The Ethics of Legalizing Recreational Drugs

by | Jul 28, 2018 | Crime, Regulation

Cannabis companies, like alcohol producers, voluntarily trade with others, including their customers who want to consume their products.

As a non-user—and a free market advocate—I hadn’t paid much attention to Canada’s plan to legalize recreational marijuana. But now Bill C-45, which legalizes the use, sale, and production of cannabis, received the royal assent at the Canadian Parliament this week, meaning it will become a law in October. Cannabis companies’ share prices went up overnight, and the commentary in the media both for and against legalization intensified.

What got me really thinking about cannabis, and particularly the ethics of cannabis business, was a conversation with a friend who has a negative view of the impending legalization. He thinks the impact would be destructive: marijuana use will go up, particularly by teen-agers whose developing brains will be harmed; people’s productivity will go down and workplace accidents will go up under the influence of cannabis; traffic accidents will increase, caused by drivers high on weed; crime will go up; and no real value will be created, as investors will put their money in the fast-growing cannabis companies instead of investing in firms producing beneficial products.

Most of my friend’s fears are unfounded, based on the evidence from Colorado and Washington, the first American states that legalized cannabis in 2012. Teen- agers’ use of marijuana actually declined. Data on workplace accidents and labor productivity have not been reported, but likely the legalization of marijuana has had no effect. Companies continue to have drug policies and testing and can require zero THC in the blood of their employees. Insurance claims from traffic accidents increased somewhat both in Colorado and Washington, but how much that reflects increased cannabis use, is unclear. Overall crime rates in both states went down.

As for value creation attributed to cannabis business, legalization of the drug has created an economic boom in both states, as cannabis-based companies are growing rapidly, creating value for their shareholders and for their customers, the recreational marijuana users. Growth of the legal cannabis industry has also created jobs and taken business away from traffickers who facilitated organized crime.

Advocates of cannabis legalization also count the significant increase in government revenues from cannabis taxes as one of the benefits, as such taxes are primarily used for health care and harm reduction programs for drug users.

Although I oppose cannabis taxes, I am an advocate of legalization of cannabis (and of all drugs) and of cannabis business. My stand is not based on a cost-benefit calculation, but on moral principle. That principle is the individual right to liberty. Government should have no say what substances, including drugs, citizens consume. That should be up to individuals to decide. By extension, businesses should be free to choose what goods or services to produce and trade, whether energy, financial planning—or cannabis.

In other words, the market for cannabis and for all other goods and services should be completely free, leaving it to individuals to choose to engage in it, or not. Companies cannot use force or fraud to make others—investors, employees, customers—to trade with them, but voluntary trade is none of government’s business. (Should any trading partner use force or fraud, the government’s role is to protect the victims, by punishing the perpetrator(s) and deterring future violations of individual rights).

What if recreational cannabis users become addicted or develop health problems as a consequence of their drug habit? Isn’t it unethical to allow companies to sell marijuana legally, as this may happen so some of their customers? Aren’t the companies morally responsible for their customers’ potential addiction or illness?

The principle of individual liberty applies here as well. Inherent in it is individual responsibility. If you choose to use drugs, such as cannabis, you are responsible for the consequences—not the producer or seller of the substances should you become addicted or develop other negative health effects. Companies producing and selling alcohol are not responsible for alcoholism or cirrhosis of some of their customers (and vast majority consumes alcohol responsibly and don’t develop diseases). Likewise, food companies are not responsible for the obesity or illnesses of the consumers of their products (even of those who get addicted to sugar).

Yes, addiction is an illness and requires treatment, but again, that is not the responsibility of cannabis companies. Absent physical force or fraud, they are acting ethically. Cannabis companies, like alcohol producers, voluntarily trade with others, including their customers who want to consume their products. The companies are not violating anyone’s individual rights—and create economic value that facilitates human flourishing

Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada. How to Be Profitable and Moral” is her first solo-authored book. Visit her website at

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

Related articles

No spam. Unsubscribe anytime.

Pin It on Pinterest