12 ms·

Wait I was told that when it was legalized there would be no more underground drug market. Seems things aren't as simple as they seem on the surface.

Nursie 5y ago
Depends on how much regulation you place around the market. According to wikipedia, most cities and counties in California have banned cannabis retail, which is just one thing likely to contribute to an ongoing black market. I imagine there are others.
klyrs 5y ago
This is something pot activists have complained about from the get-go. Legalization was sold to politicians with the promise of high taxes. We knew that poor users would be priced out of the market, that legal weed would be a privilege enjoyed by the rich, that dealers with criminal records would be shut out of the legal market.
- thaumasiotes 5y ago
  > Legalization was sold to politicians with the promise of high taxes. We knew that poor users would be priced out of the market, that legal weed would be a privilege enjoyed by the rich Poor users seem to enjoy a lot of legal alcohol. Taxes on that are high too, and it's even easier to make your own alcohol than to make your own weed.
  - parineum 5y ago
    Liquor licenses and marijuana licences are very different in availability and, due to how the products are consumed (alcohol being very central to social gatherings), the necessity of having a license is more important for alcohol.
  - mandmandam 5y ago
    > it's even easier to make your own alcohol than to make your own weed. It sure as fuck isn't. There are parts of the world where putting some free seeds in the ground is sufficient.
    - kortilla 5y ago
      People make alcohol in prison toilets. That’s not really far from “throw seeds in the ground”.
      - curryst 5y ago
        It's also not really safe to drink. Probably unlikely to kill you, but you're not going to get any assurances E. coli isn't in there. It's pretty hard to mess up growing weed bad enough to hurt someone, unless you poison yourself with pesticides on accident (which aren't really necessary at least at the personal scale). If something bad happens, it's almost always to the plant.
  - ramraj07 5y ago
    Sure, you can make alcohol yourself. Then you discover some batteries increase the kick. Then you realize a drop of methanol just takes it to insane levels. Then 2 drops kill or blind you.
    - buescher 5y ago
      A high proportion of the booze consumed worldwide is what the bureaucrats call "unrecorded", and poisonings are exceptional.
    - nate_meurer 5y ago
      "Two drops" of even pure methanol won't do anything to you. Not even close.
      - ramraj07 5y ago
        Of course I don’t know the LD50 of methanol, but I do know it’s quite close to whatever gives you the kick.
  - boibombeiro 5y ago
    Alcohol has long shelf life, can be easily produced at large scale, etc. Selling flower buds of a plant will hardly be accessible. But the industry will eventually find a way to make a viable cannabis product from waste.
  - marcinzm 5y ago
    And historically when even more alcohol was consumed there was a massive bootleg and moonshine industry. In the end, most likely the people running it have simply died of old age and the newer generations prefers other things.
  - SamBam 5y ago
    The majority of poor people have neither the time, space, know-how, or desire to make their own alcohol or weed. But it's an awful lot easier for a dealer to sell weed to a hundred people than for them to sell bottles of alcohol to a hundred people.
    - xeromal 5y ago
      One will get you in severe trouble in a lot of states.
  - klyrs 5y ago
    This isn't a terribly apt comparison. The competition for weed is not individuals growing their own weed (which, in fact, requires land which the urban poor do not have access to), but with (a) well-established growers who have been continually operating in the black market, and (b) new legal growers and their employees who can skim some of their product for "personal use". Individuals can and do make their own alcohol -- and it's a really expensive hobby to get it right. In terms of price per unit volume, distribution of illicit alcohol is quite problematic. You can easily fit $500 of weed into 1 liter (local prices and densities vary). Retail booze is less than a tenth of that. Bad booze would be even lower. This is a substantial impediment to the risk/reward calculus for street-level sellers all the way up to producers.
- sneak 5y ago
  The terms "white people" and "black people" don't appear in your comment, and I think they should.
  - ironmagma 5y ago
    You are wrong. One of my best friends is white and can’t afford legal weed so he buys it from unsavory sources.
    - sneak 5y ago
      My point is that the legalization of the weed business was a deliberate choice to shift revenue streams away from black people and toward white people.
      - ironmagma 5y ago
        Most people who supported it said it was to get away from the deliberate imprisonment of black people who didn’t deserve criminal penalties for casual drug use. So I guess the question is, which is the worse conspiracy?
        sneak 5y ago
        The USA has a long history of taking any industry in which black people are amassing wealth, power, or status, and stealing or destroying it. You can't maintain an intelligent, hard-working group as an underclass for multiple generations without deliberate action and sabotage each and every time advances are made. It's nothing new, just the latest installment. See also: music (jazz, rock, rap, techno, motown), Tulsa, civil rights, etc. Get too big or powerful, and it'll be outlawed, stolen, or you'll simply be killed outright. This is the pattern in the USA.
        ironmagma 5y ago
        This observation still provides no solution to the catch-22 of imprisoning black people vs taking away money from black people. It seems almost like black people are just people, so deciding policies are going to be good for some and bad for others, just like every policy.
baron816 5y ago
From the original article: “Mandelman’s office pointed to a Dec. 19 report from the California Legislative Analyst’s Office that found that increased state cannabis tax rates were directly linked to illegal cannabis sales. In addition to the illegal sales, increased theft is also creating problems for cannabis retailers.” I’m sure other factors are that retailers have to pay rent and payroll taxes. I have no idea what the price differential is, but I could imagine it being quite significant. Making things illegal doesn’t mean it goes away. Most often, it just makes it more expensive because people are exposed to more risk from selling it. But if you don’t enforce your laws and there is no risk, then of course the legal version of it can’t compete. If the city didn’t enforce any of its awful zoning laws, housing would be super cheap.
