Stacey McKenna is a senior fellow in harm reduction policy at the R Street Institute, a nonpartisan policy research organization. She studies and writes about the health and social impacts of drug and harm reduction policy; educates lawmakers and the public; and advocates for evidence-based drug laws.

Drug policy experts and harm reductionists have long argued that prohibition drives many of the potential dangers associated with illicit substance use. For example, the “iron law of prohibition” states that banning a substance incentivizes the emergence of increasingly potent versions; recent research highlights a relationship between drug busts and a subsequent increase in local overdoses; and criminalization of users has been shown to drive social, economic, and health harms regardless of substance used.

In an effort to counter these harms, drug policy and harm reduction advocates in North America and beyond are increasingly calling for legal routes to regulating substances, from cannabis to opioids. Efforts include pairing decriminalized possession with formal community drug checking, carving out a place in the free market, and more. Despite the fact that alcohol and tobacco have long been legal in much of the world, there is little consensus as to what legal regulation “should” look like or how a policy shift away from prohibition could most effectively avoid and rectify the harms of prohibition.

R Street Institute is a policy research organization with expertise in pragmatic solutions that utilize limited (but effective) government and free market approaches. As such, we believe it is essential to consider the role that capitalism plays in shaping the creation and function of legal markets for substances. In this presentation, we will highlight lessons from established industries such as tobacco and alcohol to demonstrate the potential pros and cons of legal substance markets in a capitalist system, exploring issues related to profit motives, the potential to accelerate innovation, and more. In addition, we will consider how these lessons may translate to improve the equitability and ethics of potential and emerging legal markets for substances, from cannabis to psychedelics to opioids.