Despite Legalization, Black Market Still Prolific in Colorado
One of the biggest pro-legalization arguments is that lifting prohibition leads to the eventual downfall of the black market. But as we continue seeing, this approach has only been marginally successful and varies from one state to another.
Colorado has always been a shining example of legalization. To their credit, they pulled it off quite well and have a nice, established and successful industry.
But according to northern Colorado’s KUNC radio, Colorado’s black market woes are far from over. In fact, recent drug busts show that Colorado’s illegal cannabis market is alive and stronger than ever.
This flies in the face of everything advocates fought for. Why is this even happening after seven years?
“The Largest Illegal Marijuana Market”
One of Colorado’s most notable marijuana busts occurred in the spring of 2019. Authorities from Fort Collins raided several homes, finding – among other things – 420 marijuana plants.
While KUNC is quick to point out the comedic value of finding 420 illegal plants, law enforcement has no reason to find it funny.
According to KUNC:
“It’s part of what state and federal officials are calling the largest illegal marijuana market Colorado has even seen. It’s a puzzling situation considering that back in 2012, proponents of Amendment 64 promised a regulated market would do away with the illegal dealers and drug cartels. In fact, it appears to have done just the opposite.”
This presents a huge problem for the legalization movement. Although there are many other benefits to a legal framework, reducing crime is one of the most important goals – arguably more important than generating revenue.
A blossoming illegal market also means easy access for youth, making the age restrictions of the open market effectively useless.
Attorney George Brauchler of Colorado’s 18th Judicial District says:
“I’ve only been doing this for 25 years and I have never seen the black market as robust and as complicated and as expertly cultivated as this one right now.”
Harm to Legal Businesses
The reason for the black market’s continued success is universal. Price differences are what make people turn to these sources, where illegal dealers offer product at a much lower price.
This is because, unlike their legal counterparts, black market distributors do not have to worry about things like testing costs and a 15% excise tax to drive up prices.
Scott Brady, manager of a Colorado dispensary called Smokey’s 420, laments the effects Colorado’s illegal sales have on legitimate businesses. Every sale made on the black market represents lost revenue for dispensaries all over the state.
Furthermore, Colorado cannabis often makes its way to other states where the product is recreationally illegal. Colorado’s reputation for having high-quality cannabis helps increase the street value.
“I don’t think those guys understand the damage they do to our industry,” Brady says.
Things may look bleak for Colorado’s (or everyone’s) fight against illegal marijuana, but there is still hope.
According to both Brauchler and Brady, federal legalization would certainly help. These illegal growers and dealers rely on revenue from states where marijuana is prohibited. Federal legalization would effectively kill that business model.
But legal experts and industry insiders are not the only ones who believe this. KUNC interviewed one dealer, who only goes by the name of “Lloyd” for obvious reasons. Lloyd says:
“Anywhere marijuana is not tolerated at all is usually where the price is going to be the highest.”
Unfortunately, even federal legalization will not completely kill the black market. KUNC argues that the drug will become like illegal cigarettes, distributed in states where taxes on tobacco (or cannabis) will be high.
Nonetheless, state legalization did at least make a dent – albeit a small one – in small criminal activities. Lloyd points out that legalization made some of his fellow dealers “succumb to getting a 9-to-5.”
WeedAdvisor’s Concern for Legal Businesses
The news about the black market is distressing, but not necessarily surprising. Cannabis is not the only commodity fueling the black market, keeping it very much afloat through the sale of other drugs and illegal activities. At best, legalization would deny them a major income source.
But an infrastructure so entrenched is hard to simply destroy in a few years, regardless of how good the legal framework is.
Hopefully, WeedAdvisor will soon be able to partner with contacts throughout the industry, once federal legalization does away with most of the black market.