Crony-Capitalism in the Provinces

Why are medical-only licensed producers making deals with provincial governments for recreational sales?

Why is this going on while BC Bud is waiting for the federal government to finally get around to licensing “micro” cultivators and processors?

Already approved by Health Canada, the LPs came into existence as a result of government policy in 2012. Restricted from advertising, promoting, and selling recreationally, these LPs are supposed to be brandless entities whose only staying power is the ability to trade stocks.

But there is crony-capitalism in the provinces. Using the LPs to supply to government retailers is only going to drive connoisseurs underground. 

That Ontario and Quebec expect to lose money on legalization would be funny if it wasn’t so sad. Taxpayers’ money wasted. So much for “the children” when you squander their future with deficits and unfunded liabilities.

How does one lose money selling cannabis? Easy: get into government. Losing money on legalization goes to show the backward nature of bureaucracy. 

Bureaus receive money first and provide services later. This is completely unlike private enterprise. Also unlike private enterprise, consumers don’t have competitors to patronize. In government, consumers are “citizens” and have little choice but to vote indirectly for the issues. 

This would be like having to shop at Walmart because they’re a “social service.” And, while free to vocalize your discontent, you can only vote for a new board of directors every four years. The idea of not using Walmart for your shopping needs would be illegal.

Canada’s many provincial government retail stores, whether for booze or soon-to-be cannabis, look and feel like an ordinary store. The idea is that the profits go back to the government, hence, back to “the people” for things like health care or education.

But government retail is a bastardization of the real thing.

When entrepreneurs in the private sector buy and sell, when they use prices and factor in capital goods for accounting and balancing the books —they perceive scarcity and provide consumers with the most efficient uses of resources.

This is not what government bureaus are doing when they mimic the real thing. Businesses must find a way to persuade individuals to give them money. Governments simply tax.

Bureaucrats pricing goods, purchasing capital equipment, factoring components into the structure of production — it means nothing.

Entire countries have attempted to run their economies on the belief that capitalism is merely arithmetic the government can replicate. 

This mistake cost hundreds of millions of lives over the 20th century. Unfortunately for us, the lessons have not been learned.

Why are medical-only licensed producers making deals with provincial governments for recreational sales? Crony-capitalism in the provinces isn’t good for them, either. 

Other than the obvious public relations problem, there are the economic consequences of having a government monopoly as your single largest vendor. In that situation, there is no true market price for your cannabis. 

Unless, of course, BC legalizes correctly, then at least there is some resemblance of the free market. Otherwise, it’s back underground. Where the market-clearing price for cannabis isn’t set by government fiat.

A Who’s Who of Crony-Capitalism in the Provinces: