Who decides what businesses are desirable?

There is a heated debate going on in the City of Fountain, Colorado right now over whether or not to allow medical marijuana dispensaries to operate within the city limits and under what conditions. Several groups have been informally polling and speaking with business people and the general public, to get an idea where they stand on the issue.

As a local business owner, I was asked if I thought having a medical marijuana dispensaries open nearby would help, or hurt my business. I found the question not only leading, but very disturbing. It illustrates an attitude and modis operandi that’s all too typical among people who see more and more government control as a virtuous goal.

The problem I have with the question is that it assumes that I, as a local, existing business, can work with the government to ban undesirable businesses from opening nearby. That’s a very convenient way to keep out indirect competitors. Should a local phone store like Cricket or Verizon and their neighbors have a say in whether or not an electronics store can open near them? Could shopping center owners influence what businesses can open nearby. What if you’re trying to open near a large shopping center, but not renting from that center? Do you think the landlord my have some influence over his or her tennents?

But doesn’t a neighborhood or community have the right to decide what kind of businesses should operate in their area. The do and they exercise it every day. It’s called commerce. Businesses can’t survive, never mind thrive, without customers. You cast your vote every time you make, or don’t make a purchase. A factory, nationwide Internet business or businesses where the customer base doesn’t reside nearby is a different animal, but that’s not what was being discussed here. A business that relies mainly on a local customer base must have their support, as expressed by their purchases.

Taking market forces out of the equation, by making it subject to a political vote or government policy, is the kind of “business/government/community based” approach to commerce that leads to the multi-billion dollar lobbying industry. Businesses don’t compete in the marketplace, they compete in the legislature. They don’t pour resources into research, development, cost cutting and generally adding value, they pour resources into political action committees, community focus groups, polling companies and marketing material and campaigns aimed at influencing a political outcome. As it turns out, when you get large enough in terms of cash flow, it’s more cost efficient to eliminate potential rivals through legislation than to actually compete with them.

An incredible number of medical marijuana dispensaries have opened throughout the state in recent months. I fully expect the marketplace to dispense with most of them. There are a few more expenses involved in owning and operating a commercial, retail store in a highly competitive atmosphere than there are in selling dope out of your basement. Suddenly you have rent, utilities, signage, taxes, employees and there are six other guys in a two mile radius, openly enticing your customers to buy from them. Sure was nice when you were the only guy they knew that sold pot.

But if you have the know-how and the discipline to pull it off, you have a consistent local customer base, and you’re operating a legal business, who am I to say you shouldn’t exist? The legitimate issue for government is to determine whether or not there is a direct public safety issue and if so, make that case to the public. Whether or not a local retailer has the support of the public will be determined when/if they open for business.