5 ms·

Just to play devils advocate here: It sounds great, except for the fact there's a kind of product gentrification going on. http://www.thecannabist.co/2014/07/

Just to play devils advocate here: It sounds great, except for the fact there's a kind of product gentrification going on. http://www.thecannabist.co/2014/07/30/colorado-marijuana-black-market-pot-illegal-marijuana-growing/17245/ http://www.thecannabist.co/2014/07/30/colorado-marijuana-bla... "In this light, taxation is seen as a blunt instrument of exclusion, driving precisely the groups most prosecuted in the war on drug further into the arms of the black market where they remain at risk for arrest or robbery. In one Denver dispensary, a $30 purchase of one-eighth of the Trinity strain of cannabis includes $7.38 in state and local taxes — a near 33 percent rate. As Larisa Bolivar, one of the city’s most well-known proponents of decriminalizing marijuana nationally and opening a true free market, puts it: That seven bucks buys someone lunch. “It’s simple,” she says. “A high tax rate drives black market growth. It’s an incentive for risky behavior.”"

fossuser 12y ago
Cigarettes are highly taxed and there doesn't seem too be much of a black market for them. Edit: Looks like I was wrong, but the black market is buying legal cigarettes and driving them across state lines which is a bit different from growing your own tobacco.
- tvanantwerp 12y ago
  http://www.washingtonpost.com/blogs/govbeat/wp/2014/03/20/how-state-taxes-promote-an-underground-cigarette-market/ http://www.washingtonpost.com/blogs/govbeat/wp/2014/03/20/ho...
- gyardley 12y ago
  Probably because there's no nearby place to get untaxed cigarettes, and there's not enough profit in growing tobacco and making cigarettes from scratch. When I was in high school, back in the early '90s, the difference in taxes on cigarettes between Ontario and New York was a few dollars a pack - enough to cause a huge black market in smuggled cross-border cigarettes. I didn't buy a legal pack in four years. Now, amusingly, taxes in New York have been raised so much that they're the target of smugglers. (And in Ontario, the Indian reservations that used to do all the smuggling got into the direct manufacturing business, since they can sell on the reservation tax-free.)
- jamesbritt 12y ago
  There certainly is a black market for cigarettes. http://www.washingtonpost.com/blogs/wonkblog/wp/2014/06/25/why-the-massive-black-market-trade-in-cigarettes-affects-you-even-if-you-dont-smoke/ http://www.washingtonpost.com/blogs/wonkblog/wp/2014/06/25/w...
- sk5t 12y ago
  There is a black market for cigarettes (to skirt local and state taxes) but I doubt it leads to any significant risk for end-users.
- pessimizer 12y ago
  http://nypost.com/2014/08/02/cop-who-used-deadly-chokehold-should-be-charged-sharpton/ http://nypost.com/2014/08/02/cop-who-used-deadly-chokehold-s... Loosie seller killed by NYPD.
- zenburn 12y ago
  http://en.wikipedia.org/wiki/Poospatuck_Reservation http://en.wikipedia.org/wiki/Poospatuck_Reservation
- leoc 12y ago
  There's definitely counterfeiting of cigarettes too, and obviously the safety of unregulated, falsely-labelled black-market counterfeits is not assured.
  - spacemanmatt 12y ago
    That's funny, because the safety of regulated, arguably truthfully-labeled mainstream brands cannot be assured, either.
    - leoc 12y ago
      This is naturally true; however, there is at least no rat poison in them.
ejr 12y ago
Bootleggers in the old American cities didn't suddenly stop serving their clients after prohibition ended either. Legalisation is very new and there aren't enough dispensaries to bring the price down. The article itself mentions : As more legal recreational dispensaries and growers enter the market, the market will do what it does with greater competition: adjust. Prices will fall. The illegal market will shrink accordingly.
- VonGuard 12y ago
  OK, I was just in WA, and let me assure you WA is where the black market will continue to thrive. The CO market is taxed, but is actually cheaper than the black market in CA from what I hear. WA, however, has a state tax, county tax, city tax, and thus, prices are double that of the black market. Plus, the state really clamped down on growing permits, so there are now shortages driving prices up higher. WA and CO will show very clearly how to do this right (CO) and how to do it wrong (WA)
  - ejr 12y ago
    My news is a bit delayed, but from what I know of WA, the political atmosphere is a bit frayed. Local government is hampered by a complex web of bureaucracy and the state government may not be willing to play along. I'm sure there are plenty of people there that want to follow the same example, but they may not have enough momentum to organize and push through as CO did.
  - waterlesscloud 12y ago
    On the other hand, it's now a source of tax revenue, and governments can generally be counted on to find the balance to maximize tax revenue.
  - Todd 12y ago
    It's too early to tell. They only just started issuing retail licenses this past month. It's slow going because each store has to meet stringent standards. But they're opening one by one. The taxes are applied at a rate of 25% at each level of the system: growers, processors, and retailers. The remainder are standard business taxes (B&O tax) and sales tax. From what I've seen, everyone involved has been very conscientious in implementing this law and have made adjustments to ensure that it works. If the black market continues to thrive due to taxation that is too burdensome, I expect they will adjust accordingly.
aikah 12y ago
> “It’s simple,” she says. “A high tax rate drives black market growth. It’s an incentive for risky behavior.”" I disagree, as a smoker , I'd prefer buying the legit stuff somewhere safe rather than going into a dangerous neighbourhood to get a 33 percent rebate on a product with questionable quality. the premium is worth paying for my safety. And at least i'm not financing some gangs that will later be raiding my house or mugging my friends. I just want to get my shit legally. How many adults buy their booze illegaly today? none.
- gizmo686 12y ago
  >How many adults buy their booze illegaly today? none What about adults between the ages of 18 and 21?
  - salgernon 12y ago
    18 to 21 year olds are likely to pay far more than market prices. They are not likely to purchase homemade liquor when getting an adult to buy for you is trivial.
- pigeons 12y ago
  >How many adults buy their booze illegaly today? none Its a lot more than none. You can't buy good traditional local corn whiskey legally, and quite a premium is paid.
- stonerthrowaway 12y ago
  The black market isn't all stabbings ... certainly in CA, it isn't. I make good money and I wouldn't think twice about going to the black market for my medicine if they had crazy tax like that here. I mean, I (and many other people) already won't shop at places that don't roll sales tax into their prices.
  - mkopinsky 12y ago
    Do you buy your alcohol on the black market? Once the legal market for marijuana matures, why should it be any different?
enjo 12y ago
There is an ongoing conversation here about the tax rate. I think that as we get more comfortable with legalization, the tax rate will actually go down as I think the state is leaving revenue on the table right now. I think the more interesting question is the future of medical marijuana in Colorado. Right now it's a giant loophole that effectively gets you around those higher taxes. I know many folks who have kept their MMJ cards, there remains nothing actually medically wrong with them.

