Balancing Vertical Integration In Calif.'s Cannabis Industry
By Georgina Moreno ( January 12, 2018, 3:49 PM EST) -- With implementation of its new cannabis regulations in January 2018, California will become the largest legal cannabis market in the world.[1] While this new cannabis regime brings economic opportunities, it also brings challenges to both policymakers and businesses. California policymakers have developed a complex regulatory structure for the newly legalized, billion-dollar cannabis market in California, and these regulations will shape the competitive structure of this market for years to come. Cannabis industry stakeholders have voiced concerns that vertical integration may harm competition and large, vertically integrated firms will foreclose small cannabis entrepreneurs.[2][3][4] Whether a vertical relationship is harmful to competition depends on the extent to which the integrating firms have market power and whether the merger creates opportunities for anticompetitive behavior. How might California's approach to vertical integration in the cannabis market shape competition? Will regulators effectively distinguish efficiency-improving from harmful vertical integration?...
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