- genericone 5y ago
  Threat of violence is the only true currency, the final turtle at the bottom of all other currency turtles.
- taurath 5y ago
  Another problem with dispensaries is that banks will not allow them to use them. That means they end up being cash only, and a huge target for burglaries. There is a bill passed by a huge margin in the house in April, but the senate hasn’t taken it up yet, called the SAFE Banking Act.
throwawaylinux 5y ago
I do believe it could eliminate most of the illegal marijuana market, but only under a government and voting population that considers reducing taxes and this kind of crime to be important priorities. It's never going to happen in a place like California, surely.
paganel 5y ago
There's still an underground cigarettes market in my country. It helps that we (a EU country) have a land-border with some other non-EU countries, we have very high taxes on cigarettes (compared to our revenues, at least), they don't, it's only natural that money will find a way. The authorities do announce "contraband cigarettes captures" every week or two but I'm pretty sure that's just scratching the surface. They've recently also managed to "capture" an An-2 (great plane) on its way back from a contraband run, pretty cool. [1] https://www.digi24.ro/stiri/actualitate/evenimente/un-avion-cu-tigari-de-contrabanda-din-ucraina-care-se-indrepta-spre-romania-a-fost-capturat-de-politistii-din-republica-moldova-1667139 https://www.digi24.ro/stiri/actualitate/evenimente/un-avion-...
- dumbfoundded 5y ago
  It's not just the taxes. It's how hard it is to sell weed legally. All of the hoops and expenses add up. In Florida, it's like 20 licenses that cost $25M each. We should make it as easy as selling alcohol and then the prices will match.
  - sokoloff 5y ago
    Is your claim that it costs half a billion dollars to setup to sell weed legally in FL? That defies all order-of-magnitude estimation.
    - dumbfoundded 5y ago
      No, $25M is the open market price for a license charges a company to pick up a license. Looks like someone sold a license for much more (0). Only 22 licenses for companies in Florida have been granted (1). In Florida, companies have to vertically integrate their whole supplychain and not mix with any other cannabis company. It takes opening like 50 dispensaries under a license to break even. Florida sells $1.2B of cannabis a year & $500M in acquisitions were completed in Florida last year. (0) https://www.tampabay.com/florida-politics/buzz/2019/10/15/for-sale-two-florida-medical-marijuana-licenses-cost-95-million/ https://www.tampabay.com/florida-politics/buzz/2019/10/15/fo... (1) https://mjbizdaily.com/florida-medical-marijuana-operators-benefit-from-state-court-decision/ https://mjbizdaily.com/florida-medical-marijuana-operators-b... (2) https://mjbizdaily.com/cannabis-msos-on-buying-spree-in-florida-in-bid-to-take-on-trulieve/#:~:text=But%20with%20Florida's%20market%20now,cannabis%20law%20firm%20Vicente%20Sederberg https://mjbizdaily.com/cannabis-msos-on-buying-spree-in-flor....
colordrops 5y ago
It certainly reduces gang violence and fake or tainted drugs.
- moooo99 5y ago
  But I don’t think it really reduces the amount of fake or tainted drugs, at least not for those who really suffered from the prohibition. The heavy taxation and the strict regulation of the market creates a massive cost overhead. Even the lowest quality of legally sellable weed is so expensive that it’s out of reach for poor consumers. The undergroud market may even be able to offer the same quality product for a fraction of the price, for obvious reasons of course. So many people, especially those with less financial stability, will still choose the underground market over legal options. Also, I’d assume that since the legalization, the pressure by law enforcement has dropped quite a bit, at least for consumers. This would make the underground an even more compelling choice.
- Broken_Hippo 5y ago
  How common is fake pot, though? I mean, surely young folks try to do stupid things to other young and stupid people (fake and tainted drugs). Occasionally folks don't get the quality they expect. But all this stuff means you lose customers and you continually need new folks to dupe. "fake or tainted drugs" has always seemed like a bigger problem with different categories of drugs. Additionally, I'm not convinced it actually reduces gang violence since we still have a thriving black market.
  - tayo42 5y ago
    I think k2 shows up occasionally.
  - mandmandam 5y ago
    Nope, fake and tainted weed is a very real problem when it's illegal. I've seen cannabis with plaster mixed in; glass beads, added ketamine, synthetic fibres; anything cheap to increase the perceived effect and weight. And all of those are safer than legal synthetic 'weed'. The THC to CBD ratio is completely impossible to control when in prohibition areas. Dealers select for maximum THC to minimize weight to effect ratio, which is the opposite of what you want if you're trying to protect people from any possible psychosis trigger. People who are self medicating with cannabis in illegal countries have very little control over these factors. If they try to grow their own they can get prosecuted as suppliers and face higher sentences than rapists.
t-3 5y ago
How easy/legal is it to grow your own in CA? If it's very easy, the underground market will probably be entirely homegrown, and still beneficial to the local economy even without tax income. If it's hard or illegal to grow, wholesale importation from cheaper areas will continue funding criminal logistics operations, and most of the revenue will leave the area.
tshaddox 5y ago
It’s pretty clear that any argument of that form comes with the obvious caveat that excessive taxes or fees for the legal product wouldn’t cause the underground market to disappear. Obviously if it was “legalized” but there was a $1,000 per ounce tax, we would expect the illegal market to continue to thrive.
pmarreck 5y ago
It's almost like demonizing a plant was never something that should have happened in the first place.

