New Hampshire is the only state in New England that hasn’t legalized marijuana, but it looks likely to do so this year. Last year, a legalization bill passed the New Hampshire House of Representatives, then failed in the Republican-controlled Senate. But after the bill’s defeat, Governor Chris Sununu indicated his willingness to sign a more restrictive version, under which the state would operate marijuana retailers directly.
This first-in-the-nation approach seemingly was inspired by the major challenges other states have faced with legalization.
“Every other governor will tell you that their system sucks,” Sununu reportedly told cannabis lobbyist Don Murphy in a conversation leaked to Marijuana Moment. “Every governor has told me that. They hate their systems. . . . They want to maybe legalize it, but they hate the way it’s been done because it’s mostly been driven by ballot initiatives where you have, basically Big Tobacco—Big Marijuana 2.0—driving the rules and regulations.”
It’s encouraging that a state’s leadership is recognizing these problems and thinking beyond simply how best to commercialize marijuana. A state-store model has the potential at least to reduce some of the harms of legalization, though it’s far from a perfect solution. Even if done well, it could still result in many of the perils other states have faced.
Sununu is right that neighboring states are struggling. Massachusetts, for example, is increasingly saturated with marijuana stores, which have cratered retail prices and led to surging rates of marijuana-related ER visits. Maine has dealt with contaminated product, illegal shops, and a massive Chinese-run growing operation. And of course there’s New York, where a slow roll-out has led to thousands of [illegal, right] pot shops dotting the streets of its cities.
Sununu’s biggest concern is the legal market getting too big. “You have these marijuana miles. You have pot shops on every corner. We don’t want that here,” Sununu told Murphy. “We want to make it available but controlled. That’s it. That’s what people want.”
The governor is right to be concerned. “Marijuana miles” aren’t just unsightly. They also attract crime. A recent analysis of Chicago data found that opening a marijuana retailer increased crime in the surrounding half-kilometer by about 30 percent. And more retailers leads to more competition, which leads to plummeting prices, driving up consumption, particularly among heavy users. That boosts the likelihood that users will suffer the health harms of marijuana—lowered motivation, anxiety, depression, and in some cases, psychosis and schizophrenia.
A state-store system avoids some of these risks. It lets the state keep prices high and moves all profits to the state treasury, making it an efficient “sin tax.” It also can effectively decline to do business with would-be customers who shouldn’t be buying, such as children, and adults with established cannabis-use disorders. And while no state in the U.S. operates its own marijuana retailers, the state-ownership model is not untested. Many states hold monopolies on liquor sales, and New Hampshire’s Canadian neighbor, Quebec, operates a provincial retail marijuana monopoly.
That said, a state-store system doesn’t lack for potential problems. By restricting the number of retailers—New Hampshire probably will cap it at 15—and keeping prices high, the system will leave a great deal of demand unmet. That may lead to a grey-market problem akin to New York’s, where unlicensed retailers spring up and outcompete the state retailers. Such a development would not only deprive the state of marijuana tax revenue but also defeat the public-health and other purposes of a state-store system.
If New Hampshire wants to legalize marijuana and operate state stores, it will need to pursue aggressive and ongoing enforcement against unlicensed retailers. Putting law enforcement in charge of shutting down illegal shops and giving police extensive powers to do so—something New York has failed to do—would help keep the illicit market small and expensive, giving the licit market a fighting chance.
It’s not clear that New Hampshire can stomach the kind of enforcement needed to make that plan work. After all, much of the motivation for supporting legalization is activist opposition to marijuana enforcement. Putting police in charge of shutting down pot shops will attract the same ire they faced when going after corner dealers.
If Sununu is serious about getting legalization right, then, he should consider the broader spectrum of non-commercial, non-prohibition options. The state has already decriminalized minor possession, which addressed many reformers’ concerns without having to legalize. New Hampshire could also permit residents to grow their own without legalizing sales—the situation that obtained in Alaska for over three decades following the 1975 Ravin v. State ruling.
Such approaches are prudentially preferable to full commercial legalization. It’s not obvious, though, that they are politically viable. In the world where his constituents have reached the wrong-headed decision to support marijuana legalization, Sununu should at least be applauded for trying to get it right—regardless of whether that’s really possible.
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