Cannabis has come almost full circle. A hundred years ago, it was as legal as grass. Then, the world waged war on the weed, and it went underground. Now, with legalization blooming again, are underground markets drying up? In short, not even close. To understand why let’s look at the new bootlegging of bud.
Legalization versus freedom
Decades ago, after America repealed alcohol Prohibition, not everyone opened up to booze. Even today, some states have “dry counties” where alcohol cannot be sold. In the era of hot-rods and mountain stills, this meant bootleggers still had a market. They would fill their trunks with mason jars or weld on extra tanks.
Today, cannabis has come to this point. Though some states allow it, regulation means some people will still go outside the law to get it. The market may be legal, but it is far from free.
Why illicit cannabis still lives
In states that allow recreational cannabis sales, conservatives put caveats in place. The final price sees a markup of 20% or more from “vice” taxes. Regulations on purchase amounts, prices, and limits on availability do nothing less than keep bootleggers in business.
Washington’s Liquor and Cannabis Board reported in December of last year a breakdown of the market.
- 37% medical sales ($480 million)
- 35% recreational sales ($460 million)
- 28% illicit sales ($390 million)
The strict rules and high taxes on the “legal” market there keep hundreds of millions of dollars in the hands of illegal dealers. Why? Because they satisfy a customer need. Cheaper prices and bulk purchasing.
Other market factors
In some legal states, cannabis delivery services have turned into million-dollar businesses. But not every state allows them. The places that don’t leave the market open to dealers who still offer the service. When you want your weed but can’t travel, you call whoever delivers, legal or not.
Bootlegging to dry states
Of course, the legalization in certain states means that growers have an easier time there. But with restrictions on who can sell to customers, they often find it easier to ship out of state. Where demand exists, supply will find a way. States like Nebraska and Oklahoma, where cannabis remains illegal, claim an influx of herb from neighboring Colorado.
Even herb from out of the country still finds its way into the US to feed the market. But in legal states, where other products like edibles have hit the shelves, the sales have quickly increased the size of the market. In Colorado, edibles comprise almost half the market. Left out of legalization, they would remain the sole realm of illegal vendors.
Black markets thrive so long as consumers don’t have their needs met in the legal one. As states slowly decrease the restrictions on cannabis cultivation, sales, and consumption, that market dwindles. But as long as the demand exceeds the capacity of a regulated system, outliers and bootleggers still have an opportunity.
We have seen from decades of the Drug War that cannabis isn’t going anywhere. The only way to get rid of the underground market is by allowing a free one. Then, and only then, will we see the type of healthy competition of price and services that will end trade for illegal dealers.
Do you still see plenty of underground weed bootlegging in your legal state? Tell us which is easier and cheaper to get on social media or in the comments below.