Politicians are seemingly shocked to learn that people won’t pay a massive markup for legal weed when their old dealer is still answering texts.
A recent study from Ohio State University published in Health Economics confirmed the incredibly obvious: jacking up taxes on legal cannabis just sends buyers running straight back to the black market. The researchers tracked over 1,500 consumers and discovered that while higher taxes successfully sink legal sales, a whopping 89 percent of that drop is just people swapping their overpriced dispensary weed for unregulated goods.
By trying to squeeze every last dime out of the legal market, lawmakers are essentially acting as the premier marketing department for unlicensed sellers—you know, the ones who skip safety testing, ignore ID checks, and definitely don’t pay taxes.
Despite this glaring economic reality, states like Maine, Maryland, Michigan, and Minnesota recently slapped massive tax hikes on cannabis anyway. Fortunately, a few places are finally catching on. California actually rolled back its marijuana taxes, and D.C. lawmakers recently killed a proposal to drastically hike retail prices. Turns out, you can’t tax a product into oblivion when your main competition operates out of the trunk of a Honda Civic.
Dabbin-Dad Newsroom
