Before marijuana was legalized, it may be fair to say that it operated on a black market.
Interestingly enough, legalization of the substance has not gotten rid of the black market – but rather, Politico reports that it has fueled it. According to the article, there are unlicensed businesses in Los Angeles – more of them than legal ones; Oregon has low-priced legal cannabis products, so many that illegal growers have started exporting their goods across to states where cannabis is illegal. These issues have left law enforcement overwhelmed and each state has its own issues that it's tackling in relation to marijuana and the black market.
The article adds that California troubles are more than just unlicensed businesses. The price of legal cannabis is high due to state taxes, and it may not be worthwhile enough for existing businesses to go through the licensing process, which is complex. As a result, many businesses opt to operate in a gray zone.
Similarly, Massachusetts-based cannabis businesses are still operating on a black market. Though there are legal dispensaries, not many of them provide good product. As a result, the good products operate on a black market. Steve Hoffman of the Massachusetts Cannabis Commission shared with Politico that the state’s cannabis market may continue to exist until the federal government fully legalizes the substance. And not only that, also until the federal government provides access to banking so that marijuana businesses have an easier time setting up shop.
As for California, Kyle Kazan, CEO of California Cannabis Enterprises, shared in the Politico article, “California is so big, the problem is opportunity.” He added, “You better have a lot of money and a whole lot of patience, because California is not for everybody.”