The illicit market first became a ‘market’ or more widely known problem in the 1940s when the government began strict rationing across Europe. At this time, it was referred to as the ‘black market,’ which was, and still is, an extremely broad term and consists of many economies.
The illicit cannabis market is alive and well, with Americans expected to spend more than 60 billion dollars on unregulated cannabis in 2020 alone. This is more than double what our legal markets are projected to hit by 2025. When people purchase from the illicit market, they subject themselves to a variety of unknown dangers. Without regulations on the nutrients and pesticides that can be used, or requirements for microbial testing, consumers have no idea what quality of product they are putting into their bodies. We have seen how deadly this can be, most recently, with the many people harmed by vape cartridges and pens from the illicit market containing dangerous cutting agents.
Purchasing from the illicit market removes the tax revenue that would have been collected from a regulated facility. In states where regulated facilities exist, purchasing illegally robs local businesses of sales despite their steps to ensure their products are safe and legal. We have seen this in states like California, where licensing has been a mess for years due to an ongoing backlog, allowing illicit facilities to operate side by side with regulated ones. With states like Oklahoma, where there are no licensing caps, and almost anyone can get one, we see a whole new problem. Out-of-state transportation. Due to the very lax regulations in the state, Oklahoma medical patients often see inferior quality products on the shelves of their facilities, as well as products that have been transported in from out of state.
The items transported come from illicit markets from the saturated states with regulated cannabis (such as Oregon, Colorado, and California). Unfortunately, Oklahoma does not yet use a state inventory tracking system such as METRC, as many other states do. As of September 2020, Oklahoma signed a contract with METRC and plans to begin state-wide tracking in February 2021. Until then, the facility operators will continue to ‘self-regulate.'
Oftentimes pricing is what drives consumers to the illicit market due to the higher price of regulated cannabis as a result of the testing costs and taxes. However, many customers began to transition to the regulated market during the covid-19 pandemic, as people became more aware of what they were inhaling or consuming. Additionally, many of the regulated states have continued to loosen strict regulations and reduce the high costs involved with licensure. This will allow the facilities to lower prices for their patients and customers and offer another incentive to transition away from the illicit market.
There can be a happy medium between the extremes of regulation, where there is a fair opportunity for all without opening the doors to just anybody. With federal legalization on the horizon, the illicit market could become only a distant memory. Until then, each state involved in regulated cannabis holds tremendous responsibility to their customers, employees, and prospective states to operate with the utmost integrity and morality. The more we learn, the better we get.
At enVgrow, we see safety as a top priority and appreciate the businesses that have taken the necessary steps to ensure they offer a safe, quality product to their customers. If you have a licensed cultivation or extraction facility and are looking to increase your yield's efficiency, quality, or quantity, we can help! Our goal is to help you optimize your facility while providing a safe environment for your plants and people.