Don’t Blame Legal Weed for Faulty Regulations

Nearly a decade after Massachusetts legalized recreational marijuana, a campaign to repeal legalization has qualified for the November ballot. Critics especially cite youth access and high-potency products.

These concerns are understandable. But they should be addressed by expanding legalization, not abandoning it. Millions of people want to use marijuana, and prohibition does not eliminate that demand. Instead, it mainly shifts production and distribution underground, where no one tests for contaminants or resolves disputes without violence.

Massachusetts’ legal market was supposed to displace that underground trade. Instead, the legal market competes with the underground component on unfavorable terms. This is not surprising.

A legal purchase carries a combined tax of roughly 20% based on state excise, sales, and local option taxes. More than a third of the state’s cities and towns ban retail dispensaries, pushing consumers toward unlicensed sellers or neighboring towns, and licensed operators face a broad range of costly regulations.

When governments make the legal product more expensive, some consumers stick with the more convenient but illegal product. Thus excessive regulation is just back door prohibition.

Another reason state legalization works imperfectly is that marijuana remains illegal under federal law. Because it is still a Schedule I substance for recreational purposes, cannabis businesses face restrictions ordinary companies do not.

Section 280E of the federal tax code bars marijuana companies from deducting ordinary business expenses; an April 2026 rule change began easing that, but only for state-licensed medical operators. On top of that, cannabis cannot legally cross state lines, so every state market operates as an island. Most banks still refuse to serve the industry, forcing many dispensaries to operate in cash. Federal prohibition keeps costs artificially high, even in states that have legalized.

Some argue that marijuana is detrimental because of health risks, but alcohol and tobacco are equally, if not more, dangerous. In those cases, however, society regulates without deliberately sabotaging the legal market. The same logic should apply to cannabis.

Proponents of prohibition argue, for example, that capping potency is safer because it lowers real-world doses, but that isn’t necessarily true. For example, hard seltzer and beer sales made up almost 80% of all the alcoholic liquids purchased by Americans in 2023. By contrast, alcohol prohibition pushed drinkers toward stronger spirits, which were easier to conceal and transport. Banning legal marijuana risks a similar shift toward unregulated, untested products.

It’s also worth asking what legalization does to other substances, and whether more adult use is even a problem. Evidence on substitution is mixed: one study tied U.S. legalization to a small increase in drinking among younger adults, but another reports a substantial decrease in traffic fatalities. If legalization lets more adults choose a product whose risks mainly fall on the user, not the public, that is policy working as intended.

None of this means marijuana must go entirely unregulated. Basic safeguards like minimum ages, bans on impaired driving, and accurate labeling requirements are unlikely to incentivize an underground trade. The government can regulate for safety without using regulation as a disguised prohibition.

The past decade’s real lesson is that legalization has largely worked. Teen marijuana use has kept falling for more than a decade, even as more states legalized for adults: high schoolers’ past-month use has dropped by double digits since 2012. Reported adult use has risen, though part of that may reflect reduced stigma rather than more real consumption, since fewer people now hide legal behavior from surveys. Meanwhile, the state has collected nearly $2 billion in cannabis tax revenue.

The right response to an imperfect legal market is less oppressive state regulation, ideally combined with federal legalization. Massachusetts should complete the experiment it started in 2016, not reverse it.