Unlicensed pot shops in California are big business

Unlicensed pot shops in California are big business:
Why the licensed marijuana industry in California can’t compete with unlicensed shops
The unlicensed, illegal marijuana trade is booming in California seven years after the state legalized possession, cultivation, and distribution. This illicit market totals over $8 billion in 2022 in contrast to only $5.4 billion in legal sales.
New York is headed in the same direction as California in regard to the boom of illegal marijuana. There are only five dispensaries in the whole of New York City.
The slow rollout of dispensary licenses means marijuana smokers have to resort to illicit means to get their supply. The states that have had more success with hampering the illicit marijuana industry have permitted more legal marijuana dispensaries and streamlined the process of registration and licensing.
In California, as in much of the country, police focus on violent crime rather than illegal marijuana sales.
High taxes on legal marijuana sales drives consumers towards untaxed sellers. Marijuana taxes can range from 30% to 40% which makes it virtually impossible to compete on price with illicit sales.
Government officials will try and argue that illicit sales of marijuana risk product safety issues, human trafficking, environmental pollution, and public safety issues but it is clear their main concern is primarily the lack of uncollected tax dollars for their respective states.
For illicit marijuana growers in California, it is much easier and more profitable to supply illegal marijuana dealers than to comply with the bureaucratic red tape that is licensing. One of the most prevalent criticism from people like me is that California’s big government model is overly burdensome for small businesses and entrepreneurs. Another criticism is the high tax rates. By growing and selling marijuana illicitly, someone can avoid both licensing hassles, as well as overly aggressive taxes.
Some legal marijuana dispensaries are exiting the California market entirely.
Marijuana is illicitly sold out of brick-and-mortar businesses which may display a green cross sign. A half ounce of quality marijuana can be purchased for around $45 which is less than half the price of a legal dispensary. Considering the price of illicit marijuana, why would anyone bother to go to a legal dispensary and pay an arm and a leg or the same product? After all, high quality weed has become sort of a commodity. The end goal is to get high. The average person cares about the flavor of their wines, not the taste and subtilities of their marijuana.
Los Angeles is estimated to have between 700 to 1,000 illicit marijuana shops and delivery services versus 354 licensed retail shops. The Los Angeles police have busted less than 100 unlicensed marijuana stores. These offenders will likely just get a ticket and be back up and running the same day perhaps.
Los Angeles levies a hefty 10% city cannabis tax in addition to a 15% state excise tax, and a 9.5% sales tax levied on all goods and services for the most part.
Legal marijuana shops thought that by providing a clean, modern looking store that sells lab tested marijuana, that they could draw people away from unlicensed marijuana dealers and stores. However, they are learning how price conscious the consumer is. Let me ask you this, do you honestly care what the dispensary looks like? You are there to purchase marijuana, take it home, and smoke it. How long do you actually spend in a marijuana dispensary anyways? I bet you look at the specials or what is on sale. If you do, this again demonstrates my point that price is the primary consideration of marijuana consumers.
California cities and counties get to decide on whether or not there will be a legal cannabis trade in their jurisdictions. 61% of them prohibit marijuana sales. That leaves the consumer two options, travel to a jurisdiction where marijuana can be purchased legally, or just visit their dealer or an illegal store.
Colorado has about three times more licensed marijuana shops than California.
The cannabis czar of California, Elliot, claims the state of California is being unfairly blamed for failing businesses. “It’s very hard to look inward and determine where there are potential business failures. A lot of this is driven by business decisions, and a market that’s very competitive.” This is incredibly important tone deaf and demonstrates a total lack of knowledge of the marijuana industry specifically, but also business in general. Price is the most important thing to a consumer, especially when it comes to commodities like marijuana.
Many customers of unlicensed marijuana stores do not even know they are illegal. The state of New York is spending $3 million on an ad campaign to get people to purchase marijuana at licensed stores. It is amazing how bureaucrats will throw money at a problem instead of addressing the root issues. There is a reason people are going to unlicensed stores.
The marijuana eradication program is called CAMP. CAMP seized 1.1 million plants between 19803 and 1992. In the past two years it has seized 2.2 million plants. In one March raid alone, 3,250 plants were seized from a gated community. This provides protection from robbers. Incredibly, no charges or fines resulted from that raid.

Works Cited:
https://www.wsj.com/articles/marijuana-legalization-dispensary-california-new-york-db1bb11c?mod=hp_lead_pos9
https://www.politico.com/news/magazine/2021/02/09/los-angeles-legalization-cannabis-criminalization-467572