Reefer Madness
A Drug Bust in Pot-Friendly Colorado

The black market in pot is alive and kicking in Colorado despite legalization. The state has indicted 32 people for illegally growing pot and selling it across state lines, in a scheme went on for four years and netted the growers $12 million. More, via the Denver Post:

The charges are the culmination of sweeping raids on multiple warehouses last October. All of the raided warehouses were in areas popular with licensed, commercial marijuana growers.

According to the indictment, though, the raided grow facilities were not licensed with the state. Instead, the growers are accused of operating under the false pretense of being medical marijuana caregivers. Their real goal, according to the indictment, was to use Colorado’s laws and commercial marijuana industry to “hide in plain sight.”

These export-oriented illegal growers demonstrate how easily legalization in one state can undermine prohibitionist regimes in others. In a classic American Interest piece on pot legalization, the authors (Mark Kleiman et al.) noted that prohibition states aren’t likely to be happy if the federal government sits on the sidelines while some states legalize:

If Colorado became the dominant supplier of cannabis for the entire country, or even for large parts of it, revenues from out-of-state sales could approach $500 million, about the size of Colorado’s deficit this past year.

So while it might be counterproductive for the Federal government to fight back tooth and nail against state-level legalization, complete acquiescence might touch off a brawl. Other states might well cry foul and push for Federal intervention if Colorado’s legalization led to Colorado replacing Mexico and Canada as a closer and more efficient “source country” for marijuana, putting downward pressure on prices around the country and hence stimulating more use.

Colorado, at least in this case, has cracked down in way that other states would welcome. But if Kleiman and his co-authors are right, there could be many more problems coming as legalization works itself out on a state-by-state basis.

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