Even though weed is becoming legal in more and more places, there are still so many illegal grow operations taking place. At first glance, this might seem unreasonable and confusing, but a closer look shows us why this occurs. Taking Europe and the USA as an example, we explore why people might want to grow illegally within a legal market. Keep reading to learn more.
In the globally changing cannabis market, the last thing we expect during legalization is an increase in the illegal commercial growing of cannabis. It comes as a huge surprise that despite efforts to legalize cannabis across the world, there is still an enormous black market.
This article is an exploration into the phenomenon of a growing black market in the face of global cannabis legalization. A look into the economics between a legal and illegal market gives us an idea of how they affect one another. It seems that for the most part, worldwide legalization of cannabis could thwart a black market entirely and its repercussions on the legal market.
The Netherlands as an example
Before delving in to why people might want to grow illegally in a place where it is legal, we can look at the Dutch model as an example. It is an interesting example of what might lead people to growing illegally in a legal state.
For a long time, licensed coffee shops have been allowed to sell cannabis in the Netherlands, but commercial growing operations have always been illegal. Growers have been limited to a small number of plants, but the demand has been too high to be supported by smaller grow operations.
As a result, growers resorted to operating large-scale grow operations, and coffee shops need to buy their stock from criminals or need to illegally grow their own cannabis.
Recently, things have started moving in a positive direction in the Netherlands, with the previous government passing a bill to decriminalize cannabis cultivation. That bill didn’t make it through the First Chamber yet, but in the meantime the new government has agreed to do an experiment with regulated cannabis cultivation.
It is natural to hypothesize that this would mean the end of illegal growing operations. But that is not necessarily true until we see some stabilization within the global cannabis industry. As we can see from the US model, legalization doesn’t necessarily come with the eradication of a black market, as there are still incentives for illegal growers.
Why might people want to grow illegally?
Even in the USA, where weed has become legal in so many states, there are still people with illegal growing operations, and the black market heavily affects the legal market.
There are several reasons why people might resort to growing illegally, but the biggest factor is of course, money. It is still illegal to grow and possess cannabis in many states in the USA, and those living in legal states can make a lot of money by growing illegally and then exporting it to those places where it is still illegal. It’s all about money.
The legal industry in the USA has made it entirely possible for people to pull this off quite successfully, especially if the grow is happening in a somewhat legal context. The price for weed in illegal states is much higher than that in legal states. So, there is big money to be made in growing weed in a legal state and transporting it across the border.
Another reason people are illegally growing weed is that they have no patience. This might not be without justification, as in states where it is hard to obtain medical cannabis, the easiest and quickest solution to give loved ones a cure is to grow your own. This doesn’t heavily contribute to the black market because it is not really about economics, but about last medical resorts.
To put it simply, growing illegally isn’t that hard, especially in states where cannabis is legal. This situation makes it less likely to get caught. As a result, people do it. It’s the principle of, “I do it because I want to, and I can”.
How illegal cannabis farms affect the environment
Every industry is highly concerned with money, whether it is the cannabis industry or the mango industry. With legal cannabis growing, a lot of money and research has been invested into finding a sustainable way to grow. Legal cannabis is the result of decades of research and scientific application. However, in the case of illegal growing operations, the environment, health and sustainability are hardly factors of consequence.
Illegal grow operations are usually concerned with producing a lot of weed, and fast. They resort to chemical herbicides and pesticides, and the treatment of the soil is not one of their top priorities.
As a result, the land on which these growing operations take place become completely barren. In the past few years, there has been huge media attention on the environmental impact of illegal grow operations in California. The amount of waste that is created by these grow operations is completely unsustainable, as well as the amount of chemicals used.
This isn’t about someone growing a couple of plants in their closet, although that, too, can be unsustainable if not done correctly (especially concerned with the power consumption). The illegal grow operations we are talking about here are those on a much bigger scale whose impacts on the environment can be irreparable.
How does the black market affect the legal market?
It doesn’t take an economist to know how the black market affects the legal market. Of course, illegal sale of cannabis completely undermines the legal production of it.
When there are criminals making more money than honest cultivators, there is some sort of imbalance taking place. When the black market is worth more than the legal market, the entire industry suffers and becomes financially unsustainable.
There is a catch 22 for consumers, because they are interested only in having a product that is of high quality and that they can afford. In states or countries where cannabis is illegal, the only way to satisfy need this is through a black market. Having said that, there is no competition for a legal market.
In states or countries where cannabis has been decriminalized in some form, the black market still has the tendency of catching the consumer for the sheer fact that prices are usually lower, while quality is often maintained (although not regulated). This is especially true in the USA where laws work on a state by state basis.
Inevitably, this system leaves legal growers between a rock and a hard place – wanting to invest in legal cultivation but obviously not wanting to lose to a growing black market.
How to fix the problem moving forward
It might sound extreme, but the really simple answer is to legalize cannabis worldwide. Legal weed is usually much cheaper than illegal weed, and if it were legal everywhere, there would be absolutely no need for a black market.
A black market only really exists for products that are illegal, and if a black market persisted after global legalization, it wouldn’t be worth much to really care about. There’s no black market for tomatoes, right?
If weed were readily available to everybody, there would be no point risking persecution by growing illegally.
We need to accept that there is a human tendency towards “taboo”, and that there might be some kick out of doing something illegal. It means that even in the case of global legalization, there could still be a black market for cannabis. But the chances of it being worth anything at all are slim, because a high-quality product will be available legally.
The same way people grow their own tomatoes: Because it’s fun to cultivate your own vegetables, people grow cannabis for the sheer enjoyment of it. In your own growing operation, you can manage and control everything that goes into the process, and you get to see your babies grow from seeds to harvest. This is just the kind of thing that would make a black market fizzle out.
So, in order to move past a black market, we need to give no reason for a black market to exist. It seems that the only real way to do this is to make it completely legal around the world. Only time will tell!