Strict Marijuana Laws Encouraging Black Market Purchases

With legal medical marijuana rapidly expanding across the United States, most expected to see pot's black market fade away. However, illegal marijuana continues to thrive in several states despite relaxed laws that allow people to buy the drug legally. High costs and limited availability are keeping illegal marijuana markets afloat and those markets are giving marijuana a bad name.

New States, Strict Laws

When states make medical marijuana available for the first time, the rules governing the drug are typically much more strict than in other states. This is especially true in Minnesota, where medical marijuana became legal in July. Minnesotans who wish to use medical marijuana must first qualify for one of nine conditions allowed to be treated with cannabis. However, once they've qualified, the patients are forced to pay high prices which their insurance won't cover.

A vial of marijuana extract in Minnesota costs $130, while in Colorado the same product runs around $65.

Related Link: Medical Marijuana May Help Transplant Patients

Enter The Black Market

These price differences have allowed black market dealers to push their products effectively even in states where pot is legal. Taxes, delivery costs and approval standards have made legal marijuana exponentially more expensive in certain states making it difficult for dispensaries to compete with their illegal counterparts.

What To Do?

The black market is unlikely to subside until marijuana firms have more control over their own operations. At the moment, any company that deals in cannabis products is unable to engage with most banks, making day-to-day tasks like paying employees difficult. Federal tax laws also prohibit pot-based businesses from taking deductions, something that has significantly undercut the profitability of marijuana firms.

Many believe that until marijuana becomes legal at a federal level, the black market will continue to have the upper hand on legal pot.