Tag: legalized marijuana

Setting Marijuana Taxes Too High Drives Consumers To The Illegal Market, Federally Funded Study Finds

States that impose high tax rates on regulated marijuana products are driving adult consumers to the illicit market, according to a new federally funded study.

The research, published in the journal Health Economics, looked at past-month cannabis purchasing behavior of 1,525 adults aged 21 and older.

Researchers with Ohio State University found that high cannabis taxes and prices are linked to “lower cannabis consumption and THC intake” from legal purchases, but that the majority of those reductions (89 percent) may be offset by consumers switching to unregulated products from the illegal market.

“If the illegal market is restricted, policymakers can expect increasing cannabis prices using excise taxes to reduce both unit and THC consumption, while generating tax revenues,” the study said. “However, given the sizable illegal market, a large portion of the consumption reduction due to taxes may be offset by switching to illegal products.”

States have worked to strike a balance between pricing marijuana low enough to transition adults to the regulated market but still high enough to generate revenue. The results so far have been mixed, with no firmly established universal price or tax rate.

States that impose high tax rates on regulated marijuana products are driving adult consumers to the illicit market, according to a new federally funded study.

The research, published in the journal Health Economics, looked at past-month cannabis purchasing behavior of 1,525 adults aged 21 and older.

Researchers with Ohio State University found that high cannabis taxes and prices are linked to “lower cannabis consumption and THC intake” from legal purchases, but that the majority of those reductions (89 percent) may be offset by consumers switching to unregulated products from the illegal market.

“If the illegal market is restricted, policymakers can expect increasing cannabis prices using excise taxes to reduce both unit and THC consumption, while generating tax revenues,” the study said. “However, given the sizable illegal market, a large portion of the consumption reduction due to taxes may be offset by switching to illegal products.”

States have worked to strike a balance between pricing marijuana low enough to transition adults to the regulated market but still high enough to generate revenue. The results so far have been mixed, with no firmly established universal price or tax rate.

The study, meanwhile, also demonstrated that legal and illicit cannabis flower are essentially “substitutes for each other.”

Raising the price of legal cannabis flower by 10 percent “results in a 0.9 percent-1 percent increase in illegal flower consumption (units and THC),” and the inverse follows a similar pattern, the researchers found.

“While the cross‐price elasticities for unit demand between legal and illegal flowers are symmetric (not statistically significant), the cross elasticities for THC demand suggest that the increase in THC from illegal flowers in response to higher legal flower prices exceeds the increase from legal flowers in response to higher illegal flower prices.”

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Inside California’s Battle With The Marijuana Black Market

A convoy of sheriff’s deputies heads into a vast network of illegal marijuana grow operations in the foothills of Mount Shasta in California’s Siskiyou County.

They drive into a dusty encampment strewn with garbage and piles of empty plastic fertilizer containers, a blight on the otherwise scenic landscape.

The morning raid is nothing new for Siskiyou County Sheriff Jeremiah LaRue.

Thousands of makeshift greenhouses known as “hoop houses” – each one containing hundreds of illegally grown cannabis plants – are operating in the county at any given time, LaRue told The Epoch Times, as his deputies scoured the Mount Shasta Vista subdivision, a 20-minute drive northeast of Weed, Calif.

The sheriff’s office has counted 2,732 hoop houses using satellite and aerial imagery in the subdivision alone.

By the time he arrived at the scene on June 4, all the occupants had fled.

Spotters at these illegal grow sites – sometimes armed with AK-47s and rifles, according to nearby residents – alert laborers to leave the camp when they see sheriff’s deputies approaching.

Except for a few roosters, an older German shepherd, and a couple of curious pups, the site was abandoned. The occupants had already cleared out when an advance team of investigators approached the camp earlier that morning.

They know the drill.

About 430 flowering marijuana plants were found in each of two 30-by-100 foot hoop houses. Agents from the regional North State Marijuana Investigation Team weighed about 900 pounds of freshly cut marijuana plants that were hanging to dry in another slightly larger greenhouse.

