I'm curious what happens to the people who were surviving on the cash from selling it illegally.
Some of them are poor slobs. Some of them are organized crime.
Are they just going to try to sell it at a lower price since the police cannot tell where you got it from and might not even care anymore? Tax savings alone radically reduces the price.
The same profit margins exist for tobacco and alcohol, especially cities like NYC, but there are relatively few bootleggers in both markets. I think the legal risk significantly offsets the increase in price from taxation. But then again, cannabis differs from tobacco and alcohol in many ways in that an underground market has become highly developed. It will indeed be interesting to see...
There's a lot of bootleggers for cigarettes in NYC. I've found many places, mainly in Brooklyn, that sell Virginia cigarettes. Big selections too!
Alcohol flows plentifully and relatively cheaply here though although I hear there are speak easies.
So I guess the moral is, if you tax it so much people are paying exorbitant amounts for it, you may end up creating a bootlegger's market, especially if you don't have to cross any national borders with the product.
They can now get a legal job selling it over the counter. They can get licensed and sell it legally via delivery or whatever (I don't know the regulations). They can leverage their growing operation into a legal business that sells to dispensaries. They can get a job in another field...though, the skills acquired through dealing illegal drugs aren't necessarily very marketable.
I dunno...but, we didn't, as a nation, mourn the end of bootlegging as a career option when alcohol prohibition ended. So, I'm not going to mourn the end of the small-time drug dealer (or the large scale cartel dealers, either).
This has already been tested with the medical setup. Many retail buyers continued to purchase their cannabis the way they were before, from their friends. That system had been in place for such a long time that people didn't feel the desire or need to change. Growers also found dispensaries to be a ready new group of wholesale buyers.
When I was in Seattle this summer, there were dozens of people selling it in the park by Pike Place. I asked one of them what he was going to do when recreational marijuana was legalized, and he said "keep sellin'!"
why not? it would be just like selling contraband cigarettes for the small guy. the big shots probably can just move to another market since they have a know how of dealing illegal stuff.
If you can consider random poor people in front of supermarkets and older friends and as illegal markets, then there is.
If you have the right (or wrong, depends on how you view it) friends, then booze will be almost always available. Your friend doesn't necessarily need to be old enough to buy the booze, since if she/he has the contacts to yet older friends then you can understand how the buying circulates trough different levels. This way you don't necessarily need more than one middleman to buy vodka at age of 17.
Tobacco gets usually passed on the same way as booze, but at least in case of snus there are usually known groups which adopt the use. For example, hockey players are known to use snus, so there's high chance that you can buy some from them. And you don't need to know more than one hockey player, as the players know which one of their teammates has the stuff and when.
In cases where some known groups have the substances and the interest to sell them, you could consider it as somewhat centralized market. The people who run the market don't likely think it as one, but that's up to the viewer. After all, the way the liquer and tobacco gets spread may seem like there's no market at all.
One thing I don't see mentioned here is the illegal tobacco market due to high taxes. You can get cigs from Mexico, or a low-tax state, say, and re-import them into a high-tax state.
This is one of the braking factors on tobacco taxes. It applies to any market -- if the taxes are too high, people will cheat the taxes.
Edit: I see the first link by @munin refers to a Virginia-to-NY cig smuggling scheme.
Moonshining is on the rise! In my travels in the south last year, I encountered many people drinking and selling corn whiskey, especially in the form of Apple Pie liquor.
Another anecdote: at my high school there were several people involved in a ring of cigarette carton theft, who would then sell cartons at the school for inflated prices.
Some of them are poor slobs. Some of them are organized crime.
Are they just going to try to sell it at a lower price since the police cannot tell where you got it from and might not even care anymore? Tax savings alone radically reduces the price.