Legal Marijuana Prices Are Forcing Cannabis Growers Back into the Black Market

You would think with a growing number of states legalizing recreational marijuana that the cannabis black market would begin dying out. But it turns out there's still plenty of illegal operations, and it's mostly due to legal prices.

NPR recently ran an article about how illegal marijuana operations are still plentiful, even in states with cannabis legalization. And the reason why these illegal operations still exist is simple economics. States with legalized marijuana have major overproduction problems, which has led to huge price drops in the market. One cannabis expert noted that marijuana growers can get maybe $1,500 per pound tops in the legal market, but if they take their supply to illegal states, they can get three or even four times more money.

Not only do illegal operations exist, but some legal cannabis growers are even taking some of their supply and taking it to the black market. Of course, this is risky since it's illegal and most states require growers to track their marijuana crops to ensure this type of thing doesn't happen. But some law enforcement experts note that this system is partially based on the honors system, and growers can easily set aside some of their harvest and not add it to their tracked data.

The bigger issue is organized crime groups masquerading as legal operations and using it to continue pushing black market cannabis. Keeping organized crime out of the marijuana trade is one of the few restrictions the federal government has put on legalized states, and many worry these types of operations could possibly lead to federal intervention.

(h/t NPR)

Latest.

Citing supply shortages, Ontario announced Thursday that they would now be taking a “phased approach” to issuing cannabis retail licenses. Despite earlier claims that they would not be capping the number of licenses for retail pot shops, they announced Thursday that they would, in fact, be limiting the number of licenses dispensed in April to 25. The province says that the licenses will be issued though a lottery system overseen by a third party to “ensure equality and transparency.” This, of course, is following the Progressive Conservative’s stark change in cannabis policy for the province after defeating the Ontario Liberal government in 2018.