California’s Legal Weed Is So Heavily Taxed and Regulated That the Black Market Might Survive

California's Legal Weed Is So Heavily Taxed and Regulated That the Black Market Might Survive
“The situation in the market is pretty dire,” one major cannabis seller told us.

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As of January 2018, anyone over the age of 21 can walk into a store in California and pick up some marijuana. All you need is some cash or a credit card.

To learn more about how legalized recreational cannabis sales works, we tracked a product, the Kiva chocolate bar, up the supply chain—from seed to sale. We talked to cannabis entrepreneurs along the way to find out what’s changed for them operating in a legal state market.

And what we found was surprising: Anxiety about the future of the legal market under California’s highly regulated—and highly taxed—system.

Some industry insiders told us that if the legal market remains so overtaxed and overregulated that the black market will continue to stay in business.

“The situation in the market is pretty dire,” says Kristi Knoblich Palmer, COO and co-founder of KIVA, which had to lay off employees for the first time in the company’s history after recreational legalization went into effect. “That has everything to do with the cost of cannabis to the end consumer.”

Produced by Zach Weissmueller. Camera by Alex Manning and Weissmueller.

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California’s Legal Weed Is So Heavily Taxed and Regulated That the Black Market Might Survive

20 thoughts on “California’s Legal Weed Is So Heavily Taxed and Regulated That the Black Market Might Survive”

  1. MOM AND POP. PLEASE. MOST OPERATIONS ARE RUN BY GANGS. AND I'VE SEEN FIRST HAND WHAT THESE ASSHOLES DO TO NICE AREAS. THEY COMPLETELY TRASH THE PLACE.

  2. Honestly these are my favorite subjects colliding: The tide of marijuana legalization, and California destroying anything it touches. Good times.

  3. Regulatory reform in California???? Blah Ha Ha Ha Ha Ha Ha Haaa.. .That is funny! They are the most regulated state and one of the highest taxed state in the Union. Good luck with that wet dream.

  4. I could be mistaken but if there were not a lot of taxes involved, marijuana would not be legal. The pot heads will sooner or later be able to get through the bureaucracy. I am not even stoned and I have a hard time getting through it. The problem that I have with the legalization, is the notion that pot is somehow good for you. I guess if you do not mind, that it lowers your I.Q. for an extended period by 10 points. In many ways it is better than drinking. But it should come with warning labels not promoted as a health food. That said, it is in my opinion much better that it is legal, that we are receiving tax revenue from it. The further decriminalization of it, will slow the incarceration of people for pot sales or and related crimes. We will not have to pay to keep them incarcerated if nothing else. Also, these related crimes hit the minority population much harder than Whites and Asians. Having a criminal record can destroy a life, create hardships in a a community. Getting a criminal record early in life, is a sure way to poverty. I know that many people want to blame the "White Man" for all of the minorities problems. The fact is that drugs are illegal is a much bigger problem for the minority population than any racism. We need to empty out our prisons, and bring the Black man back into the family. Illegal drugs is the main reason they are in jail. There are a lot of good reasons to make Pot and I believe all drugs legal, including the argument that illegal drugs would harm these communities more than legalized drugs. Bringing up the Minorities in our population would benefit the country as a whole. But people do need to quit claiming it is a health food. That is just my opinion, I sometimes am wrong.

  5. Marijuana should be sold for like 1 penny per gram, at an insanely unprofitable rate for drug dealers. Just make Govt workers grow weed paid at min wage, and distributed in mass quantities to the point there's zero reason to use illegal weed. And most importantly no money to be earned from illegal drugs. No black market.

  6. I feel the same way regarding Colorado's over regulation and over taxation of cannabis in that it could easily go back to the black market thanks to greedy and petulant politicians of both parties.

    We were told that cannabis would be regulated like booze; but that's far from the case here. I support sane regulation for product quality and sane taxation for obvious purposes. But for now, I'll stick to my life long drug of choice…booze as it's easier and cheaper to buy.

