USA: Different Regulatory Markets Mean Short Term Boom For Cannabis Black Market

19 April 2016

…….Leaving a market where possession is becoming no more serious that a traffic violation.

Thus creating an environment where product can only be accessed via the existing black market ntworks

The following Vice article on the subject makes a very good read especially in the week where the UN are in the city debating proposals that may take marijuana off prohibited schedules

As the liberalization of marijuana laws continues to spread in a blaze of THC-drenched glory across America, street corner dealers and black market drug operations could fade out as legit, taxable businesses that hawk a medley of products and services enter an increasingly lucrative marketplace.

Twenty-three states have approved some form of legal weed, and nearly two dozen more are reported to be considering changing their laws or regulation of the plant this year. While nationwide legalization is likely inevitable, it’s uncertain how long it will be before all states embrace the green economy that seems to be thriving in places like California, Oregon, Washington, and Colorado.

New York offers a unique look at the changing marketplace. Medical marijuana was only recently legalized after Governor Andrew Cuomo signed a bill into law that took effect on January 6, but the state’s legislation is among the most restrictive in the country. “Only a handful of serious conditions qualify for a prescription,” VICE News explained earlier this year. “The patients are only allowed to use tinctures and oils, which can be vaporized, inhaled, or consumed orally in capsules. Smoking or growing marijuana is still strictly forbidden.” For the few patients who do qualify for medical marijuana cards in New York, insurance won’t cover the inflated cost of the medicine, as weed is still classified by federal law as a Schedule I controlled substance.

At the same time, however, New York City has slowly embraced decriminalization. In 2014, it was announced that the NYPD would move away from marijuana-related arrests and instead give out court summons, a change that led to a notable decrease in such arrests in 2015. So long as New Yorkers carry less than an ounce on them—and no incriminating ephemera, such as a scale—then the punishment for being caught with possession should, in theory, be no worse than a traffic ticket that requires a court appearance. New York is by no means Amsterdam, but even smoking weed is close to legal in NYC now—well, it is at least if you’re white.

All of this is great news for dealers. Smoking weed is acceptable enough that practically everyone is doing it, but a legal market doesn’t exist to drive prices down. When I spoke to half a dozen pot merchants and low-level delivery operators, they told me that we’re in “the golden age” of slanging. In other words, there’s never been a better time to sell weed in New York City.

For more on weed, watch our doc ‘How to Sell Drugs’:

“People in the weed business here in New York are lucky right now, and I’d give it two to five years until we’re all going to be fucked,” says Benny*, a white dealer in his late twenties who’s been selling pot for the past year.

Benny has struggled with substance abuse and never finished high school; through a mutual friend, he scored a gig doing deliveries for a small-scale weed operation, dropping eighths and quarters throughout Brooklyn and Manhattan on his bike. He now rides several days a week, and “easily makes over $300 a shift,” through sales commissions. That’s enough for him to live comfortably, and the flexible schedule means he can pursue personal passions, such as art classes. “With my past, I don’t think I could find a better hustle right now,” he tells me.

Juan* is a Hispanic dealer who’s operated an independent, one-man delivery service for over five years. Juan keeps his overhead costs low and profit margins high by getting his product shipped from Colorado or Oregon. Despite working alone, he doesn’t feel threatened by the other weed services in the city. “The demand is so large,” he says. “It’s not even a competition really because there are so many people who smoke weed that I never step on [other dealers’s] toes.” He described the market as a “no man’s land” that dealers can’t be boxed out of, as long as they operate their business well. “The territory isn’t officially claimed and the little guys can still stay afloat.”

Juan makes “$4,000 or $5,000 a month, and I don’t have to pay taxes,” and he rarely feels anxious about getting caught. (His landlord lets him pay rent in cash, not an uncommon practice in New York.) He used to sell out of his place, but now bikes to clients because “looking like a Seamless guy” is less suspicious than strangers coming in and out of his apartment all day. When on bike, he makes sure he has less than an ounce on him (stored in a lockbox, in case he’s ever stopped by police), and avoids neighborhoods with heavy police presences during busier hours of the day. “I can pick and choose who I sell to because I work for myself,” he says. “Unlike a dispensary where they probably follow the ‘customer is always right’ model, dealers in New York still have some type of power over their clients. I can blacklist whoever, whenever.”

“It’s a unique and short-lived window of time that’ll soon close like all others”

Elissa* is a self-described “college-educated white girl” who started selling weed very casually after she quit her job at an art gallery. She pays her rent through a restaurant gig, but is trying to save money so she can move cities. A friend hooked her up with a large, popular delivery service that allows messengers to sign up for shifts whenever they feel like it, which appeals to her because she could make extra cash without the job interfering with her schedule at the restaurant. “It’s really that chill,” Elissa says. “There are risks, sure, but I’m honestly more worried about getting hit by a taxi than getting in trouble with the police or a client trying to take advantage of me for being a woman.”

Other dealers interviewed for this article agree that now is a great time to deal—the phrase “golden age” came up more than once. But some also say they feel the end of this era is just on the hazy horizon.

“It’s a unique and short-lived window of time that’ll soon close like all others,” says Benny. “When real medical marijuana dispensaries [that sell smokeable products] eventually open up in New York, it’s only a matter of time until independent delivery services are driven out. It won’t be about loyalty to your guy and appreciation of whatever company culture they bring to the table. It will be about efficiency, business acumen, and brand dominance. The players with the most business experience will win. I say it all the time, but the only dealers who will last will be those who go to business school and then start consulting for Philip Morris, or whatever big corporation takes over the weed market here.”

Juan agrees, and knows his five-plus years selling pot are coming to an end. “I don’t want New York to legalize marijuana because then what am I going to do?” he half-jokes. “I’ve always envisioned that I’d get out of the game once weed is legalized here—it will be too hard to compete then. Consider this a peak with a swan song fast approaching.”



Primary Sponsor

Get Connected

Karma Koala Podcast

Top Marijuana Blog