First Year Projected Legal Illinois Marijuana Sales To Be $242 Million; 80% of Sales Expected To Be On Legal Market, Destroying Black Market

From the Chicago Sun Times:

Your weed dealer will be OK even after marijuana becomes legal — here’s why

Cost and convenience and will help keep the black market thriving, experts and dealers say.

By Tom Schuba Aug 26, 2019, 6:00am CDT

A longtime Chicago dealer said he offers his customers familiarity and convenience, which will encourage them to stay loyal.

“Let me see the dispensary front you a dub sack until payday,” he said about his willingness to provide a $20 bag of dope to customers and get paid later, for example.

Provided photo

Black market will dominate — at first

Experts agree that even as Illinois’ pot prohibition comes to a close Jan. 1, black market bud sales will likely continue smoking the legal competition in the coming years.

“The price in the legal market generally tends to be significantly higher than that in the unregulated market,” said John Kagia, executive vice president of New Frontier Data, a Washington, D.C., firm that analyzes the cannabis industry.

First-year sales of recreational pot are expected to hit $242 million in Illinois, less than medical pot sales and well behind the anticipated $2.9 billion in black market sales that will continue across the state, according to New Frontier Data. Even by 2025, the illegal market will likely net around $1 billion.

Next year, Illinois’ 20 existing cultivation centers will be tasked with supplying the growing number of legal pot shops, which could potentially double to 110. The limited number of growers may not be able to meet the demand, which could lead to a supply shortage that pushes the price of recreational pot products even higher, experts said.

That leaves plenty of room for the black market to fill the void.

That’s what’s happened in California, said Steve DeAngelo, a trailblazing cannabis activist and entrepreneur…

Read the Chicago Sun Times article for what went wrong in California. Prices will eventually stabilize and drop over time, the article goes on to say:

Prices will drop

The price of regulated cannabis will ultimately come down within a matter of years and enable legal sales to outpace black market totals, experts predict. That’s because consumers are eventually willing to pay a slight premium to shop at well-designed dispensaries that offer high-quality products and better service than the “sketchy people” selling weed in back alleys, Kagia said.

That trajectory has already been seen in other states. Five years after Colorado legalized weed for adult use, 82% of total consumers are purchasing pot through the legal market, according to Kagia.