Greedy Politicians Are Already Wrecking the Legalized Cannabis Industry
Once all these regulatory and financial hurdles are overcome, there is still one major issue: the black market. Since marijuana sales are subject to a “sin tax,” consumers end up paying the government 35 cents for every dollar they spend on legal cannabis. This has made the black market ever more intriguing to consumers, who know they can escape excessive taxation by going through a street dealer. According to Fitch Ratings, when all is said and done consumers end up paying about 45 percent more for legal marijuana than they do on the black market.
Tom Adams of BDS Analytics, a company that tracks the cannabis market, said:
The bottom line is that there’s always been a robust illicit market in California—and it’s still there. Regulators ignored that and thought they could go straight into an incredibly strict and high-tax environment.
It’s actually rather shocking that California hasn’t been leading the way in the cannabis industry, considering how it has led the nation in ending prohibition.