Consumers Will Pay More for Legal Weed Than Black Market Bud, Study Says
As America’s green rush grows more fruitful by the day, customers are expressing their cannabis legalization advocacy with both their voices and wallets.
Published on September 14, 2018

Is legal weed really superior to black market bud? If you ask the average consumer, the answer is a resoundingly clear yes, with new research indicating that most pot smokers are willing to pay up to $14 a gram if they can get their stash from a licensed dispensary.

The new research, published in the journal Addiction this week, tallied the spending habits of 721 adults living in U.S. states where recreational weed is legal, eventually concluding that the “demand for legal cannabis was significantly greater than for illegal cannabis.”

Since Colorado first legalized cannabis for adult-use in 2014, politicians and prohibitionists have consistently derided local reform as cover for the plant’s illegal market, conjuring images of a wild west pot industry across California, Oregon, and more.

From a customer standpoint, though, the safeguards of mandatory product testing and the appeal of brand names and open customer service are significant, and when given the option, researchers say cannabis users are confident that legal weed is worth the regulatory and tax-fueled price hikes seen across the recreational market. 

Still, everyone has limits, and the study’s respondents did indicate that they would return to the black market if prices spiked too high. But considering recent reports about deadly pesticides used in illicit cultivation, as well as products rejected from legal supply chains for contamination, it’s clear why a customer in California or Colorado might feel more comfortable shopping in a dispensary over an exchange in a dealer’s car.

“[This] study provides empirical evidence that cannabis users treat legal cannabis as a superior commodity compared to illegal cannabis, and exhibit asymmetric substitutability that supports the use of price policy that results in higher consumer costs for legal cannabis relative to contraband product,” the new study’s authors concluded. “These findings suggest that availability of legal cannabis generally does not incentivize and expand the illegal cannabis market, unless the price of the legal product is too high. Pricing policy will need to be optimized to maximize the benefits of a legally regulated cannabis marketplace."

According to Marijuana Moment, a study surveying Canadian cannabis users published earlier this summer found similar preferences for legal weed over black market bud.

Of course, the underground marijuana trade is not only a product of consumer demand, but a result of federal and statewide roadblocks, as well. As long as there are places where weed is still illegal, there will be incentive for growers to move product out-of-state for higher prices. And as long as regulators in legal states set high financial and political barriers to entry, a portion of the community will continue to skirt those rules.

But as America’s green rush grows more fruitful by the day, and officials from the Golden State to Massachusetts continue to evolve their practices and regulatory mindsets, customers are expressing their cannabis advocacy with their voices and wallets, with the black market fading in the rearview mirror.

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Zach Harris
Zach Harris is a writer based in Philadelphia whose work has appeared on Noisey, First We Feast, and Jenkem Magazine. You can find him on Twitter @10000youtubes complaining about NBA referees.
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