While Colorado led the nation in legalizing recreational weed, the state is still dealing with an expanding underground black market for marijuana. The reasons for legalization are still valid – consumers should be able to buy marijuana without fear of being arrested. In addition, legalization has made marijuana both safer and more accessible, and the increased tax revenue has also been beneficial.
But an illegal drug trade has flourished, creating a separate underground, secret “black market“. This is bad news for consumers.
One of the strongest arguments for legalization was the idea of shutting down an illegal system. Black markets reward criminals and foreign drug cartels and put consumers at risk from products contaminated with harmful ingredients. Legalization helps ensure safer products and protection for consumers. In addition, legalization has generated millions in revenue for the state. Legalization should have ended illegal sales of marijuana.
Legal marijuana operations have done the work to meet all regulations and have flourished across Colorado since legalization (including us, Buddy Boy Brands!), but a growing number of illicit operations have flown under the radar. The strength of some of these unlawful operations has now become visible.
In 2019, federal agents raided over 250 homes across the Front Range. This was a culmination of more than two years of investigation. As a result, dozens of people were arrested, and over 80,000 marijuana plants were seized.
Members of a black market marijuana organization allegedly bought homes in middle-class neighborhoods in the Denver Metro area, along with specialized growing equipment. Up to a thousand plants could be cultivated in a single spacious basement of one of these suburban houses.
In the 2020 National Drug Threat Assessment, the DEA (US Drug Enforcement Administration) reported that for every 100 plants grown and cultivated, up to 1,800 pounds of marijuana can be produced (with the right resources and expertise). This can be worth millions of dollars. Money from the illegal operations was laundered via restaurants and then whisked overseas, often through online apps.
A Look at the Trends
These types of arrests garner sensational headlines. But are these reports indicative of more significant trends toward illegal activities involving marijuana? Unfortunately, because the underground black market is hidden, it isn’t easy to measure its impact.
The statistical picture is confusing. After legalization, marijuana arrests went up and then down.
There were over 2,500 felony charges filed in 2008 for marijuana-related offenses and a little over 1400 in 2019. Misdemeanor marijuana offenses have also dropped within that timeframe. One way to measure black market activity is to look at the Colorado Organization Crime Control Act violations. There were 31 filings under the act in 2009, but that number jumped to 119 in 2017. Then came a decline to only 34 filings in 2019.
Another metric is to check reports of marijuana diverted to other states illegally. For example, a federal database reported 286 seizures of Colorado marijuana in other states. That number blew up to 673 by 2017 but had dropped to 266 by 2019.
Law enforcement claims that legalization is what has allowed a black market presence to increase. But cannabis experts say that if marijuana remains illegal federally and in some states, the illicit market will continue to exist and even grow.
What’s Behind the Illegal Operations?
Some legal cannabis growers say that allowing at-home operations was a mistake. When it became legal to grow medical and recreational marijuana at home, some illegal growers saw ample opportunity. And some of the operations have been run very professionally – there are effective organizations behind them.
Smaller illegal growers have also found marijuana crops profitable, knowing that criminal punishments are mild compared to what they were before legalization. Small pot dealers, seeing the higher prices of legal weed, have been happy to be the cheaper alternative. And for those who’d rather not pay taxes, illegal marijuana fits the bill.
Some consumers have found dispensary prices too high (or dispensaries too far away) and have been willing to turn to illegal sources.
What to Do?
How can the problem of the marijuana black market be solved? Some say the answer is more resources for law enforcement. In contrast, legal marijuana advocates say the answer is helping legal businesses compete against the prices of the black market. Experts in the black market issues say that black markets can never be eradicated. Instead, it will be a constant battle to keep them in check.
For now, the state has shown a commitment to expanding resources for law enforcement. Colorado implemented a program to get more money to communities throughout the state to fight the presence of illegal marijuana operators. Grant money of over $770,000 was awarded in 2021.
Stay tuned for more updates on all-things Colorado weed law and news!