Kirk Tousaw is a lawyer and cannabis activist. Along with John Conroy, he was one of the lawyers for the Allard case which protected a patient’s right to grow his or her own cannabis or have a designated producer do it for them.

Although respected and adored by many in the cannabis community, he, like many Canadians, are left-leaning and don’t entirely trust free markets. But as this is a cannabis blog that favours a free market, I couldn’t let Kirk’s recent Facebook status go unchallenged.

Of course, I’m criticizing the ideas, not the man himself. So let’s discuss. Kirk’s Facebook comments are in bold.

People advocating for no rules/regulations on the production and sale of cannabis are, in my view, wrong.

I don’t know anyone advocating for no rules or regulations. It’s a matter of the proper role of the state. Here, I’ll quote French classical liberal Frédéric Bastiat:

“Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.”

It’s also as if the socialists (or statists, or “liberals” as they call themselves) accuse us of not wanting any rules or regulations on cannabis because we don’t want the state involved.

Deregulation of industry is a net negative for society (see, eg, the Reagan years and what people fear is coming in the Trump era).

Deregulation of the Reagan years? This chart prepared by the US Chamber of Commerce and based on records from the National Records and Archives Administration reveal that regulations have increased non-stop since the 1970s.

Simply, deregulation is a myth.

Today there are rules for everything. In fact, on Tuesday, January 3rd 2017, the US federal government published an astonishing 700 pages of new regulations.

And that’s just one day. They publish new regulations every single business day.
These rules make it more difficult to produce, to start a business, to sell a good or service to a willing consumer.

And these rules carry costs, whether it’s in paying a fee or filling out paperwork.

Can you imagine the effect that decades worth of rules and regulations has had on economic productivity?

How does putting up substantial obstacles to prevent entrepreneurs from selling (while protecting the firms with larger capital and the right political connections) constitute a net benefit for society?

Deregulation typically leads to market consolidation by the biggest players with the deepest pockets.

I recommend researching “regulatory capture.” The modern banking and corporate elite didn’t rise to the top in a free market system, they used state privileges thanks to the regulations they helped lobby for.

In a totally laissez-faire system, where accreditation and quality assurance are provided by private enterprise, in much the same way the insurance industry operates, the only way to profit is to provide goods and services people actually want to buy.

In other words, all of the reasons people rail against LPs now get worse in a totally free-market environment

In a totally free-market environment, there are no state licenses, price controls, or restrictions that impede consumer choice.

How exactly does a government program dependent on state licensing and obstructing competition with capital barriers get worse in an environment where anyone can grow and sell?

Kirk gives us examples of what might happen. None of them hold up under scrutiny.

Monopoly — Quoting economist Thomas J. DiLorenzo, “If competition is viewed as a dynamic, rivalrous process of entrepreneurship, then the fact that a single producer happens to have the lowest costs at any one point in time is of little or no consequence. The enduring forces of competition — including potential competition — will render free-market monopoly an impossibility.”

When everyone can grow and sell, without seeking permission from Justin Trudeau, the prospect of a monopoly is virtually nil.

Price gouging — If the price of cannabis was fixed, I might consider experimenting with my own extracts. But when allowed to rise, I will allocate my cannabis its most urgent uses, namely, smoking.
Market prices are signals, indicating supply and demand. If a natural cannabis monopoly does form and the monopolist uses this opportunity to raise prices, new potential suppliers would come out of the woodwork, coming from all over the world to get a share of the premiums.

Prices, then, would return to their market-clearing rate. Unless of course, government intervention (under the guise of consumer protection) hinders this process.

We need free market pricing far more than we need federal regulations preventing “price gouging.”

If the issue is the rising costs of all goods and services, then look no further than the Bank of Canada’s open market operations.

“skirting rules on pesticides,” incorrect potency labelling, advertising/marketing, signing celebrities — In some ways it’s funny that Kirk points to all the problems of a government regulated system and then says it will be worse without these government regulations. Something doesn’t add up. It’s as if Kirk was cooking food and found it too salty, and so, he decides adding more salt or different kinds of salt is the solution.

The federal government first said no one can produce or consume cannabis. Then they eased up a bit, but the various regulations they’ve implemented have failed. Meanwhile, the free market has given us the best strains, growers, and vendors without licenses (and lo and behold, nobody has died or gotten hurt, save for the victims of prohibition), but we’re told by “liberals” that only government can effectively deliver a rational cannabis model.

On what basis is this claim made?

“profiteering” — Profits represent arbitrage opportunities and in a competitive market that never lasts. What leftists have always misconstrued as exploitation of workers by capitalists is actually a reward for smoothing out discordance in the distribution of goods and services.

As classical liberal and economist Ludwig von Mises put it, “The capitalist system of production is an economic democracy in which every penny gives a right to vote. The consumers are the sovereign people. The capitalists, the entrepreneurs, and the farmers are the people’s mandatories. If they do not obey, if they fail to produce, at the lowest possible cost, what the consumers are asking for, they lose their office. Their task is service to the consumer. Profit and loss are the instruments by means of which the consumers keep a tight rein on all business activities.”

Crushing the “little guy” out of the market — Insomuch that this happens in a free market, it is by consumer choice. But often, this is the consequence of government regulations, whether intentional or not.
The big telecommunication companies influence the Canadian Radio-television and Telecommunications Commission (CRTC), and thus, Canadians pay some of the highest prices for phone and internet services in the western world.

