Marijuana Negative Solvency

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Marijuana Neg
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1nc black market turn

Legalization fuels the black market---low prices incentivize illegal businesses

Fertig 19---a writer in Washington, D.C., covering cannabis and politics. (Natalie, “How Legal Marijuana Is Helping the Black Market”, Politico, July 21st, 2019,
What’s happening to Meguerian is a window into one widespread side effect of marijuana legalization in the U.S.: In many cases it has fueled, rather than eliminated, the black market. In Los Angeles, unlicensed businesses greatly outnumber legal ones; in Oregon, a glut of low-priced legal cannabis has pushed illegal growers to export their goods across borders into other states where it’s still illegal, leaving law enforcement overwhelmed. Three years after Massachusetts voters approved full legalization of marijuana, most of the cannabis economy consists of unlicensed “private clubs,” home growing operations and illicit sales.
Though each state has its own issues, the problems have similar outlines: Underfunded law enforcement officers and slow-moving regulators are having trouble building a legal regime fast enough to contain a high-demand product that already has a large existing criminal network to supply it. And at the national level, advocates also point to another, even bigger structural issue: Problems are inevitable in a nation where legalization is so piecemeal.

2nc black market

State taxes and regulations post legalization boosts the illicit market

Fertig 19---a writer in Washington, D.C., covering cannabis and politics. (Natalie, “How Legal Marijuana Is Helping the Black Market”, Politico, July 21st, 2019,
If Oregon’s surplus of legal marijuana has become a massive headache for its neighbors like Idaho, the illicit markets thriving in parts of California and Massachusetts are self-inflicted wounds. High state taxes and fees are driving up the price of legal cannabis, and mild repercussions for remaining unlicensed discourage existing business owners from navigating the complex licensing process in both Los Angeles and Boston.
Massachusetts legalized the sale of marijuana in 2017. Since then, close to 200 business licenses have been approved across the state. Boston approved its first one just this past week.
As they wait for approvals that don’t come, marijuana businesses continue to operate in a legal gray zone. Sieh Samura, 40, opened his private cannabis club in Boston in 2014, when only medical marijuana was legal. In 2018, Samura was given priority status under the state’s community empowerment program. Almost a year and a half later, Samura still doesn’t have an open dispensary. He needs something called a community agreement from Boston before he can apply for his state license, and he doesn’t have that yet.
So in the interim, Samura has continued running his private club, one of a handful in Boston and Worcester, where customers can bring their own product—much of it home grown or purchased on the illicit market—and share and smoke communally. They are unlicensed and supposedly legal, but when asked by POLITICO, state and local officials disagreed on whose job it is to regulate them.
When she heard this, Massachusetts-based cannabis advocate Maggie Kinsella laughed. “So basically nobody knows what’s going on.”
Kinsella says this runaround between state and local governments has left New Englanders in the cannabis industry to fend for themselves. She says the lack of legal dispensaries with good product means 80 percent of the market is still underground. And a lot of the customers at the legal dispensaries, she adds, are primarily from out of state.
“It’s probably premature to say that we’ve had a big dent in the illicit market,” says Steve Hoffman of the Massachusetts Cannabis Commission, the state’s independent commission created to monitor the licensed cannabis market. And, he adds, “I don’t think we’re ever completely going to eliminate the illicit market, I think that’s probably unrealistic.”
Like many cannabis advocates, Hoffman says the illicit market in Massachusetts likely won’t die until cannabis is fully legalized federally and access to things like banking—for basic needs such as loans and deposits—is easier for startup marijuana businesses. The barriers to entry, he says, are still high and discourage even those who have had approved licenses from opening up shop.
In California, where the statewide regulatory apparatus is legendarily hard to navigate, those barriers to entry are only magnified.
California is so big, the problem is the opportunity,” says Kyle Kazan, CEO of California Cannabis Enterprises, which operates dispensaries in Los Angeles and Santa Ana and will soon open a third in Santa Barbara.

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