Beating the Cannabis Black Market? Don’t Tax the Legal Industry to Death

Beating the Cannabis Black Market? Don’t Tax the Legal Industry to Death
Beating the Cannabis Black Market? Don’t Tax the Legal Industry to Death

Cannabis use is healthy.

It promotes our health in numerous ways: better sleep, better appetite and weight moderation, anxiety/stress relief, better digestion, etc., etc., etc.

It provides numerous medicinal benefits. It is currently being safely prescribed by thousands of physicians across North America to treat hundreds of different medical conditions.

As a recreational drug, it’s a safe alternative to alcohol and tobacco use.

These legal drugs kill well over half a million people each year in North America and sicken tens of millions. The potential healthcare savings in getting people to switch from alcohol/tobacco use to cannabis consumption are astronomical.

Yet cannabis-phobic governments continue to tax cannabis as a “vice product”: punitive levels of taxation which discourage rather than encourage cannabis use in our societies.

This isn’t merely unwise. It’s completely insane.

It’s not just the massive health benefits along with the enormous potential to save human lives and taxpayer dollars. There is an even better reason why governments must show restraint with cannabis taxation. The cannabis black market.

The cannabis black market was artificially created by our governments. They did so when they criminalized cannabis without even the slightest justification.

There is no rational universe where using alcohol and tobacco is legal, but cannabis use is illegal.

If an enlightened government chose to legalize only one recreational drug, obviously that drug would be cannabis. Not alcohol. Not tobacco.

Now our anti-cannabis governments are reluctantly legalizing cannabis, after being forced by the courts to allow medicinal cannabis use.

Every government and every politician says that one of their “highest priorities” in cannabis legalization is elimination of the black market. The legal cannabis industry has been handed the task of phasing out the black market through legal cannabis sales.

So what have these same governments done?



First, they handcuffed the legal cannabis industry with irrational and onerous over-regulation. Then they kicked the legs out from under the legal cannabis industry with over-taxation.

Cannabis is as safe as any medicine available to us. Yet the Canadian government has slapped a $1 per gram excise tax on medicinal cannabis.

It is the only medicine in Canada that is taxed. It adds approximately 10% to the cost of medicinal cannabis. And it forces millions of cash-strapped Canadians to purchase their medicinal cannabis from the black market.

Utter idiocy. Complete hypocrisy.

But even Canada’s government can’t compete with California when it comes to cannabis taxation insanity.

California has (by far) the largest cannabis black market in all of North America. It is a major source of illicit cannabis not only for the state itself but all of the U.S. It is also a major nexus for the tainted black market vapes that are sickening and killing Americans.

So what does the State government do? It taxes California’s legal cannabis industry as heavily as anywhere in North America.

Current taxes are as high as 45% in California. And the state just piled on another tax increase.

These tax increases are automatic. Under California law, the moment that legal cannabis demand strengthens enough for wholesale cannabis prices to rise, the state hammers the legal industry with a tax increase.

Because of California’s sadistic taxing of the legal cannabis industry, it is flatlining. Revenues for the legal cannabis industry in 2019 are unlikely to be any higher than in 2017. And thanks to the latest tax increase they could fall (again) in 2020.

Meanwhile, California’s cannabis black market continues to grow larger and larger.

Incredibly in the U.S., cannabis taxation insanity could be about to get much worse.

 “Social equity” is now a major buzzword in the cannabis legalization movement in the United States – and for good reason. While all Americans were prosecuted for cannabis use, visible minorities were persecuted.

Put another way, in the United States the “crimes” associated with cannabis Prohibition were committed by government, law enforcement agencies, and the courts. Tens of millions of Americans were victimized – predominantly African Americans and Latinos.

Someone should pay for these government crimes. The government should, meaning all taxpayers.

We all voted for the corrupt governments that wrongfully criminalized cannabis and persecuted people for cannabis use. We all must pay for the consequences.

The problem? Many politicians and cannabis activist groups want to tax the legal cannabis industry to pay for these government crimes.

Private companies that didn’t even exist when our governments were committing these cannabis crimes are expected to compensate the victims of those crimes.

It is insane. It is absolutely unjust. And it would make it impossible for the legal cannabis industry to ever displace the cannabis black market (see California).

How do you phase out the cannabis black market?

Set government taxes on cannabis to zero.

Not forever. Just until the legal cannabis industry has been able to undo the damage caused by our governments when they created the cannabis black market.

As noted above, governments will already get a huge economic dividend from increasing legal usage of cannabis. Along with rescuing alcohol- and tobacco-users, cannabis is now a proven safe alternative to the Killer Opioids flooding North America.

However, our political leaders continue to completely ignore logic and reason when it comes to legalizing and regulating the legal cannabis industry.

Our governments lied to us (repeatedly) when they criminalized cannabis. Now the politicians are lying to us again as they (grudgingly) legalize it.

They say they want to “phase out” the cannabis black market through supporting the legal cannabis industry. But their actions display a completely opposite intent: sabotaging the legal cannabis industry at every opportunity.

Government (anti-cannabis) corruption isn’t ending as cannabis is gradually being legalized. It’s merely changing.