Grey market for marijuana — medical suppliers may be a problem

Let me put a nuance on the story http://www.nwnewsnetwork.org/post/grey-market-concerns-grow-washington-legalizes-pot.  Here’s the quote:  “Oglesby doesn’t worry too much about unscrupulous medical marijuana providers entering the true black market – and selling pot to recreational users without a medical card. Why? Because of something he calls, ‘The prohibition premium. You gotta charge more if you are engaged in illegal activity to compensate you for the risk of getting caught and going to jail.'”

Well, the prohibition premium does raise costs for illegal actors, but medical marijuana providers selling to recreational users might have an easy time getting away with violation — it all depends on enforcement.  That’s something to worry about when trying to maintain a tax base.  The illegal market will always be trying to find the path of least resistance.

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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