This reminds me of a recent article that came out about legalization in Canada. The province of Ontario somehow managed to lose $42 million selling marijuana last year, according to the CBC. Such a thing should be impossible. However, with government, mismanagement is always the most likely option. It’s like that old Soviet joke– that if the Communists took over the Sahara Desert, within five years it would run out of sand.
Similar here in California. Voters and lawmakers expanded people’s rights in its legalization efforts. However, the legislators doubled back to severely restrict the market. This over-regulation and taxation instead led to severe disruptions. And since there is no real check on private production, many smokers have simply turned to the black market. Who could have guessed?
Reason wrote a good piece on the phenomenon. According to an informal count, there are now three times as many illegal dispensaries in the state as legal. The state raided almost $19 million in unlicensed sales last year. This compared to an estimated near $9 billion in total illegal sales in the state.
Complicating the Simple, Over and Over Again
Considering that the state does everything it can to make the process more complex, why should we be surprised. State and local taxes drive up the cost of legal weed by 30%. Not to mention the fact that Los Angeles is considering dragging out small time illegal sellers and growers. Another proposal is to cut off the power supply to suspected growers. Sounds a lot like how the law was carried out before legalization.
And LA is doing its best to constrain the legal market. According to the Reason article:
The city has received more than 1,600 applications to operate legally, but it has licensed only 187 so far this year. Only now, in September—nine months after it became legal to operate recreational marijuana dispensaries—is it going to approve 100 additional licenses.
Just make sure never to let Governor Newsom or the Legislature anywhere near the Sahara.