One of the more interesting questions that inevitably comes from legalizing marijuana at a large scale is what happens to the stuff that had been sold illegally for decades. Does the market dissipate rapidly due to its lack of convenience, or remain steady because of zero taxation?
Some actual data has come out of Illinois describing what’s going on. This state has been killing it in marijuana sales ever since it legalized recreational marijuana last January, but the data shows that high taxes are causing some to turn back to the illicit market.
High estimates of legal sales this year are at $1.9 billion, which is staggering. However, that doesn’t reach the level of estimated illegal sales, which is projected at $2.2 billion.
Before taxes, the average legal eighth in the state costs around $60. It’s quite high, and much more so after taxes are included, bringing it up to $80. This is a steep hill to climb considering you can go illegal and pay just a little more than half that.
In the long run, it seems legal marijuana will eventually win out. A chart by New Frontier Data shows predictions for the legal market to overtake illegal weed by 2022.
But all of this depends on the pricing of the legal market. If taxes continue to be astronomical, the sharing of the demand may be even more elongated than the chart suggests.
Read the original at the Chicago Sun Times.