Posted by Derek Champoux
3 years ago / February 25, 2020
100 Years Later: 3 Lessons Cannabis Must Learn from Alcohol Prohibition
The ‘Roaring Twenties’ are usually remembered for Gatsby-esque economic growth and prosperity, but the decade was also known for the United States’ prohibition of alcohol production, importation, transportation, sales and consumption throughout the country.
Just like the prohibition of cannabis in the subsequent decades that followed, alcohol prohibition simply did not work and actually created more problems than it solved.
While wartime recovery had economic and social benefits, prohibition went the other way. It paved the way for racketeering, illicit products and violence to spread throughout the US like wildfires. Putting the majority of these fires out was a lengthy process, but several lessons can be gleaned from this era of US history and applied to our nascent legal cannabis industry so that we can avoid making the same mistakes.
Legalization Can Benefit Society (Even Non-Users)
One of the big takeaways from ending alcohol prohibition is that legalization is good for everyone except the criminals! The biggest issues with cannabis, like alcohol, occur when no federal regulations or regulatory bodies exist to oversee its production and test that it is completely safe for human consumption. Ending cannabis’s prohibition would not only help to prevent this but would also offer other the following socioeconomic benefits as well:
Increased Tax Revenue
Every dollar spent on black market products means less money going towards taxes. Current projections state that the legal cannabis market will be worth $66.3 billion by 2025 and this additional revenue can do a lot of good in local communities and towns throughout the nation. In Kentucky, for instance, current legalization attempts are focusing on using the revenue from taxing cannabis to pay off their underfunded pension plan. In states like Colorado, where cannabis is already legal, cannabis tax revenue goes into a general fund that is allocated for education, social services, health care, law enforcement, and substance abuse programs.
Many states that have not yet legalized cannabis already have elevated taxes on certain products (lottery, cigarettes, alcohol), commonly referred to as “sin taxes,” that generate billions of dollars per year. Cannabis would be a welcome addition to this group.
Increased Job Creation
As was the case with alcohol prohibition, cannabis prohibition hasn’t done much to actually stop or curb its usage. What it has done, however, is create a revenue source for gangs and criminals. Legalization helps to create safe, legal jobs that help the economy grow.
Cannabis legalization creates job. Lots of jobs! In the US alone, the cannabis industry already employs nearly 300,000 people, just under 1% of the population—and that figure is surely to climb with a handful of states teetering on the brink of legalizing adult-rec cannabis within their own borders
Cannabis jobs aren’t limited to sales, cultivation, and extraction. They range far and wide, including high-paying, skilled jobs in a number of ancillary capacities, such as lighting, security, finance, insurance, marketing, consulting, software tracking. And that’s just the tip of the iceberg.
Reductions in Crime
Banning a product creates a niche for the criminal element to fill, and that niche is worth a lot. Al Capone built a criminal empire worth $1.3 billion (adjusted for inflation) by taking advantage of alcohol prohibition. Capone’s gang may be among the most notorious from that era, but they were hardly the only gang profiting from prohibition.
Similarly, a large contingent of organized crime today relies heavily on the illegal cannabis trade for their income. And whether you realize it or not, most black-market cannabis purchases help to support these organizations in some way.
The federal legalization of cannabis would certainly help to root out these criminal organizations by eliminating one of their main sources of income. The result would not only be compliant, thoroughly tested cannabis, but also safer communities across America. That’s a win-win!
The Importance of Education
Legalization is doomed to fail without a strategic and robust plan for its implementation. In this regard, one of the most important takeaways from alcohol prohibition is the importance of education.
Safe cannabis use, as well its widespread acceptance into all aspects of mainstream society and commerce, hinges on education. All sorts of false claims about alcohol were made during prohibition, including that a mere whiff of the substance could lead to deformities in unborn infants or that alcohol consumption led directly to bouts of dropsy. When prohibition was ultimately repealed in 1933, the effect of this propaganda resulted in the public being unable to separate alcohol facts from fiction.
Cannabis, too, has been overzealously maligned over the last 80+ years. While there are some risks that all cannabis users should know before consuming it, the majority of cannabis “information” circulating out there by less-than-trustworthy “news” outlets is patently untrue. If there is, in fact, a plan to legalize cannabis at the federal level, the government would do well to devise a concerted and candid education platform, similar to the initiative the Canadian government oversaw prior to its federal legalization of cannabis in 2018.
Focus on New Demographics & Upscale Products
Venturing into a newly legalized industry can lead people to follow the misguided temptation of marketing to stereotypes and existing consumer bases.
This isn’t the best approach.
Simply put, the most successful brands after prohibition didn’t market to drunks. In fact, associating their product with drunks would damage the reputation of new brands in an industry already trying to overcome years of stigmatization.
It also didn’t help these companies expand their audiences. Heavy consumers of alcohol didn’t need anyone telling them to consume alcohol. Expanding its consumer base meant expanding alcohol’s appeal to new demographics. To this end, successful alcohol brands focused on luxury products and lifestyle marketing.
The cannabis industry can learn from this. Focusing on the classic, “stoner” character can have a negative effect, fueling misinformed, preconceived notions of the types of “seedy” characters that use it. Instead, producers, manufacturers, and retailers should look to grow the industry with audiences who can appreciate new, upscale cannabis products. There are many of them!
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