Legal versus illegal sales of marijuana
March 21, 2024 5:35 AM Subscribe
Watching The Gentlemen (TV series on Netflix), where the plot involves huge amounts of money being made from marijuana growing in UK, I started to wonder about states in the US where recreational weed has been decriminalized, and how the dynamic of buying and dealing may have changed.
I've tried Googling for information about this particular question but haven't come up with much, so here goes:
If you had been selling weed before, how would legalization have affected your career? Did growing and/or selling pot illegally suddenly become not worth the trouble anymore? Does the answer vary from state to state? For instance in Illinois, prices for recreational weed are very high compared to other states, and the selection widely said to be not great either. So is the situation different here than in a state like Michigan, where the legal supply and prices seem to be better?
I would love either anecdotal or scholarly answers to this question. Thanks!
I've tried Googling for information about this particular question but haven't come up with much, so here goes:
If you had been selling weed before, how would legalization have affected your career? Did growing and/or selling pot illegally suddenly become not worth the trouble anymore? Does the answer vary from state to state? For instance in Illinois, prices for recreational weed are very high compared to other states, and the selection widely said to be not great either. So is the situation different here than in a state like Michigan, where the legal supply and prices seem to be better?
I would love either anecdotal or scholarly answers to this question. Thanks!
You may find this incredible ProPublica reporting of interest.
posted by General Malaise at 6:13 AM on March 21, 2024 [4 favorites]
posted by General Malaise at 6:13 AM on March 21, 2024 [4 favorites]
The NYTimes just had an article about this recently- Grown in Oklahoma, Smoked in New York: Illicit Marijuana’s Legal Roots. The Daily (NYTimes) also had a podcast episode recently that relates to this.
posted by coffeecat at 6:14 AM on March 21, 2024 [3 favorites]
posted by coffeecat at 6:14 AM on March 21, 2024 [3 favorites]
There was an FPP about this a while back that you might find of interest.
Anecdotally, I know one person who has grown modest amounts (like hobby farm -- tens or hundreds of pounds, not tons) for sale for a very long time, more as a self-supporting hobby rather than a real business. After legalization prices got so low that he just started giving it away by the full trash bag for a few years. I have been meaning to ask if he has started selling again or is still giving away like extra zucchini.
I know of someone else who grew illegally at a pretty large scale, and then successfully transitioned into running a legal weed business. My understanding is that he finds the legal business less fun and lower profit, but also less stressful.
What I've been told is that the years prior to legalization, when everyone knew it was coming so the police mostly stopped enforcing, but prices were still high, were the real golden years for growers. Low costs, zero compliance issues or regulations, high prices, and no risk of going to jail.
posted by Dip Flash at 6:41 AM on March 21, 2024 [3 favorites]
Anecdotally, I know one person who has grown modest amounts (like hobby farm -- tens or hundreds of pounds, not tons) for sale for a very long time, more as a self-supporting hobby rather than a real business. After legalization prices got so low that he just started giving it away by the full trash bag for a few years. I have been meaning to ask if he has started selling again or is still giving away like extra zucchini.
I know of someone else who grew illegally at a pretty large scale, and then successfully transitioned into running a legal weed business. My understanding is that he finds the legal business less fun and lower profit, but also less stressful.
What I've been told is that the years prior to legalization, when everyone knew it was coming so the police mostly stopped enforcing, but prices were still high, were the real golden years for growers. Low costs, zero compliance issues or regulations, high prices, and no risk of going to jail.
posted by Dip Flash at 6:41 AM on March 21, 2024 [3 favorites]
There’s a recent New Yorker piece that talks about this in New York.
posted by Xalf at 7:07 AM on March 21, 2024 [2 favorites]
posted by Xalf at 7:07 AM on March 21, 2024 [2 favorites]
I am pretty skeptical of your sources if they say there's not good variety of legal marijuana products in Illinois. Have you looked at any of the IL dispensaries' web pages? I just checked one and saw 30 different brands of flower, coming in five different size classes, across several dozen named strains. Not to mention vapes, drinks, edibles etc. etc. On the black market most people get a choice of maybe three or so strains at a time. It's probably different if you're Snoop Dogg or Seth Rogan etc. It may even be true that Michigan dispensaries have a few more items on average, but I don't think that's really much of a meaningful difference if they have say 550 SKUs compared to 500 in IL. The overall picture is still that legal sellers generally blow the black market out of the water in terms of variety available, and so that line of reasoning makes no sense to me at all.
