Editor’s Pick. Written by Mark Thornton.
During alcohol prohibition (1920-1933), alcohol consumption went from a beer, wine, and whiskey market to one of rotgut whiskey with little wine or beer available. The rotgut whiskey could be more than twice as potent of the normal whiskey that was produced both before and after prohibition. The product is then diluted at the point of consumption. During the 1920s all sorts of cocktails were invented to dilute the whiskey and to cover up for bad smells and tastes.
Therefore, the current high potency of marijuana is not a market phenomenon, nor is it a market failure. It is primarily driven by government’s prohibition and the odd incentives that this produces on the sellers’ side of the market. Under these conditions consumers may prefer higher potency marijuana, ceteris paribus, but it is not primarily a consumer driven phenomenon.