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June 8, 2013

How can/should I cover drug markets — black, gray, and white — in my marijuana seminar?

Marijuana-industry-infographic-620In my first post here last week in my new summer series discussing my plans for my law school semester titled "Marijuana Law, Policy & Reform," I raised some questions about how law professors should think about covering legal history topics in courses not dedicated to legal history.  I am deeply grateful for all the helpful feedback I received via this blog and elsewhere, and I am starting to slowly develop a working game plan for how I will cover and discuss Prohibition and related legal and social history during the first part of my law school seminar to be taught at OSU this coming Fall semester.

As the title of this new post highlights, today's topic on which I seek feedback concerns how I should think about covering drug markets and related economic issues in this seminar.  As I mentioned when talking about how to cover legal history, I sometimes worry that teaching "poor legal history" may be worse than no legal history.  Candidly, I am even more concerned about the prospect of teaching "poor economics" in my seminar — especially concerning modern drug markets, both legal and illegal.

The graphic reprinted here, despite being dated and hard-to-read, provides just a window into the range of challenging market/economic issues that surround just the topic of so-called "medical marijuana."  (For the record, and as I plan to discuss at length in my seminar, I am generally suspicious of any and all uses of the term "medical marijuana" because so many concepts, both valid and not-so-valid, can be and have been rolled into this phrase.)   The graphic draws some data from (biased?) reports like this one, titled "The State of the Medical Marijuana Markets," which is produced by a company trying to market its marijuana market analysis through this website titled Legal Marijuana Markets.

Specifically, one of my chief concerns here is that most, if not all, of those persons and groups likely to assemble information and analyses on modern marijuana markets are likely doing so with a specific advocacy agenda.  More broadly, what necessarily defines a black or gray market is a need or desire not to be transparant about how the market operates and its various economic inputs and outputs.  Indeed, public policy groups like Rand doing sustained reasearch concerning marijuana markets are quick to note that "variation in assumptions such as grams per joint and extent of underreporting can cause substantial variation in estimates of market size."

In addition, I am eager in my seminar to integrate stories about the various historic and modern market/economic realities of marijuana with the various historic and modern market/economic realities of various other licit and illicit drugs — ranging from alcohol to oxycodone to tobacco to valium.  Knowing simply that the national marijuana market might reach up to $10 billion in coming years does not mean much if one does not also know, for example, that the national alcohol market may be well over $250 billion and that tobacco companies spend about $10 billion each year on advertising alone.

So, dear readers, any clear thoughts about how I can and should cover opaque drug market realities?  In particular, I would be eager to get advice on essential dos and dont's: are there certain drug market dynamics I must be sure to cover and/or certain market myths or economic falacies I must be sure not to perpetuate in my marijuana seminar?

Cross-posted at PrawfsBlawg

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I agree with Bill Otis, the medical marijuana movement is a thinly disguised excuse to get high. All the medical benefits are available in controlled oral doses in the form of Marinol. That is made from marijuana from a federally owned farm. It is in a pill form, swallowed, going through the stomach, intestines, lymphatic system, and liver prior to reaching the blood and brain. That takes an hour, has a slow upsweep in blood and brain level. It is very hard to get people high, even in overdosing. Its delivery is controlled, and not by the smoker. The rapid delivery from lung to blood directly to brain in a minute is associated with delirium in the elderly and psychosis in the adolescent. Even if one wants to use Marinol for everything, the FDA will not stand in the way, because it can be prescribed off label (FDA approval is for appetite in chemotherapy patients). I hear no advocates for Marinol, except among docs. They have used it successfully in many other conditions than hunger effect. If the doctor judges that marijuana use is for self medication, he should try to substitute the safer Marinol, to avoid the hazard of smoke, and the above effects of rapid brain delivery. Most patients will stop smoking marijuana on marinol. The economic aspects of marinol are nil, because there is no patient demand for it. Because it comes from a herb, the profit potential is limited to that of nutritional supplements, a pittance, compared to a patented molecule. So there will be no big promotion by drug companies. Here is a nice calm review of its untried potential. One still has to wonder, why is there a cannabis receptor int he brain. What is its natural purpose?

http://cannabisni.com/medicinal-cannabis-news/1148-cannabinoids-and-the-pharmaceutical-industry

Posted by: Supremacy Claus | Jun 8, 2013 10:06:28 PM

I've spoken to both AIDS and cancer patients who have used both Marinol and marijuana. The unanimous report is that Marinol is not as effective as the real thing. So, why Marinol instead of pot brownies?

My hypothesis: because Big Pharma (and Congressional war chests) get no vig when grandma can grow her own medicine, and bake it into some butter.

There's one economics perspective to address, Professor Berman: how does profit (and the potential loss thereof) affect the positions of campaign contributing drug manufacturers?

As Nancy Reagan meant: "Just say no . . . except to our friends in Big Pharma."

