Stories are emerging that the Liquor Control Board has chosen Botec Analysis Corp. to be its expert consultant on implementation of I-502 regulations. Botec is a Massachusetts-based company that specializes in performing policy and economic research and analysis. Originally formed in 1984, Botec Analysis has worked with and evaluated government agencies on problems related to drug abuse, crime, and public health.
Botec’s President is Mark Kleiman, a professor of public policy at UCLA. To better predict Botec’s approach to I-502, we can take a look at Professor Kleiman’s background. He has a Ph.D. in Public Policy from Harvard, and he serves as an adjunct scholar for the Center for American Progress in addition to his faculty duties at UCLA. The majority of his scholarly writings focus on drug policy reform, though they do not expressly advocate for legalization. In a 1998 interview, Kleiman told PBS, “If we legalize marijuana or any other drug, either we will have a private industry whose profits depend on creating and maintaining addicts, or we will have a public bureaucracy whose revenues depend on creating and maintaining addicts.”
Professor Kleiman’s views on cannabis do not fit neatly into any particular box; his most recent writings on the topic can be found at his shared blog. It is clear that Kleiman is anything but a champion for large-scale legal commercialization of recreational cannabis. He believes that marijuana is habit-forming for a significant fraction of its users, and this habit has negative effects. In his opinion, any sort of commercialization effort will likely increase its use in a non-desirable way. Also, he believes that private businesses involved in cannabis will necessarily have a financial interest in marketing and encouraging addiction. On the other hand, he recognizes that marijuana is less dangerous than alcohol, less habit-forming, does not lead to aggression, and has fewer long-term health effects. He recognizes that criminalized marijuana has wrecked communities and wrought immense harm on our society. In short, he is a policy moderate. He has clearly spent a significant amount of time thinking about drug policy, and he has spent the better part of his career thinking about the policy ground between criminalization and commercialization. For a good primer, here is a (long) lecture he gave on drug policy (cannabis section starts at minute 42:30).
The main questions, then, are why did Botec bid to be Washington’s marijuana consultant?; what are Botec’s goals?, and why did the Liquor Control Board choose them? While any answer is speculative, Washington offers something that any serious drug policy analyst would kill for: a controlled testing ground to actually monitor the effects of legalization. Kleiman likely wants to find a price point and level of regulation that significantly reduces the costs and consequences of prohibition without significantly increasing the damage from increased use.
For its part, the Liquor Control Board needed to choose an expert that did not have a financial stake in the regulations, one that was not likely to apply for an I-502 license, and one that showed the federal government that the Board was serious about controlling the market. By not giving the position to an established business interest, the Liquor Control Board has given the federal government some room to understand that Washington is seeking to legalize in a controlled way.
What does this selection mean for potential I-502 licensed businesses? First, remember that this is a consultant, not the be-all, end-all of determination. Ultimate decision-making power still rests with the Liquor Control Board. If they do follow his lead, however, we can make a few predictions. Advertising will likely be heavily controlled. Regulatory and taxation decisions will be made with a view toward hitting a sweet-spot final price that neither substantially increases demand nor encourages significant black market participation. Large companies may not get the licensing preference that they thought they might get, and commercialization aimed at increasing demand will be disfavored.
We will reserve final judgment on Botec’s installation as the Liquor Control Board’s consultant until we hear more from Professor Kleiman and the LCB. Stay tuned, as things will finally begin to heat up on the regulatory front.