The Myth of “Relinquishing the Market”

In the Huffington Post, Lucia Graves repeats one of the biggest myths of the entire I-502 campaign:

As voters in Washington state this month legalized marijuana for recreational use, they overrode the concerted lobbying of a conspicuous interest group: The dispensaries that already had the right to sell marijuana for medical use, and who now risk relinquishing that lucrative marketplace to new competitors.

Though one might assume that legalization would be opposed primarily by law enforcement and social conservatives, nearly all of the money donated to fight the ballot measure in Washington came not from such groups but rather from the existing medical marijuana industry, according to state campaign contribution filings.

All things told, the anti-502 forces dabbled in far more fantasy and myth-making than those who supported the initiative. But the idea that the anti-502 crowd was simply a bunch of greedy dispensary owners trying to protect their turf was also a fantasy. As a supporter of the initiative, I mostly bit my tongue throughout the campaign over this point, but now that the vote passed, I feel compelled to kill off this myth once and for all.

The opposition to I-502 from the activist and medical marijuana community had two primary reasons. First, it was a result of various aspects of the bill. The per se DUI provisions were a very big part of that, but so was the lack of home growing and the 1 ounce possession limit. What New Approach Washington (the group behind I-502) saw as necessary regulations to appeal to undecided voters, many activists and medical marijuana patients saw as new open doors for the police to go after medical marijuana patients and even regular users.

The second reason was due to longtime internal divisions in the state’s activist community. When Sensible Washington was trying to get a legalization initiative on the ballot in 2010, an expected source of funding mysteriously dried up at the last minute. At the time, I tried to investigate (this was long before I had any affiliation with the group), but couldn’t get anyone to divulge what happened. The leaders of Sensible Washington blamed Alison Holcomb (who eventually founded New Approach Washington), and since then, there’s been a serious rift in the community between the two groups. If you look at the folks who were most outspoken in opposition to I-502 this year, almost all of them had some affiliation with Sensible Washington. In fact, they even wrote the No on I-502 argument for the voter’s guide.

In her post, Graves writes about how the funding for the opposition came primarily from the medical marijuana community, but that’s only because the opposition received almost no funding at all. The I-502 campaign raised $5.6 million, compared to the opposition’s $16,000. If the medical marijuana dispensaries were in such a lucrative marketplace and needed to guard their turf, they could’ve scared up far more than $16,000.

Beyond that, Graves is simply incorrect when she talks about “dispensaries that already had the right to sell marijuana for medical use”. Dispensaries in Washington state are still technically illegal (thanks to Governor Gregoire’s veto in 2011). It’s only in Seattle and a limited few other places where the authorities have generally looked the other way. In that environment, it’s possible that some folks were making good money, but just about any of those people would stand to benefit far more by becoming a totally above-board dispensary that sold to everyone. If anyone was opposing I-502 because they wanted to keep a system where they were quasi-legal and could only sell to a smaller segment of the population, they’re likely too dumb to stay in business for that long anyway.

Sadly, one of the biggest purveyors of this myth was our friend Dominic Holden from The Stranger. Back in April, he wrote this in the New York Times:

In late February, Dr. Gil Mobley, a physician with a local clinic providing medical-marijuana authorizations, began a campaign called No on I-502, a new name for a group that, before, called itself Patients Against I-502. It anticipates donations from lawyers and doctors, said its treasurer, Anthony Martinelli, and pot dispensaries may also finance a fall volley of television commercials.

Needless to say, the pot dispensaries never did that. There wasn’t a single anti-502 television ad made. And Holden never explained what basis he had for saying that. He never quoted any dispensary operators who opposed it. Nor did he explain what Mobley’s financial motive was. In fact, because I-502 bans home grows for non-patients, Mobley’s clinic will likely see increased profits from folks who still want a doctor to authorize their green thumb to cure whatever ails them. And at no point this year did anyone manage to explain how it made financial sense for the state’s few dispensary operators to oppose I-502.

At the end of Graves’ article, she quotes several dispensary operators who opposed the measure, and they all repeated what has long been known:

Trek Hollnagel, a spokesman for the Conscious Care Cooperative in Northern Seattle, also dismissed the notion that his dispensary fought the measure out of self-interest, saying that while the law does take away some patient “rights” — he again cited the provision on driving — he added it’s a victory to a certain extent, because there will be some form of arrest protection for everybody.

“I would say it’s kind of a mixed emotion,” Hollnagel said.

Hollnagel continued that the new law might be good for business, because it would make patients feel more comfortable about seeking help.

“In my professional opinion I think this will be beneficial for the cannabis industry as far as the dispensaries and all aspects of business go,” he said.

A lot of people don’t want to believe this for one reason or another, but it was the truth. Dispensary operators were somewhat caught between a rock and a hard place. They had customers who vehemently opposed the measure (and who on Facebook tried to identify dispensaries who didn’t oppose it and organize boycotts), but also knew that I-502 would have some pretty serious benefits as well. In the end, most dared not offend their customers. And now that I-502 has passed, a lot of them could potentially make a lot more money in a fully regulated system.