All the marijuana was destroyed. No one was arrested, according to the sheriff’s office.

The team had served a search warrant on the same property last August and arrested the property owner, Haizhou Wang, then 56, who was on-site at the time.

Cannabis industry experts estimate that more than 30 million pounds of illicit marijuana are grown in the United States annually.

Siskiyou County alone produces about 17.8 million pounds of illegal marijuana every year, with a “low-end” estimated local street value of about $3.6 billion based on sales at $200 a pound, according to the sheriff’s office.

A typical pound of processed black-market marijuana may sell for a couple hundred dollars in California, but can sell for $1,500 in Midwest and East Coast markets and much more in other countries, according to both the sheriff’s office and the California Department of Cannabis Control.

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Arkansas GOP Governor And Democratic Challenger Agree On Opposing Marijuana Legalization

Medical marijuana has generated more than $1 billion in Arkansas since voters legalized it in 2016.

After the state opened its first dispensary in 2019, thousands of Arkansans joined the program and spent a record $291.1 million on medical marijuana in 2025, according to the state’s Department of Finance and Administration.

Tax revenue from those sales now supports free breakfast for public school students, following approval of legislation by lawmakers last year.

Medical marijuana programs have expanded across the country, as has recreational marijuana. Two dozen states, including neighboring Missouri, permit recreational marijuana use, according to the National Conference of State Legislatures.

Arkansas voters in 2022 rejected an effort to expand legalization to recreational marijuana, despite national groups spending millions in support of the measure.

Restrictions on marijuana have relaxed at the federal level, with the U.S. Department of Justice downgrading the drug classification for medical cannabis earlier this year.

Here’s what Arkansas’s gubernatorial candidates—Democratic state Sen. Fred Love, Republican Gov. Sarah Huckabee Sanders and Libertarian Colt Shelby—say about legalizing recreational marijuana.

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Prohibitionists Just Argued Themselves Into a Corner: To Stop Weed Reform, They Told a Court How Much Money They’d Lose

One of the loudest arguments against cannabis reform has always been about money. Legalizers are in it for the cash, prohibitionists have argued, and the science is just the wrapping paper. On July 2, in a filing before the D.C. Circuit, the Justice Department argued that the challengers’ alleged harms were commercial interests the CSA was never written to protect. Two of the groups trying to freeze marijuana rescheduling asked the court to hit pause on the reform, and the government told the judges that those two were guarding their own revenue.

The two groups behind the request are a drug-testing trade association and a pharmaceutical company that has never brought a product to market. The DOJ told the court that both of them “invoke pocketbook interests served by keeping all marijuana in Schedule I.” Their own sworn declarations, the government argued, undercut their request for a stay.

Here is the shape of it. In April, Acting Attorney General Todd Blanche moved FDA-approved cannabis medicines and state-licensed medical marijuana from Schedule I to Schedule III. A coalition of prohibition and drug-testing groups, two state attorneys general and a pharmaceutical developer is suing to undo that order, Kevin Sabet’s Smart Approaches to Marijuana and the attorneys general of Nebraska and Indiana among them. But the request to freeze the order while the case plays out came from just two of those parties, the National Drug and Alcohol Screening Association, or NDASA, and MMJ International Holdings. The government’s answer was blunt. The petitioners, it wrote, “come nowhere near satisfying the demanding standard for that extraordinary relief.”

The Accusation, Turned Around

For over a year, the case against reform has run on a single accusation. Sabet has made it repeatedly, including in a video posted as the DEA hearing opened: the government moved on marijuana because of industry money and campaign donations from cannabis executives, not because the science changed. The July 2 brief never answers Sabet directly. But read against that year of messaging, it lands as an inversion. If this is about money, it is worth asking whose.

