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Comment by hereforphone | Hacker News Reader

Wait I was told that when it was legalized there would be no more underground drug market. Seems things aren't as simple as they seem on the surface.

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This is something pot activists have complained about from the get-go. Legalization was sold to politicians with the promise of high taxes. We knew that poor users would be priced out of the market, that legal weed would be a privilege enjoyed by the rich, that dealers with criminal records would be shut out of the legal market.

> Legalization was sold to politicians with the promise of high taxes. We knew that poor users would be priced out of the market, that legal weed would be a privilege enjoyed by the rich

Poor users seem to enjoy a lot of legal alcohol. Taxes on that are high too, and it's even easier to make your own alcohol than to make your own weed.

This isn't a terribly apt comparison. The competition for weed is not individuals growing their own weed (which, in fact, requires land which the urban poor do not have access to), but with (a) well-established growers who have been continually operating in the black market, and (b) new legal growers and their employees who can skim some of their product for "personal use".

Individuals can and do make their own alcohol -- and it's a really expensive hobby to get it right. In terms of price per unit volume, distribution of illicit alcohol is quite problematic. You can easily fit $500 of weed into 1 liter (local prices and densities vary). Retail booze is less than a tenth of that. Bad booze would be even lower. This is a substantial impediment to the risk/reward calculus for street-level sellers all the way up to producers.

And historically when even more alcohol was consumed there was a massive bootleg and moonshine industry. In the end, most likely the people running it have simply died of old age and the newer generations prefers other things.

Liquor licenses and marijuana licences are very different in availability and, due to how the products are consumed (alcohol being very central to social gatherings), the necessity of having a license is more important for alcohol.

The majority of poor people have neither the time, space, know-how, or desire to make their own alcohol or weed.

But it's an awful lot easier for a dealer to sell weed to a hundred people than for them to sell bottles of alcohol to a hundred people.

One will get you in severe trouble in a lot of states.

Alcohol has long shelf life, can be easily produced at large scale, etc.

Selling flower buds of a plant will hardly be accessible. But the industry will eventually find a way to make a viable cannabis product from waste.

> it's even easier to make your own alcohol than to make your own weed.

It sure as fuck isn't. There are parts of the world where putting some free seeds in the ground is sufficient.

People make alcohol in prison toilets. That’s not really far from “throw seeds in the ground”.

It's also not really safe to drink. Probably unlikely to kill you, but you're not going to get any assurances E. coli isn't in there.

It's pretty hard to mess up growing weed bad enough to hurt someone, unless you poison yourself with pesticides on accident (which aren't really necessary at least at the personal scale). If something bad happens, it's almost always to the plant.

Sure, you can make alcohol yourself. Then you discover some batteries increase the kick. Then you realize a drop of methanol just takes it to insane levels. Then 2 drops kill or blind you.

A high proportion of the booze consumed worldwide is what the bureaucrats call "unrecorded", and poisonings are exceptional.

"Two drops" of even pure methanol won't do anything to you. Not even close.

Of course I don’t know the LD50 of methanol, but I do know it’s quite close to whatever gives you the kick.

There's still an underground cigarettes market in my country. It helps that we (a EU country) have a land-border with some other non-EU countries, we have very high taxes on cigarettes (compared to our revenues, at least), they don't, it's only natural that money will find a way.

The authorities do announce "contraband cigarettes captures" every week or two but I'm pretty sure that's just scratching the surface. They've recently also managed to "capture" an An-2 (great plane) on its way back from a contraband run, pretty cool.

[1] https://www.digi24.ro/stiri/actualitate/evenimente/un-avion-...

It's not just the taxes. It's how hard it is to sell weed legally. All of the hoops and expenses add up. In Florida, it's like 20 licenses that cost $25M each. We should make it as easy as selling alcohol and then the prices will match.

Is your claim that it costs half a billion dollars to setup to sell weed legally in FL? That defies all order-of-magnitude estimation.

No, $25M is the open market price for a license charges a company to pick up a license. Looks like someone sold a license for much more (0). Only 22 licenses for companies in Florida have been granted (1). In Florida, companies have to vertically integrate their whole supplychain and not mix with any other cannabis company. It takes opening like 50 dispensaries under a license to break even. Florida sells $1.2B of cannabis a year & $500M in acquisitions were completed in Florida last year.

(0) https://www.tampabay.com/florida-politics/buzz/2019/10/15/fo...

(1) https://mjbizdaily.com/florida-medical-marijuana-operators-b...

(2) https://mjbizdaily.com/cannabis-msos-on-buying-spree-in-flor....

There's an underground market in cigarettes in high-tax states of the US also! https://www.npr.org/templates/story/story.php?storyId=129934...

From the original article: “Mandelman’s office pointed to a Dec. 19 report from the California Legislative Analyst’s Office that found that increased state cannabis tax rates were directly linked to illegal cannabis sales.

