Legal Weed in California Hasn’t Erased the Black Market

legal weed black market california

The cost of legal weed in California depends on where you get it. But the black market lives on as a cost-effective alternative.

Thousands lined up as recreational pot became legal in California on New Years Day. As the new year continued, dispensaries rolled out their products and consumers got their first chance to see legal weed prices.

Despite California’s best efforts, a black market still thrives. And buying weed outside of a licensed shop is still a lot cheaper. According to Tawnie Logan, chairwoman of the board of the California Growers Association, the black market price for an eighth of an ounce is around $20 USD.

However according to a report from Greenstate, the price of recreational weed will depend largely on what stores decide is a viable increase. On average, consumers will be paying eight dollars more. Prices of a legal eighth range from $50 to $65 USD.

According to the rating agency Fitch, multiple layers of taxes could cause prices to go up 45 percent in some parts of the states. Fiona Ma, member of the state board of equalization, says “it’s going to be kind of messy in the beginning.” Ma goes on to say,

“THIS IS A HUGE UNDERTAKING. TRYING TO RUSH IT ALL IN A TWO-YEAR PROCESS IS A DAUNTING TASK.”

legal weed black market california
A marijuana bud displayed in a California Dispensary Via High Times 

Tax Hikes Could Boost the Black Market

Fitch says these tax increases might actually boost the black market. California’s black markets for Cannabis were established long before voters legalized cannabis in 2016, the agency added. They expect the black markets to dominate post-legalization production.

“High tax rates raise prices in legal markets, reinforcing the price advantage of black markets.”

Priceofweed.com, a website that compiles data on marijuana prices via crowdsourcing, also confirms Green State’s estimates. The site currently estimates that the average eighth is around $32.06, seemingly an average of the legal and street price. Almost all user submissions came before legalization.

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