California’s medical cannabis industry operates in a legal gray area–while state law allows for the operation of medical marijuana dispensaries, federal laws still list cannabis as a Schedule 1 controlled substance. As a result of the complex legal context, the medical cannabis industry stands as a unique underground market in California, defined by an attitude of defiance and disregard for the prohibition of cannabis. In the recent Journal of Macromarketing paper entitled “Entrepreneurship, Identity, and the Transformation of Marketing Systems: Medical Cannabis in California,” author Kenji Klein analyzes how medical cannabis entrepreneurs, who perceive cannabis prohibition to be unfounded, are able to enact their value identities by challenging prohibition. The abstract for the paper:
This paper examines how entrepreneurs operating in underground markets come to see laws governing marketing systems as illegitimate and explores the role identity plays in motivating entrepreneurs to challenge existing institutions. Analysis of interviews with 27 cannabis dispensary founders showed that entrepreneurs came to reject medical cannabis prohibition as illegitimate after direct experience with both cannabis and traditional medicines convinced them the factual basis upon which prohibition rested was flawed. Perception of prohibition’s illegitimacy fostered entrepreneur identification as a member of a superior in-group constrained by an illegitimate institution. Pursuing opportunities in illegal markets then became a vehicle for entrepreneurs to enact valued identities by challenging and undermining prohibition. This analysis extends work on informal economy entrepreneurship by showing that dis-identification with formal institutions does more than enable entrepreneurs to recognize economic opportunities ignored by those working within institutional boundaries; it also opens existing marketing systems to decay by providing economic and psychological resources for dismantling the laws that govern them.
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