Extended examination on how marijuana reform might (or might not) be impacting black markets

This lengthy new Vice article, headlined "How America's Legal Weed Is Changing the Black Market and Influencing Mexican Cartels," provides an effective (though necessarily incomplete) account of how legal reform developments in the United States are impacting all sort of marijuana markets. The piece merits a full read, and here are excerpts:

And these are mostly happy days for the legal weed industry, whose sales revenues grew from an estimated $1.5 billion in 2013 to $2.7 billion last year; one projection has them hitting $35 billion by 2020. All across Oregon, which legalized medical marijuana in 1998, people are attempting to carve out niches, hawking a dizzying array of weed sodas, candies, extracts, and other products. Oregonians overwhelmingly approved a ballot initiative last year that sanctioned pot sales to recreational users, making the state the next frontier of the so-called "green rush" that began in Colorado and Washington in 2012....

That new day hasn't dawned entirely. The hodgepodge of pot laws nationwide — 23 states plus Washington, DC now allow some form of medical marijuana — has created a situation ripe for exploitation. One of the great promises of marijuana legalization has been the concurrent elimination of the black market for weed, putting local dealers out of business and sticking it to Mexican cartels by cutting into their bottom line.

But while that may happen eventually, the black market in the United States is still thriving. Growers, consumers, dealers, and others in the industry told VICE News about operators that undercut prices at state pot shops, and several sources described illicit operations that ship large quantities of weed across the country from states that have legalized pot to states that haven't. Mexican organized crime experts told us that cartels are still smuggling bricks of bud across the border, and are perhaps even improving the quality of their product to cater to the rising expectations of American stoners.

"You're not going to eliminate the black market overnight," Beau Kilmer, co-director of the RAND Drug Policy Research Center, told VICE News. "It's going to take some time, because essentially when you look at prices in the black market, whether it's marijuana or meth or cocaine, you're compensating drug dealers and everyone in the supply chain for the risk of arrest and incarceration. That goes away with legalization."

Most experts agree with Kilmer, saying that in time, as more states repeal pot prohibition, the dynamics of the marijuana black market will begin to resemble those of America's tobacco and alcohol black markets. There are still people selling untaxed loose cigarettes and running moonshine even though the vast majority of consumers prefer going to the store to buy smokes and alcohol legally. Right now, it's extremely tempting for growers in legal states to export their product to prohibition states, where prices are far higher.

Sam Chapman, cofounder of New Economy Consulting, a firm that specializes in the marijuana industry, told VICE News it's widely known that a significant portion of the weed grown in Oregon and northern California gets exported to the East Coast. "We've been seeing that product end up in Florida, end up in New York — places that don't have cannabis decriminalization and have very harsh punishments," he said. "When you have prohibition in other states, it drives the price up [there] because it's not regulated… I'd guess 80 percent of all product in Oregon is, unfortunately, leaving the state."