultivation or processor licenses available. These few strengths, however, are largely negated by the fact that the state would monopolize the retail function.

Wisconsin Republicans aren’t the first to propose a state monopoly on marijuana. Republicans in New Hampshire are considering a similar idea at Gov. Chris Sununu’s suggestion. In both cases, Republicans have taken the lead in suggesting state ownership of the means of production—literal socialism—throughout an entire tier of the marketplace.

The proposals would also introduce major legal complications. First, the manufacture and distribution of marijuana remain criminal actions under federal law, and any enterprise organized to carry out these activities is, by definition, a federal criminal enterprise. By directly trafficking marijuana, as the Wisconsin proposal suggests, the state itself would become a criminal enterprise, state assets would become subject to federal seizure, and state officers would be subject to arrest. Moreover, Wisconsin could face civil liability through the Racketeer Influenced and Corrupt Organizations (RICO) Act if a private party alleges they’ve been harmed by the state’s federal criminal activity.

This danger isn’t illusory. California examined the possibility of establishing a state bank just to facilitate transactions in the marijuana industry. But it determined that doing so would expose the state to criminal and civil RICO liability.

Second, the entire medical marijuana program could be shut down at any time by federal preemption, and any store employee would have standing to bring suit against the state for compelling them to violate federal law.

Third, a new Office of Medical Cannabis Regulation, which would run the stores, could face commercial lawsuits from suppliers depending on their purchase decisions. What criteria would regulators use to evaluate which products they will purchase or where products will be displayed on shelves? In New Hampshire, the Liquor Commission frankly acknowledges it holds no expertise over marijuana products and would hire a third-party consultant to make these decisions.

These issues are entirely avoidable. Private entrepreneurs and investors have demonstrated a robust appetite to assume the risks of operating in a federal illegal market to operate state-legal medical and recreational marijuana businesses. Wisconsin could simply follow the model pioneered by states like Michigan.

Because Wisconsin’s neighbors offer recreational marijuana markets, Wisconsinites already have access to a wide range of products at retail locations that may be closer to their homes than the proposed state stores. A legislative analysis from last spring estimates that Wisconsinites spent a total of $61.3 million at Illinois’ private marijuana dispensaries in 2022.

Wisconsin should legalize medical marijuana. However, state lawmakers should get serious and put forth a bill that recognizes a right for medical patients to procure marijuana and that individual initiative is the best way to organize economic life.