A growing number of states are legalizing either the medical or recreational (or both) sale and use of marijuana. The slow end of prohibition is welcome news to advocates of individual liberty.

But there’s a growing dark side to legalization: public corruption. It’s a problem at the local level, where, as this Politico report notes, regulatory control rests in the hands of a few public officials – who can’t resist the temptation to use that power for personal gain:

In the past decade, 15 states have legalized a regulated marijuana market for adults over 21, and another 17 have legalized medical marijuana. But in their rush to limit the numbers of licensed vendors and give local municipalities control of where to locate dispensaries, they created something else: A market for local corruption.

Almost all the states that legalized pot either require the approval of local officials — as in Massachusetts — or impose a statewide limit on the number of licenses, chosen by a politically appointed oversight board, or both. These practices effectively put million-dollar decisions in the hands of relatively small-time political figures — the mayors and councilors of small towns and cities, along with the friends and supporters of politicians who appoint them to boards. And these structures have given rise to the exact type of corruption that got [ex-Fall River Mayor Jasiel] Correia in trouble with federal prosecutors. They have also created a culture in which would-be cannabis entrepreneurs feel obliged to make large campaign contributions or hire politically connected lobbyists.

For some entrepreneurs, the payments can seem worth the ticket to cannabis riches.

For some politicians, the lure of a bribe or favor can be irresistible.

Whenever government is put in charge of picking winners, corruption inevitably follows. What makes the marijuana industry so prone to the whims and vices of local pols on the take is that legalization is still mostly uncharted territory:

The cannabis industry is “particularly vulnerable to lacking a set of safeguards or regularity that might hedge against corruption in other areas,” said Berman, the Ohio State law professor. Even with other vice industries like alcohol or gambling, policymakers have been working on regulating those industries for decades. “In the cannabis space, we’re almost literally making it up as we go. No history, no background, no norms,” he said.

States that have largely avoided corruption controversies either do not have license caps — like Colorado or Oklahoma — or dole out a limited number of licenses through a lottery rather than scoring the applicants by merit — like Arizona. Many entrepreneurs, particularly those who lost out on license applications, believe the government shouldn’t be in the business of picking winners and losers and should just let the free market do its job.

That’s exactly what should happen. Swapping the corrupt and dangerous black market in marijuana for a corrupt and dangerous government racket is a bad bargain for everyone.

Image Credit: By Chmee2 (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons