Smoke 'Em If You Got 'Em...

For the record, I really don't care about weed anymore. Never used it, don't plan on it, don't care if you do. But I do tend to nerd out on some economics, so I felt like responding to this article from the CATO Institute. While CATO seems to want to use the legal vs. illegal marijuana trade as justification to throw in the towel on border control, the real driver is simple supply and demand economics. Legalization will not stop weed from coming across from Mexico.

Not sure what the President has to do with it, but this is the photo from the CATO piece…

The thing is, as long as an imported product can be offered more cheaply than a home grown product and remain profitable for the seller, it will be continue to be imported as long as the demand is there. If there is money to be made it, the product will be imported…legally or otherwise. Doesn't matter if that product is weed, iPhones, or human labor.

Just wait until marijuana is 100% legal and grown and sold on an industrial scale, and then see how fast the weed companies move their operations south for longer growing seasons and cheaper labor...resulting in higher profit margins.

"Smuggling" is just another word for importation, except that it is malum prohibitum illegal. Legalization won't stop marijuana from coming across the border, it will simply make it legal. Despite the CATO piece’s lengthy explanation of why legalization is awesome, the only difference it will make in the smuggling of weed is semantics. It’s still going to come across, only legally. It’s like saying you’ve ended speeding by removing speed limits. Technically it’s true, but it doesn’t mean anyone has slowed down.

If the issue is stopping marijuana from crossing the southern border, the only fixes are a more desirable American made product (cheaper or better), or border control. Otherwise,weed will continue to be grown in Mexico and brought to the USA and sold; people will continue to buy it, and money will continue to be made. It will just be more economical to grow it there and import it. Same as it ever was.

Who knows? Maybe we can throw some tariffs on Mexican weed to prop up the US industry…