North American Cannabis Black Market Continues to Shrink

New data from Prohibition Partners reveals that while Central and South American cannabis seizures are spiking, North America is experiencing a decline in the amount of illegal cannabis seized.

Unsurprisingly, as cannabis legalization sweeps across North America, the amount of illicit cannabis that is found and seized by law enforcement has been declining since 2015. Contrastingly, Africa, Asia, and South America saw a rise in police seizures over the period.

This will come as no surprise to those who have kept an eye on the cannabis industry, as the greatest legislative leaps have been made almost entirely within North America.

PP

Though there is more than meets the eye when thinking about cannabis seizures, and it isn't simply a case of people having their drugs taken from them. Firstly, a decrease in cannabis seizures can be representative of one of two circumstances; either fewer people are consuming and possessing cannabis, or fewer resources are being allocated to seizing cannabis – likely as a result of changed legislation.

Clearly, in North America, the decreases in cannabis seizures are commensurate to the changes in cannabis legislation, rather than being the result of decreased use. Additionally, one can assume that cannabis usage rates in Central and South America haven't doubled over the past few years, but rather, there has been more police enforcement when it comes to cannabis possession.

What this suggests is that thanks to the loosened laws surrounding cannabis in North America, police resources have been freed up to pursue more heinous crimes. Moreover, while South America may have a booming illicit cannabis market, North America has instead somewhat plugged the tax hemorrhage that is the black market and is seeing serious returns as a result. For example, last year Colorado announced that the State – who was an early-mover on cannabis legalization – has brought in over $1 billion in tax revenue since 2014. Had Colorado not legalized cannabis when it did, that tax revenue would largely be floating around illicit markets.

And then one must ask, what happens to cannabis when it is seized?

In the best-case scenario, seized cannabis plants are occasionally given to researchers so that they may better understand the plant and its effects. In the worst-case scenario, the plants are burned or destroyed. This is particularly wasteful when one considers the electricity, heating, and water used to grow cannabis crops in an indoor setting.

While the above graph may seem self-explanatory, there are many layers to it; namely that by legalizing cannabis, States will likely experience a freeing up of their police force, an increase in tax revenue, and a decrease in waste if they are otherwise likely to burn or destroy seized cannabis.

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.

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