A new report indicates that Washington, which legalized recreational marijuana in 2012, has been much more successful at displacing the black market than California, where voters approved legalization in 2016. In a 2021 survey by the International Cannabis Policy Study (ICPS), 77 percent of Washington cannabis consumers reported buying “any type of marijuana” from a “store, co-operative, or dispensary” in the previous year, while 17 percent said they had obtained pot from a “dealer.”
The share of Washington consumers who report buying marijuana from a “store, co-operative, or dispensary” is higher than the average for states that have legalized recreational use, which was 57 percent in 2021, according to a nationwide ICPS survey. Washington’s Liquor and Cannabis Board (LCB) paid for the ICPS report on cannabis consumption in that state, and the ICPS has not published California-specific survey data. But calculations based on estimated total consumption and legal sales suggest that the black market accounts for somewhere between two-thirds and three-quarters of marijuana purchased in California.
California’s striking failure to shift consumers from illegal to legal dealers is largely due to a combination of high taxes, onerous regulations, and local retailing bans. While Washington has a relatively high retail marijuana tax (37 percent, plus standard sales taxes), in other respects the state has made it easier for licensed suppliers to compete with illegal sources.
A 2022 study from Reason Foundation (which publishes Reason) notes that local restrictions in California have created “massive cannabis deserts” where “consumers have no access to a legal retailer within a reasonable distance of their home.” Washington has more than three times as many legal dispensaries per capita as California.