The licensed marijuana retail stores in Los Angeles are finding it hard to make a profit, while illegal storefronts enjoy brisk sales, owing to their cheaper, tax-free prices.
Looking at the situation, LA Mayor Eric Garcetti said this week, in a press conference, that the city is considering a major crackdown on all illicit marijuana shops. “The legal shops can’t get undercut every single day by everybody else that’s out there,” the mayor told reporters at City Hall.
In order to tackle the situation, the government may have to pump millions of dollars into law-enforcement.
What’s more worrisome, however, is the fact that the drugs sold in the illicit market are dangerous as they, of course, do not undergo any safety tests. All products sold in the licensed retail stores though have to go through a number of safety tests conducted via independent labs.
Since in the illicit stores, the prices of cannabis products are heavily discounted — sometimes even by more than 50% of the legal price — why would people resist entering such places?
According to Ruben Honig, executive director of the United Cannabis Business Association, an industry group of licensed operators, the baffling scenario has resulted in a loss of jobs for many people as legal shops are left with no other option than to lay-off employees.
Illegal shops that are shut down, quickly reopen somewhere else, another reason that Garcetti needs more enforcement funds.
Although California kicked off its legal cannabis sales in full-swing in January 2018, the state’s effort to transform its longstanding illegal and medicinal marijuana markets into a unified, multibillion-dollar industry still remains a work in progress.
Notably, Los Angeles is the largest US city with a legal marijuana marketplace.