Author Topic: WA pot growing black market evolves following legalization  (Read 668 times)

Offline Chemsoldier

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Apparently the legalization of marijuana cultivation and consumption has not destroyed the black market in marijuana in the state.

https://www.npr.org/2018/05/16/610579599/despite-legalization-marijuana-black-market-hides-in-plain-sight

Reading the article it seems that the illegal cultivation of MJ in state has continued and expanded to service the illegal trade in MJ in other states and perhaps overseas.  I suppose the economist in me is saying, "Duh!"  What did they think would happen?  At least they are good old American illegal jobs rather than central American illegal jobs.  Far as I am concerned, grow poppies here and make Afghanistan even more of a squalid hole than it already is.

There also seems to be an issue with profitability of the legal industry as the price of legal MJ has declined.  Throughout though it mentions security cameras growers have to have, RF tags on individual plants, etc.  At least for in-state cultivation, eliminating those costs would probably help people's ability to make money growing it.  Ultimately though, I would think small scale growers are kidding themselves to think they can grow for the mass market and compete with more corporate growers.  Just as with other forms of ag, the small scale producers have to work the relationship and niches to make their money.

I suppose for a prepper, it is a cash crop with some pain management utility...if you are willing to deal with the added scrutiny from the state and potential targeting by ne'er do wells.

Offline Smurf Hunter

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Re: WA pot growing black market evolves following legalization
« Reply #1 on: May 16, 2018, 08:46:21 AM »
Since you posted this in the money board, there's also some creative banking and financial instruments some of these MJ businesses have had to utilize.

I can't precisely recall, but at the federal level, there was some issue with MJ retailers depositing their revenue into federally insured banks.
e.g. it was illegal and the funds could be seized. 

Enter crypto currency:  https://www.fool.com/investing/2018/02/22/3-ways-cryptocurrencies-are-changing-the-marijuana.aspx

Offline Mr. Bill

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Re: WA pot growing black market evolves following legalization
« Reply #2 on: May 16, 2018, 08:47:02 AM »
WA has intra-state problems too.  Lots of counties and cities in the conservative areas went all "NIMBY" and "local people voted against this", and have set up moratoriums or permanent bans on marijuana farms and retailers.  Here in Benton County, we probably did the worst combination: allowed pot businesses at first, then after the local howling started, banned them -- but with a grandfather clause allowing existing businesses to continue operations.  So this gives the appearance (whether it's true or not) of the county having passed protectionist legislation, keeping out new competitors of the established businesses.

We're pretty far away from a free market in pot.

Offline alexlindsay

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Re: WA pot growing black market evolves following legalization
« Reply #3 on: May 16, 2018, 09:25:10 AM »
I have family in jackson county oregon. Apparently the wholesale blackmarket price there fell to 800 an lb following legalization. You can see at least one legal farm from the house my wife grew up in. It has created a problem with cash sales resulting in commercial robberies and they often have very well armed guards at these grow ops.

Offline AvenueQ

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Re: WA pot growing black market evolves following legalization
« Reply #4 on: May 16, 2018, 10:17:49 AM »
Lots of small towns in CO banned it as well, though not as many as you might think. The tax revenue from the first year of legalization far exceeded what anyone thought it would be, and we had to vote on what to do with it (the first $40 mil went to the schools, the rest either every resident got a small refund, or it was put toward anti-drug campaigns). It's actually been quite a boon to some rural towns, reviving them after fickle tourist money dried up (whether or not it's a long-term boon remains to be seen).

I can't precisely recall, but at the federal level, there was some issue with MJ retailers depositing their revenue into federally insured banks.
e.g. it was illegal and the funds could be seized. 

This was a huge problem the first year in CO, and retailers were operating "cash only" for a while. I think eventually one bank formed some kind of deal with the business owners and they worked something out.

Offline David in MN

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Re: WA pot growing black market evolves following legalization
« Reply #5 on: May 16, 2018, 12:27:06 PM »
Legalization rarely has a legit price effect. High taxes insure the black market. Otherwise I wouldn't pay $10 for a bottle of vodka when I can buy denatured alcohol for $2. Hence we still have bootlegging.

My friends in CO hate it. They complain that pot smoke is everywhere because the law change got all the potheads to move to their state. Besides, I could make a couple phone calls and get you any drug you want in under an hour. Legalization really doesn't help the core user. 16 year old me didn't pay much heed to the law. But if it were legalized my very conservative mother might try it for her arthritis.

I guess what I'm getting at is the tax/ban/regulate scheme doesn't effect the user who wants to get high but prevents people who actually could have medical improvement from trying. It's a very perverse incentive. Millions  of people with stomach issues or insomnia continue to suffer and we have Phish concerts. Go figure.

Offline Smurf Hunter

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Re: WA pot growing black market evolves following legalization
« Reply #6 on: May 16, 2018, 12:56:04 PM »
Another aspect, and something I tend to focus on is law enforcement.

Where I live, we have less than 1 officer on patrol for every 10,000 city residents. 
e.g. population 50K has 5 cops driving around 24/7

That's enough most of the time, but just two larger incidents can tie up the whole city.  My thinking is, anything trivial we can take off the police department's plate, is a win-win.
I want burglars, and violent criminals caught. The way I see it, less cops enforcing the Phish concert is more cops doing something more constructive.

Offline Chemsoldier

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Re: WA pot growing black market evolves following legalization
« Reply #7 on: May 16, 2018, 01:17:39 PM »
Another aspect, and something I tend to focus on is law enforcement.

Where I live, we have less than 1 officer on patrol for every 10,000 city residents. 
e.g. population 50K has 5 cops driving around 24/7

That's enough most of the time, but just two larger incidents can tie up the whole city.  My thinking is, anything trivial we can take off the police department's plate, is a win-win.
I want burglars, and violent criminals caught. The way I see it, less cops enforcing the Phish concert is more cops doing something more constructive.

From what I have seen the highest payoff would be getting rid of bars, let them be another county's problem.  ;D

Offline AvenueQ

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Re: WA pot growing black market evolves following legalization
« Reply #8 on: May 16, 2018, 02:53:42 PM »
My friends in CO hate it. They complain that pot smoke is everywhere because the law change got all the potheads to move to their state.

Hm, I didn't have that issue, though maybe it's more of a problem in their neighborhood. It's pretty heavily restricted in public places, and outside of certain special events or venues I didn't notice it (and believe me, I despise the smell of weed).

Offline Smurf Hunter

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Re: WA pot growing black market evolves following legalization
« Reply #9 on: May 16, 2018, 05:01:27 PM »
The greater Seattle area feels like it's without rule of law.  People openly smoke weed at bus stations, walking down the street, in public parks - none of it legal.
I was downtown a few days ago for a job interview.  I was familiar with the neighborhood as I'd worked there about a decade earlier.

WOW, it had changed.  There are now more than 10,000 homeless people estimated to be within the city limits.  Encountering panhandlers has always been a common thing, but this is a new level.  Cops haven't even considered enforcing MJ laws.