Google Says the Marijuana Black Market Could Explode by over 450% in a Coronavirus Recession
Millions are exploring how to grow and sell cannabis according to Google.
The world is changing at a record pace and the fear and worry about coronavirus, and what could be the largest recession since 1929, is forcing people to think about how they are going to pay their bills if the world dips into a deep and painful recession. According to Google Trends, the search volume for such terms as “how do I sell weed”, “how do I grow marijuana” and “best way to ship weed” is exploding at record pace.
Recession
The world is going to hit a recession, we just don’t know how long and hard the economic carnage will be in the coming year or years. When people are in dire financial shape, unable to get a job, pay their basic bills, and cover expenses like rent and food, they tend to take bigger risks because “they had to do what they had to do to survive”. With the growing legalization of cannabis and the diminished fines and enforcement of cannabis growers, millions are searching out how to grow, sell, and ship marijuana.
Google Trends, which monitors search activity for the entire Google search empire, is showing massive increases in the terms around growing marijuana and shipping marijuana.
Cannabis sales have remained strong during the coronavirus pandemic with many states labeling legal dispensaries as “essential items and activity”, which allows them to stay open and serving customers during the “stay at home”, “shelter in place”, and “limited lockdowns” taking place across North America.
If we hit a recession where unemployment hits 30% in the US as some FED models have suggested, we could see a massive black market explosion as millions of jobless people search for a way to meet their very basic needs such as food and rent money. Knowing that demand has remained strong in this time of pandemic, meaning people find income to still buy marijuana, speaks to the demand that could still exist after the coronavirus wave has peaked.
Another advantage of cannabis as a product is that not only can it be sold to create actual cash, it is a excellent bartering commodity. In many areas, if you can’t sell it directly for cash, there are many interested parties who would trade you your pot for their food, water, services, etc.
Is Google Trends Legit?
Does the fact that Google Trends shows explosive growth in selling and shipping marijuana mean everyone is going to start growing and shipping? No, but the law of ratios and big numbers show that for every 100 people typing in these searches “X” amount of those searchers will be taking the steps of putting a seed in the ground, watching YouTube videos on growing, and deciding on selling it. Now, they can either sell it locally, or decide to ship it in the mail. Selling it locally is much cheaper, easier, and safer from law enforcement.
What about those that want to sell and ship it in the mail? Right now, cannabis is a Schedule 1 drug on the Controlled Substance Act. That means it is highly illegal at the Federal level, it cannot cross a state line being a schedule 1 drug and it cannot be shipped through UPS, UPSP, or FedEx. Shipping cannabis is a numbers game for many illicit suppliers right now. They know for every 100 boxes they ship, 10 will be held up or caught, 90 will get through, and the margins are big enough to have those 10 boxes be “accepted loses”.
What if you get caught selling weed illegally, or without a license? Right now, in California the fine for getting caught selling marijuana without a state license is a $10 civil fine. That means you do not get a criminal record. The second time you are caught selling weed without a license in California? Another $10 civil fine. So, the state fines and punishment for illegal growing and selling is worth it for many people who may not have a way to pay their rent or buy food.
What about Shipping an Order in the Mail?
Things get a bit more complicated here as if you put the cannabis products in the mail and it crosses a state line, you are committing a felony offense. Federal felony offenses are determined the amount shipped and your history in doing this type of activity. People will weigh their options around the chances of getting caught (burner phones, fake addresses, different Post Offices) verse the cash money coming in most likely through Paypal, Western Union, MoneyGram, Venmo, etc.
Will the Feds catch every package? Will the Post Office find every double-vacuum sealed package? No. It is smart to go down this road? No. Do desperate people do desperate things, yes. Will people justify their decision to go this road by saying they had no choice, they have kids, they would you be homeless if they don’t do something? Yes.
Does an End Justify a Mean?
The smartest thing the Federal Government could do is to legalize cannabis at the Federal level as part of the recovery process. We talked about how cannabis legalization is being hurt by the coronavirus now, but legalization could be accelerated with a jobless recover in our article here, “Does COVID-19 Help or Hurt Cannabis Legalization?”. It would create massive job growth in the marijuana industry and spur massive investment in the niche that would create thousands of jobs. This would also keep desperate people from crossing that line because prices would come crashing down due to new availability, lower prices across the board would dissuade people from breaking Federal law, as the risk vs. reward equation gets changed in their mind. For example, if you weigh your options, and know you could make $1,000 per pound of cannabis by shipping it out in the mail, the risks may be worth it when you don’t have food or rent money. If you are only going to make $250 lb. you may shy away from the risk of a Federal arrest.
Prediction
With the Trump administration, we will not see Federal cannabis legalization as part of a recovery. Trump is up for re-election and his core base is not cannabis fans. If he can get the stock market back to where it was by October, he should be in good shape for re-election. It is awful to say, but to get marijuana legalized you really need to root for a massive depression where the Federal government will do anything and everything to create jobs and growth, then he may have no choice.
Will millions of people who were laid off or lost jobs start growing and selling weed? You bet. Will some percentage of those people decide to put an order in the mail and ship it? Yes. That is just the law of numbers. The big pivot point or takeaway will be the percent of new illicit growers who decide to sell outside their local circle and put it in the mail. That is an unknown right now through Google Trends and will only be determined by how much pain is felt by these individuals during the recession or pull back due to the coronavirus. The great the pain, the longer the recession and more severe, the newer growers will have to ship it to make higher margins and revenue. For example, your pound of marijuana locally might make you $1,000, but if you are willing to ship it to a non-legal state, you can get $1,800.
With greater risk comes greater reward.
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