If Cannabis is Legal, Why Is the Illicit Market Still Thriving?

Some Michiganders have access to a lot of great weed. Provisioning centers have it. “Legacy” sellers — aka the illicit market — have it. And your cousin’s #frostynugs are blowing up your feed. So, if you can get high-quality pot anywhere, does it matter whether you’re buying it from a dealer or a dispensary?

Since 2018, when Michigan became the 10th state — and first in the Midwest — to legalize possession of cannabis and recreational cannabis use for adults, consumers have been protected by laws requiring testing for all state-regulated cannabis products to ensure potency and safety.

That testing, though, increases the cost, which is passed along to customers. And what neither testing nor state policy can guarantee is access to the product. Amanda*, a 45-year-old single mother in a rural area who uses cannabis to treat anxiety, would love to buy from a licensed dealer, but “visiting one would require me to drive farther away, which would mean more time, money, and planning. It would turn into too much of a production.”

Welcome to cannabis deserts. If you’re in Washtenaw County, the choices are endless. The city of Detroit, mired in a debate about how to provide opportunities to city residents and people of color, has yet to license any recreational shops. “There are vast areas of the state without any dispensaries, and then there are areas that are highly concentrated with dispensaries, such as Washtenaw County,” says Michigan State University epidemiologist Kipling Bohnert, who studies substance use and abuse.

The ongoing existence of the black market for pot is also something of a fail-safe, for when the testing system goes awry. Notably, in November, the Michigan Marijuana Regulatory Agency recalled 64,000 pounds of flower, worth some $230 million because of problematic, possibly misleading test results. More than 400 medical and recreational retailers lost much of their stock in that purge.

Illicit cannabis dealers, of course, evade testing regulations, Byzantine government licensing practices, and high taxes. “It is extremely expensive to get into [the state-regulated market], and there are a lot of agencies that have a lot of oversight over your whole operation from day one until you’re fully licensed,” says Joe*, a 31-year-old pot dealer. Still, illegal pot is risky, so Joe says he is hoping to shift from underground to legit sooner or later.

The legal system intends to give the public more confidence in the product, but a lot of cannabis users trust their longtime illegal dealers more. “What I’m buying is more of a craft product,” one such customer says. “I get a much better-quality product.”

Some people believe the playing field will level out once the state’s market matures and prices come down. Others doubt the “legacy” market will ever vanish entirely. Bohnert says the two will coexist because of “expense, taxes, and jurisdictional issues, including whether or not dispensaries have been approved to operate in a given community.”

At the moment, the testing problems are creating uncertainty and mistrust that need to be corrected, says attorney Matthew Abel, founder of the Cannabis Counsel law firm in Detroit, who served on the drafting committee for the pot legalization statute. “One of the reasons the government tells us that we need a regulated market is so they [customers and patients] will have access to cannabis that’s been tested,” Abel says. “If that testing process or the testing results are unreliable — or even thought to be unreliable — it harms that system and reduces the reason to use the licensed system in the first place.” 

*Names have been changed.