Nursie 5y ago

Depends on how much regulation you place around the market. According to wikipedia, most cities and counties in California have banned cannabis retail, which is just one thing likely to contribute to an ongoing black market. I imagine there are others.

klyrs 5y ago

This is something pot activists have complained about from the get-go. Legalization was sold to politicians with the promise of high taxes. We knew that poor users would be priced out of the market, that legal weed would be a privilege enjoyed by the rich, that dealers with criminal records would be shut out of the legal market.

thaumasiotes 5y ago
> Legalization was sold to politicians with the promise of high taxes. We knew that poor users would be priced out of the market, that legal weed would be a privilege enjoyed by the rich Poor users seem to enjoy a lot of legal alcohol. Taxes on that are high too, and it's even easier to make your own alcohol than to make your own weed.
- parineum 5y ago
  Liquor licenses and marijuana licences are very different in availability and, due to how the products are consumed (alcohol being very central to social gatherings), the necessity of having a license is more important for alcohol.
- mandmandam 5y ago
  > it's even easier to make your own alcohol than to make your own weed. It sure as fuck isn't. There are parts of the world where putting some free seeds in the ground is sufficient.
  - kortilla 5y ago
    People make alcohol in prison toilets. That’s not really far from “throw seeds in the ground”.
    - curryst 5y ago
      It's also not really safe to drink. Probably unlikely to kill you, but you're not going to get any assurances E. coli isn't in there. It's pretty hard to mess up growing weed bad enough to hurt someone, unless you poison yourself with pesticides on accident (which aren't really necessary at least at the personal scale). If something bad happens, it's almost always to the plant.
- ramraj07 5y ago
  Sure, you can make alcohol yourself. Then you discover some batteries increase the kick. Then you realize a drop of methanol just takes it to insane levels. Then 2 drops kill or blind you.
  - buescher 5y ago
    A high proportion of the booze consumed worldwide is what the bureaucrats call "unrecorded", and poisonings are exceptional.
  - nate_meurer 5y ago
    "Two drops" of even pure methanol won't do anything to you. Not even close.
    - ramraj07 5y ago
      Of course I don’t know the LD50 of methanol, but I do know it’s quite close to whatever gives you the kick.
- boibombeiro 5y ago
  Alcohol has long shelf life, can be easily produced at large scale, etc. Selling flower buds of a plant will hardly be accessible. But the industry will eventually find a way to make a viable cannabis product from waste.
- marcinzm 5y ago
  And historically when even more alcohol was consumed there was a massive bootleg and moonshine industry. In the end, most likely the people running it have simply died of old age and the newer generations prefers other things.
- SamBam 5y ago
  The majority of poor people have neither the time, space, know-how, or desire to make their own alcohol or weed. But it's an awful lot easier for a dealer to sell weed to a hundred people than for them to sell bottles of alcohol to a hundred people.
  - xeromal 5y ago
    One will get you in severe trouble in a lot of states.
- klyrs 5y ago
  This isn't a terribly apt comparison. The competition for weed is not individuals growing their own weed (which, in fact, requires land which the urban poor do not have access to), but with (a) well-established growers who have been continually operating in the black market, and (b) new legal growers and their employees who can skim some of their product for "personal use". Individuals can and do make their own alcohol -- and it's a really expensive hobby to get it right. In terms of price per unit volume, distribution of illicit alcohol is quite problematic. You can easily fit $500 of weed into 1 liter (local prices and densities vary). Retail booze is less than a tenth of that. Bad booze would be even lower. This is a substantial impediment to the risk/reward calculus for street-level sellers all the way up to producers.
