The Growth of the Black Market by the Existence of the Legal Market

The cannabis black market was always there, and always big. But it has seemed to surge in recent years; offering way more options than it did before. How did this happen amid legal markets opening? Maybe simply, because they did. It seems the growth of the black market is due to the legal market.

What the black market used to be

For people coming of age today, the idea of shady black-market sales with dealers, is a less common thing. Not even because these covert sales don’t exist, but because nothing feels quite as covert anymore, when there are laws saying the contraband is actually legal. I mean, sure, it’s technically illegal when bought in that covert way, but unless the product a person has can be directly tied to an illicit sale, it’s no different than the legally bought product.

Back in the day, it really was an issue though. Deals were made behind closed doors, or in back alleys. People carefully traded money for product in ways that made it hard to tell what was going on. Dealers went by funny names like ‘Dank’ or ‘Scaggs’, and their clientele rarely knew them outside of the deal. And it was just standard flower, in the few options an individual dealer had. Apart from law enforcement and government harassment, we were all cool with this process, and the product sold.

Back in the day, which is everything back to a few years ago, no one thought about gummies in connection to weed. No one thought about super hard-core extracts. It was more about the quality of the plant material; which ranged from ditch weed that looked like stuff picked off the street, to crystal-covered, brightly colored, strong-smelling buds. A few people here and there baked up brownies, but this was usually an individual project, and edibles weren’t generally a part of black-market sales.

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What the black market is today

The idea that the growth of the black market is due to the emergence of legal markets, isn’t hard to understand. Today, the two look almost identical, to the point that many people have no idea they’re buying from the black market at all. And that’s because if a legal market emerges, any black market will copy what’s popular, and often with lower prices due to no tax or regulatory burden.

Beyond the still-standard back-alley sales (which often happen more conspicuously), both markets today use dispensaries to sell goods. Which means, all the products that came out of the legal market that expanded options, are also seen in the black-market dispensaries. This includes the range of edible products that go well beyond baked goods, to include gummies and other candy, chips, drinks, tablets, and so on.

Today’s cannabis black market is hiding in plain sight, keeping up with all the advancements of the legal industry. And while operators in the legal industry are subject to strict, costly, and often difficult-to-meet regulatory measures; along with seemingly ridiculous and greedy tax structures; the black market is not. And that means the ability to buy these same (or same-looking) products, but at lower prices. This ability for lower pricing has led to growth of the black market, which is essentially all owed to the existence of the over-priced legal market.

Where the black market and legal market differ

That they often look the same on the outside, doesn’t mean they are the same. Or that they sell the same products. Sometimes this is the case, but not always. Owing to that lack of regulation, illegal dispensaries and operations can offer different products. Some which are great for consumers, and some which pose problems.

That issue of people ingesting too much THC of late? Sure, simply having something easy to pop like gummies is a factor, but it goes beyond that. Illegal dispensaries don’t have to adhere to regulation limits on THC in products. I’ve seen edibles marketed as having 40mg, 50mg, or even 100mg of THC per dose. Though anyone can go crazy and pop a full pack of legal gummies; if buying super intense products, the chance of overdoing it on THC is that much more likely. One of the things that sets the markets apart, is this ability for the black market to sell super, super high THC products.

Another thing is the use of synthetics. With literally no regulation, the black market doesn’t have to sell what it’s saying it’s selling; something that’s relevant both to edibles, as well as vape carts. While I don’t have much faith in the legal industry anymore, partly due to issues of shoddy vape carts, I definitely don’t believe that the majority of carts sold in illegal dispensaries, are what they’re said to be. Of course, having said that, the last time I bought legal carts, even the ones that should have tasted like weed, instead had the taste of fake flavoring that permeates the carts of illegal dispensaries.

When something isn’t regulated, it creates a general free-for-all. And that ability to offer more products than its legal counterpart, and at lower prices, has likely helped the growth of the black market. Which then went several steps further.

How to know if you’re buying from the black market?

Obviously, if you have your own personal dealer who isn’t a licensed retailer, it’s black market. That’s the idea most of us think of when we hear ‘black market.’ But if illegal black-market dispensaries exist, how can a person know if they’re buying from a black-market retailer or a legal one? There are a few ways to make an informed guess.

• If the dispensary doesn’t check your ID upon arrival, it’s likely a suspect place. This is a legal requirement for all legal dispensaries, so a location that doesn’t adhere to this, isn’t going by enforced regulation. It’s a great way to get an idea about the legality of the location you’re in.

• If the dispensary sells products with THC above legal limits, it’s an illegal dispensary. All that stuff I said above about super high THC products; well they don’t exist in legal dispensaries, because they’re not legal products. If you see gummies that boast 40mg of THC per gummy, you can be sure you’re in an illegal dispensary.

• If the dispensary sells products that almost appear to be a well-known product, but with the insertion of THC; the place is an illegal dispensary. Trademark law protects companies that have legal and trademarked products, from having the likeness or taglines stolen by another company to sell a different product. So if it looks like Skittles, has a name that’s almost the same, with virtually the same packaging, but with the inclusion of THC; you’re not in a legal place.

These are just a few guidelines for establishing if where you’re buying from is technically legal. I’d be remiss, however, if I said it really matters. These dispensaries are still plenty good at providing basic products like flower, so if that’s what you’re about, you don’t have to care. You don’t even have to care if you like the edibles or carts from a place, so long as you feel like the product doesn’t negatively affect you. In fact, the reality that it’s so hard to know the difference between establishments, indicates that you’re probably fine either way.

Is the black market bigger than the legal market?

It’s always impossible to say for sure, and black-market sizes vary by location. As black markets don’t report sales or earnings, an exact comparison is difficult to know. I can say this though, in a place like Vegas, it’s much easier to come across a black-market dispensary than a legal one, and illegal dispensaries enjoy prime locations like in the middle of the Strip.

What we keep seeing, is that dispensaries are having issues. Instituting monthly slotting fees, closing down, reporting low sales (often seen as reports of low tax revenue by governments.) So, does this strictly involve only legal dispensaries? Likely not, but it could be more of an issue for the legal ones because of higher pricing, or less-desired lower-THC items.

But then there’s another reality. If dispensaries aren’t doing as well, and people are still using weed; they’re either growing it themselves, or going back to their back-alley dealer. And that guy is now way more likely to have the same products found in a dispensary. Meaning, if the trend is to not use dispensaries as much, the black market still wins.

If the black market hadn’t copied the legal market, this might not be true. Since people like the new-age products; offering them is key to getting business. Which, again, points to the idea that the growth of the black market, is really based on the existence of the legal one. If it was just the guy doing back-alley deals, only offering flower, the legal market might have won.

Conclusion

For all the complaints of the black market still existing, the funniest aspect is that it is what it is today, solely because of the entrance of legal markets, and all the new options therein. This article does nothing to offer ideas for how to change this, I’m just putting it out there that if the black market has experienced growth since this began, it’s because of legal markets coming into being.

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