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Reason why black market weed is cheaper

by /u/nuclearswan · 3 votes · 2 weeks ago

California law Prop64 made marijuana legal for use and comes with heavy taxes for growers and sellers. These taxes were said to generate over $500,000,000 a year for the state. Legal state regulated farms have to pay at least $100,000-$50,000 a year for permits and taxes. Some pay a lot more depending on the size of the farm. This kills their profits. The barriers to entry are to high for most. They have to pass these costs down to their customers. Unlicensed shops don't have to pay for state and local permits or taxes. That's just one of the many reasons black markets can sell you the same great quality weed for a cheaper price. Marijuana taxes can reach up to 45% of the actual product. Just because you see cheaper prices in the black market, doesn't necessarily mean you're getting lower quality weed than the licensed shops. Any grower in Cali can tell you this.

Comments (16)
/u/empty Established Bohemia Vendor · 2 votes · 2 weeks ago · Link

Good post, a lot of casual buyers don't realize this is the case.

/u/nuclearswan OP · 1 votes · 2 weeks ago · Link

Thanks. Yes I've seen some of the confusion on other posts.

/u/captainsensible · 1 votes · 2 weeks ago · Link

Unfortunatelt the only reason some states choose to legalize MJ is for the tax revenue alone....

/u/nuclearswan OP · 1 votes · 2 weeks ago · Link

A fact

/u/DrReefer ⭐ Star Vendor ⭐ · 1 votes · 2 weeks ago · Link

The biggest reason why its cheaper is because legal market can only be sold legally. The stores carry all the buying power. They can offer 100 a lb, and the growers either need to accept it or wait for it to go bad and burn it. If/when it becomes legal federally and you can send it to other states, youll see some legal states price go down and others near the bottom (like OR/CA) go up while some of the supply goes elsewhere. If a dispo in IL is offering 2k a lb, then cali stores need to match it or have no supply anymore because growers aren't going to continue to accept there lowball offers. Thats the issue right now, is you have no other real options in terms of selling it. So you take the bullshit price or dont sell it.

/u/nuclearswan OP · 1 votes · 2 weeks ago · Link

That's definitely another reason. There's more licensed stores in Colorado and Oklahoma than there is in Cali. Despite Cali's population being 8x larger. Those Cali stores are milking farmers. If farmers can sell across state lines, the world would be a better place. Doubt that will ever happen though.

/u/fasttrack23 · 1 votes · 2 weeks ago · Link

Ive read that 80% of californias weed ends up on the black market. they really fucked it up with too much greed and red tape.

/u/nuclearswan OP · 1 votes · 2 weeks ago · Link

That's 100% correct. Greed is killing the Cali market. Main reason why they have the most expensive weed as well.

/u/jomamma · 1 votes · 2 weeks ago · Link

They are able to use harsh pesticides not fit for human consumption, and or inorganic fertilizers.

/u/nuclearswan OP · 1 votes · 2 weeks ago · Link

That a fact. Hopefully as technology advances, growing will become more organic.

/u/dankservices ⭐ Star Vendor ⭐ · 1 votes · 2 weeks ago · Link

At best a retail store is paying their supplier %50 of the MSRP of their items. When you order online you can order direct from the grower avoiding the retail store mark up which goes to rent and staff salaries.

/u/nuclearswan OP · 1 votes · 2 weeks ago · Link

Most definitely. This alone should convince most people to buy directly from growers if they can.

/u/SudoPip · 1 votes · 2 weeks ago · Link

The Cartels have a ridiculous impact as well they have been laundering tons of money through dispensaries as well as setting up massive grow ops in CA. That is where most, probably the vast majority of the black market weed comes from.

/u/nuclearswan OP · 1 votes · 2 weeks ago · Link

This too. Cali weed is the most expensive for a reason. And it's not because they have the best weed. No offense to Cali growers.

/u/SudoPip · 1 votes · 2 weeks ago · Link

And the Chinese buying up entire neighborhoods to grow in the houses. There is a supposedly great documentary on this that I haven't seen yet lemme try n find it.

/u/dankservices ⭐ Star Vendor ⭐ · 1 votes · 2 weeks ago · Link

probably a housing investment angle, growing might yield them more per month than airbnb or renting it out while they wait for the property value to rise.