fossuser 12y ago

Cigarettes are highly taxed and there doesn't seem too be much of a black market for them. Edit: Looks like I was wrong, but the black market is buying legal cigarettes and driving them across state lines which is a bit different from growing your own tobacco.

tvanantwerp 12y ago
http://www.washingtonpost.com/blogs/govbeat/wp/2014/03/20/how-state-taxes-promote-an-underground-cigarette-market/ http://www.washingtonpost.com/blogs/govbeat/wp/2014/03/20/ho...
gyardley 12y ago
Probably because there's no nearby place to get untaxed cigarettes, and there's not enough profit in growing tobacco and making cigarettes from scratch. When I was in high school, back in the early '90s, the difference in taxes on cigarettes between Ontario and New York was a few dollars a pack - enough to cause a huge black market in smuggled cross-border cigarettes. I didn't buy a legal pack in four years. Now, amusingly, taxes in New York have been raised so much that they're the target of smugglers. (And in Ontario, the Indian reservations that used to do all the smuggling got into the direct manufacturing business, since they can sell on the reservation tax-free.)
jamesbritt 12y ago
There certainly is a black market for cigarettes. http://www.washingtonpost.com/blogs/wonkblog/wp/2014/06/25/why-the-massive-black-market-trade-in-cigarettes-affects-you-even-if-you-dont-smoke/ http://www.washingtonpost.com/blogs/wonkblog/wp/2014/06/25/w...
sk5t 12y ago
There is a black market for cigarettes (to skirt local and state taxes) but I doubt it leads to any significant risk for end-users.
pessimizer 12y ago
http://nypost.com/2014/08/02/cop-who-used-deadly-chokehold-should-be-charged-sharpton/ http://nypost.com/2014/08/02/cop-who-used-deadly-chokehold-s... Loosie seller killed by NYPD.
zenburn 12y ago
http://en.wikipedia.org/wiki/Poospatuck_Reservation http://en.wikipedia.org/wiki/Poospatuck_Reservation
leoc 12y ago
There's definitely counterfeiting of cigarettes too, and obviously the safety of unregulated, falsely-labelled black-market counterfeits is not assured.
- spacemanmatt 12y ago
  That's funny, because the safety of regulated, arguably truthfully-labeled mainstream brands cannot be assured, either.
  - leoc 12y ago
    This is naturally true; however, there is at least no rat poison in them.

