This year marks the 250^th anniversary of the Declaration of Independence, the document whose words about “life, liberty and the pursuit of happiness” inspired not just Americans of 1776 but generations since from around the globe.

This year marks the 250^th anniversary of another important piece of writing that, dare I say, has even more impact. This year marks the anniversary of the publication of “An Inquiry into the Nature and Causes of the Wealth of Nations” by the Scottish philosopher Adam Smith, who basically invented economic theory as we understand it today. Smith’s observations on market economies, inspired by watching the comings and goings of ships in his native Glasgow, remain as relevant today as when he first put pen to paper. No discussion of tariffs and trade policy, for instance, can avoid dealing with Smith’s views on how it’s more economically efficient for countries to specialize. If Smith were around today, he’d likely be a regular guest on CNBC and other cable news shows whenever international trade came up for discussion.

One of Smith’s key observations, about supply and demand, was demonstrated last week in Bristol — although there the “invisible hand” of the marketplace as he described it came into conflict with the heavy hand of the law.

Virginia State Police, the Holston River Regional Drug Task Force and the Bristol Police Department raided four locations in Bristol and seized more than 300 pounds of marijuana, with what state police said had “a street value of more than $1 million.”

What makes this particularly noteworthy is that three of those four locations are businesses that have been openly operating — doing business as The Mile High Club, CannaBoyz and Space Apes. These establishments, through their names and logos, have not exactly been shy about what wares might be available inside. The fourth location raided was described in police reports as a warehouse but which was, at one time, the offices of the Bristol Herald Courier. The paper’s owner, Lee Enterprises, reported a net loss of $36 million for the last fiscal year, but one of its former properties has apparently been turned into quite the moneymaker. State police said that at the warehouse they seized “250 pounds of marijuana (street value of $1,135,000), 192 marijuana plants ($576,000), 50 pounds of THC edibles ($22,700).” That’s a lot of inventory for somebody.

Police have been busting people for buying and selling marijuana for a long time, long before we started calling weed “cannabis,” which is the preferred industry term these days. By industry, I don’t mean shady guys in raincoats in back alleys, but cannabis companies that are nowadays traded on Wall Street.

Here is where we really need to interview our old friend Adam Smith, although some state officials may have to do.

On the one hand, what happened last week in Bristol was a standard law enforcement action — police learned of suspected criminal activity and executed search warrants to seize evidence.

On the other hand, what we saw might also be described in business schools as “the cost of doing business.”

In a statement, Bristol Police Chief Byron Ashbrook said: “Last summer, I personally visited a number of these establishments, including CannaBoyz and Space Apes, and provided them with copies of the rules and regulations from the Virginia Cannabis Control Authority. At that time, they were advised that as long as they complied with the law, enforcement action would not be necessary. Evidence gathered during this investigation indicates that these businesses failed to comply with those requirements.”

CannaBoyz posted this statement on social media: “We are confident that our business follows all applicable laws, regulations, and industry standards. Our team takes compliance seriously and works diligently to ensure that every aspect of our operations meets required guidelines.”

The law that Ashbrook refers to is an unusual one. Virginia is the only state where it’s legal to possess small amounts of cannabis but illegal to buy it or sell it, which, of course, raises the question of how you’re supposed to obtain this legal product. You can grow your own, you can give some as a gift to a friend, which all sounds fine until you think about tomatoes instead of jazz cabbage. We can all grow our own tomatoes if we have the inclination, and if our crop is bountiful, we can give some away. Most of us, though, wind up buying tomatoes somewhere — a store, a farmers market, a roadside stand. Why? It’s a hassle to grow tomatoes. They’re susceptible to drought and deer, and a homegrown tomato is a fine thing in the summer and early fall, but not many of us want to fool with the hydroponics of growing them indoors in the winter — so we willingly pay somebody else to do that. Adam Smith would log this in his notebook as a key example of the division of labor.

The same principle applies to cannabis. Some people want it, and are willing to pay for it — which means some people are willing to grow it and sell it. This demand and supply existed back in the days when cannabis was fully illegal; it still exists today when cannabis exists in a gray area of the law in Virginia.

The reason for that gray area is rooted in the blue and red of politics. Democrats legalized possession of small amounts of the green goddess, as some call it, in 2021 on the theory that they’d come back the next year and set up a retail market but didn’t want people getting busted in the meantime for something they intended to legalize. What they didn’t count on was that the 2021 election would install a Republican House of Delegates and a Republican governor, neither of whom had any interest in legalizing weed sales — so here we are. There’s now a fully Democratic General Assembly, which this year passed a bill to set up a retail market for cannabis, and there’s a Democratic governor, who said she was in favor of such a market — but who has reservations about the particular bill on her desk. She sent it back to the legislature with amendments, the legislature rejected them, and now Gov. Abigail Spanberger must decide whether to sign a bill she has concerns about, or veto the bill and wait another year to try again. The devil in the devil’s lettuce is not just in the chemistry but also in the details. The current mood among legislators is that the governor will veto the bill, but the only person who really knows is our 75^th governor and she may not know herself yet. She has until 11:59 p.m. Saturday to decide.

