Why is an Unregulated Cannabis Market is Bad for Marijuana Legalization?

We dive into the details exploring the current situation and growth
MarijuanaBreak Staff / Updated on September 16, 2018

Why an unregulated cannabis market

At the time of writing, marijuana is still the most widely used ‘illicit’ drug in the world. According to a 2017 United Nations World Drug Report, the number of global weed users is somewhere in the 183 million to 238 million range! Despite this, and the fact that no one has ever died from a cannabis overdose, there were marijuana busts in all but four of the 168 nations studied in the report.

Although weed is legal in a total of 31 American states and D.C. for either recreational or medicinal use, it is federally illegal. Canada is set to become only the second country in the world to allow full legalization of the herb in late 2018; Uruguay was the first in 2014. As you can imagine, a combination of illegality and an enormous number of users means the black market for cannabis is thriving.

A report by ArcView Market Research found that black market sales made up 87% of the entire marijuana market in 2016 – an estimated total of $46.4 billion! For reference, wine sales were ‘just’ $38 billion!

But the Legal Market is Fighting Back, Right?

It was always going to be the case where the black market would suffer from legalization. Even before the raft of new legislation that allowed weed to be consumed in multiple states, black market sales had fallen by 3% from 2015 to 2016. Recreational legalization in California was a significant step in the right direction, and the legal industry could be worth more than $21 billion in North America by 2021.

Incidentally, this estimate was made before full legalization in California and without considering the Canadian market. Grand View Research recently released a report suggesting that the global legal marijuana market could be worth an incredible $146 billion by 2025! Surely, this is the end of the black market?

CBD GUMMIES

Black Market Boom in Legal States

Unfortunately, illegal weed is not going away any time soon. If the legal marijuana market is indeed worth around $21 billion within the next few years, it still represents just one-third of sales. That’s right; even in a positive scenario, the black market could still comprise 67% of total cannabis sales in North America.

A May 2018 report by CBC News discovered that the black market in Colorado is booming, four years after marijuana was made legal for recreational use. Even though there are over 500 legal recreational marijuana dispensaries in Colorado, illegal sales are thriving. Criminal gangs in the state are growing marijuana and transporting it to states where it is illegal! As a result, they can sell it for a significantly higher price than if they elected to sell it legally in cities such as Denver.

Unfortunately, Colorado is now the marijuana capital of the United States as criminal enterprises legally grow the herb and ship it to states such as Alabama and Georgia where it is illegal. In Alabama for example, cultivation is a felony offense with prison sentences varying from two years to life! While the legally grown weed is trafficked to multiple states, it seems as if Florida, Texas, and Illinois are the most profitable areas.

CBC News spoke to a marijuana dealer in Colorado who admitted spending most of his days driving around the city of Denver. He can make $400-$500 a day through his ‘delivery’ service which sells weed from growers who have ‘extra’ product. The unnamed man jokingly compared himself to a pizza delivery person because of his ability to guarantee delivery of marijuana anywhere in Denver in under an hour.
Larisa Bolivar is the president of the state’s Cannabis Consumers Coalition, and through an online survey, she found out that almost 50% of respondents were purchasing their weed from regular dealers rather than state dispensaries. One of the reasons is because dispensaries in the state require you to show ID; you must also be aged 21+ to buy it.

The taxes one must pay on marijuana in Colorado, and other states, is also a factor. In Denver, you have to pay a tax of over 23% when purchasing the herb for recreational use. Obviously, this tax doesn’t apply when purchasing it from a street dealer. It is the same story in every state, especially those where cannabis is legal for recreational use.

How the Black Market Hurts the Marijuana Industry

In Canada, an estimated 651 metric tons of weed was consumed in 2017, and 99% of it came from the black market. Up to 120 metric tons was exported illegally to the United States. Along with the obvious issues with violence associated with any black-market activity, there is the trifling issue of weed quality.
Admittedly, marijuana grown by criminal gangs in states such as Colorado is high standard for the most part. Why wouldn’t it be? They can grow it using the same techniques as growers who sell their weed to dispensaries. There is so much information about growing weed at your fingertips these days that you should be able to provide decent weed after a little bit of trial and error.

The real danger is criminal gangs mass-producing garbage weed to cut corners. There is still a proliferation of low-quality shwag, or ‘brick weed’, doing the rounds. Those who smoke this type of marijuana report nothing more than a nauseating feeling followed by a throbbing headache. Gangs looking to make a fast buck have no issue in quickly growing marijuana without any regard as to the quality. If they are selling in states where it is illegal, beggars can’t be choosers, so dealers get away with selling rubbish.

If this was the only problem, it could eventually be overcome through full legalization, but there is a potentially deadly issue coming to the fore. As addicts continue to chase a high that becomes harder to achieve, sellers are responding by offering marijuana laced with fentanyl, a deadly narcotic. Fentanyl is 50 times stronger than heroin, and there have been reports of people, who were believed to have only smoked weed, being found dead from an opioid overdose.

Fentanyl is a highly dangerous substance used to cut drugs such as heroin. It is cheap and easy to produce, and once you use it, there’s a strong likelihood that you’ll be hooked. From that point onward, ‘regular’ marijuana won’t be strong enough. Sadly, failure to wean yourself off fentanyl means that one day, you’ll probably end up on a mortuary slab prematurely.

Final Thoughts on Today’s Cannabis Legalization

As long as marijuana continues to be a federally illegal substance, it is going to aid the black market. Weed lovers in states such as Florida will gladly help the criminal gangs of Colorado because they are unable to get marijuana legally in their home state. In a bid to keep costs down and profits up, these enterprises will cut corners to mass-produce low quality weed.

A flood of schwag and fentanyl-laced marijuana will diminish the overall quality of the herb and badly hurt its reputation. Imagine smoking weed medicinally for the first time only to be punished with low-grade garbage. You would assume that’s how all cannabis tastes and revert to opioids to treat your pain. Full legalization may not destroy the black market, but it would boost the overall standards. To survive, black market dealers would have to up their game and produce better quality weed.

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Why is an Unregulated Cannabis Market is Bad for Marijuana Legalization?
September 16, 2018
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