Greed – The Simple Reason Why California is Failing at Legal Weed
Even though people are eager to see legal cannabis on a federal level, the current approach to legalization does have a few benefits. We are seeing different models of cannabis legalization play out in isolated areas, allowing us to see what works and what doesn’t.
Whereas states such as Colorado and Washington have fairly maintained a solid progression within the implementation of their models, California is struggling to get it right. Despite all of this, California is still the biggest marijuana market in the United States.
However, since they went “full-legal” they have had problems transitioning from their medical program to the recreational market. It isn’t really a problem with the cannabis players (businesses, consumers, suppliers, etc). The real problem lies with the government itself, and more importantly…their greedy money grab on a budding new/old industry.
The problem with high taxes
In some instances, consumers can pay up to 45% of tax on their weed purchases. What this does is drive the consumer to turn to the black/grey market where they don’t have to pay any taxes. Unfortunately, that weakens the infrastructure of the legal market.
People buy less, meaning that in some cases businesses operate at a loss. Supply chains are being hampered by bureaucratic red tape, licensing is taking forever. The governmental overreach and desire to maintain control over every aspect of the marketplace means that they are losing consumers to the black market.
Personally, I would make cannabis laws as relaxed as possible. Allow for in-person trading, home cultivation and very low taxes on cannabis sales. This makes the legal alternative enticing for consumers, even if it’s nominally more expensive than the black market product.
Black Market Problems
You can’t beat the black market by punishing the consumer. It’s dumb and shortsighted. Of course the consumer will choose the black market. You’re not stripping away their hard earned dollars to fund your broken regulatory machine.
The black market will always try to undersell product to compete with the legal market. If the Californian regulators think that people will simply “choose legal” because it is legal, they should not be in office. They obviously have no idea what the average cannabis consumer looks like.
There’s a reason why cannabis had the reputation of the “cheapest drug” for so long. Granted, new cultivation methods and alternative product arrangements may have elevated the product, however in essence marijuana is nothing more than a plant.
You can grab a seed, put it in some soil, water it and in a few months you can harvest your own plant. It shouldn’t be costing you two baby kidneys to buy an ounce or even a pound of weed. This isn’t to say that premium weed won’t have an elevated cost.
With lights, irrigation, strain selection, cultivation and a million other things, these cost would eventually be absorbed by the consumer. However, as a consumer…we’re okay with that. What we’re not okay with is some guy or gal in a suit trying to squeeze our pockets because they need the money to “regulate” the industry.
I believe state regulators are feeling the collective “fuck you” by the consumers as they continue to buy on the black market.
It’s a shame really. California has the potential to become one of the great “Weed Capitals” of the world. It already is one of the most renowned weed places on earth, however with the proper regulatory system in place…it could become something truly amazing.
However, while politicians and regulators bicker about the amount of cheese that belongs to them, the black market continues to thrive.
A Simple Fix?
Will California be able to fix their cannabis marketplace by simply lowering taxes? Odds are that they won’t. High Tax rates are but only a fraction of the problem. They would need to revisit their entire licensing protocol, and fix supply chain issues in order to woo consumers back to the legal marketplace.
Will it happen soon? Probably not. Until they do fix this however, we will see both grey and black market players taking a slice of the pie, all the while legal businesses suffer in the process.
Don’t get me wrong, I believe in a world where we can buy weed from anyone, however, understanding that society won’t simply accept such a liberal system, a well-regulated system that is accessible to consumers is a good alternative.
The Ideal System
What is the ideal system? I don’t think we have seen it play out yet. Colorado seems to have a good handle on things, Washington, although expensive, manages to generate a wealth of tax revenue while not having similar black market problems like that of California.
For me personally, let everyone grow freely, regulate it like Tomatoes…remove the power from the authorities and place it in the hands of the people.