The Huge Difference a Few Regulatory Changes Can Make to the Shape of an Industry
I love this infographic from the Brewers Association about the history of breweries because it shows what an immense different a few policy changes can make to an entire industry.
After alcohol prohibition ended the rules adopted on beer regulation favored big players resulting in a steady concentration of the market to just a handful of breweries for decades. But several regulatory changes starting in the 1970’s laid the groundwork for an explosion of new offerings.
The big thing President Jimmy Carter did was legalize home brewing, allowing regular individuals to perfect new beer recipes in their garages which they would later use to start new breweries with. Soon after new state laws allowing the creation of small brewpubs were adopted making it easy for these hobbyists to start new small breweries.
This created a positive feedback cycle that started pushing things in the other direction. The more small breweries and craft beer fans there were, the more people you had pushing lawmakers for pro-craft beer regulatory changes. For example just last week D.C. adopt a new rule allowing local breweries to sell pints at their tasting rooms.
If you care about what legal marijuana will actually be like you should very closely examine the history of alcohol post-prohibition for lessons on what should be copied or avoided. Just a few seemingly boring regulatory decisions made in the coming years as more states legalize marijuana could make the different between a marijuana industry which ends up dominated by just a handful of big corporations and one with a huge number of small specialized local players.
It is worth noting that Washington State’s law doesn’t allow hobbyists to grow recreational marijuana at home but the Colorado law does. In addition the marijuana legalization initiatives this year in Alaska, Oregon, and D.C. all have home grow provisions.
Jon Walker is the author of After Legalization: Understanding the future of marijuana policy where he explores subjects like this at greater length.