Originally Posted by Myfuture_yourdebt
The traditional black market of marijuana cannot compete with the legit market on quality, period! Unless the cartel and illegitimate growers start pumping out medical grade buds (they won't, too much overhead and risk), no one's going to want to buy from them. Sure we don't know the exact taxes/fees yet but chances are they aren't going to be any worse than a high sales tax which many of us already get screwed with. So instead of $40 for the best 8th in the USA, it'll be $45. Whoop-dee-doo. For that same price, you could buy maybe as much as 4 times the amount of true black market bud if it's even available, but chances are it's not going to even come close to 1/4th the quality. So what's the point?
A way around the fees that will undoubtedly be pursued by many will be to purchase buds from commercial and/or medical suppliers "under the table", which will be especially easy if you can get to the actual grower. That sort of thing will essentially be tax evasion which I personally have absolutely no problem with. Regardless, this sort of "problem" or black market, if you want to call it that, is much more preferable over any sort of organized crime marijuana source and the legitimate problems associated with that where tax evasion is the least of the problems. As I've said in more than post before this, who gives a damn if this sort of black market exists? The state and local governments will but only because they are "losing money", what a tragedy.
But the idea that the black market that existed before MMJ and before A64 will continue to reap profits as it has before is just nonsense. Here's an economic law: in a free (legal) market, the greatest value wins. For the last few years MMJ has been bringing huge value to the table (low cost, insane quality) and the traditional black market has suffered because it can't compete with that. It can't get that quality period and if it could it would cost more than MMJ, probably a lot more. No one wants black market buds, not even high school kids and definitely not any experienced toker. It has no attraction, period. So when commercial growers start selling for prices similar to MMJ, even if the prices overall in the legit market (commercial and MMJ) increase a decent amount, black market bud still looks like a waste of time.
Lotta periods in there. I don't claim to know the quality of CO MMJ vs. CO black market MJ, but I've got to believe a cartel with years of experience and billions of dollars on the line will make a product superior to that of a green (pun intended) newcomer. I do agree that the vast majority of sales will come from taxed, legal sales, because the quality is empirically proven to be satisfactory to the market, which, coupled with the convenience factor and the now absent risk of participating in an illegal transaction, will trump other market forces.
But that doesn't mean there won't be a black market. More people will grow their own simply because they can, and many will have a surplus beyond their needs. Many of them will sell it outside the legal market because they don't have enough to bother going into the legit MJ business with its regulations and hoops to jump through. They will have to sell it below the legal market price, because, for the reasons mentioned above, black market prices are lower. This phenomenon will occur regardless of the new law's effect on the market price. The downside is not the emergence of organized crime, but rather the fact that it makes criminals out of otherwise law-abiding citizens who would be selling a legal product.
Now, the new law will likely bring down the cost of production. This is true because the current cost of production includes a premium for the risk of getting caught (in the form of higher fees/profits for middlemen, the cost of detection avoidance, increased cost of manufacture associated with remote areas, over-utilization of electricity for light). Unless the fees and taxes are so great as to cover the gap between the new cost of production and the market price in neighboring states, the lower cost would encourage a black market, not in CO, but in other states whose citizens would see CO as a source of supply. Actually, I think you can expect the fees and taxes to be greater than the gap, because the taxing authorities know that the CO market will not switch to black market MJ until the price differential is so great that the black market product becomes preferable despite the risks and loss of convenience.
It's going to be fun to watch.