The Costs of Legality and the Punitive Logic in California’s Cannabis Market

• In Event: Sex Work and the Economics of Criminology

Abstract

While it is commonly assumed that legalization policies eliminate illicit market activities, the California case offers a remarkable example of how creating a legal framework inadvertently fosters the expansion of illicit practices. With most California cities opting to prohibit commercial cannabis activity or limit the number of licenses, market participants are compelled to compete for a restricted number of permits tied to specific locations, and those with fewer resources typically find themselves on the losing end. Cannabis providers who manage to secure licenses encounter further challenges, such as excessive taxation, premium prices for standard business necessities, overregulation, and high compliance costs. These cumulative hurdles induce them to operate in a semi-legal way. The political establishment believes that lenient penalties for unlicensed operations encourage the growth of the black market and suggests adopting a more punitive approach. In contrast, this project contends that it is more important to address the root causes of the surge in illicit practices. Relying on punitive measures will enhance control over the most socially vulnerable groups and undermine the intended benefits of legalization for marginalized actors, all the while enabling corporate entities to exploit the advantages of a burgeoning market.

Author

• Ekaterina (Katya) Moiseeva, University of California, Irvine