Marijuana Black Market Thriving After Legalization. Why?

Marijuana Black Market Thriving After Legalization. Why?

It has never been easier for Americans to legally buy weed than it is right now. While for years a cannabis consumer’s only options were to grow it themselves or buy it on the marijuana black market, today 205 million Americans live in states where weed is now legally available for either medicinal or recreational use.

This current trend toward legalization is certainly encouraging. More people than ever before are able to buy marijuana without fear of arrest. The trouble is, however, another 120 million Americans live in one of 21 states where marijuana is still illegal. If you want to buy pot in one of those states, you have to get it on the black market — a market that is thriving, and one that will continue to thrive until marijuana is legal across the nation.

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In theory, the legalization and regulation of marijuana should bring the industry out into the open, where cannabis can be taxed and the marijuana black market essentially shuts down. Marijuana is still illegal in nearly half of the U.S. states, though, and smugglers are using the disjointed, hodgepodge nature of laws to their advantage.

In Oregon, for example, state police estimate that legal marijuana accounts for just 30 percent of Oregon’s total marijuana market. Consumers in Oregon aren’t buying anywhere close to all the pot that the state’s growers produce, so much of the excess — between 132 tons and 900 tons — is likely being sold illegally out of state. This practice is called “diversion,” and, as Cannabis Now explains, it’s the inevitable result of market forces where marijuana is illegal.

Weed can be grown in Oregon and wind up in Detroit. Or be snuck out of California and be up for sale in Memphis. The potential profits are simply too irresistible. For example, a pound of pot that fetches $2,000 in Colorado could fetch three times as much in a city on the East Coast.

According to Colorado Attorney General Cynthia Coffman, criminals are buying houses in her state where they can grow pot, then harvesting the plant and shipping it elsewhere. Law enforcement officials in California say that foreign cartels have largely given up smuggling pot across the border, and are instead growing thousands of plants in the open on public lands in the state. Not only do the cartels no longer have to worry about getting past border security, but if their crops are discovered, they only face misdemeanor charges.

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Black market sellers can also see profits even if they never send their product across state lines. In legal states, their weed is often cheaper than the weed sold in stores because they don’t have to pay overhead in the form of employee salaries and taxes. Not surprisingly, legal pot businesses can often struggle to compete.

Pot is still technically illegal at the federal level, and while President Trump has given no indication that his administration will crack down on the marijuana industry, his attorney general, Jeff Sessions, has informed the nation’s governors that he is monitoring the illegal flow of weed across state borders. Sessions says that the diversion issue could lead to states violating the Cole Memo, the non-binding, Obama-era policy that gives legal marijuana states legal protection against federal prosecution.

Despite his threats, Sessions appears to be fighting a losing battle. Not only do an increasing number of Americans think marijuana use should be legal in the U.S., but the number of people in his own political party who support legalization is now higher than the number of those who don’t.

Making marijuana more difficult to get is not the answer. As long as there are pockets of prohibition across the U.S., there will be incentive for marijuana black market sales. Make pot legal everywhere, and that market goes away almost entirely.

As the USA today noted, “sure, some people still make moonshine, but the vast majority of us buy legally made — and taxed — alcohol.”