Mike Adams

Why America’s cannabis experiment failed

Indiana

Once cannabis legalisation in the US started being taken seriously a decade ago, the majority of liberal Americans supported it. It just seemed like common sense. No longer would pot users have to rely on street dealers, so criminal organisations would wither away. At the same time, states would benefit from billions in tax revenue. Booze, after all, was once held under the thumb of prohibition in the US, bringing about 13 years of black market activity and gang violence, which all ended when prohibition was repealed in 1933. The alcohol trade is now one of the leading earners in America and contributes roughly $260 billion to the economy. Why would marijuana be any different?

Ten years on and it’s clear that America’s cannabis experiment has been an abject failure. For the 19 states that have legalised weed, the easy part was passing policy. Making a legal market work is the real challenge.

As states continue to try to sort out the logistics of running a taxed and regulated market, it’s business as usual for illicit operations. Illegal weed still outsells legal weed. At the same time, many legitimate cannabis companies, which are required to pay upwards of 70 per cent in federal taxes, are struggling to turn a profit.

In Illinois, where weed was legalised at the start of 2020, cannabis buyers must pay around 40 per cent in local, state and excise taxes; illegal sales there were worth more than $2 billion last year simply because the state’s consumers are economically motivated to buy from the illicit market. California, which is the largest legal cannabis market in America after it legalised recreational use in 2016, is no different. Since 2018 it has generated more than $4 billion in tax revenue, but the illicit market is worth more than $8 billion a year.

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