ejr 12y ago

Bootleggers in the old American cities didn't suddenly stop serving their clients after prohibition ended either. Legalisation is very new and there aren't enough dispensaries to bring the price down. The article itself mentions : As more legal recreational dispensaries and growers enter the market, the market will do what it does with greater competition: adjust. Prices will fall. The illegal market will shrink accordingly.

VonGuard 12y ago
OK, I was just in WA, and let me assure you WA is where the black market will continue to thrive. The CO market is taxed, but is actually cheaper than the black market in CA from what I hear. WA, however, has a state tax, county tax, city tax, and thus, prices are double that of the black market. Plus, the state really clamped down on growing permits, so there are now shortages driving prices up higher. WA and CO will show very clearly how to do this right (CO) and how to do it wrong (WA)
- ejr 12y ago
  My news is a bit delayed, but from what I know of WA, the political atmosphere is a bit frayed. Local government is hampered by a complex web of bureaucracy and the state government may not be willing to play along. I'm sure there are plenty of people there that want to follow the same example, but they may not have enough momentum to organize and push through as CO did.
- waterlesscloud 12y ago
  On the other hand, it's now a source of tax revenue, and governments can generally be counted on to find the balance to maximize tax revenue.
- Todd 12y ago
  It's too early to tell. They only just started issuing retail licenses this past month. It's slow going because each store has to meet stringent standards. But they're opening one by one. The taxes are applied at a rate of 25% at each level of the system: growers, processors, and retailers. The remainder are standard business taxes (B&O tax) and sales tax. From what I've seen, everyone involved has been very conscientious in implementing this law and have made adjustments to ensure that it works. If the black market continues to thrive due to taxation that is too burdensome, I expect they will adjust accordingly.

aikah 12y ago

> “It’s simple,” she says. “A high tax rate drives black market growth. It’s an incentive for risky behavior.”" I disagree, as a smoker , I'd prefer buying the legit stuff somewhere safe rather than going into a dangerous neighbourhood to get a 33 percent rebate on a product with questionable quality. the premium is worth paying for my safety. And at least i'm not financing some gangs that will later be raiding my house or mugging my friends. I just want to get my shit legally. How many adults buy their booze illegaly today? none.

gizmo686 12y ago
>How many adults buy their booze illegaly today? none What about adults between the ages of 18 and 21?
- salgernon 12y ago
  18 to 21 year olds are likely to pay far more than market prices. They are not likely to purchase homemade liquor when getting an adult to buy for you is trivial.
pigeons 12y ago
>How many adults buy their booze illegaly today? none Its a lot more than none. You can't buy good traditional local corn whiskey legally, and quite a premium is paid.
stonerthrowaway 12y ago
The black market isn't all stabbings ... certainly in CA, it isn't. I make good money and I wouldn't think twice about going to the black market for my medicine if they had crazy tax like that here. I mean, I (and many other people) already won't shop at places that don't roll sales tax into their prices.
- mkopinsky 12y ago
  Do you buy your alcohol on the black market? Once the legal market for marijuana matures, why should it be any different?

enjo 12y ago

There is an ongoing conversation here about the tax rate. I think that as we get more comfortable with legalization, the tax rate will actually go down as I think the state is leaving revenue on the table right now. I think the more interesting question is the future of medical marijuana in Colorado. Right now it's a giant loophole that effectively gets you around those higher taxes. I know many folks who have kept their MMJ cards, there remains nothing actually medically wrong with them.