sneak 5y ago
The terms "white people" and "black people" don't appear in your comment, and I think they should.
- ironmagma 5y ago
  You are wrong. One of my best friends is white and can’t afford legal weed so he buys it from unsavory sources.
  - sneak 5y ago
    My point is that the legalization of the weed business was a deliberate choice to shift revenue streams away from black people and toward white people.
    - ironmagma 5y ago
      Most people who supported it said it was to get away from the deliberate imprisonment of black people who didn’t deserve criminal penalties for casual drug use. So I guess the question is, which is the worse conspiracy?
      - sneak 5y ago
        The USA has a long history of taking any industry in which black people are amassing wealth, power, or status, and stealing or destroying it. You can't maintain an intelligent, hard-working group as an underclass for multiple generations without deliberate action and sabotage each and every time advances are made. It's nothing new, just the latest installment. See also: music (jazz, rock, rap, techno, motown), Tulsa, civil rights, etc. Get too big or powerful, and it'll be outlawed, stolen, or you'll simply be killed outright. This is the pattern in the USA.
        ironmagma 5y ago
        This observation still provides no solution to the catch-22 of imprisoning black people vs taking away money from black people. It seems almost like black people are just people, so deciding policies are going to be good for some and bad for others, just like every policy.

baron816 5y ago

From the original article: “Mandelman’s office pointed to a Dec. 19 report from the California Legislative Analyst’s Office that found that increased state cannabis tax rates were directly linked to illegal cannabis sales. In addition to the illegal sales, increased theft is also creating problems for cannabis retailers.” I’m sure other factors are that retailers have to pay rent and payroll taxes. I have no idea what the price differential is, but I could imagine it being quite significant. Making things illegal doesn’t mean it goes away. Most often, it just makes it more expensive because people are exposed to more risk from selling it. But if you don’t enforce your laws and there is no risk, then of course the legal version of it can’t compete. If the city didn’t enforce any of its awful zoning laws, housing would be super cheap.

genericone 5y ago
Threat of violence is the only true currency, the final turtle at the bottom of all other currency turtles.
taurath 5y ago
Another problem with dispensaries is that banks will not allow them to use them. That means they end up being cash only, and a huge target for burglaries. There is a bill passed by a huge margin in the house in April, but the senate hasn’t taken it up yet, called the SAFE Banking Act.

throwawaylinux 5y ago

I do believe it could eliminate most of the illegal marijuana market, but only under a government and voting population that considers reducing taxes and this kind of crime to be important priorities. It's never going to happen in a place like California, surely.

paganel 5y ago

There's still an underground cigarettes market in my country. It helps that we (a EU country) have a land-border with some other non-EU countries, we have very high taxes on cigarettes (compared to our revenues, at least), they don't, it's only natural that money will find a way. The authorities do announce "contraband cigarettes captures" every week or two but I'm pretty sure that's just scratching the surface. They've recently also managed to "capture" an An-2 (great plane) on its way back from a contraband run, pretty cool. [1] https://www.digi24.ro/stiri/actualitate/evenimente/un-avion-cu-tigari-de-contrabanda-din-ucraina-care-se-indrepta-spre-romania-a-fost-capturat-de-politistii-din-republica-moldova-1667139 https://www.digi24.ro/stiri/actualitate/evenimente/un-avion-...

