Jacob Sullum reports on its persistence:
“The black-market prices are definitely lower than recreational prices,” says Michael Elliott, executive director of Colorado’s Marijuana Industry Group. “The taxes are a big reason why, the new testing requirements, the packaging requirements, and basically this whole hurdle of the extraordinary expenses people have had to go through to open these businesses. Another reason is that the businesses have had limited supply.”
But, as prices fall, the black-market is going to shrink:
Kayvan Khalatbari, co-owner of Denver Relief, a medical dispensary that started serving recreational consumers in July, says after-tax prices in that market average $50 to $60 per eighth. He expects those prices to plummet by next year, however, as growers ramp up production and new suppliers enter the market. As of October 1, dispensaries no longer have to grow 70 percent of their inventory, and businesses dedicated to cultivation will be allowed.
“I would not be surprised, given the flood that’s going to happen, if we see $10 and $15 eighths by early next year,” Khalatbari says. “I would believe that. I could see ounces being sold for $50. I truly see that happening, because there is going to be so much competition [and] people are becoming so efficient in their production. They’re automating much more. We’re seeing best practices settle in. There’s less risk in operating because people are operating at a higher level. I think we’re going to become a very efficient industry very quickly. We’re going to see competition, and we’re going to see prices hit rock bottom early next year.” At that point, he predicts, the black market will dwindle away.
The Dish 