Cannabinoids Bring in More Than Legal Markets

Why are we only hearing this now?

The report didn’t make a big deal about the term ‘black market,’ referring to it instead as ‘illicit.’ But the terms mean the same thing. The hemp-derived cannabinoids market is a black market, and no products in it are approved. While some products collect sales tax for governments, others are not scanned at all, or only for show. This means, no government has direct statistics of how large this (or any) black market is.

It’s not that we’re not being told the sales comparison, its because there isn’t one in hard numbers. And the unfortunate truth of gray areas in information, means that anything can be said. Think of all those headlines about how much money cannabis taxes bring in. Well, those amounts are far less than expected and hoped for, regardless of their hype. And we know this because of the sheer size of the black market; which indicates only a percentage of people use legal dispensaries.

To give a quick example on this one, consider that New York has had an operational market for the better part of a year. Yet it was reported in the spring (and then repeated in September) that the state only gave out about 60 licenses for legal establishments. And this while approximately 1,400 illicit stores exist. Just taking those numbers into account, (which is conservative given that the 60 licenses might not all be operational dispensaries yet); it becomes clear that the black market is way bigger, and therefore likely makes way more money.

Since governments don’t technically tax black markets, all we have are estimates. It should be noted that sales tax is applied to some products; but sin (excise) taxes uniformly are not, nor are THC taxes, cultivation taxes, or any other industry-specific taxes. Beyond this, no sales information is collected on most of these purchases.

The weed black market isn’t that different from the growing vape market; most of which functions outside of regulation. This applies to both disposable vapes, as well as other non-disposable products. While we once gain don’t have direct numbers to compare sales, we can consider the following: Grand View Research estimated just the disposable market brought in close to $6 billion in 2021, with an expected yearly growth rate of over 11% until 2030.

It was also estimated that 9,000+ vape products are on the market in the US, and nearly 40% are disposables. As no disposables are legal, this indicates automatically at least 40% of the market is illegal. Seeing as how governments apparently approved less than 1% of vape product applications, the illicit number could be closer to 90%+. We’re never told about this in terms of a lack of government revenue; instead, the public hears about it as fear campaigns meant to dissuade it from buying certain products.