Cannabis on the illegal market is __________ cheaper than the legal market? A. 15%, B. 55% or C. 93%?

The illegal cannabis market is _______ cheaper than the legal market? 10%, 55% or 93% cheaper?

$80 legal ounces in Michigan, $4 in Oregon, what’s up with the price drop in the legal cannabis market across America?

Unless you’ve been living under a rock, you know that the illegal cannabis market is cheaper than the legal market, and is one of the main reasons the legal market is stumbling so badly across America right now. Combine lower prices from unlicensed sellers with strict regulations and the 280E tax law and it makes it almost impossible to make money in the legal cannabis game.

But how much cheaper is illegal weed compared to legal pharmacy-bought weed? Aren’t people going to pay a premium for lab testing and “know your source, seed-to-sale tracking” stuff? Yes, to an extent, but what premium would YOU pay for a gum or vape cart to feel more secure and confident about the product you’re taking home?

Would you pay a 10% premium on a vape cart or pack of pre-rolls? So for $20 in the illegal market, would you go to a reputable pharmacy for $22 to put your mind at ease? I think almost everyone would say yes sure why not be sure.

How about 20% more for the same vape cart or edible pouch? $20 on the black market and now $24 at a pharmacy you “like, know or trust”. Hmmm, okay, but now it’s starting to leave a mark and take away the purchasing power of other products I might want to buy, like a pre-roll or lollipop.

What about 30%? Would a regular cannabis user pay 30% more for a 100 mg candy bar from a pharmacy than from a non-state licensed vendor? So your $20 candy bar is now $26? (Taxes will be discussed later, so don’t yell at me so excitedly just yet.) Ouch! On a $100 order, no taxes yet, you’re at $130, and now you’re throwing in the taxes that the legal guy has to charge you and the illegal guy doesn’t. Probably nearly 45% higher than the black market candy bar when taxes go all in depending on the state and whether it’s medicinal or recreational.

Cannabis.net decided to do an undercover sting, if you will, to find out the true prices of cannabis in the illicit market in two different areas, Maine and California. Every state has a massive illicit market thanks to a variety of reasons such as geography, taxation, population or lack thereof, and access to other state borders.

If you want to jump to the point, with state taxes, vape cartridges are 60-65% cheaper in the illegal market and edibles like chocolate and gummies can be 93-98% cheaper! I guess we call that a “hint” said the legal cannabis market!

Most of the industry rolls their eyes when they say “black market cannabis is cheaper,” and in their minds they might be thinking 10, 20, 30%. Add in onerous state taxes and state 280E codes, and maybe you’re getting 40% more in crazy liberal places like California?

Not even, nah, bud, as Bender would say at the Breakfast Club.

A quick stroll through the menus at Weedmaps will show you that in Maine, a milligram of THC can be purchased in edible form for $0.10. Yes, a cent for a milligram of THC. You will see many medical stores selling 250 mg candy bars for $25 and 250 mg gum bags for $25 plus a 6% tax. With special offers, à la Weedmaps, or bulk buying, you can probably get as much lower, say $0.08 per milligram of THC.

We chose Los Angeles as our California quick check and searched 3 legit pharmacies for deals and offers. 1-gram vape carts, live resin, ranged from $25 to $30, and one milligram of THC in edible form ranged from $0.11 to $0.15. Please note that California has onerous taxes on weed, so this figure will be much higher at checkout.

Now comes the part you thought you knew but were afraid to ask.

From a California unlicensed cannabis dealer:

THC Gummies 1000mg pack (10 x 100mg) $8 per pack in bulk $80 for a 10 pack no tax. That would be $0.008 per mg of THC. They thought a dime ($0.10 was cheap, how about an eighth of a penny per mg of THC!)

1g live resin or sauce vape cart for $12 in bulk, 10 for $120, 35 flavors. Yes, I’m talking about bulk orders so my prices are lower than retail, but I’m doing this to show you that bulk orders cost $80-$100 on the illegal market, not $500 minimum, so, although it’s not quite like that. Apples, with a $100 bill in hand, you can run out. $12 compared to $26 in LA, and that still hasn’t added $7 in state taxes, is starting to sting, isn’t it? 55 to 60% cheaper in California for vape carts from legal to illegal stores.

Chocolates? Sugar must be cheap in California. 200mg candy bar for $2 in packs of 10 or a 2500mg bar for $18 in packs of 10 but obviously no tax. These amount to $0.01 per mg of THC and $0.007 per milligram for THC in edible form. A seventh of a penny compared to a reasonable dime for a mg of THC at legal, competitive prices. That’s a price difference of 90 to 95% tax included. Would you pay 95% for THC gummies or chocolates just so you know they were lab tested?

To dig the knife in a little more, these prices quoted were from menu sheets, no bargaining or haggling has been done yet. In the gray markets, haggling and bargaining is a wide open space, so yes, you can lower that price per mg of THC with higher purchasing power and larger orders.

The point of the story? Yes, illegally marketed cannabis is cheaper than legal weed, not a little or a lot, but by a huge, huge amount. So massive that I’m not sure how the legal industry can even remotely compete, even with lab testing and friendly budtenders.

When low-cost cannabis suppliers like Colombia and Brazil come along and start shipping their legally and licensed weed for $0.06 per gram, what happens to the illegal US market? At this point, the undercutters become the undercut, and the cycle continues until we reach a bottom price for a gram, an ounce, and a pound of weed. That’s $0.06 per gram legally grown in Colombia, what do you think YOUR illegal market prices will be?

And you’re wondering why the black mark on legal weed leaves such a bruise?

(Article first appeared on LinkedIn here)

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