Illicit market

The illicit cannabis market refers to the network of unlicensed illegal producers and distributors who continue supplying marijuana across prohibition states and even within some legal territories by intentionally operating outside of the regulated legitimate channels. These persistent illicit markets exist primarily due to the excessive taxation and higher costs associated with legal retail cannabis, allowing unlicensed illicit operators to significantly undercut legal competitors by dodging taxes and regulations.

However, products from unlicensed illicit sources evade mandatory screening for contaminants and adulterants via lab testing, carrying greater risks to the end consumer. In legal markets, some illicit brands attempt to mimic legitimate companies via sophisticated counterfeiting operations in order to confuse uninformed consumers into purchasing their untested illegal product.

Many legalization advocates argue reasonable taxation rates and regulatory controls will eventually curb illicit market activity by making legal participation more economically attractive to both businesses and consumers. But excessive financial burdens and bureaucratic red tape placed on the legal industry frequently has the opposite effect of enabling and empowering thriving illicit markets.