420 with CNW – Why the Marijuana Black Market May Be Hard to Eradicate for Now
The marijuana market has been marked as one of the fastest-growing industries in the world by Wall Street. This comes after marijuana sales tripled all over the world between 2014 and 2018. By 2030 Wall Street estimates the global annual revenue to increase from 5% to 18%. The surge in pot stocks has attracted much interest as it is impossible for Wall Street and investors to ignore this type of growth. Several challenges have cropped up which have caused a drop in the price of pot stocks over the past six months. The main problem is the rise in the black market for marijuana products despite the legalization of recreational marijuana in Canada and some states in the U.S. which was expected to curb the market. Globally, California is the largest legal weed market; however, it is projected that illicit marijuana sales could outdo legal marijuana sales with a significant gap of 8.7 billion to 3.1 billion. In early February, Scotiabank estimated that black market cannabis sales would contribute 71% of the total sales in 2019. The marijuana black market may be hard to eradicate for now because of the following five reasons. Supply Shortages in Canada Canada has been faced with a persistent marijuana shortage since the legalization of recreational marijuana in 2018. The deficit is attributed to the long line of cultivation, processing, and sale licenses. In 2019, the regulatory agency Health Canada had more than 800 applications pending approval, which would take the agency several months to work through. The growers and sellers are therefore forced to wait for the permits before they can grow or sell marijuana. Issuing of dispensary licenses is also slow forcing consumers to buy marijuana from the black market. High Tax Rates in the U.S. High taxation rates are forcing consumers to…
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