Do Pot and Microbreweries Explain the Future of the U.S. Economy?

Washington Post: “Breweries and dispensaries offer lessons for how policymakers might nurture a small-business comeback in the United States. But they offer very different lessons, one focused on government intervention, the other on reducing hurdles for entrepreneurs to enter a market — and their ultimate lesson could prove to be, the big guys tend to win in the end.”

Economists can’t pinpoint what’s driving a start-up slowdown, “but one theory has to do with market power. As big companies get bigger — in retail or tech or anything else — they find ways to shield themselves from competition, often by lobbying the government.”

“The beer industry is more dominated by big players than almost any other in the United States … And yet, for all that market power, the beer giants are acting scared of their smallest competitors — perhaps because there are more of them every day.”

“There are simple reasons why brewing is so friendly to start-ups: … It doesn’t cost much to learn to brew … It also doesn’t cost much to start a brewery, relatively speaking.”

“The pot industry’s approach to start-up cultivation is the opposite of the beer industry — higher barriers to entry, coupled with strict regulations. And yet, some cannabis entrepreneurs think they can copy a … secret of microbrewers’ success: artisanal differentiation.”

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