Continued Californian Local Prohibition Results in Black Market Three Times as Valuable as Legal Marijuana Retail

9 months ago

When talking about areas popular for weed consumption, the most commonly named state in the USA is California. Cannabis, despite being criminalized early last century, has been popular and part of the state’s culture since the 50s, and 60s with beatnik and hippie culture.

The state has been leading in efforts to legalize marijuana consumption with the creation of the first cannabis legalization group in 1964, LEMAR (LEgalize MARijuana). Shortly after Woodstock re-popularized consumption of marijuana in the mainstream culture, the USA’s first legal weed initiative went to the ballot in California in 1972. Proposition 19 failed to pass but the Golden State would stay at the forefront of the liberalization of cannabis and became the first state to legalize medical marijuana in 1996 with the Compassionate Use Act.


Yet it would take another two decades before adult recreational use of cannabis was legalized. In 2016 the so-called Prop64, or Adult Use of Marijuana Act was eventually passed by the state’s citizens. California was not the leading state anymore as five states had leapfrogged the Golden State in legalizing recreational use of marijuana already (Colorado and Washington in 2012, Alaska, Oregon, and the District of Columbia in 2014, and even Ohio who legalized the sale of recreational marijuana in 2015).

Who thought that, finally, California would join the fold and its citizens could at long last purchase and enjoy their toke across the state couldn’t be more wrong as the state would see a continued divide against the presence of legal marijuana retail in its localities.

Statewide legalized delivery of cannabis would take until earlier this year. Currently less than 20% of cities in California — 89 out of 482 — have issued licenses to legal dispensaries.

Black Market Thrives in California

Pretty much like Steve DeAngelo said this weekend on Twitter about the ridiculous lottery system in Canada, obviously a botched legalization roll out wouldn’t change the pre-existing market much.

”Anybody who thinks the legacy cannabis community will passively accept being forced from the market hasn’t studied our history or culture very well.”
— Steve DeAngelo, Cannabis Rights Activist

And thus was proven by a recent report about the legal and black market in California, which estimates the black market to be almost three times as large as the legal market. The study benchmarked the black market at $8.7 billion revenue, compared to $3.1 billion spent legal weed in the Golden State.

Additionally, an audit found 2,835 unlicensed dispensaries and delivery services in the state — listed on Weedmaps — compared to only 873 licensed dispensaries according to the state’s Bureau of Cannabis Control. It is worth pointing out that the number of unlicensed services may be even higher as not every service promotes itself on Weedmaps.

Especially in light of the current “vape epidemic” it needs not pointing out that the continued local prohibition puts consumers at risk. Since late June this year, the State has identified 67 cases of acute lung disease among people with recent history of vaping.

Existing Legal Sector Opts for Protectionism

Rather than fast-tracking further rollout of legalized weed to the benefit of consumers.

In a protective move, trade association UCBA presented California Governor Gavin Newsom an audit report, listing every California-based dispensary present on Weedmaps, in further attempts to constrain the operations of the popular platform, and protect the operations and competitiveness of the legalized operators. The association also called upon the state to impose the strict fines made possible earlier this year with Assembly Bill 97.

”Every day that Weedmaps continues to advertise for unlicensed retailers they are putting consumers at risk and suppressing the growth and very existence of the legal market.”
“The unlicensed operators on Weedmaps do not pay taxes or the cost of compliance with local and state regulations, do not follow required worker or consumer protections and do not allow labor unions to organize workers, in turn allowing them to charge a fraction of the cost.”

— UCBA trade association letter to California Governor G. Newsom

As is often the case in legal states, the degree of requirements as well as legal tape are counterproductive to fast roll out of legal weed. Additionally, in many states the level to entry is very high and smaller businesses are left out of the loop, often forced out due to the huge war chest larger franchises such as Med Men and Co. bring to the game.

Californian cannabis rights activist Steve DeAngelo — image via

On top of that comes the usual red tape, and obligations, which come with operating a business. One positive above legal weed is compulsory state level testing of marijuana. But beyond that, as is often the case, entry to business is more often than not friendly.

Additionally, cities in California — and other legal states — maintain the right to continue #newprohibition and restrict availability of legal weed in their locality to only delivery services.

Thus, ongoing stigmatization and anti-attitude on [ultra] local level continues the status quo in a vast majority of Californian cities and sees the black market continue to thrive, outperforming the legal market by a multiple. Undoubtedly also benefitting from ever increased popularity and lowered consumer inhibition to try out marijuana.

At the same time, consumers continue to be put at risk both due to typical black market issues, lacking quality control, and in worse case dangerous knock offs with potential lethal outcome.

Tags: #news #california #blackmarket #freemarket #newprohibition

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