The illegal cannabis market in California is swelling with some serious momentum. News of a thriving black market in “the Golden State” might come as quite a surprise, considering the fact medical cannabis legalization expanded to the recreational level under a 2016 voter initiative known as the Adult Use of Marijuana Act (AUMA) or Proposition 64.

Prop. 64 passed with 57 percent approval, but since the idea of cannabis retail businesses was rejected in 80 percent of California’s cities, illegally-operating drug dealers are finding it quite easy to permeate the pot market in areas with less relaxed laws.

Fewer than one percent of California’s cannabis cultivators

There’s a lack of legally-operating pot stores and cultivation facilities spread across the most populous U.S. state, which is home to some 33 million residents. Data published in the California Growers Association’s latest report indicates that less than one percent of Cali State’s 68,120 growers have been awarded licenses to do the job legally.

As of April 2019, 620 cannabis shops were licensed to legally conduct business in California. This figure isn’t much higher than the 562 stores that had received licenses in Colorado, which is just a sixth of California’s size and is home to less than six million residents.

Even the Governor of California, Gavin Newsom, thinks that Northern California’s illegal cannabis-growing operations are posing a serious problem for the legal market. He says that they are “getting worse, not better.” Just a couple of months ago, Newsom went as far as to redeploy the National Guard troops to deal with the issue at hand.

California’s black market is the biggest in the United States

Although the illegal pot market infiltrates the vast majority of the U.S., California’s black market is by far the biggest. Industry experts are concerned that licensed cannabis business owners could be abolished from the scene, due to the fact the strengthening illicit market is undercutting the legal market on price.

Less revenue means less room for growth in California’s legal weed sector and illegal pot businesses aren’t exactly finding it difficult to compete with their licensed competitors; the largest cannabis shop directory in the U.S., Weedmaps, has continuously failed to remove unlicensed pot companies from its listings.

California’s ‘cannapreneurs’ want unlicensed cannabis businesses shut down

Budding business owners in California are getting frustrated. Before complete cannabis legalization unfurled across the state on the first day of January last year, entrepreneurs did whatever they could to steer clear of the anti-pot federal government.  

After operating in the state’s still-thriving illicit market for decades, licensed cannabis business owners in California are reaching out for the long arm of the law in the hopes that unlicensed cannabis business owners will be eliminated from the legal weed scene and prosecuted.

“We are the taxpayers — no one else should be operating,” were the words of a man named Robert Taft. He owns a dispensary called 420 Central. Sales figures for his licensed Orange County-based cannabis business have nosedived over the last few months.

“I resigned as a board member from Santa Ana Cannabis Association because half of the members are running rogue operations,” he said, adding that, “They’re going to mess it up for all of us.”

How each city regulates cannabis in California is left up to overseeing governments in the 500 municipalities that extend across the state. Although pot businesses are permitted in Los Angeles, San Francisco, San Jose, and San Diego, they are forbidden in the vast majority of metropolises statewide.

Illegal cannabis trade, or the “black market,” is getting stronger

Half a million pounds more of weed will sprout out of California’s illegal market this year than in 2019, according to New Frontier Data. Surging demand and innovation in cultivation methods will be the main catalysts for the continuing growth of California’s black market.

Aside from those factors, oversupply is an issue that is making it difficult for the legal market to eclipse the illegal one. Under 20 percent of the state’s annual weed cultivation of 14 million pounds is consumed in-state, with the surplus making its way beyond California’s borders by means of trafficking and private express mail/air delivery.

Additionally, as new consumption methods emerge, more products are being introduced to the market. This presents black market suppliers with an opportunity to capitalize on growing trends, such as vaping oils, tinctures and other derivative products, like extracts. After all, it is a lot simpler for a dealer to hide odor-free cartridges of liquid, as opposed to bags of pungent bud.