Good news. Your dealer is fine. Cannabis blackmarket thrives as legalization expands.

Anne Marie Fisher, Green Market Report

Despite legalization continuing to spread, and efforts advocating towards federal legalization of cannabis, the black market in the U.S. for cannabis continues to thrive across the nation.

Simply put, despite access and legal product being available, people are still as or more likely to purchase their cannabis from black market sources, with this trend not showing any signs of stopping.

Consumer Research Around Cannabis, a U.S. research company specializing in data for the cannabis market released data from a survey that tracked where people were sourcing their cannabis in many major U.S. states.

Black Market Sales In Fully Legal States

Here are just a few snapshots of cities, and where their citizens are sourcing their cannabis, in some of the legal recreational states:

Denver, Colorado: In Summer, 2018, 9.4% of survey respondents were still purchasing cannabis non-legally, a small incline from the 9.2% of the previous year. In comparison, 28.4% were purchasing from legal markets in 2018, up from 26.6% the previous year;

Las Vegas, Nevada: Illicit market purchases rose from 9.7% to 12.8% from Spring to Fall 2018. At the same time, legal purchases rose from 21.5% to 29% in the same time period;

Seattle, Washington: Purchases in the illegal market rose from 7.8% to 10.3% from Winter 2018 to Winter 2019. Purchases in the legal markets rose from 25.6% to 28.6% during this time period.

Comparison of Legal and Non-Legal Purchase of Cannabis Among Adults 18+ in Four US Markets Where Recreational Cannabis Purchase Is Legal, 2018 and 2019

Market Denver Portland          Las Vegas       Sacramento

Visited legal cannabis retailers/dispensaries at least once a month or less 28.4%  28.3%  29.0%  17.9%

Non-legal purchase    9.4%    11.1%  12.8%  11.9%

Non-legal purchase as a percentage of legal purchase        33.1%  39.2%  44.1%  66.5%

Massachusetts recently legalized adult use cannabis sales and BDS Analytics believes that its black market sales will fall from 90% in 2018 (when recreational sales were illegal) to 76% in 2019. However,  the state has been slow to issue adult use licenses to retailers. Until the dispensaries are open in larger numbers the black market consumers aren’t likely to make the switch if it is inconvenient.

Black Market Sales in Legal Medical States

Here is a snapshot of cities, and where citizens are sourcing their cannabis, in some of the legal medical cannabis states, showing a trend of an increase in illicit market purchases:

Albany, New York: Illicit market purchases rose from 8.5% in Winter of 2018 to 12.5% in just a year; at the same time, purchases in the legal market rose from 4.1% to 9.6%;

Cincinnati, Ohio: In Fall 2017, 9.9% of survey respondents indicated they bought from the legal market, compared to 12.4% in Winter 2019; legal purchases rose from 4.2% to 6.6%;

Detroit, Michigan: Illegal purchases rose only slightly from 11.3% to 11.6%; legal purchases rose from 26.6% to 28.4%;

Jacksonville, Florida: Illicit market purchases rose from 7.1% in Fall 2017 to 11% in Winter 2019; at the same time, legal market purchases rose from 3.4% to 7.7%;

New Orleans, Louisiana: Between Winter 2018 and 2019, illicit market purchases rose from 7.3% to 12%; there was an equally large jump in legal market purchases from 3.6% to 10.6%.

In these medical states, illicit purchases, according to this survey, slightly declined:

Minneapolis, Minnesota: In Spring 2018, 9.4% of respondents were purchasing from the illegal market, in Winter 2019, that number had declined to 6.8%; legal purchasing rose from 4.3% to 7.2%;

Pittsburgh, Pennsylvania: In the spring of 2018, illegal spending was at 9%, and had fallen to 7.8% by fall; legal market purchases rose slightly from 5.4% to 6.4%.

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