It is indeed true that some black market sellers remain in business in legal states, usually offering some mix of lower price and lower quality from what I've heard. As far as I can tell this is true in most legal states. It is also true that lots of people in the illegal business went straight and got jobs at dispensaries or farms, because those are the people with the in-demand skills and lots of them like the benefits of being legal.
TLDR: in my experience most illegal sellers quit or went straight, some hang on for various reasons. NY seems to be the big exception, where illegal stuff is sold openly at storefronts regularly, as described above. I have no experience there.
posted by SaltySalticid at 7:13 AM on March 21, 2024 [1 favorite]
It is indeed true that some black market sellers remain in business in legal states, usually offering some mix of lower price and lower quality from what I've heard. As far as I can tell this is true in most legal states. It is also true that lots of people in the illegal business went straight and got jobs at dispensaries or farms, because those are the people with the in-demand skills and lots of them like the benefits of being legal.
TLDR: in my experience most illegal sellers quit or went straight, some hang on for various reasons. NY seems to be the big exception, where illegal stuff is sold openly at storefronts regularly, as described above. I have no experience there.
posted by SaltySalticid at 7:13 AM on March 21, 2024 [1 favorite]
"Legal" marijuana cultivation has become a pretty bad business in the short term. Prices are low, inputs (fertilizer, energy) are high, labor costs are high and labor quality is low (this is a job that is still a federal felony, after all), taxes are sky high because you can't deduct your expenses, working capital is expensive because you can't take seasonal crop loans or get standard vendor credit. In most states you are (at least effectively) uninsurable which means that you have to maintain significant cash reserves against loss events, or risk getting put out of business by them.
Federal legalization will solve for almost all of the above, and it's fair to say that pretty much every "legal" grower out there is just holding on until that moment.
My own view of this is that they are waiting in vain. Federal legalization is much farther away than it seems, and if it does happen will simply lead to all the existing players being put out of business almost overnight by large-scale agribusiness concerns with high scale and low cost of capital.
posted by MattD at 7:46 AM on March 21, 2024 [5 favorites]
Federal legalization will solve for almost all of the above, and it's fair to say that pretty much every "legal" grower out there is just holding on until that moment.
My own view of this is that they are waiting in vain. Federal legalization is much farther away than it seems, and if it does happen will simply lead to all the existing players being put out of business almost overnight by large-scale agribusiness concerns with high scale and low cost of capital.
posted by MattD at 7:46 AM on March 21, 2024 [5 favorites]
Response by poster: I do shop at Illinois dispensaries and have found them somewhat frustrating-- low stock, not what the website says they have.
My comparative sources are people I know who travel regularly to Michigan dispensaries to get cheaper weed, and who also claim the selection is better there. I also used to shop in northern California and thought the sort of mom and pop dispensary my family used had a much bigger selection than places I go to in Illinois.
That said, people probably complain about this sort of thing in Michigan and California too. A lot of it's subjective, I am sure.
posted by BibiRose at 8:18 AM on March 21, 2024 [2 favorites]
My comparative sources are people I know who travel regularly to Michigan dispensaries to get cheaper weed, and who also claim the selection is better there. I also used to shop in northern California and thought the sort of mom and pop dispensary my family used had a much bigger selection than places I go to in Illinois.
That said, people probably complain about this sort of thing in Michigan and California too. A lot of it's subjective, I am sure.
posted by BibiRose at 8:18 AM on March 21, 2024 [2 favorites]
I know in California the legal grow licenses primarily went to what we might gently call "entities with decades of experience and long-term relationships with key members of local, state, and international public service infrastructure," and growing/distributing/selling in California was always heavily managed by those private interests. Smaller producers were always thin on the ground, and they did not get grow permits to "go straight". There was no amnesty program that allowed all growers to say aw shucks sorry and get a permit, I think this is a popular myth that is useful to the private entities. Those permits are given out to the highest bidder with the most guns, for the most part.
As far as I know, you can still get yourself pretty dead distributing or selling in competition to those interests. It's just not generally done by people in uniform unless they've been contracted for the work.
Trying to find an actual minority-owned dispensary in California (NOT one with weasel-wording that sounds like it on their website or weedmaps) tells its own story pretty well.
