Knowing the difference between the “Informal Market” and the “Black Market” when it comes to buying weed.
With the whole world moving towards a “legal market” for cannabis, it becomes more important than ever to understand the difference between the “different cannabis markets” that will exist post-legalization.
For States like California and Washington, they do have both legal medical and recreational laws on the books. However, unlike states such as Oregon and Colorado, they have a much larger issue with “black market activities”.
Some people believe that this is directly linked to stringent regulatory standards that make black market appeal greater and more cost effective to the end-user. Sure, there is a “legal avenue” to buy weed, but if costs 50% more than I would buy off the streets – the end consumer prefers to save the money.
Who in their right mind wouldn’t? If you can get twice the amount of weed for half of the price, while still maintaining the same quality – wouldn’t you opt for the better deal?
Thus, some experts recommend that deregulation occurs in these ‘overregulated’ market places – specifically Washington and California.
What is the black market?
Before, the black market was defined as “anything to do with weed, however, with the birth of legal marketplaces, the black market definition has shifted. These days, black market activities deal with unlicensed establishments and grow operations that circumvent the legal market.
Often times, these black market activities can be directly linked to organized crime and other criminal elements.
One of the main arguments in favor of legalizing cannabis is to divert the revenue streams ‘away’ from the criminal element. This, for the most part has worked to great effect. In Mexico, Cartels are abandoning their mass-scale grow approach and shipping weed to the north.
Rather, they now grow on U.S land (at higher rates) at similar quality levels as would be found within the legal market. The problem, this often occurs on public land where they could cause irreversible damage to the ecosystem.
This is obviously a problem that we should be focusing on, with the hopes of eliminating it from the system. To do this, we would dramatically remove some of the regulatory hurdles and fees that increase the price to the end consumer.
If the government makes it difficult to compete with the black market, they can’t expect to eliminate it. With alcohol, a full-scale legalization gave rise to big name alcohol brands. This commercial approach, eliminated the Mafia’s stake in the alcohol trade.
These days, we’re not too worried about “illegal alcohol” activities and black market activities as a result.
What is the “Informal Market”?
The difference between the informal market and the black market comes down to the individuals. Within many of the legal regimes, we have certain clauses that allow ‘individuals to cultivate’ at home. This obviously creates a “source” for consumers.
However, unlike the black market, the funds go to the supplier of the cannabis. Perhaps you buy a baggy from a grower friend – this is the informal market.
The informal market should always exist. People shouldn’t be limited to ONLY buying from the legal market. If you can grow it, you should be able to sell it (on the down-low). There should be a difference between “public retail” and “private retail”.
The informal market provides opportunities for people who don’t necessarily have the solvency in their finances to sustain their need for cannabis. A grower’s network would be an optimal solution for people of “low income” financial standings to obtain cannabis on a consistent basis. This is especially true when we’re talking about medical applications of cannabis.
The informal market is your “Farmer’s Market” and I believe that we should have that for cannabis as well. The informal market can never compete with the formal market, but it allows for the “smaller players” to participate within the industry.
Currently, the cannabis game is a “rich person game”. You need to have a lot of money to get licenses, follow the regulatory schemes and keep yourself in business. This means that everyone who doesn’t have enough money is forced to become a mere consumer.
Within an informal cannabis market, “small-scale” sales should be permitted with virtually no oversight save the restriction on selling to underage consumers.
The informal market could provide those of lower income situations to build a cannabis business that can eventually translate into a commercial retail operation.
Social Justice Issues Solved Through the Informal Market
The biggest issue that many legislatures have with the cannabis market is the definitive “gap” between those affected by the drug war, and those who benefit from legality.
We can remedy this by creating rules to support the informal market. Perhaps, buying a license for $ 1000 a year, that allows you to sell up to “X Amount” of pounds per month without legal consequences, would be a great way for low-income individuals to break into the market.
We don’t have to make “special rules” for people, but rather, create a more inclusive approach to scaling your cannabis business efforts.