Prop 205 Marijuana Oligopoly Fails In AZ

Prop 205
Prop 205

Arizona voters appear to have rejected Prop 205 which would have regulated limited amounts of marijuana for adults despite polling that showed the majority of Arizonans supported marijuana legalization.

Activists believe that the failure was due to the oligarch spirit of 205 that led to its demise. The way Prop 205 was designed. Only existing 130 medical marijuana dispensary license holders were guaranteed one of the 150 or so recreational licenses leaving about 20 additional licenses for new people until 2021. Many of these people hold multiple licenses so its not even 130 different people. There are about 3,700 licenses of availability for alcohol including hard alcohol, beer, and wine. 150 is only 4% the availability of alcohol.  All other licenses in the cannabis industry under Prop 205 were regulated to serve the 150 or so retail shops which satisfies the definition of an oligopoly.

Ol·i·gop·o·ly noun ” a state of limited competition, in which a market is shared by a small number of producers or sellers:”

The “State Of Limited Competition” went even deeper. So much so that 205 even satisfied the definition of being a cartel.

Car·tel noun “an association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.”

The investor authors purposely left marijuana prohibition in place under prop 205 which means anything covered under prop 205 was legal but anything not covered including unlicensed sales, possessing 2.6 OZ of flower, 5.1 G of concentrates and growing 7 sprouts all defaulted back to todays felony prohibition.

Keeping a felony on the street keeps prices high in the store. If you remove the felony off the street the risk of selling goes away and the street price drops. When the street price drops the retail price drops to compete. So to maintain prices at a high level the investors kept prohibition running in parallel with Prop 205. Getting back into restricted competition, the investors who authored 205 ensured that cities can prohibit home cultivation which would have knocked out the home cultivation competition like the 25 mile rule did for prop 203. Additionally they allow cities to ban new recreational stores from opening but cant touch existing ones. Both of these tactics of restricting the competition using government satisfies the definition of cartel. (Not to mention the new marijuana police force 205 created to hunt down the competition)

It goes further. With the special guarantee of recreational licenses to existing dispensaries and the relationship between the Prop 205 profiteers and government enforcing their bottom line at government gun point defined by Prop 205. This situation can now satisfy the definition of  “Crony Capitalism” Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism.

So Activists believe 205 failed because it was a crony capitalist cartel pushing a felony enforced oligopoly.

This is one of the reasons Safer Arizona 2018 is pushing a total decriminalization and legalization initiative for the 2018 election ballot. Safer Arizona is almost finalized with their initiative and should be completed by this weekend and ready to file shortly after. You can view the latest draft of the initiative at the Safer Arizona 2018 Drafting Committee on Facebook. You can sign up as a volunteer and make campaign contributions here at . Once the initiative is filed, Safer Arizona will be contacting you and providing you with petitions and instruction.


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