It's a pretty shit system benefitting a small group of people, as of course it was bankrolled to be. And I agree with MattD that federal legalization is still so far off that the "industry" is just a bigger cartel, and they like it like that. It's still incredibly difficult to be in any aspect of the industry and have stuff like bank accounts, payroll processing, insurance, and on and on.
It's still SO shady. When I lived in California I was always baffled at the number of "vape shops" - not dispensaries, just nicotine vape - in every other strip mall. Never open, empty parking spaces even if the open light is on. It's a money-laundering op, clearly. And we've been traveling the country including a lot of legal states, and yeah for sure you smell someone smoking on the street pretty often, but we've stayed in small towns (nowhere near a border) where the pizza restaurant is only open 4 hours a day and the Dairy Queen is barely keeping the lights on because there's just not enough people, but there's 3 dispensaries. Like, Portland OR is certainly a weed-friendly city, but at this point they have more dispensaries than CVSes. Nobody is buying or consuming that much weed. Only once in the past year have I been in a dispensary (town of 7K, only dispensary in town I think and near a state border with worse offerings, and it was a Saturday so probably their busy day) with other customers in it at the same time.
It feels bad, the whole business. It feels bad enough to participate in that at this point I am mostly avoiding it via extensive procrastination, and just use CBD-only products from someone I'm acquainted with and trust to be lab-testing the product and growing and harvesting hemp without icky labor practices or shadowy investors.
I will say, comparing the other states we've been traveling in with California and Oregon: West Coast Best Coast. The offerings in every other state we've checked out (CO, IL, NY, VT, MA) are paltry in comparison, especially in manufactured products (edibles, tinctures, topicals and other targeted pain relief formats). Going to a West Coast dispensary is like going to a boardwalk candy store extravaganza, and then in Vermont it was like going into one of those weird hyperfocused musems that has 9 small statues, extremely well-lit and spaced extremely far apart, plus a wall with a community bulletin board and a shelf of locally-made candles and crocheted items. Finding out that other states don't have 27 different gummies including at least one each 20:1 and 50:1 (CBD:THC) - for my agonies - was a shock. Thanks to state lines, though, I can't get my preferred California gummy in Oregon, and I can't get the really good Oregon ones anywhere else, and I appreciate how incredibly expensive it is to get an in-state-only food-safe manufacturing facility going with a very small and still fragile (and often weirdly limited - NY, VT, and MA all have complicated rules on top of tight permitting) market, so I can hardly blame IL etc for not offering the full Willy Wonka array.
posted by Lyn Never at 8:36 AM on March 21, 2024 [5 favorites]
As far as I know, you can still get yourself pretty dead distributing or selling in competition to those interests. It's just not generally done by people in uniform unless they've been contracted for the work.
Trying to find an actual minority-owned dispensary in California (NOT one with weasel-wording that sounds like it on their website or weedmaps) tells its own story pretty well.
It's a pretty shit system benefitting a small group of people, as of course it was bankrolled to be. And I agree with MattD that federal legalization is still so far off that the "industry" is just a bigger cartel, and they like it like that. It's still incredibly difficult to be in any aspect of the industry and have stuff like bank accounts, payroll processing, insurance, and on and on.
It's still SO shady. When I lived in California I was always baffled at the number of "vape shops" - not dispensaries, just nicotine vape - in every other strip mall. Never open, empty parking spaces even if the open light is on. It's a money-laundering op, clearly. And we've been traveling the country including a lot of legal states, and yeah for sure you smell someone smoking on the street pretty often, but we've stayed in small towns (nowhere near a border) where the pizza restaurant is only open 4 hours a day and the Dairy Queen is barely keeping the lights on because there's just not enough people, but there's 3 dispensaries. Like, Portland OR is certainly a weed-friendly city, but at this point they have more dispensaries than CVSes. Nobody is buying or consuming that much weed. Only once in the past year have I been in a dispensary (town of 7K, only dispensary in town I think and near a state border with worse offerings, and it was a Saturday so probably their busy day) with other customers in it at the same time.
It feels bad, the whole business. It feels bad enough to participate in that at this point I am mostly avoiding it via extensive procrastination, and just use CBD-only products from someone I'm acquainted with and trust to be lab-testing the product and growing and harvesting hemp without icky labor practices or shadowy investors.