Their Own Declarations

The answer is in the challengers’ own paperwork. NDASA told the court that its members would lose money if employers stopped screening for marijuana. In a sworn declaration, the group’s executive director estimated that marijuana-positive results are the largest source of revenue at the medical review offices that read drug tests, and projected a revenue decline of “at least 35%” over the next 6 to 12 months if the order stands. NDASA also attached a number to what compliance would cost its members: about $700,000, spread across 700 employers. Do the arithmetic and it comes to a thousand dollars each. That is the figure the group called irreparable harm, the kind of injury that is supposed to justify a court freezing federal drug policy. A thousand dollars per employer. One cannabis attorney who reviewed the motion did the same math and called the argument “ridiculous.”

MMJ’s claim is stranger. The company says it spent eight years and $10 million developing cannabinoid drugs the proper way, through the FDA, and that rescheduling rewards state-licensed competitors who skipped that path. The problem, as the DOJ pointed out, is that MMJ has no product on the market. It has applications pending, not medicine on shelves. You cannot lose your share of a market you have not entered. Its complaint, the government argued, describes a policy it dislikes, not an injury a court can fix.

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Vermont Governor Signs Bill To Double Legal Marijuana Possession Limit And Allow Interstate Commerce

Vermont’s governor has signed legislation that will allow adults over the age of 21 to legally possess twice as much marijuana as they could previously, enable interstate cannabis commerce and make other changes to rules for licensed businesses.

Gov. Phil Scott (R) on Friday announced that he approved the large-scale cannabis regulatory reform bill, S. 278, which passed both chambers of the legislature last month.

One of the main impacts of the new law for consumers is that it doubles the prior legal possession limit to up to two ounces of marijuana or 10 grams of hashish.

The legislation, sponsored by Sen. Kesha Ram Hinsdale (D), also allows the governor to enter into compacts with other states for cross-border cannabis trade.

The legislative text notes that there is a “shifting federal posture on regulated cannabis markets” and says it is “the intent of the General Assembly to prepare for the possibility of regional or interstate cannabis markets.”

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Supreme Court Upholds Marijuana Users’ Gun Rights, Rejecting Trump DOJ Arguments In Major Second Amendment Case

The U.S. Supreme Court has unanimously sided with a man who was prosecuted for possessing a gun while being a regular consumer of marijuana, ruling that the government’s actions violate the Second Amendment.

The opinion authored by Justice Neil Gorsuch is narrow in scope and does not entirely strike down the federal law known as 922(g)(3) that prohibits people who illegally consume controlled substances from possessing or purchasing firearms.

But it does say that as applied to the man in the current case, Ali Danial Hemani, it is unconstitutional to automatically bar people from lawful gun ownership just because they happen to use marijuana occasionally.

It also says that the broad ban and the government’s effort to defend it are “at odds with” the Trump administration’s move to federally reschedule cannabis.

The government “asks us to conclude that anyone who regularly uses marijuana is categorically violent and dangerous without any further showing,” the opinion says. “All based on little more than its current say-so, one at odds with its own regulatory actions. And affording the government that kind of ‘broad power to designate any group as dangerous and thereby disqualify its members from having a gun’ would risk allowing it to ‘quickly swallow’ the Second Amendment.”

The court’s opinion in U.S. vs. Hemani does not address “efforts to ban addicts, or those presently intoxicated, from possessing a firearm,” it says. “We do not address other prophylactic laws Congress might adopt after determining that users of a particular drug pose a special risk of misusing firearms. We do not address 18 U. S. C. §922(g)(1)’s provision disarming individuals convicted of felonies (often including drug-related ones).”

“We do not even address whether the government could bring a prosecution under §922(g)(3) accompanied by individualized proof that the defendant’s use of marijuana (or any other drug) renders him a danger to himself or others. Or proof that a certain drug always renders its users dangerous because of its potency or for some other reason. None of those issues is before us and we do not pass on them either way.”

“All that is before us is one, if surely ambitious, theory. The government maintains that it may automatically strip Mr. Hemani of his Second Amendment right to possess a firearm because he uses marijuana a few times a week,” Gorsuch wrote. “More than that, because he possessed a gun despite this prohibition, the government insists it may imprison him for up to 15 years and disarm him for life.”

