Why is Black Market Pot still a thing in Colorado?
How Does the Cannabis Black Market Still Exist in Legal States? from CannabisNet on Vimeo.
Recently, a grand jury in Colorado indicted 62 individuals and 12 businesses in a case that involved a massive black market pot ring that used the medical marijuana laws in the state to grow and distribute to other states.
Now, for the prohibitionist this is evidence that legalizing cannabis will not shrink the black market, however for those of us who exercise logic and reason…there is another explanation. Throughout this piece I will aim to educate those who think that the black market operations was a result of cannabis legalization with the hopes of at least shedding some light on the issue.
They didn’t sell in state…
The first most important thing we need to understand about this “black market pot ring” is that their production was never intended for Colorado but rather states that still has prohibition on the books. The reason the pot was aimed for these ‘other states’ is because there is no way that an illegal operation can compete with the legal market.
People living in Colorado has easy access to cannabis, at competitive prices…so unless the black market ring wanted to drop their prices so low that they would barely make a profit…there was no black market sales within the state of Colorado.
Of course there are black market transactions within the state of Colorado, the point I’m trying to make is that it is minimal. Perhaps a friend selling a baggy to a friend but no real organized group of people working in collusion to circumvent state laws.
Why did they sell to other states?
To the prohibitionist, the mere fact that an illegal cannabis ring was existing within Colorado is more than enough to demand a repeal of the law. However, instead of being reactionary to the news, let’s take a deeper look as to “why” this ring existed in the first place?
This comes down to basic economics; Supply and Demand. Within the state of Colorado, the supply and demand is being handled by a legal system that ensures there is quality and competitive prices when it comes to purchasing pot. Thus, it makes almost no sense for an illegal enterprise to attempt to outperform the legal system.
So why did these people grow weed and sell it to other states? Because of the demand in the other states. Since cannabis is illegal in Kansas, Texas, Nebraska, Ohio and Oklahoma, the price of weed is higher.
This provides incentive for people who aren’t too keen about ‘abiding by the law’ to produce illegal growing ops to ship them to these states where the profit margins are higher. Sure, there is a lot of risk involved, however if you can get 4 to 5 times the value per pound, it’s a risk some are willing to take.
Allegedly the ring produced roughly $200,000 worth of cannabis each month for a period of four years. That’s $9.6 million dollars they produced in four years (allegedly).
So one of the real reasons as to why this ring existed was due to prohibition in other states. Trust me, if all states legalized cannabis, there would be no incentive to grow illegally for profit.
How to Stop Illegal Cannabis Grows?
As I have said many times before, legalization is the only real way to compete with the black market. Within a competitive legal market, the incentives for black market agents is greatly diminished. The risk is too high for the returns, meaning most people will simply opt out from trying to compete with the legal market.
For those who decide to continue to push black market pot, the profit margin would be small and the core group of consumers would be small. Think of it as your local hookup who can get weed for you. At most the dude is selling to about 30 people, no more. This is hardly an organization that would pose any real threat to society.
However, cartels and those who deal with mass production would in all likeliness not grow weed for profit. There would be other drugs that have higher returns for the same risk that would be a more sound investment.
You have to stop thinking of drug dealers as “criminals” and rather as “business people” who just so happen to trade in an illegal substance. The problem is that people think that pot dealers or drug dealers are these gangster-type folk who shoots first and asks questions later.
If Breaking Bad taught us anything it’s that those who you least expect to be a dealer often is the big cheese of the operation. Outstanding citizens who pay taxes (some) and participate within their communities. When you’re going big scale drug pushing, you require legitimate businesses to launder money, you require to have an image that doesn’t call for attention.
The only way to rid yourself of illegal traffickers is to legalize the trade (in all states), regulate it and then create an inter-state commerce which can be taxed. Once this happen, you’ll quickly see these illegal operations dwindle into history.
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