Posted by: Jay Hurst | Jun 8, 2013 10:33:00 PM

FDA approved indication for marinol to prevent nausea apparently does not work well, and is avoided by people in the field. Smoking it is even less popular.

http://www.ncbi.nlm.nih.gov/pubmed/9042166

Posted by: Supremacy Claus | Jun 9, 2013 6:23:40 AM

1. NIH and NIMH are frequent collaborators and cross-funders with the Office of National Drug Control Policy and the National Institute on Drug Abuse -- both Executive policy drivers with strong law enforcement ties (and dependence on the Federal Government for their existence). Citing to Federal Government studies when the Federals will not yet admit that marijuana may have legitimate medical uses both
(a) leaves open a potential bias in the hypotheses and findings; and
(b) supports another economics questions, "how does Government policy and funding affect empirical results of drugs? do we have access to publicly-funded studies that do not support prohibition?"

2. The 1997 study cited above addresses whether oncologists would prescribe smoked marijuana. According to the abstract, there was no discussion of baked goods, and still a full 30 percent of oncologists recommended rescheduling marijuana -- and that's 16 years ago.

3. The FDA has proven again and again that its decisions are too often political rather than science-based to trust its data. It is an impotent political organ that, again, is dependent on Federal funding for its existence.

So, I respectfully submit that there is nothing telling -- or perhaps even accurate -- in the current U.S. Government data.

Posted by: Jay Hurst | Jun 9, 2013 10:18:56 AM

Another economics question, Professor Berman: how does the billion-dollar per year property forfeiture industry figure into our current drug control policy development?

Posted by: Jay Hurst | Jun 9, 2013 10:20:22 AM

My hypothesis would factor in moral opposition* to certain drugs which here has racial and ideological aspects. Corporate powers that be could get profits from legalization if done a certain way (see big tobacco). The average person won't grow their own any more than the average person rolls their own tobacco. Legalization could broaden their markets considerably. Marinol is a limited thing. Legalized marijuana or even broad medical usage akin to the usage of various OTC drugs would be a money maker.

---

* Opposition enough to make change given the powers that be and the conservative nature of the government in place hard to change. Only a minority have strong feelings on this subject, but given the system in place and their (the opponents) greater incentive to act than the general public, the minority is a forceful block to change.

Posted by: Joe | Jun 9, 2013 11:32:10 AM

Big Pharma has the only and hence the biggest role to play if one is forced to buy "legal" pot and not grow one's own pot. There is a commercial about some product with the tag line: If Cows Could, They'd Give Milnot.

Posted by: Liberty1st | Jun 9, 2013 7:02:24 PM

Marijuana brownies are not a substitute for Marinol, a pill with 2.5 mg of THC.

One does not know the dose of THC in a brownie, nor the effect of baking weed with hundreds of ingredients at 400 degrees for 30 minutes.

Why not increase the dose of Marinol until effectiveness is reached?

Posted by: Supremacy Claus | Jun 10, 2013 7:11:05 AM

[cross posted from Prawfs]
Market-based ideas permeate discussions of drug law and policy, so it’s hard not to discuss them in a course like yours. You could cover market-related theories and assumptions, without necessarily diving into (let alone endorsing) empirical claims. For example, you could examine and unpack the idea that imposing legal sanctions will reduce drug use. Or you could examine what a regulated market for marijuana might look like (e.g., licensed vendors, limits on advertising, etc.) and what barriers exist to successful regulation (ease of entry, federal prohibition, etc.). Some understanding of how markets work is important for understanding drug policy.

But I think you should also wade into the empirical literature. There are so many interesting empirical studies on drug policy, for example: the drug war’s impact on prices, including what the cost of marijuana would be if it were legalized (very low, apparently); the cost of prohibition, including the cost of violence associated with criminalizing drug transactions; and so on. To be sure, students need to be wary of many of the claims made in the empirical literature. But I believe they can think critically about these studies. And I think it’s important for them to be exposed to all of the uncertainty and contrasting claims now being made about drug policy and to think about how we should proceed in the face of such uncertainty.

Posted by: Rob Mikos | Jun 10, 2013 11:20:37 AM

The better question is, why pay Big Pharma for Marinol when we can perfect the medicinal pot brownie? The standardization questions posed above can be just as easily answered as "what level of manufactured cannabinoids should the corporations use?"

Posted by: Jay Hurst | Jun 10, 2013 12:53:19 PM

I took one economics class in college, so am in no way qualified to suggest ideas on teaching economics. I wonder, though, if any study has been done of the markets in Amsterdam? Scholarly work or other coverage of the realities on the ground there may provide some insight.

Posted by: defendergirl | Jun 10, 2013 1:05:22 PM

The economic analysis of a law is the beginning of the utilitarian analysis. Money is the sincerest form of valuation and the best representative of people's feelings about a product or service.

The cost savings from ending the war on drugs should be calculated. That includes the cost of lawyer jobs, prosecuting, defending and judging. The disparate advantage on the black community.

The defunding of adversaries, such as the Drug cartels and the Taliban.

The revenue to American tobacco companies, and the tax revenues.

Do people on weed get lethargic, hungry and less active? Is there a drop in crime, suicide and even car crashes, in alcohol consumption after legalization in other nations? What is the economic value of a crime that did not happen?

The higher cost of treatment as use explodes after legalization.

Posted by: Supremacy Claus | Jun 10, 2013 3:15:57 PM

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