California is on the verge of creating a legal market for marijuana worth more than $5 billion that will help make the state a destination for pot-loving tourists, according to a new state-sponsored economic study.
However it is estimated that about 29% of all cannabis consumers may stay in the illegal market at first to avoid the cost of new regulations requiring the pot to be tested, tracked and taxed at 15% of its retail value, according to the study by the University of California Agricultural Issues Center.
State officials developing the regulations hope to gradually persuade the vast majority of cannabis users to go through the legal market, said Lori Ajax, director of the state Bureau of Marijuana Control, which hired the center to look at the economic impact of the new rules.
New regulations allowing purchase of marijuana for recreational use are expected to shrink medical cannabis sales from $2 billion to $600 million as people are given an alternative to going through physicians to get medical pot cards for a fee.
Californians should be concerned about the high rate of continued illegal activity. The legal market is easily undercut by the well-established underground market.
It will take some time for the underground market to be driven out of business…however it will happen.
Source: LA Times