Cannabis Black Market and Legalization in the US

Cannabis Black Market and Legalization in the US

Supposedly, the legalization of cannabis in more states could have been deterring and reducing the black market’s dominance. The opposite is happening. The underground cannabis business is cutting into the sales and profits of legal businesses.

So if you’re asking, “Is the black market still alive?” Yes, it is. Its market total is $70 billion that’s 7 times more than the regulated and legal market nationwide based on New Frontier Data. Let’s have a look at some states and its cannabis black market status.
California: Despite the legalization, its black market is still thriving, and that includes sellers and growers. Based on a similar research of New Frontier Data about 80 percent of cannabis sold in the state is from the underground economy.
It also estimates that its illegal cannabis market is now worth $3.7 billion, a figure four times the California’s legal market size is.
Oregon: The state has more than enough of marijuana supply for six years even if growers would stop producing the herb now. And this oversupply is no good for many growers who invested much in cannabis since its legalization.
What’s more worrying the state authorities is that the legit growers and sellers might turn to the underground economy to dispose of oversupply and inventory. And in the hopes of containing the current issue, authorities is moving to stop in issuing new grower licenses or taking away some licenses.
In the same state, six people were charged with a wide range of schemes involving interstate drug trafficking that supplies pot to the black markets of Florida, Virginia and Texas. A few of them were also charged and allegedly involved in money laundering and kidnapping as well as firearm use in a drug-trafficking related crime.
Colorado: The authorities have been complaining about illegal growers entering the state – hiding in plain sight. These underground businesses, as the authorities fear, are setting up fields and cultivating pot for export to other states. In 2017, the authorities had confiscated 80,000 illegal cannabis plants and had to use garbage trucks to collect the pot they’d raided.
What’s getting worse is that there appears to be more cartels growing the plant in Colorado, and then smuggling it to other states. This alone can spur violence. In fact, there were seven homicide cases in the state related to growers.
Nevada: Back in 2016, pot was legalized in the state, so more investors had looked into and started investing in the growing marijuana industry in the USA. However, still many pot users are turning into illegal drug dealers not on local dispensaries for supply. It is what is happening in other states, too.
It’s not the only problem though because violence that surrounds cannabis has also increased by 21% in 2017 versus 2016. Fifty-eight percent of drug-related murders involved cannabis use.
Washington: The authorities have been occupied arresting employees and workers from illegal farms that set up their businesses close by legal fields in the hopes of throwing off any enforcement efforts.
Massachusetts: The rollout of marijuana sales have been slow even if there are 22 licensed dispensaries. It is because the regulation requires the dispensaries to negotiate local government contracts before they could obtain a license.
The customers also complain of high prices and long lines. In fact, marijuana sold at dispensaries is also double the price of illegal cannabis. The higher price is also before the local and state taxes that could be adding up to 20 percent more.
How does it work?
The black market attracts customers and lures them away from the legal vendors and for reasons.
Cannabis edibles are still illegal, so the underground and unregulated economy will keep on dominating this space.
Then, cannabis oils and dried cannabis products may also have shortage due to the increasing demand, but the black market sources for these should be gone soon once more growers become operational, according to some studies.
The cannabis black market in states where marijuana is legal is obviously a problem to the authorities that are trying to encourage people to get their supplies from legal pot dispensaries. As a move, the states are moving into setting fair taxes that won’t send consumers into their illegal dealers just like on the east coast.
Final Thoughts
Legalizing cannabis business should have been creating an organized marketplace where patients and cardholders of medical marijuana card in Floridamedical marijuana card in Florida and recreational pot users (where it’s legal) could buy high quality and safe cannabis.
It should’ve also been allowing the government to collect tax revenues and fund more projects out of the industry.
However, the unlicensed sources continue to thrive in many states, leading to more violence, oversupply, crimes and a whole lot of problems.
Not to mention, the unlicensed sources are driving consumers away from legal growers and sellers and increase their chances of buying unregulated, unsafe and low-quality cannabis products.
So if anything, the black market is getting worse and legalizing pot is not making things better. The black pot market is booming in California and in other states where it’s legal. Definitely, the illegal pot industry is still alive.

1 Comment

  • Daniel D Mains
    October 12, 2019

    I think if you REALLY want to put a dent in or completely demolish the underground market is to lift the restrictions on how much cannabis can be purchased through legal stores. All of these laws that are being passed are being called, something to the effect of, Regulate Marijuana Like Alcohol, but then restrictions are put in place on how much can be purchased. I’m pretty sure if you buy alcohol you can buy as much as you want, only being limited by your wallet and stock on hand at the store. If you’re only allowed one bottle of vodka per purchase, the price of vodka is going to go way up. Allowing customers to buy how ever much cannabis they can afford and balancing that with what stores have on hand would drive down the price of legal cannabis. If more cannabis can be purchased at one time then more would have to be grown. It’s just simple supply and demand.

Post a Comment