In the meantime, the invisible hand of the marketplace is really what governs us, not the written law. We at Cardinal have documented multiple times that there are stores throughout Southwest Virginia that are openly selling cannabis. Sometimes they go through pretenses of being “membership clubs” but those memberships can be obtained simply by walking in — I’ve written about how I’ve done that and shipped the merchandise off to be tested. Each time, it was marijuana, often with strong potencies.

A little more than a year ago, I interviewed then-Attorney General Jason Miyares on the subject. At the time, we were in Wytheville and I invited him to accompany me to the local weed store on Main Street. He politely declined. He also pointed out that, under Virginia law, the attorney general has no real authority over enforcement of cannabis laws. He didn’t have the power to shut down these weed stores. It was up to local law enforcement to deal with them — and many local sheriffs and police chiefs have simply looked the other way because, to use another business term, the cost/benefit ratio didn’t work out. They’d have to invest a lot of investigatory time to do what — bust some minimum wage clerk? Police here have apparently put in that investigatory time and, based on the amounts seized, have made a big score.

In my younger days in journalism, I was always schooled by editors that I should be skeptical of police estimates about the street value of a certain drug seizure — that police liked to overestimate the value. It’s possible here, though, that the police have underestimated the street value of the marijuana they’ve seized — 250 pounds at the newspaper-turned-warehouse, 30 pounds at one store, 25 pounds at another store, a mere 3 pounds at another. That’s 308 pounds in all, or 4,928 ounces.

I have no personal knowledge about the market price for weed, so I’m in no position to question the police estimates. However, American Addiction Centers say the average going rate for cannabis in Virginia is $311 per ounce. If they’re right, that’s $1,532,608 of weed that police just confiscated in Bristol.

Now, here’s the thing: American Addiction Centers say Virginia has some of the highest-price jazz cabbage in the country, with only three other states where prices for “high quality” weed are more expensive (South Dakota at $335 per ounce, Minnesota at $331 per ounce, North Dakota at $330 per ounce).

If you just want to buy a single joint, but want a “high-quality” one, then Virginia’s prices ($8.49) are the second-highest in the county, surpassed only by North Dakota, the American Addiction Centers say.

The size of joints varies — I’m currently listening to bluesman Albert Castiglia, who sings that “I’ve been up night, baby, drinking stone black coffee, rolling joints as big and round as my thumb.” However, that’s not very precise, so let’s look for more professional guidance. The multistate cannabis company Kush21 estimates 56 joints per ounce. At that rate, the 4,928 ounces of weed seized in Bristol would equal 275,968 joints and, at the price quoted above, sell for $2,342,968. The Ohio-based Recovery Center envisions smaller joints, so estimates 84 joints per ounce, which works out to 413,952 joints, and a market value of $3,514,452. (This math also proves another business principle: It’s cheaper to buy in bulk.)

There’s a general trend, the Addiction Recovery Centers say, and it’s one Adam Smith could have predicted: Prices are higher where weed is illegal or restricted; they’re lowest in places where the product is legal. If I could get Smith’s ghost on the phone, he’d say that those states’ decision to legalize weed have lowered the risk and therefore lowered the cost of doing business, and ultimately lowered the cost to the consumer. Virginia’s decision to keep retail sales of cannabis illegal has made it more risky to engage in cannabis sales, and therefore driven up the cost. Right now all that money changing hands is going into the black market, benefiting who knows who, but certainly not benefiting taxpayers because not a single penny of tax is getting paid on black-market weed. Police can make raids, but as long as the demand is there, decades of experience tell us that this isn’t a problem we can solve through more arrests. Smith would tell us that if we want to reduce the black market for cannabis, then we need to make weed more widely available — through legal sales, which will reduce the price, which in turn will lower the incentive for black market operators.

Smith, though, isn’t available, so I had to make do with Del. Paul Krizek, D-Fairfax County, who sponsored the House version of the legalization bill on the governor’s desk. “Smith would recognize this as a market responding to demand when lawful institutions refuse to supply,” he told me. “All the more reason for the legislation.”

Now we’ll see whether the governor agrees.

Bristol police provided this handout on Virginia cannabis laws.

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