Marijuana retail sales in Lowell could be seen as a cash crop, but that apparently hasn’t stopped a thriving black market, if a recent crackdown on a large-scale Woburn-based illegal distribution ring is any indication. .
The last Lowell City Council meeting reported that Lowell brought in about $1.4 million in revenue from legal pot sales in the fiscal year that ended in June.
Earlier this month, Attorney General Maura Healey announced the investigation that the Woburn Network had identified four suspects and a cache of cash, illegal drugs and drug-related devices.
The charges stem from a year-long investigation into the major multi-level organization that authorities say trafficked in illegal marijuana and THC products, black market tobacco and electronic nicotine delivery system products. .
The majority of this contraband was flavored — in violation of the state’s ban on flavored tobacco products — and smuggled to commercial enterprises in the area.
The arrest of a suspect, Samuel Habib, 43, of Stratham, NH, was the result of law enforcement agencies executing search warrants at several commercial facilities in Massachusetts, as well as locations in New York and New Hampshire.
During these raids, authorities seized approximately 750 pounds of marijuana, 250 cases of illegal vapes, 200 cases of THC-infused products, approximately $540,000 in cash, four vans and a luxury SUV, according to the press release. of the GA.
The New Hampshire and New York markets for marijuana and these other substances make sense.
The Granite State remains the only recreational marijuana resister in New England, despite several attempts to pass — a missed opportunity to exploit its no-sales-tax advantage.
Currently in New York, adults 21 and older can possess and publicly use cannabis, as well as give marijuana to other adults as long as they are not compensated. However, with regulators still finalizing licensing rules, no retailers are currently allowed to sell cannabis.
But why Massachusetts, which legalized the recreational use of marijuana in 2016?
The slow rollout of the marijuana distribution network created pent-up demand that outstripped supply.
In April 2019, four months after the launch of legalized pot sales, Massachusetts police reported a booming underground marijuana market, with dealers taking advantage of increased demand and shortages.
Law enforcement and cannabis advocates at the time agreed that the combination of high prices and a low supply at the few operating retail stores was causing consumers of potentially legal weed to seek less options. expensive on the black market.
As recently as 2019, the illicit market accounted for more than 75% of marijuana sales in Massachusetts, according to a study cited by state Sen. Michael Moore, a Democrat from Millbury.
But the retail landscape has changed dramatically in recent years.
According to statistics kept by the state Cannabis Control Commission, as of March, Massachusetts had 387 licensed retailers.
Last year, retail pot sales in Massachusetts generated more than $1.3 billion in revenue.
The City of Lowell, which has licensed five outlets, has four in operation.
So what allows the black market in weed to not only survive, but to thrive?
Well, this so-called Woburn distribution center paid no state or local taxes on its sales and operated where and when it wanted, unconstrained by any municipal bylaws.
Minus this combined 20% of the national and local tax burden, illegal operators can undermine licensed retailers by a considerable margin, up to 50%.
And if the price is right, consumers are less concerned about the quality or potency of the pot product, one of the selling points of legalized marijuana.
And the combination of fines and jail time for illegal possession or distribution of pot doesn’t seem to be enough of a deterrent.
There is also the legacy of buying a banned substance on the sly. This romantic notion may go up in smoke over time, but for a certain generation, it’s a rite of passage.
So it looks like these parallel marijuana markets – one legal, the other forbidden – will continue to co-exist for the foreseeable future.