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Marijuana Legalization’s Unintended Consequences

Lukas Barfield

August 17th, 2017

Policy

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The 10th Amendment of the Constitution says, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” This allows individual states to go outside of Federal guidelines and pass laws and regulations that best conform to the local citizens.

Many issues have come to the forefront of American politics under the banner of states’ rights, and marijuana is just the latest issue to test Federal law. Starting in 2012, Colorado and Washington legalized marijuana for adult recreational use. By the election of 2016, that number had grown to 8 states and DC.  There are 28 states with some form of full plant medical marijuana law.

So far, reports show things are going well in these state marijuana policy laboratories around the United States. However, some critics of legal marijuana point out the legal market is fueling a thriving black market in many parts of the country where marijuana is not legal.

Black Market Concerns

According to ArcView Market Research, the marijuana market in North America in 2016 was estimated at $53.3 billion. Despite this being an astounding number only 6.9 billion of those transactions are legal.

The remainder of the revenue from marijuana sales is captured by the black market, but with the US Border Patrol reporting a steady decline in marijuana seizures at the border, less and less is coming from outside the United States.

Reports indicate that consumers are rejecting lower quality imported marijuana for higher quality US grown marijuana, but not just in the states where it’s legal. According to police reports, much of this black market marijuana is being produced in legal marijuana states.

Who’s to Blame?

Anti- legalization groups blame legalization efforts. They point out instead of bringing marijuana across the border, the cartels are simply setting up shop in legal marijuana states and using the legal systems as cover to grow black market marijuana.

Some studies show some validity to that assertion. A recent report sanctioned by the state in California showed the state produces 13.5 million pounds of marijuana each year, but they only consume 2.5 million pounds of that in state. Oregon has a similar problem.

A state police report in Oregon finds Oregon black market marijuana has a wide geographic footprint across the country. The report says, “In addition to creating a legal market for cannabis production, legalization has provided an effective means to launder cannabis products and proceeds, where in essence, actors can exploit legal mechanisms to obscure products’ origin and conceal true profits, thereby blurring the boundaries of the legal market and complicating enforcement efforts.”

This outflow of marijuana from legal states seems to fly in the face of the Obama era Cole Memo. The memo states that the Federal Government will take a hands off approach toward legal marijuana if it stays within the borders of the legal state. That is clearly not happening in all cases. Some states have pushed back to try and stem the flow of marijuana grown in legal states.

Pushback from States

The first states to push back against the legal marijuana were Oklahoma and Nebraska. Both states complained to the Supreme Court,  that Colorado legal marijuana was crossing into their states and thereby taxing their criminal justice system. The Supreme Court on a vote of 6 to 2 refused to hear the case, but the Oklahoma Attorney General vowed to continue to fight the flow of illegal drugs into his state.

This hasn’t been the only lawsuit filed. Police and sheriffs in Nebraska, Oklahoma, and Kansas have filed lawsuits against Colorado in response to the large amount of marijuana flowing across their borders. Responding to the outflow of marijuana from legal states, the Federal Government is beginning to take more notice of legal marijuana.

The new Attorney General Jeff Sessions has signaled a crack down on legal marijuana. The former Alabama Senator went further by sending Congress a letter asking them to abandon the Rohrabacher-Farr Amendment and go after medical marijuana programs around the country. To date, the push back from non-legal states has not had much effect on legal marijuana states, but Jeff Sessions’ statements have caused legal marijuana states to begin cracking down on illegal marijuana grows.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Lukas Barfield

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CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

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