“According to the government, none of this turns on how much marijuana Mr. Hemani uses or what effect it has on him. It makes no difference either if he keeps a firearm only in his home for selfdefense, never misuses a gun while intoxicated, and never poses a danger to himself or others as a result of his marijuana use. The only thing the government must show, it says, is that an individual like Mr. Hemani regularly uses any amount of any controlled substance.”

The court’s opinion details recent large-scale federal policy changes concerning marijuana, and how they undermine the broad statute seeking to strip cannabis consumers of their Second Amendment rights.

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California GOP Senator Suggests Putting Marijuana Back On The Ballot To ‘Reverse’ Legalization

A California Republican senator says it is time to have a “serious discussion” about putting a measure on the ballot to potentially “reverse” legalization of marijuana in the state—also raising concerns about President Donald Trump’s move to reschedule cannabis at the federal level.

“I think it’s time to assess the effects, the significant unintended consequences of the legalization of marijuana, which has not just happened in California, but in other states too,” Sen. Roger Niello (R) said at a hearing of the Senate Business, Professions and Economic Development Committee last week.

“Now we can’t change it without going back to the people, but I think we should have a serious discussion, a serious analysis of the obvious…unintended negative consequences I don’t think that the writers of the proposition cared about,” he said as first reported by State Affairs, referring to the cannabis legalization ballot initiative that California voters approved in 2016. “I think these could have been predicted. They just wanted recreational use to be legalized.”

Niello raised concerns that “we’re even seeing our current president now advocating that by downplaying the classification of marijuana at the federal level.”

“We have seen significant negative consequences of this legalization, both here as well as in other states,” the senator, who was speaking at a hearing at which lawmakers approved a bill to legalize marijuana dispensary drive-thru windows in California, said. “I think it’s time for us to have a serious analysis of that, and whether or not we want to develop a proposition to go back to the voters and either reverse it or somehow reform it so that we don’t continually deal with the problems that we do.”

“I oppose the legalization of marijuana,” he said, citing data about cannabis use by young people and an alleged link to mental health problems and claiming that the 2016 reform was “written to please everybody” which resulted in a “dysfunctional policy that is bound for unintended consequences.”

Elsewhere in the U.S., marijuana legalization opponents are currently collecting signatures to put measures to roll back the reform in Maine and Massachusetts—though those anti-cannabis campaigns have faced accusations of misleading petitioning tactics.

A separate anti-marijuana effort in Arizona for a similar measure was dropped after its lead organizer said his initial concerns about the legal cannabis industry were misplaced.

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Drug Testing Industry And Pharmaceutical Company Ask Court To Pause Trump’s Marijuana Rescheduling Move

An industry association that represents drug testing companies and a cannabis-focused biopharmaceutical corporation are asking a federal appeals court to block the Trump administration from moving forward with federal marijuana rescheduling while ongoing litigation challenging the reform is considered—claiming that cannabis is a “dangerous drug that destroys lives.”

The National Drug and Alcohol Screening Association (NDASA), along with MMJ International Holdings and its subsidiaries, argue in the new filing on Tuesday that the cannabis rescheduling move is “a brazen agency overreach in which the Acting Attorney General ignored restrictions on his authority set by Congress—and a binding decision of this Court—to carry out one of the most sweeping reductions in restrictions on a dangerous narcotic in the history of the Controlled Substances Act (CSA).”

“Nearly fifty years ago, this Court held that the Attorney General lacks authority to unilaterally decide how marijuana ought to be restricted—that is, which Schedule it should be placed under—pursuant to the CSA. The Court explained that Congress constrained the Attorney General’s authority by requiring him both to secure recommendations from the Secretary of Health and Human Services (HHS) and to make detailed findings through a formal rulemaking on the record. While the CSA contains a limited bypass of those procedures to allow the Attorney General to ensure that the U.S. complies with certain treaties…this Court made clear that the bypass cannot be invoked when the Attorney General is simply deciding to move a drug between two Schedules under the CSA, either of which would comply with treaty obligations.”

