Why Does the Black Market Continue in Places Where Cannabis is Legalized?
It’s often assumed that many still prefer illegal cannabis due to the fact that it’s cheaper. And while this holds some truth, the real reason behind the surge in the black market goes much, much deeper.
California has become a prime example of this issue. The state’s main problem is the fact that they’re producing more cannabis than there’s a demand for. So much so that cannabis prices have dropped to an all-time low in the state.
While this is great for the consumer, it’s become a nightmare for both farmers and manufacturers. Many of whom are unable to pay their bills at the current turn-out of $700 a pound. Compare that to last year when prices were around $1,200 a pound.
According to some farmers, it costs around $500 to grow a pound. Much of that money goes harvesting, trimming, and testing. With that in mind, you can see why many farmers find it ridiculous to sell with only a $200 profit.
However, one of the biggest issues is it remains illegal for California farmers to transport their cannabis from one legal state to another (i.e. from California to Oregon). While cannabis is legal in both parts of the country, its federal illegality makes such trafficking a federal offense. Therefore, California can’t ship out the extra millions of pounds of weed it has in order to make up for both the oversupply and reduced price points.
Still, that hasn’t stopped a number of farmers. Many are turning back to the black market and are having their cannabis shipped throughout the country. As you can imagine, many are opening up to cannabis. Even in states where there seem to be no actions towards legalization, there remains a strong demand for marijuana. And this demand is largely being met by excess weed from legal states.
With this in mind, the only real solution to the black market seems to be federal legalization. But as we’ve seen in the past few years, that’s going to take much longer than anticipated. So much so, it’s unlikely these illicit farmers will have any problems continuing to turn a profit through the black market.
And while all of this remains illegal, it’s difficult to criticize. California made the mistake of giving away more cannabis licenses than there was consumer demand. This has negatively affected a large number of people and the only way they’re able to pay their bills is through illegal means. However, even while those means are illegal, they’re simply a showcase for what the entire country is ready for; premium and legal cannabis.