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Cali’s Cannabis Black Market is Thriving…But Why?

Cali’s Cannabis Black Market is Thriving…But Why?

By Grow How

One of the goals of cannabis legalisation in the United States is to drive black market operatives out of business for good. Until recently, the black market was the only market for recreational cannabis in the US. Today, tens of millions of citizens are able to access all the pot they could ever wish for in a 100% legal unregulated manner.

In which case - why does California’s cannabis black market continue to thrive?

California legalised cannabis all the way back in 2016, yet continues to play host to an enormous underground industry. In fact, the results of a recent study would seem to suggest that California’s black market still accounts for up to 80% of all cannabis sales. That’s a combined value of approximately $3.7 billion - outperforming the state’s legal cannabis industry by more than 400%.

Theoretically, you’d expect the legalisation of cannabis to spell the outright end for black market operatives. Particularly in states like California, where overhauled legislation has made it easier than ever before to obtain the highest-quality cannabis money can buy. All in a 100% safe and 100% legal manner.

Nevertheless, evidence suggests that 20% of all Californians still buy cannabis from the black market.

A Widespread Issue

But it isn’t just California that continues to struggle with a thriving cannabis black market. A separate report suggested that more than 75% of all cannabis sales for 2019 in Massachusetts will be made by illegal operatives. No specific figures have been released for Washington State, though lawmakers have reported a growing issue with illegal cannabis farms popping up all over the place.

The question being - why? If premium-quality cannabis is legally available all over these states, why are millions still turning to the black market?

Ask most analysts and economists and they’ll tell you the same - it’s a simple case of affordability. Due to the limited number of legal dispensaries in operation and comparatively high taxation, legal cannabis continues to be sold at a significantly higher price than black market cannabis. What’s more, there are still enormous areas in states like California where there simply isn’t access to even a single legal dispensary. If it’s a choice between driving for hours or hitting-up a local dealer around the corner, it’s an obvious outcome for most.

Not to mention, the fact that less than one in three cities on average allow cannabis to be sold or purchased within their confines - irrespective of its legal status.

It’s also been suggested that more liberal attitudes to cannabis cultivation and commerce are leading some to cross lines they’d have previously being cautious of. With cannabis having been effectively legalised, there’s no longer a sense of doing something completely unacceptable for those who choose to grow and sell their own. Plus, it’s worth considering the impossibility of policing black market cannabis sales, given how anyone wishing to do so can legally grow cannabis on their property.

You grow it, you sell it to the people you know and there’s pretty much no way of anyone finding out.

The Obvious Solution?

For the time being therefore, it’s pretty clear that the cannabis black market in the United States isn’t going anywhere. Despite the fact that the solution is relatively obvious - make commercial cannabis cheaper.

It’s technically something that can and should be done. Issuing more legal dispensary licenses could also help solve the problem.

In any case, it’s essential that regulatory standards evolve to ensure demand for cannabis is met legally, or it will be met elsewhere.

Keith Imel 6 months ago at 5:20 AM
Get the Government involved and it's always the same, taxed to death, regulated to death. It's no surprise that the Black Market is thriving.
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