“The Department of Justice complied with this Court’s construction of the CSA for over four decades—until now,” the joint motion for a stay pending review that was filed before the U.S. Court of Appeals for the District of Columbia Circuit argues.

While HHS had issued a recommendation to reschedule marijuana during the Biden administration, the recent move by the Trump Department of Justice canceled ongoing proceedings related to that proposal and issued a new final rule.

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Anti-Marijuana Ballot Campaigns In Maine And Massachusetts Accused Of ‘Fraudulent’ And ‘Misleading’ Petitioning Tactics

Campaigns that are working to put measures to roll back marijuana legalization on the ballot in two states are facing accusations of “fraudulent” and “misleading” signature gathering tactics—and not for the first time.

Now, however, new social media posts from both states appear to show signature collectors for each measure arguing that people who support legal cannabis access should sign the petitions in order to advance or protect marijuana reform.

A video posted to Reddit of a signature gatherer for the Massachusetts proposal—which would repeal state laws allowing the regulated commercial sales of recreational marijuana while maintaining legal possession and continuing the medical cannabis system—shows the man collecting signatures outside a supermarket next to a sign that says “keep cannabis legal.”

When confronted by a marijuana reform supporter who recorded the petitioner’s interactions with voters, he appeared to be trying to convince them that it is important to qualify the anti-cannabis measure for the ballot in order to then defeat it.

“This is what we’re fighting against right here. That’s why we vote no,” he said. “If we can get this to the ballot right here, we vote no.”

The person who captured the video pointed out that Massachusetts voters already approved marijuana legalization years ago, and that the only way it could be imminently repealed is if the new ballot measure qualified for the November election. If the initiative does not get enough signatures to go before voters, the state’s laws will remain the same.

“It’s my job,” the petitioner insisted, however. “I know what I’m talking about.”

“It’s a group of rich folks from out of state that want to basically take marijuana to when it was a medical marijuana card,” he said. “We don’t want that to happen.”

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California Marijuana Regulators Unveil New AI Tool To Prevent Product Packaging That May Appeal To Kids

California cannabis regulators are rolling out a new AI tool to help businesses identify marijuana product packaging may appeal to kids in violation of state rules.

The Department of Cannabis Control (DCC) on Monday announced that licensees can now utilize a Cannabis Product Image Analyzer (CPIA) that was developed to aid in preventing the market launch of potentially problematic packaging that violates state statute by enticing minors.

Marijuana business licensees can “simply snap a photo using their smart phone or mobile device, screenshot or any other supported file format and upload to the CPIA tool,” DCC said. “The image will be analyzed and provide a summary of its findings.”

DCC said it won’t retain images uploaded to the CPIA database, or the summaries of findings that it produces. Rather, the goal is to “assist licensees in their independent evaluation of whether packaging or labeling may be attractive to children.”

That includes packaging and labels that depict:

  • Images of minors or anyone under 21 years of age
  • Cartoons
  • A likeness to images, characters, or phrases that are popularly used to advertise to children
  • Images that are any imitation of candy packaging or labeling and
  • Images with the terms “candy” or “candies” or variants in spelling such as “kandy” or “kandeez”

“The CPIA uses artificial intelligence technology to review images submitted by a user to identify issues that may indicate attractiveness to children for further evaluation,” DCC said in a notice. “The CPIA may not identify all concerns an image may present, or that the Department may find attractive to children.”

Regulators stressed that licensees should not “rely on the CPIA’s output, as it does not establish definitively whether advertising or marketing violates” state rules. And if the tool finds that an uploaded image is likely compliant, that alone “does not preclude a finding by the Department or a factfinder in a disciplinary or administrative action from determining the uploaded image violates the regulation.”

“Because artificial intelligence systems evolve, update, or produce variable outputs, the CPIA’s evaluation may change from day to day, even when reviewing the same image. The quality, clarity, angle, lighting, or completeness of an image uploaded by a user may affect the CPIA’s review and assessment. Users are solely responsible for ensuring uploaded images accurately depict the product’s labeling.”

Cannabis licensees are being encouraged to provide feedback on the AI tool through an online survey.

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