The “Trap Market”: Navigating the Costs of Legality in California’s Cannabis Industry

• In Event: Race, Gender, and Class Roundtables Session
  In Refereed Roundtable (60 minute): 10) Markets and Inequalities: Gender, Livelihoods, and Social Justice

Abstract

This paper explores markets in transition in the context of cannabis legalization in California. Despite the continued federal prohibition of cannabis, many states have legalized its medicinal and/or recreational use, which has created ambiguous regulatory regimes and significantly increased compliance costs for market actors (e.g., excessive taxation, restrictive zoning policies, inflated prices for rent, limited access to banking). Although scholarship on cannabis legalization is rapidly expanding, there remains limited empirical evidence on how market actors respond to the burdens of legalization and make strategic decisions around compliance when legal status becomes costly and difficult to obtain. This paper applies the framework of liminal legality to the analysis of markets undergoing legal transition. Drawing on interviews and ethnographic data collected in California between 2021 and 2024, it discusses how cannabis operators make sense of new rules. The findings reveal that the creation of a formal legal structure and the expansion of state control can inadvertently contribute to the proliferation of illegal and semi-legal practices, which in turn prompt calls for harsher sanctions against unlicensed operators. The article argues that, in designing policies to suppress illicit markets, it is essential to recognize that liminal legality often emerges as a response to imperfect regulation. An overreliance on punitive measures is likely to disproportionately affect the most visible and vulnerable actors, while undermining the social justice goals of the cannabis reform movement.

Author

• Katya Moiseeva, Pennsylvania State University