In addition to the illegal sales, increased theft is also creating problems for cannabis retailers.”

I’m sure other factors are that retailers have to pay rent and payroll taxes. I have no idea what the price differential is, but I could imagine it being quite significant.

Making things illegal doesn’t mean it goes away. Most often, it just makes it more expensive because people are exposed to more risk from selling it. But if you don’t enforce your laws and there is no risk, then of course the legal version of it can’t compete. If the city didn’t enforce any of its awful zoning laws, housing would be super cheap.

Another problem with dispensaries is that banks will not allow them to use them. That means they end up being cash only, and a huge target for burglaries. There is a bill passed by a huge margin in the house in April, but the senate hasn’t taken it up yet, called the SAFE Banking Act.

Threat of violence is the only true currency, the final turtle at the bottom of all other currency turtles.

It’s pretty clear that any argument of that form comes with the obvious caveat that excessive taxes or fees for the legal product wouldn’t cause the underground market to disappear. Obviously if it was “legalized” but there was a $1,000 per ounce tax, we would expect the illegal market to continue to thrive.

Depends on how much regulation you place around the market. According to wikipedia, most cities and counties in California have banned cannabis retail, which is just one thing likely to contribute to an ongoing black market. I imagine there are others.

It certainly reduces gang violence and fake or tainted drugs.

But I don’t think it really reduces the amount of fake or tainted drugs, at least not for those who really suffered from the prohibition.

The heavy taxation and the strict regulation of the market creates a massive cost overhead. Even the lowest quality of legally sellable weed is so expensive that it’s out of reach for poor consumers. The undergroud market may even be able to offer the same quality product for a fraction of the price, for obvious reasons of course.

So many people, especially those with less financial stability, will still choose the underground market over legal options. Also, I’d assume that since the legalization, the pressure by law enforcement has dropped quite a bit, at least for consumers. This would make the underground an even more compelling choice.

How common is fake pot, though? I mean, surely young folks try to do stupid things to other young and stupid people (fake and tainted drugs). Occasionally folks don't get the quality they expect. But all this stuff means you lose customers and you continually need new folks to dupe.

"fake or tainted drugs" has always seemed like a bigger problem with different categories of drugs.

Additionally, I'm not convinced it actually reduces gang violence since we still have a thriving black market.

Nope, fake and tainted weed is a very real problem when it's illegal.

I've seen cannabis with plaster mixed in; glass beads, added ketamine, synthetic fibres; anything cheap to increase the perceived effect and weight. And all of those are safer than legal synthetic 'weed'.

The THC to CBD ratio is completely impossible to control when in prohibition areas. Dealers select for maximum THC to minimize weight to effect ratio, which is the opposite of what you want if you're trying to protect people from any possible psychosis trigger.

People who are self medicating with cannabis in illegal countries have very little control over these factors. If they try to grow their own they can get prosecuted as suppliers and face higher sentences than rapists.

Ketamine is a bit harder to come by than cannabis, and at a dose that anyone would actually feel, it's going to make the weed more expensive. That just doesn't make any sense.

It makes perfect sense if you're an organized gang stealing horse tranquilizer, and adding it to awful quality hash that's been mixed so much with garden waste that it barely works.

It's not seen as much these days, but was literally a nationwide problem in Ireland for well over a decade.

FTR, ketamine is much more than a "horse tranquilizer" - it is used extensively in emergency rooms, for depression and neuropathic pain, and in general vetinary medicine. And of course, it has wide-scale use recreationaly.

I presume the "horse tranquilizer" moniker came about as some kind of anti-ketamine propaganda.

You're not wrong; but I meant it quite literally, as in, it was being stolen from vets and thrown into incredibly shitty hash.

I find it hard to believe people would mix $100/g ketamine to make $10-$20/g weed have more mass. US prices

The ketamine was for effect on very weak hash, not mass.

And did I mention the theft, in the very short comment you're replying to.The US might have a thriving K market but 90's Ireland did not.

Here in Europe, there have been a lot of cases where sort-of-legal CBD weed was laced with sort-of-legal synthetic cannabinoids, which are essentially research chemicals (i.e. nobody really knows about their long-term effects and risks). If it's done right, the end result is not easily distinguishable from the real thing, but it's cheaper and safer to obtain for the dealers.

I think k2 shows up occasionally.

How easy/legal is it to grow your own in CA? If it's very easy, the underground market will probably be entirely homegrown, and still beneficial to the local economy even without tax income. If it's hard or illegal to grow, wholesale importation from cheaper areas will continue funding criminal logistics operations, and most of the revenue will leave the area.

It's almost like demonizing a plant was never something that should have happened in the first place.

I do believe it could eliminate most of the illegal marijuana market, but only under a government and voting population that considers reducing taxes and this kind of crime to be important priorities. It's never going to happen in a place like California, surely.

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