From: lessgovt@gmail.com   
      
   How New York and California Botched Marijuana Legalization   
   By Zusha Elinson and Jimmy Vielkind, April 28, 2023, WSJ   
      
   DISCOVERY BAY, Calif.—State agents broke through the doors of a stucco home   
   in a gated community in March shouting “Police! Search warrant!” Inside,   
   they found marijuana growing in bedrooms and the living room, with fertilizer   
   stowed in the Jacuzzi    
   tub.   
      
   Officers piled the plants on a trailer already overflowing from a morning of   
   busting illegal growers in this quiet Bay Area suburb. An agent jumped up and   
   down on the mound to make more room.   
      
   The illegal marijuana trade is booming in California, seven years after the   
   state legalized its possession, cultivation and distribution. Unlicensed sales   
   totaled $8.1 billion last year, dwarfing legal sales of $5.4 billion,   
   according to estimates by New    
   Frontier Data, a cannabis analytics firm.   
      
   Lawmakers in New York are concerned their state is headed in a similar   
   direction. New York legalized cannabis possession in small amounts in 2021.   
   Two years later, just 5 shops sell marijuana legally in NYC, while 1,400   
   bodegas, smoke shops and other    
   outlets without licenses do, according to an estimate by the city sheriff.   
      
   The persistence of the illegal pot business in the face of state legalization   
   reflects a variety of forces. Slow rollouts of dispensary licenses leave unmet   
   demand that unlicensed outlets are happy to serve. Police and prosecutors,   
   facing pressing    
   problems such as violent crime, give little priority to stopping illegal pot.   
   And high taxes on legal sales fan the embers of illicit ones.   
      
   “When you start seeing tax rates that are approaching 30-40% on products,   
   it’s really going to be difficult to compete against the remnants of an   
   illegal market,” said Mason Tvert, a consultant who played a role in several   
   state campaigns to    
   legalize cannabis.   
      
   Some of the 22 states that have legalized marijuana possession have had better   
   luck extinguishing the black market, said industry observers, because they   
   have permitted more legal retail shops, streamlined the process of going legal   
   or didn’t have such    
   entrenched networks of dealers or growers at the outset. At the federal level,   
   marijuana remains illegal.   
      
   The continued vitality of the illegal market in places like California and New   
   York has a range of consequences. “There are harms that come from purchasing   
   and consuming illegal cannabis,” said Nicole Elliott, director of the   
   California Dept of    
   Cannabis Control, “whether that be product-safety harms, or we’ve seen   
   issues around worker trafficking, environmental harm, public-safety harm.”   
   It also means uncollected taxes.   
      
   In California, the historic cannabis basket of America, many growers find it   
   easier and more profitable to supply illegal shops or to ship their product   
   elsewhere than to comply with licensing requirements. Some businesses that   
   spent millions to ramp up    
   legal marijuana operations in the Golden State have walked away. Curaleaf   
   Holdings Inc., a large, publicly held company, is shifting its focus to states   
   where taxes and regs are less onerous.   
      
   “Our No. 1 competitor is the illicit market.” said Matt Darin, CEO of   
   Curaleaf, which said in January it was pulling out of California.   
      
   Kaleb Davies, a 25-year-old Los Angeles bartender, has a monthly marijuana   
   budget that he tries not to exceed. When a friend recommended a new unlicensed   
   pot shop in their hip Echo Park neighborhood, he went.   
      
   The storefront bore no sign except a green cross. Mr. Davies and his   
   girlfriend purchased a half-ounce of the London Pound Cake variety for around   
   $45—less than half the price he pays at legal dispensaries.   
      
   “As a consumer, I love it,” Mr. Davies said. “A lot more for a lot   
   less.”   
      
   Los Angeles has between 700 and 1,000 unlicensed shops and delivery services,   
   according to estimates by the United Cannabis Business Assn, which represents   
   legal businesses. The city has 354 legal retail shops, according to the Dept   
   of Cannabis Control.   
      
   At first, legal shops thought they could succeed by creating a clean, well-lit   
   retail experience and offering lab-tested marijuana, said Jerred Kiloh,   
   president of the business association.   
      
   But they have to add a 10% city cannabis tax, a 15% state excise tax and a   
   9.5% sales tax not exclusive to cannabis.   
      
   “All those other incentives of safety, security, testing, all those things   
   start to drift away when it’s half price and people go, ‘You know, I   
   don’t want to be ripped off,’” said Mr. Kiloh.   
      
   Det. Michael Boylls said the cannabis unit that he runs for the LAPD regularly   
   busts illegal shops, but it’s like a game of whack-a-mole. Los Angeles   
   police say they’ve identified 77 unlicensed retail shops.   
      
   “Most of them will reopen again because most of them just get a ticket,”   
   Det. Boylls said.   
      
   Under California’s 2016 legalization measure, cities and counties were given   
   final say on whether cannabis businesses can operate in their jurisdictions.   
   Currently, 61% of California’s cities and counties prohibit retail marijuana   
   sales, and    
   unlicensed delivery services thrive there. The result is that California has   
   1,233 licensed marijuana shops, or about three for every 100,000 residents. In   
   contrast, Colorado has about 11 per 100,000 residents.   
      
   Anyone growing more than 6 plants in California must get permission from state   
   and local authorities and can only sell to licensed pot businesses within the   
   state. The limited number of legal retail outlets as well as expensive,   
   time-consuming licensing    
   requirements in some areas have made selling to illegal stores or shipping   
   crops out of state attractive alternatives for some growers.   
      
   Ms. Elliott, the director of the California Dept of Cannabis Control, said the   
   state is offering incentives for local governments to permit retail shops.   
      
   In New York state, many unlicensed marijuana shops advertise and display their   
   products openly. One in the East Village section of Manhattan features a white   
   and green backlit sign saying “Recreational Cannabis Dispensary.” A visit   
   to the nearby Go    
   Green Dispensary on First Avenue found rows of jars filled with buds priced as   
   low as $20 for 3.5 grams, or an eighth of an ounce, for varieties like Gelato   
   or Oreos. The same amount of cannabis sold for at least $42 at a licensed   
   store several blocks    
   away.   
      
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)