California's black market is three times the size of its legal cannabis market
A group called the United Cannabis Business Association has conducted an audit of cannabis-related businesses in California, and has found 2,835 unlicensed dispensaries and delivery services. When you compare that to the 873 cannabis services in the state that are licensed, you can see that the illicit market for cannabis in California is still three times the size of the legal market. That’s bad news — California’s cannabis industry (including, you know, us) has been saying loud and long that cannabis taxes in the state are too high, and the licensing processes are too complicated (and often based on bribery or corruption), and a stat like this highlights just how prevalent unlicensed dispensaries are.
The information for the audit came from none other than Weedmaps, which has been accused in the past of listing lots of unlicensed businesses, and that appears to still be the case. Weedmaps, for its part, has been dragging its feet to get rid of the unlicensed listings, and now we can see why: There’s three times more business in unlicensed dispensaries than there is in legal outlets.
If this was just an issue of taxing or licensing, it might not be so important, but unlicensed dispensaries also often sell poorly made or untested products — exactly the kind of products that have reportedly been hospitalizing and even killing consumers recently. People are dying because they’re buying and using vaping devices that don’t meet standards for legal sales, and in California, they’re often getting them through these unlicensed dispensaries.
So what’s the fix here? California needs to lower its taxes and standardize its licensing processes, and give the legal market the boost it needs to compete against these unlicensed vendors. Local law enforcement is routinely raiding unlicensed dispensaries, but it’s just not enough, clearly. The Bureau of Cannabis Control says to the LA Times that it can’t license more dispensaries, which isn’t a surprise either — it’s currently underfunded and understaffed. Taxes need to be lowered, more licenses need to be granted. “Right now,” as Assemblyman Tom Lackey from Palmdale says, “there’s more incentive to be an illegal dispensary than a licensed dispensary.”
Hopefully, and soon, California (and other states suffering from these issues) will be able to get a handle on this issue before more harmful products are sold. Legal cannabis was meant to stop unlicensed sales, but the rollout in California has allowed the illicit market to flourish.