Guy Page: Black market for marijuana flourishes in ‘tax and regulate’ states

By Guy Page

This morning, two Vermont legislators assured me that if Vermont passes S.54, the tax and regulation of marijuana bill now in House Government Operations Committee, the black market will dry up. When I said the black market hasn’t decreased in other “tax and regulate” states, they both laughed and shook their heads.

It is an article of faith among some legalization supporters that consumers will choose legal pot over buying on the black market. To answer this question, one must see what’s happening in other “tax and regulate” states.

Guy Page is affiliated with the Vermont Energy Partnership, the Vermont Alliance for Ethical Healthcare, and Physicians, Families & Friends for a Better Vermont.

Colorado: Rocky Mountain PBS reported in Dec. 12, 2018 — “Five years ago, Colorado voters decided to stop sending adults to jail simply for using marijuana. People over 21 in the state can legally purchase controlled amounts of marijuana and grow it in their own homes for their own use. Proponents said the legalization of cannabis would have a healthy side effect: it would kill the sale of illegal marijuana in Colorado. But something unexpected has happened in the years since: more people are being charged with serious marijuana-related felonies (like cultivation and possession of large amounts of the drug) in Colorado than in the years before legalization.”

California: The Los Angeles Times reported February, 2019 — In an article headlined “California’s black market for pot is stifling legal sales,” the LA Times reports: “A new report from the state Cannabis Advisory Committee on the first year of legal pot sales in California says there is problem that requires urgent action: “Fragmented and uncoordinated” enforcement has allowed the black market to flourish, threatening licensed business with unfair competition.” Other reports show 80% of marijuana sales in California are illegal, with legal pot revenue lagging $345 million below 2018 projections.

Michigan: Detroit Metro Times reported February, 2019 — In article headlined “Why marijuana sales on the black market are blooming in Michigan after legalization,” the Times reports: “Dispensaries and growers are also required to pay new taxes and the steep price of testing all of their products for impurities. Since illicit retailers aren’t straddled with those costs, they can offer lower prices and undermine tax revenues.”

In fact, the only state where black market sales may have suffered is Washington State, where drastic over-production has dropped the cost (and state tax revenues) of legal pot so low that it’s actually cheaper in legal stores than on the black market. That wasn’t supposed to happen. It’s an anomaly that revenue conscious state officials and the marijuana industry are eager to fix.

These news stories all say the same thing: tax-and-regulate legal marijuana won’t reduce the black market. And, we already know it won’t raise revenue for anything more than its own regulatory maintenance, and maybe a few dollars for prevention programs. So, the problems that legalization were supposed to solve, won’t be solved. If anything, they will be worse.

So Vermont legislators and Gov. Phil Scott may well ask themselves — why are we doing this?

Statehouse Headliners is intended primarily to educate, not advocate. It is e-mailed to an ever-growing list of interested Vermonters, public officials and media. Guy Page is affiliated with the Vermont Energy Partnership; the Vermont Alliance for Ethical Healthcare; and Physicians, Families and Friends for a Better Vermont.

Image courtesy of U.S. Immigration and Customs Enforcement/Public domain
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4 thoughts on “Guy Page: Black market for marijuana flourishes in ‘tax and regulate’ states

  1. Vermont legislators ” assured “Guy, that if Vermont passes S.54, the tax and regulation of marijuana
    bill now in House Government Operations Committee, ” The Black Market” will dry up ….. Yeah.

    These two legislative Idiots need to take a lesson from average Joe ” POT Smoker ” if they think
    they are going to run down to the local Pot Store and by a batch of ” Designer Buds ” at inflated prices, due to overhead & taxes, when they can just pick it up at the nearest street corner !!

    Also, the state now allows Average Joe to have in his residence two adults plants if they are any good at there “Agricultural Trade ” they will have harvested more than enough…….For Free.

    Gullible Legislators bought the ” Pot Revenue ” scenario from the growers…The new cash cow
    or is it ?? Montpelier like always takes the easy way out, don’t fix the states real debt problems

    Where do we get these fools

    • Where do we get these fools?
      How about from the same place as the ones voted for the 26% and go to NH to restock their likker cabinets.

  2. Of course the black market will thrive, government will want to make a killing off taxing this new found
    revenue maker. The cost of legal weed will be twice the cost of black market and the black market will do better then before as they now can raise price and still sell same quantity. Government greed will
    insure the black market survives.

  3. Last year I was a jury in a trial of a killing for illegal cannabis and other drug in Colorado. 3 people killed a guy with a growing and selling operation out of his home. My guess the good old boys got payed off to look the other way. Little do they know the pandoras box they are opening. You will never get back in. Vt. has an opiate now I can hardly wait to see what illegal cannabis and other drug hit the fan. I learned a lot about the dark side of illegal cannabis and other drug. PS been out of Vt. 6 years and enjoying not paying the Tax man Terry

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