I will say, comparing the other states we've been traveling in with California and Oregon: West Coast Best Coast. The offerings in every other state we've checked out (CO, IL, NY, VT, MA) are paltry in comparison, especially in manufactured products (edibles, tinctures, topicals and other targeted pain relief formats). Going to a West Coast dispensary is like going to a boardwalk candy store extravaganza, and then in Vermont it was like going into one of those weird hyperfocused musems that has 9 small statues, extremely well-lit and spaced extremely far apart, plus a wall with a community bulletin board and a shelf of locally-made candles and crocheted items. Finding out that other states don't have 27 different gummies including at least one each 20:1 and 50:1 (CBD:THC) - for my agonies - was a shock. Thanks to state lines, though, I can't get my preferred California gummy in Oregon, and I can't get the really good Oregon ones anywhere else, and I appreciate how incredibly expensive it is to get an in-state-only food-safe manufacturing facility going with a very small and still fragile (and often weirdly limited - NY, VT, and MA all have complicated rules on top of tight permitting) market, so I can hardly blame IL etc for not offering the full Willy Wonka array.
posted by Lyn Never at 8:36 AM on March 21, 2024 [5 favorites]
Those permits are given out to the highest bidder with the most guns, for the most part.
As far as I know, you can still get yourself pretty dead distributing or selling in competition to those interests. It's just not generally done by people in uniform unless they've been contracted for the work.
That might be the case in CA, I don't know, but certainly isn't prevalent in other states in the west. You can get yourself killed in the illegal drug business for sure, but it's not like the legal weed outfits are perpetrating cartel-style violence and none of the small-scale growers I've known have ever talked about it as a violent situation where they had any personal safety concerns beyond getting robbed during a sale.
There was a long period where the violence in the Humbolt area got a lot of attention and that might still be the case there.
posted by Dip Flash at 8:55 AM on March 21, 2024 [1 favorite]
As far as I know, you can still get yourself pretty dead distributing or selling in competition to those interests. It's just not generally done by people in uniform unless they've been contracted for the work.
That might be the case in CA, I don't know, but certainly isn't prevalent in other states in the west. You can get yourself killed in the illegal drug business for sure, but it's not like the legal weed outfits are perpetrating cartel-style violence and none of the small-scale growers I've known have ever talked about it as a violent situation where they had any personal safety concerns beyond getting robbed during a sale.
There was a long period where the violence in the Humbolt area got a lot of attention and that might still be the case there.
posted by Dip Flash at 8:55 AM on March 21, 2024 [1 favorite]
Maine has legal weed, stupid and cumbersome regulations. Some people who grew weed before still sell to private customers to avoid the myriad hassles. Unregulated grow operations still get shut down. It's ludicrously easy to get a medical certificate from a bored doctor, by phone. My doctor, like most these days, is employed by a big conglomerate that's nominally non-profit whose octors are not allowed to certify that patients need weed, not least because the Federal Government is still wringing its hands, though Biden is an improvement. Recreational and medical weed must be in separate shops. Shops have proliferated like weeds. It's still not possible to buy edibles that are a strain that would suit individuals needs, as far as I can tell.
I assume Big Pot is waiting to swoop in and make money; for now, it's still mostly small growers.
posted by theora55 at 9:31 AM on March 21, 2024 [1 favorite]
I assume Big Pot is waiting to swoop in and make money; for now, it's still mostly small growers.
posted by theora55 at 9:31 AM on March 21, 2024 [1 favorite]
In the "It varies state-by-state" vein: I don't know how common these are nationwide, but Missouri (a medical/recreational state) has a Medical Caregiver* program that allows homegrowers to apply for an advanced license and grow on behalf of up to 6 medically-licensed patients. There's no state-supplied structure to the program: caregivers and patients are on their own to link up and work out their own agreements, but it does allow a way for a small/medium grower to operate legally and has functionally served as a way for some unknowable percentage of the in-state "legacy market" to legitimize without having to go full-in on the dispensary lottery game.
(*I'll note this is vastly different from Illinois's Caregiver program which appears to just be a license to purchase from a dispensary on behalf of a patient that cannot go themselves. Regulations and terminology are so different from state to state.)
posted by Ufez Jones at 10:10 AM on March 21, 2024 [1 favorite]
(*I'll note this is vastly different from Illinois's Caregiver program which appears to just be a license to purchase from a dispensary on behalf of a patient that cannot go themselves. Regulations and terminology are so different from state to state.)
posted by Ufez Jones at 10:10 AM on March 21, 2024 [1 favorite]
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Anecdotally, allegedly, etc.
posted by GamblingBlues at 6:03 AM on March 21, 2024 [2 favorites]