Study: Nearly 1 in 5 California marijuana consumers buy from black market

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A cannabis consumer survey commissioned by California-based Eaze Solutions supports what many licensed marijuana businesses in the Golden State already know: They’re losing market share to illicit companies that don’t care about regulations, and the main reason is cheaper prices.

The study, conducted July 6-12 by New Jersey-based Marketview Research Group, collected responses from 1,419 California marijuana consumers and another 331 in Colorado, according to Peter Gigante, head of policy research for Eaze. The San Francisco-based company runs a website and smartphone app through which consumers can place delivery orders for cannabis.

Among the findings:

  • Eighteen percent of California respondents made a cannabis purchase from an unlicensed business in the previous three months, and 84% of those are “highly likely” to buy from that source again “due to the illicit market having cheaper products and no tax.”
  • On the flip side, 96% of respondents made a purchase from a state-licensed business. Of those, 92% said they were definitely or probably going to buy from the legal market again.
  • Taxes on cannabis products were a big reason consumers turned to the illicit market, and the study concluded that a 5% decrease in the California MJ tax rate could spur as much as 23% of black-market customers to buy from licensed cannabis businesses. Conversely, the survey found that a 5% tax increase on California marijuana products could result in as much as a third of the legal market’s customer base choosing to buy instead from illegal MJ retailers.
  • The top factors for California consumers deciding patronize licensed cannabis companies include consistent product quality, affordability, customer support, lab/safety testing, accurate labeling, electronic payment options and brand-name recognition.

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