Study: Nearly 1 in 5 California marijuana consumers buy from black market

A cannabis consumer survey commissioned by California-based Eaze Solutions supports what many licensed marijuana businesses in the Golden State already know: They’re losing market share to illicit companies that don’t care about regulations, and the main reason is cheaper prices.

The study, conducted July 6-12 by New Jersey-based Marketview Research Group, collected responses from 1,419 California marijuana consumers and another 331 in Colorado, according to Peter Gigante, head of policy research for Eaze. The San Francisco-based company runs a website and smartphone app through which consumers can place delivery orders for cannabis.

Among the findings:

  • Eighteen percent of California respondents made a cannabis purchase from an unlicensed business in the previous three months, and 84% of those are “highly likely” to buy from that source again “due to the illicit market having cheaper products and no tax.”
  • On the flip side, 96% of respondents made a purchase from a state-licensed business. Of those, 92% said they were definitely or probably going to buy from the legal market again.
  • Taxes on cannabis products were a big reason consumers turned to the illicit market, and the study concluded that a 5% decrease in the California MJ tax rate could spur as much as 23% of black-market customers to buy from licensed cannabis businesses. Conversely, the survey found that a 5% tax increase on California marijuana products could result in as much as a third of the legal market’s customer base choosing to buy instead from illegal MJ retailers.
  • The top factors for California consumers deciding patronize licensed cannabis companies include consistent product quality, affordability, customer support, lab/safety testing, accurate labeling, electronic payment options and brand-name recognition.
8 comments on “Study: Nearly 1 in 5 California marijuana consumers buy from black market
  1. Laura L Santos on

    The problem isn’t the difference in price, the problem is about 70 percent of municipalities have failed to adopt their ordinances. Businesses are desperate to become licensed but the cities and counties are jacking things up.

    Reply
    • Squeeler on

      I don’t know anyone that buys from licensed companies except as an occasional curiosity. Low quality and high prices.

      Reply
  2. Mike Hawk on

    This is too small of a sample size to get a realistic snapshot of the market, and how were these participants selected? Something tells me that 1 in 5 or 18% is meaningless and naively optimistic.

    Reply
  3. George Bianchini on

    “Eaze Solutions supports what many licensed marijuana businesses in the Golden State already know”
    A total success for the BCC. Let the market fail by enacting onerous unattainable regulations and then turn it over to the alcohol industry. Gavin Newsom needs to clean house after his landslide win for California Governor in November. We need to petition him to start by firing all BCC Board Members that have histories of working in industries that kill people, this includes tobacco and alcohol executives. Let’s create a blueprint for the entire nation.
    Also the two union board members need to be on the other side of the table. They need to represent the workers of the industry not the destroyers of the industries. Let the unions hold weekly workshops with industry stakeholders to make a regulatory process that deals with a beneficial plant that has never harmed anyone that doesn’t abuse it. About 5 or 6 pages of do’s and don’ts.
    If the state won’t do this I think it’s time for the next public initiative. This time we include the rules and regulations and not let our opponents kill us off slowly.

    Reply
  4. Gary H. Gately on

    The state govt. should simplify the procedure for cultivation, processing & sale of marijuana products. It should encourage the banks & the Stock market to lend their active support to the medical marijuana industry. After all, the health of the masses should be the first concern of the State Govt. The patients who are already undergoing health issues, should not be made to experience additional difficulties like searching for the suppliers or escalating prices. Several thousands of patients with the life-threatening conditions, are relying upon medical marijuana after getting recommendations from reputed licensed clinics. The best way to check any black-marketing in medical marijuana is, it’s sale should be allowed only at clinics.

    Reply
  5. Lippke on

    It’s all about time and money no matter who you are. What I mean is these are limited resources we all get a small share of and we need to be careful how they are spent.

    Unfortunately, the law is still purposely set up in California so that one saves both time and money going the unlicensed route for cannabis purchases. Oregon is the example of how cannabis law should be written in every state. Capitalism allows the people to vote with dollar bills and the illegal or the legal enterprise that serves its customers time and money needs best will be the victor. Democracy allows our voice to be heard by spending time researching and voting for the people and laws that serve our money and time needs best.

    Let’s continually vote both ways to get what we want, which is a great priced, conveniently located, regulated and branded cannabis market!

    Reply
  6. Rick on

    The survey is flawed

    The fact is, there is only 352 legal outlets for recreational marijuana in a state with nearly 40 million people that means 95% are buying black market marijuana.

    Reply

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