“Best Practice” in Regulating Medical Cannabis in Canada

We’ve been told by Vancouver‘s top bureaucrat, Penny Ballem, that the regulatory by-law on medical cannabis dispensaries and compassion clubs is in the spirit of “best practice.” Likewise Justin Trudeau, while on the campaign trail, is telling Canadians that his legalization model will stem from “best practice” in which the “equivalent of a liquor control board” has the exclusive right to sell cannabis.

But how do they determine what “best practice” is? They claim to learn from other jurisdictions that have legalized cannabis, but then how did those jurisdictions determine best practice? This gets to the heart of what “best practice” is all about. By the mere power of semantic fiat, government employees can determine what “best practice” is despite having no connection to market prices or competition. Additionally, taxpayers can’t withdraw their funds from the municipality if “best practice” turns out be the worst possible course. There is simply no supporting evidence, whether empirical or logical, to back up the claim that government central plans are engaging in “best practice” vis-à-vis the free market alternatives.

Let’s start with empirical evidence: Where is it? Granted, regulating dispensaries is something new, but what of other regulations in the economy? In February 2011, CRTC chair Konrad von Finckenstein testified before the House of Commons Standing Committee on Industry, Science and Technology to defend the bureau’s decision to “kowtow to Bell” regarding usage-based billing. Critic Steve Anderson said, “The CRTC’s stubbornness in the face of a mass public outcry demonstrates the strength of the Big Telecom lobby’s influence. While government officials have recognized the need to protect citizens’ communications interests, the CRTC has made it clear that their priorities lie elsewhere.”

But I’m sure the CRTC was just following “best practice.”

Yet, even the World Bank suggested that big government is associated with more political corruption, even in so-called “free” Western democracies. In Vancouver, there’s no reason to trust Mayor Gregor Robertson. Like most politicians, he’s in bed with trade unions, ensuring that city hall jobs, if they are contracted out, find their way into the right hands. Again, must be “best practice.”

And ending homelessness by the end of 2015 is clearly not going to happen. Given all the political incentives to keep Vancouver’s downtown Eastside as decrepit as possible, it’s not surprising that the Mayor’s plan (which followed “best practice”, I’m sure) is an utter failure.

We could continue, but reporter Bob Mackin has done some fine work exposing Vancouver City Hall corruption:

“In 2011, the city instituted a ban on bureaucrats communicating with reporters. Even the city clerk’s office shunts reporters seeking facts to corporate communications. More often than not, reporters will receive a paragraph statement rather than the interview they originally sought. 

It is part of city manager Penny Ballem’s influence. The former deputy health minister under premier Gordon Campbell created a $2 million-a-year department for 30 people, full-time and part-time.

By comparison, Surrey, B.C.’s second biggest city, has a two-person communications department.”

Ballem was ranked as the third highest paid bureaucrat in BC during 2011 and 2012. In 2013 she made more than $334,000 and claimed expenses of over $5,500. Some of that spending included a $700 flight from Vancouver to Victoria, and $126 worth of cab rides to and from the airport during a single visit.

“She could have flown for cheaper on Harbour Air or Helijet,” said Jordan Bateman of the Canadian Taxpayers Federation and vocal critic of the TransLink monopoly. “There’s so many other different options that would have saved taxpayers money.”

Ah, but Jordan, don’t you realize this was “best practice”? How could an organization like the CTF, which relies on voluntary donations, ever comprehend the complex and structural decisions made by Vancouver’s bureaucrats?

So clearly, “best practice” doesn’t have an empirical leg to stand on. But what about logically? Maybe the problem is just Robertson and Ballem? While the problem is most definitely those two, plus many more, the solution isn’t to throw ’em out and elect someone else (although Vancouver doesn’t elect a City Manager).

The notion that a government central plan is “best practice” does not logically follow. Resources are scarce and how we allocate them matters a great deal. With free markets, we have a price mechanism wherein individuals have the ability to decide how a good or service should be distributed based on their willingness to pay for it. We don’t have this option with taxation. Free market prices convey embedded information about the abundance (or lack of) of resources, as well as their desirability, which in turn allows, on the basis of individual adult consensual decisions, corrections that prevent shortages and surpluses.

Without access to market prices, there is no rational economic calculation and therefore no “best practice” as envisioned by bureaucrats who don’t know their history.

Of course, bureaucrats can look to the market and try to mimic it. Furthermore, they can contract out work to market-based participants. This is called crony-capitalism, also known as fascism. An example of this in the cannabis dispensary regulations is the city’s definition of “Compassion Club.” As it says right in the bylaw, “A Compassion Club must have a Trade Association Membership in the Canadian Association of Medical Cannabis Dispensaries [CAMCD].”

The CAMCD provides a regulatory service on the (relatively) free and fair market. However, now that the city has stepped in with their coercive regulations that, for whatever reason, decided to write CAMCD into the bylaw, the opportunity for market competition in the regulatory sector is officially dead. The CAMCD now holds a state-protected monopoly on the certification of compassion clubs in Vancouver. Prior, a compassion club could voluntarily decide whether getting certified by the CAMCD was worth the trouble. This freedom of choice is now gone, and the former entrepreneurs (now crony-capitalists) of CAMCD are suspect.

Is it “best practice” to enforce a 300-meter distance from schools, community centers, and neighborhood houses? Can’t children just walk 300 meters in the direction of a dispensary? Is it “best practice” to enforce a 300-meter distance from other cannabis-related businesses? Why can’t dispensaries and compassion clubs be seen within 300 meters of each other? What’s the rationale behind that? And is it “best practice” to force dispensary owners to sign a “Good Neighbour Agreement” or to forcibly escort them into the proper “commercial zoning areas”? Is it “best practice” to implement a $30,000 licensing fee to create a new regulatory bureaucracy? Previously, in the free and fair market, the CAMCD (and their competitors) made money by regulating. The city would rather usurp these responsibilities and create a new bureaucracy. Bureaucracies are financially draining for all taxpayers. This isn’t the fault of bureaucrats; it’s just how tax-and-regulate organizations work. There is no way around the economic calculation problem, and therefore no truth to the notion that government central plans follow “best practice.”

Best practice is determined by consumer sovereignty in a free and fair market, not by city bureaucrats and politicians.

Note: An earlier version incorrectly cited Ms. Ballem’s earnings at “more than $339,000.”