The Ontario Liberal government has remodeled the energy sector to be more “green” and “sustainable” by awarding exclusive contracts to build wind turbines and solar panels to multinational corporations, thereby locking out “little guy” entrepreneurs without the political capital.

And now, with the help of law firms like Bennett Jones, the LPs are lobbying the federal government to crush the “illicit market” out of existence.

The free market has given us dispensaries and superior strains. Government regulation has given us the LPs and contaminated products. I’m not against rules and regulations, I’m against the government’s pretense of knowledge.

To again quote Ludwig von Mises,  “There is simply no other choice than this: either to abstain from interference in the free play of the market, or to delegate the entire management of production and distribution to the government. Either capitalism or socialism: there exists no middle way.”

And, “If one rejects laissez faire on account of man’s fallibility and moral weakness, one must for the same reason also reject every kind of government action.”
  • Josh Russell

    LP shill article. People wake up! The LP system is only here to make turdeau’s friends rich.

  • Josh Russell

    “The modern banking and corporate elite didn’t rise to the top in a free market system, they used state privileges thanks to the regulations they helped lobby for.” Exactly what the LP’s are doing right now. Fucking retarded article.

    • http://www.calebmcmillan.com Caleb

      Which is why I’m for a free market… I think you’re confused.

      • Josh Russell

        That is possible.

  • Josh Russell

    Grow your own. Oh wait, I bet cannabislifenetwork is against that as well. fucking corporate shills.

    • bob

      LP’s are not the devil…corporate LP’s are corporations by definition are sociopaths and have no business in business hahahahah

      corporations will bring our entire world to its knees if we do not do something about them….especially banks and insurance

      the federal reserve bank[private] has systematically done so to the us in the last 30 years…

      i have an lp and some good people i know do to…

      it is up to the consumer who gets their money and it is truly the only vote we have…

  • bob

    well i have been an organic farmer for decades and have been selling my product with no government oversight…thank GOD….
    also medicinal herbs some of which are more dangerous than MJ

    i think we will end up with some LP system different than and far less onerous than the present system

    the real reason all this controversy is going on is because of the money that can be made…..

    it is always about the money with those people

    soon if farmers like me are producing and selling at the proper prices this will change ….as a farmer i can make a decent living at 25% of todays prices….

  • Devo

    Good article…
    There is alot of truth to what you are saying… not all of the LPS are evil… I think we need to remember some of the LPS started under ground and moved into the light.

  • Winston Smith

    There’s not now nor has there ever been demonstrable justification for the prohibition of cannabis, therefore Step 1 in any sort of legalization process must be the complete repeal of the unjust prohibition.
    Once the unjust prohibition has been repealed, step two would be to allow the marketplace to grow. In the absence of evidence to the contrary, there should be no further regulation on cannabis production and distribution than there is on equivalent products such as tomatoes and cucumbers. There are already Enough Rules and regulations on the books for the food inspectors regarding the production and distribution of grocery produce, and no further regulation is required for the commercial production and distribution of cannabis.
    Of course there are room for the corporate licensed producers. (LP’s). But if Heinz, Aylmer, and ED Smith Lobbied government to prevent Farmers Markets, backyard gardening, people producing their own tomatoes, there would be a public outcry about racketeering price-fixing ethics and morals. There would be protests, boycotting, divestment of stocks and sanctions against the company and government figures involved.
    Step 3 should be the issuing of an DIN number, (drug information number) by the government so that insurance companies and healthcare providers can cover the prescriptions of those who have the substance prescribed for them.

    A step forward should be the arrest and prosecution of prohibitionist who are conspiring to unjustly deprive their fellow Canadians of their constitutionally-guaranteed Charter rights. To undermine the Canadian Charter of Rights and Freedoms of your fellow Canadians is a crime that is deserving of harsh punishments. Especially and particularly when that crime is committed by those who have a mandate to enforce and uphold the Constitution Act of Canada and the Canadian Charter of Rights and Freedoms. Every single act of enforcement of unjust and unjustifiable prohibition is a violation of the Charter guaranteed rights of a Canadian. There should be consequences for these violations and the violators must be made to pay dearly to prevent further violations of the rights of Canadians.
    When governments use law enforcement to violate the rights of the people THEY become criminals.

    • bob

      HAHAHAHAHAHAH GOOD LUCK WITH THAT POLITICIANS RESPONSIBLE FOR THIER ACTIONS????WHY DO YOU THINK MOST OF THEM ARE LAWYERS[[LIARS]

      PLEASE DO NOT GO THE ROUTE OF DIN AS THAT WILL GIVE BIG PHARMA WHAT THEY NEED
      SAME AS THEY HAVE WITH OPIATES NOW

      THE COST OF DOING A DIN IS EXORBITANT

      THIS IS OUR MEDICINE…MADE BY US FOR US OUR BASIC HUMAN RIGHTS

  • Winston Smith

    I would like to add regarding the clamour for the money to be made from cannabis that it is all smoke and mirrors. In the absence of unjust prohibition a bud of cannabis would cost just about exactly the same to produce is a tomato or a cucumber and should be priced accordingly. When we can openly grow fields of cannabis and have a pot patch in every backyard the dollar signs that are in people’s eyes will disappear. The artificially inflated prices will just evaporate. Those who have heavily invested in licensed cannabis producers making Investments made considering prohibition based pricing in corporate business plans, have acted rashly and deserve to lose their investment.