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Comment by shittyadmin | Hacker News Reader

> The initial tax rates for pot will be much lower, but should increase steadily year-over-year. Alcohol taxes continue to rise every year.

The problem is they've got to play this game very carefully right now as the black market is still well established and providing to many people.

They need to both drop prices (which should happen once more supply spins up) and start raiding illegal dispensaries and mail order shops if they want to convince people to stay in the legal system. From what I've seen on reddit - we need to see a significant price drop and potentially quality improvement before many existing regular users will be convinced to switch.

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Personal anecdote, I was a heavy cannabis user in Colorado when it became legal. In the beginning most people still would purchase green from their dealer to avoid the the high tax. Over time, most people simply switched to using dispensaries for the convenience and selection. I no longer live in CO but of my cannabis friends there, almost everyone I know uses a dispensary now.

Are you and your cannabis using friends white? Colorado actually tracks these numbers and has found for years since legalization that about 50% of "street" level sales are illegal and 50% go through dispensaries. Minorities are significantly more likely to purchase it illegally and whites are significantly more likely to purchase it legally.

Yep. CO in general is a very white state so I wonder how relevant that is? It is interesting regardless.

Are there still people who buy/sell illegally? What's the price difference, if you have any idea?

I no longer live in CO, at this point I assume most people who buy off the black market just have a friend with a lot of plants who can grow it at a cheaper price.

From personal experience (as an Oregon resident, not a drug dealer), it will be incredibly difficult for black market sellers to compete with the technology and economies of scale that large companies will bring to bear on the cannabis market. Taxes would have to be much, much higher (200%?) to allow for significant black market competition. Of course there will always be some fraction who buy "under the table" just as there will always be some people who prefer to brew their own beer but overall their impact is negligible as a proportion of the whole.

I completely agree, however we just need to see that in effect - and it's not yet visible on the marketplace currently.

Meh, what people say on reddit and what they do are two different things. Folks might hold out for a bit, but I imagine most folks will pay the “convenience fee” and pop down to the shop on the way home from work. As a WA resident, at this point if I had to go tracking down a dealer, I’d go back to not smoking.

A lot of people currently use illicit mail order services, which puts it pretty much at the same level of convenience as government run online shops at the moment.

Fair enough, much different situation than the U. S., I guess. I'll admit to be being pretty surprised that the government's solution to not having brick-and-mortars up and running was, "well, would it be okay if we just mailed it to you?" Umm...hell, yeah?

It wasn't a surprise to me.

All medical cannabis in Canada has been shipped via Canada Post for almost two decades, and the same set of producers are handling recreational supplies. Extending this to recreational seems like a straightforward way to get things started.

Can't all these (once?) illegal growers sellers just do so legally now?

Not talking about someone who buys an ounce and sells 3/4 so they get a 1/4 for free, but those doing it as a business, making good money.

About 15 years ago used to grow and sell in the UK, nothing too major, about 1 to 2kg a month would get cropped every month of the year. If the option presented itself to pay tax on the profit in order to remove the hassle and fear or banking the money I would have taken the hit of lost profit in a heart beat.

Is this not being offered to existing growers / suppliers / dealers? I can understand perhaps not as a long term solution, but as a transition period

They don't just tax the profit, do they? If they tax the sale price, it's pretty easy for the taxes to exceed your profit margin.

Nope, existing black market growers are shit out of luck, you need to have a license from Health Canada to grow commercially (over 4 plants personal), they're barely allowing movement of plant seeds from the black market into the legal system, but that's about it. If you're a black market grower you must still sell illegally.

Since cannabis is legal through out the country maybe the banking system will touch it. Illegal dispensaries wouldn't stand a chance compared to a legal one that could accept bank and credit cards.

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