Cannabis has been one of the most used drugs in the country for quite a while, drawing most of these supplies from the illegal market until states began loosening their own cannabis policies and launching legal markets. But despite nationwide efforts to legalize marijuana for adults aged 21 and over, data shows that the marijuana black market is still going strong.
States with massive cannabis industries such as California are finding it hard to compete with the illicit market for cannabis. Data shows that black market sales account for more than 80% of California’s entire marijuana market. In fact, legal cannabis retailers in some areas are struggling to keep their doors open amid immense competition from black-market sellers who aren’t licensed and do not abide by state cannabis regulations.
Analysis from the “Los Angeles Times” found that the illicit market in California, home to the largest legal cannabis market in the country, is indisputably many times larger than the regulated sector, revealing that there may be as many as 10 illicit operators for every licensed retailer. The illegal cannabis market is also impacting states such as Oregon, Colorado and New York.
Some believe that the black market has proliferated to such a degree because state cannabis policies give illicit sellers a massive advantage over licensed retailers. For instance, entrepreneurs who want to open cannabis businesses often have to deal with long, tiresome bureaucratic processes and pay significant taxes and fees that force them to increase their prices to achieve profitability.
As a result, legal cannabis can be several times more costly than black-market alternatives, pushing many consumers toward illicit traders while limiting profits in the legal market.
Others say that America will be unable to combat the illicit cannabis trade as long as large regions of the country still outlaw the drug. Keeping cannabis illegal does nothing to address the demand for the drug and simply ensures that black market sellers have a large consumer base that can’t get cannabis elsewhere.
On the other hand, some conservatives argue that cannabis reform itself is to blame for the black market, stating that the push for cannabis legalization has increased public demand for cannabis so much that it has surpassed what legal sellers can supply. They also say that legalization has made it harder for law enforcement to decipher between legal and illicit operators while looser penalties for cannabis offenses have emboldened criminals.
As all this is happening, cannabis industry actors are working as best they can to thrive despite insurmountable odds. Many, for example, making use of alternative funding sources such as REZYFi Inc. in order to bridge the gap caused by the reluctance of most traditional banks to accept marijuana companies as clients.
NOTE TO INVESTORS: The latest news and updates relating to REZYFi, Inc. are available in the company’s newsroom at https://cnw.fm/REZY
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
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