US State Struggles as Illegal Dispensaries Outstrip Legal at least 4 to 1 – LPC
It seems that no matter how cannabis is legalized, there will still be issues with illegal dispensaries. Since legalization in California last year, the state has licensed 873 cannabis sellers, according to an LA Times report. By comparison, the United Cannabis Business Association (UCBA) found 2,835 illegal dispensaries – and there are many out there that couldn’t be found.
“California’s not making it easy for business to join the regulated market,” said Tom Lackey, a member of the California State Assembly. “Right now there’s more incentive to be an illegal dispensary than a licensed dispensary.”
There are some promising numbers though. Illegal dispensaries sold $8.7 billion in product versus $3.1 billion for licensed shops. Although that’s considerably more in total sales, the licensed stores have higher sales per capita.
Part of the problem is the availability of illegal dispensaries. The UCBA found its stats through Weedmaps, a Yelp-like directory of cannabis shops that includes illegal dispensaries.
“Every day that Weedmaps continues to advertise for unlicensed retailers they are putting consumers at risk and suppressing the growth and very existence of the legal market,” the UCBA said.
Recently, they’ve pointed to the fact in “most” of the 60 cases of vaping illness, the person recently visited a black market shop. The UCBA is calling for all illegal dispensaries to be fined the $30,000 per day allowed under state law.
When Does Legal Cannabis Win? – LPC
Canada took a different approach to legalizing cannabis. It created a stricter, arguably safer cannabis industry that is highly regulated. From the beginning, illegal dispensaries were given notice. Although shutting them down was complex, the numbers dwindled. Black market activities without a storefront are, of course, harder to shut down.
The black market is still alive and well in Colorado, where cannabis was legalized five years ago. Reasons include lower price, lack of available legal shops, and loyalty to old dealers. Much of the black market cannabis actually leaves Colorado to states where it’s illegal – and therefore more profitable.
Availability is part of the problem in California as well. Only 1 in 5 cities even allow legal sales. It’s hard for legal cannabis to win when illegal dispensaries are so much easier.
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