  7. Other states have done well, but California is way overtaxed. A gram of top shelf weed is $15-$20 a gram on the legal market. On the black market it’s $5 a gram or less. This is the price difference they are worried about. I know that I have not bought anything from the new overtaxed and honestly (predatory) cannabis stores. One place I went to tried to force a purchase of a a bag string that it was the new state law, which in reality it is not the case as they can just staple the bag shut and not make extra profit on top of the overtaxed cannabis and over priced mark up at the store.

  8. We were out in SD last August and I was talking with Californians exactly about this outcome. Until you have tax reform in California (and anywhere else). And the biggest proponents to seek out and arrest those using it for recreational use will continue to be the prison guard unions and the legal producers of cannabis. The argument I remember Californians making to me was that this was going to poach the Mexican black market pot. I made the argument of what is happening to faces that were dumbfounded because they just couldn't comprehend this would happen (even though this is what always happens in California).

  9. I always hate the argument for govts to capitalize on anything. It's always implied, that somehow magically, it will make the tax sting people feel not hurt as bad.

  10. this is a very very important topic across america behind the doors of many people. theres so much more to say an forecast than whats being said here. this was a great watch and has great info. the lady with the green house puts in work but theres no way any part of that team was apart of the mid/nor cal weed scene with those lights. if they were they wouldve known that theyre customer list would drop from 300 to 50. plenty more knowledgeable people even in the hills. dont go to jungle boys tho, they snitch on grows

  11. Can confirm the dealers in my area are thriving cuz this tax is bullshit even with a med card its insane

  12. The discrimination against recreational drug users in general is disgusting. It's the new racism.

    Not your body, not your fucking business. No politician and certainly no law enforcement owns us. We are not biological property. It is asinine that this is gone on as long as it has.

    Straight up, they take their dumb fuck arbitrary opinions and make it law because they're a bunch of scared shitless Jesus Freak stuffy butt club wielding Neanderthals…

    They're like gangsters who want their cut and not only will they take people's lives and property, they will enslave everyone through taxation to do it. They win in every regard…. Then there's the privatized prison industry and blackmailing people into joining the military. Fucking terrorists. Land of the Free my ass.

    Then of course they want to take away our guns so we can't defend ourselves from their enslavement. Big fucking surprise there.

    The truth is that regulated markets don't fucking work. They need to get the fuck off of us and off all these substances that nobody fucking owns.

    Everybody's arguing over these trifling details of medical marijuana and recreational marijuana instead of banding together to tell the government to get the fuck off us, period.

    The homemade label is all you need. There is no debate. Not your body, not your fucking business. What two adults decide to produce and sell to each other is between them and nobody else. You put the homemade label on that shit and whoever is buying it and taking it is agreeing to trust whoever's making it. That's the only way to do it. That keeps the price down and prevents people from robbing each other over it.

    Everybody can be involved in the market and may the best product win, for the best price… a competitive free market is the only way to do any of this.

    It's not the government's job to tell us what we can and can't do when it comes to our own bodies or substances.

    It's on parents to take care of their own kids and it's on adults who produced or possess drugs to keep them out of the hands of kids.

    It's basic common sense and basic Community responsibility. No different in application to alcohol or aspirin.

    Stupid mother fucking fascist pieces of shit. Greedy fucking cunts.

    All they're really doing is terrorizing the poor… anybody who distracts away from that is an enemy of all life and an enemy of freedom.

    This is the failure of democracy and evidence that the stupid have overpopulated the planet.

    Yep, you can suck my dick, World or why don't you just kill me now?

  13. Like it or not Jeff Sessions is right. Colorado has a huge problem retaining sober employees. It was cannabis a year ago. Now its meth and heroin that workers are getting popped on.

  14. Commiefornia what do you expect. I really feel bad for those people from Cali. But I don't want them moving to my state.

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