dumbfoundded 5y ago
It's not just the taxes. It's how hard it is to sell weed legally. All of the hoops and expenses add up. In Florida, it's like 20 licenses that cost $25M each. We should make it as easy as selling alcohol and then the prices will match.
- sokoloff 5y ago
  Is your claim that it costs half a billion dollars to setup to sell weed legally in FL? That defies all order-of-magnitude estimation.
  - dumbfoundded 5y ago
    No, $25M is the open market price for a license charges a company to pick up a license. Looks like someone sold a license for much more (0). Only 22 licenses for companies in Florida have been granted (1). In Florida, companies have to vertically integrate their whole supplychain and not mix with any other cannabis company. It takes opening like 50 dispensaries under a license to break even. Florida sells $1.2B of cannabis a year & $500M in acquisitions were completed in Florida last year. (0) https://www.tampabay.com/florida-politics/buzz/2019/10/15/for-sale-two-florida-medical-marijuana-licenses-cost-95-million/ https://www.tampabay.com/florida-politics/buzz/2019/10/15/fo... (1) https://mjbizdaily.com/florida-medical-marijuana-operators-benefit-from-state-court-decision/ https://mjbizdaily.com/florida-medical-marijuana-operators-b... (2) https://mjbizdaily.com/cannabis-msos-on-buying-spree-in-florida-in-bid-to-take-on-trulieve/#:~:text=But%20with%20Florida's%20market%20now,cannabis%20law%20firm%20Vicente%20Sederberg https://mjbizdaily.com/cannabis-msos-on-buying-spree-in-flor....

colordrops 5y ago

It certainly reduces gang violence and fake or tainted drugs.

moooo99 5y ago
But I don’t think it really reduces the amount of fake or tainted drugs, at least not for those who really suffered from the prohibition. The heavy taxation and the strict regulation of the market creates a massive cost overhead. Even the lowest quality of legally sellable weed is so expensive that it’s out of reach for poor consumers. The undergroud market may even be able to offer the same quality product for a fraction of the price, for obvious reasons of course. So many people, especially those with less financial stability, will still choose the underground market over legal options. Also, I’d assume that since the legalization, the pressure by law enforcement has dropped quite a bit, at least for consumers. This would make the underground an even more compelling choice.
Broken_Hippo 5y ago
How common is fake pot, though? I mean, surely young folks try to do stupid things to other young and stupid people (fake and tainted drugs). Occasionally folks don't get the quality they expect. But all this stuff means you lose customers and you continually need new folks to dupe. "fake or tainted drugs" has always seemed like a bigger problem with different categories of drugs. Additionally, I'm not convinced it actually reduces gang violence since we still have a thriving black market.
- tayo42 5y ago
  I think k2 shows up occasionally.
- mandmandam 5y ago
  Nope, fake and tainted weed is a very real problem when it's illegal. I've seen cannabis with plaster mixed in; glass beads, added ketamine, synthetic fibres; anything cheap to increase the perceived effect and weight. And all of those are safer than legal synthetic 'weed'. The THC to CBD ratio is completely impossible to control when in prohibition areas. Dealers select for maximum THC to minimize weight to effect ratio, which is the opposite of what you want if you're trying to protect people from any possible psychosis trigger. People who are self medicating with cannabis in illegal countries have very little control over these factors. If they try to grow their own they can get prosecuted as suppliers and face higher sentences than rapists.

t-3 5y ago

How easy/legal is it to grow your own in CA? If it's very easy, the underground market will probably be entirely homegrown, and still beneficial to the local economy even without tax income. If it's hard or illegal to grow, wholesale importation from cheaper areas will continue funding criminal logistics operations, and most of the revenue will leave the area.

tshaddox 5y ago

It’s pretty clear that any argument of that form comes with the obvious caveat that excessive taxes or fees for the legal product wouldn’t cause the underground market to disappear. Obviously if it was “legalized” but there was a $1,000 per ounce tax, we would expect the illegal market to continue to thrive.

pmarreck 5y ago

It's almost like demonizing a plant was never something that should have happened in the first place.