By Becky Olson
Nearly 70% of marijuana users in states where dispensaries and/or recreational stores are open for business obtain cannabis exclusively through legal means, while just 17% rely solely on the black market, according to exclusive data in a new research report by Marijuana Business Daily.
The figures provide one of the clearest indications yet that marijuana legalization and cannabis businesses are highly effective in steering patients and general MJ users away from the black market.
Most marijuana users in states with operational dispensaries and/or recreational shops say they only buy through licensed businesses or caregivers, or they grow their own at home. An additional 16% of users in those states buy both legally and from the black market, meaning that just one in six users – or 17% – in those markets exclusively patronize the black market.
The contrast when compared to the rest of the country is stark.
Just over 80% of users in states without operating dispensaries/rec stores exclusively buy from the black market. Another 7% indicate they have means of legal access such as caregivers or home growing, but that they still occasionally buy from unlicensed dealers.
In total, nearly 90% of medical and recreational users typically obtain cannabis through illegal means in states where they don’t have access to dispensaries/rec stores (including states where cannabis can be obtained via home growing or caregivers).
The numbers stem from an online survey conducted in June of more than 1,600 medical and recreational users across the country. The results of that survey are included in a report titled What Cannabis Patients & Consumers Want, which was released today.
The difference in consumer behavior based on the presence or absence of legal storefronts is staggering and certainly will help bolster legalization efforts going forward.
It’s important to note that far more recreational users currently buy marijuana via illegal means than medical patients, primarily due to lack of access. Medical cannabis is currently available via dispensaries in eight times as many states as recreational marijuana is via legal storefronts.
Certainly the cannabis black market can never really be entirely eradicated, even under the ideal scenario of full federal legalization. However, the size and influence of illicit markets can be reduced sufficiently so as to be rendered inconsequential, the figures show.
To that point, a key insight for legal marijuana entrepreneurs is the portion of users who actually move from the black market to legal sales (vs. those who never previously purchased from the black market but begin to patronize retail outlets once they open). Of the 67% of users who exclusively obtain cannabis legally in states where dispensaries/rec stores are open, just over half are actual black market conversions.
This initial rate of conversion is very promising for marijuana entrepreneurs, as is the overall level of interest generated by the wave of legalization across the U.S.
As dispensaries and rec stores become operational in additional states, more and more users will fully convert to legal sales. Also, at some point in the near future, a “critical mass” of all cannabis users across the country will have access to legal sales, which will drive the overall conversion rate even higher.
Becky Olson can be reached at [email protected]