According to a report commissioned by Colorado’s Marijuana Enforcement Division, the state’s legal medical and recreational cannabis outlets will provide about 77 metric tons of product this year.
The problem, according to the same study, is that residents and visitors will consume an estimated 130.3 metric tons of marijuana in 2014.
That means that the rest, some 53.3 metric tons of cannabis, or nearly 40 percent of the total marijuana demanded, is expected to be produced by unregulated sources.
Those sources include “gray market” producers, including home-growers who can legally grow up to six pot plants for personal consumption, but aren’t supposed to be selling it, or black market producers, including gangs, who operate outside of the Colorado legal system.
The state’s solution, then, is to increase the amount that is produced legally.
“Right now we are pretty significantly under what should be produced,” said Ron Kammerzell, deputy senior director of enforcement for the state Department of Revenue. He said short supply “raises the prices and if the price is too high, then we can’t compete with the black market and that was our ultimate goal with Amendment 64 – we wanted to eliminate the black market.”
Some shop owners agree that the prices of their products are too high, as Rocky Mountain PBS I-News reported, but they contend that isn’t a function of supply, but rather of all the add-on costs of taxation and other expenses that don’t exist in the black market.
On average, state, local and federal sales taxes on recreational marijuana are just over 21 percent, while the taxes on medical are about 7.6 percent. Even though the federal government still categorizes marijuana as a dangerous drug, it collects tax revenue on its legal sale in Colorado and Washington.
The enforcement division began work-group discussions of production controls and related issues last week.