Putting The Black Market Out Of Business

Keith Humphreys wonders how states with legal cannabis will deal with illegal cannabis operations:

Law enforcement officials in Colorado and Washington will soon be grappling with the question of how to police illicit sales and production of cannabis after the legal cannabis market is in place. The logical approach would be to prioritize illicit market enforcement immediately after legalization takes effect. The enforcement and resultant busts would be coupled with press releases full of head-shaking quotes along the lines of “I can’t understand why people keep engaging in crime now that recreational marijuana is legally available”. Such tactics would help undermine the black market by driving people into the legal cannabis market.

Alison Holcomb, author of Washington state’s legalization law, responds in the comments section

1. Washington’s new marijuana law dedicates $5 million annually off the top of the new marijuana excise tax for administration and enforcement by the state’s primary regulatory agency;

2. As with the repeal of alcohol Prohibition, consumer demand will shift and likely have a greater impact on the black market than policing; and

3. Before the passage of Washington’s new marijuana law, the overwhelming majority of state marijuana law enforcement — 90% of marijuana arrests — was for simple possession, not manufacture or delivery. Now that simple possession is legal for adults 21 and older, significant policing hours have been freed up and could, should local jurisdictions so desire, be refocused to enforcement against unlicensed marijuana producers and distributors.