Tags: Marijuana Legalization | pot | legal | medical | prices | Colorado

Marijuana Thrives on Colo. Black Market Despite Legal Sales

Image: Marijuana Thrives on Colo. Black Market Despite Legal Sales (Pashabo/iStock)

By Greg Richter   |   Tuesday, 05 Aug 2014 09:08 PM

Legal sales of recreational marijuana were supposed to reduce black-market demand for pot but have actually had the opposite effect, The Washington Post reports.

"It's actually benefited the black market. Prices are going up," a broker identified as "Junior" told the Post's Tina Griego.

Griego, appearing on Fox News Channel's "The O'Reilly Factor" on Tuesday, explained that pot prices in Colorado had been plummeting since 2009. But when it became legal to sell in dispensaries earlier this year, the prices shot up, partly to pay taxes imposed by the state.

Illegal pot doesn't come with taxes attached, so the black market began to thrive again, Griego explained.

Also, people sell some of their legally grown medical marijuana out-of-state. Medicinal pot has been legal for more than a decade, with people allowed to grow up to six plants if prescribed by a doctor.

Some people use the "red card" that comes with medicinal pot to grow more than they need, then contact brokers such as "Junior," who resell the pot at double the price.

Griego said lawmakers had hoped to see medicinal users gravitate toward the legal recreational market, but that hasn't happened because the taxes on medical marijuana are significantly lower.

To the contrary, Griego said, the number of "red card" holders has actually increased.

Colorado officials say the problem will end as more competition drives down the price of legal marijuana, Griego reported.

"Prices will fall. The illegal market will shrink accordingly," she wrote.

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