Legalizing pot won’t eliminate black market

Consumers of pot, like any other product, consider price in their buying decisions.

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One of the most widely used arguments for legalizing marijuana was that legalization would force street dealers out of business and destroy black-market pot sales.

But as Washington state officials have been working to create tax policies and regulations for the sale and distribution of marijuana under Initiative 502, they are finding the task far more complicated than the campaign rhetoric implied.

Consultants hired by the state are advising officials that stores selling pot taxed and sold under state authority will initially have only about 13 percent of the market share.

“I-502 stores may not compete well on price with medical access points if they have similar production processes but face higher taxes,” consultants with BOTEC Analysis Corp. wrote. “The medical market could be hobbled by legislative intervention, but another and perhaps even greater concern is competition from the black market.”

In short, price matters.

If street dealers can beat the state’s price, they are going to keep a large share of their current market.

BOTEC estimates Washingtonians consume about 165 million grams (about 360,000 pounds) a year, according to The Tacoma News Tribune.

It “seems unrealistic that the I-502 market will be able to replace the illegal market any time soon,” the consultants wrote.

The consultants reasoning is sound. Those already buying pot are going to stick with their source as long as the price is better and the threat of getting into trouble with the law is gone.

And while technically going to the black market for weed is not legal, most folks in Washington now believe it is — or, at least, they are acting that way. When people get a whiff of pot smoke they treat it with a shrug. “It’s legal,” they say to their friends.

So as Washington moves forward in creating its policies for use of a legal-but-not-legal substance, it is going to have to face up to the harsh reality that street dealers have become emboldened and are not going away anytime soon.

Comments

bj84711 8 months, 2 weeks ago

The government could compete if they actually used common sense, but they don't know how to do anything without losing money and over burdening and taxing consumers.

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barracuda 8 months, 2 weeks ago

I have read an news article that outlines the problem, it said that the Government is planning on taxing it about the same as booze.

And there are local taxes, state taxes and they assume the feds (who are vocal opposing this) will be getting a share as well.

So, with Mr. Supplier on the corner selling a bag for 20.00, and the government selling the same amount and then charging taxes....   And, when you get it home and put it into your own container... who will be able to tell where you acquired it from.....

We all know how the booze prices went up when they "deregulated" it. They screwed everybody with the pay hike! All they are doing is getting the Mr. Supplier more money per unit, as he can sell his pot higher to compete with the "Walmart" company superstores.

Also, There are rumors that a manager of Microsoft wants to start a sales superstore chain.

Check out this site: http://www.ibtimes.com/marijuana-retail-chain-coming-former-microsoft-exec-wants-launch-starbucks-pot-diego-pellicer .

Hmmmm, anybody else see a problem here?
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barracuda 8 months, 2 weeks ago

I have no idea what is up with the font styles......... Not done on purpose.... Sorry

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