Weed May Be Legal In Massachusetts, But Dealers Aren’t Done Yet
A day that many people have long pushed for in Massachusetts finally arrived. If you’re over 21 it’s legal, now, to buy marijuana in a store licensed by the state. But the illegal market isn’t expected to go away anytime soon.
“There’s just not enough dispensaries, there’s not enough cultivators, there’s not enough manufacturers, legally,” said Kamani Jefferson, president of the Massachusetts Recreational Consumer Council, a group which advocates for cannabis consumers.
So far, no retail stores are licensed and only 22 medical marijuana dispensaries are open.
Jefferson said that unlike the medical market, the new recreational sales will be taxed by as much as 20 percent.
“The illicit market will have the upperhand with just not having a tax,” said Jefferson.
So for now, the illegal sales aren’t about to stop.
Loving life 'a little bit more with marijuana'
“I obtain it, I pay for it and then I turn around and charge people and then pay my creditors back,” said a 71-year-old builder who earns his living renovating houses.
He also distributes marijuana, without trying to make much money from it.
“I expect people to pay what I pay and a very, very, very small fee beyond that,” he said.
He doesn’t want his name used because what he does is illegal. He said he first used marijuana in 1970 as a U.S. soldier in Vietnam.
“I think it served me by giving me, probably the best attitude to get through that situation,” said the builder. “So, I love life. I just love life a little bit more with marijuana.”
He also loves helping others get marijuana at a decent price.
Lessons from Colorado
As cannabis becomes legal in Massachusetts, the experiences of people who left the black market in Colorado, may offer some lessons here.
Luke Ramirez said he made $5,000 to $10,000 a month selling pot in Colorado before it was legal.
“We’re certainly not talking Al Capone or organized cartel type of money – just your classic medium-sized cannabis dealer,” Ramirez said.
Ramirez said he got tired of watching out for the police. So he opened his first legal cannabis business -- a medical dispensary -- in 2009, when Colorado regulations were pretty loose.
It’s a good thing he did. Within a few years, the street price for marijuana dropped dramatically.
"I’d say that's the point of having legal marijuana," he said. "You price the black market out, so that dealers have less of a market here, and they’re forced to go to other states, or they’re forced to quit. Or they’re forced to join the legal side of the cannabis industry.”
But joining the legal side now in Colorado and in Massachusetts can be costly and complex.
Who benefits from the new industry?
A 40-year-old Iraq war veteran -- who doesn’t want his name used because of the stigma of being a cannabis advocate -- said opening a pot store should be as easy as a dry cleaners or a liquor store. And he said he doesn’t want his community left out.
“A lot of people like myself will absolutely not participate in any type of new scheme that doesn’t take into consideration the very real racial history of cannabis prohibition and what the drug war has done to our neighborhoods,” he said.
And those neighborhoods, he said, should be first in line for legal cannabis stores – and the economic benefits they could bring.
State regulators in Massachusetts insist they take those concerns seriously.
"It’s our obligation both under the law and morally to make sure that the people who have bore the brunt of prohibition all this time now have a fair shot to enter this business," said Massachusetts Cannabis Control Commissioner Shaleen Title.
"I don't see any other reason to be in the illegal market if they are offering this way up."
The commission said it will give priority consideration to applicants who meet several criteria, such as being a person of color, having a drug-related criminal record or living in communities hit hard by drug enforcement. And regulators just announced a new training program.
“The point of the equity program is to provide technical assistance, and allow full participation by the people from the disproportionately harmed communities,” Title said.
Getting over the financial hurdles
Sean Berte, a former Boston firefighter who did time for cultivating pot, plans to apply for the program. He wants to learn about accounting, legal compliance and investors.
“I hope to get a retail license, but I don’t foresee that happening just because of the financial hardships that prison has cost me,” Berte said.
Berte estimates the cost of starting a recreational business ranges from $2 million to $5 million. Others said it could be as low as $1 million.
And under federal law, banks can’t loan money to a marijuana business.
Michael Ortoll of Braintree, Massachusetts, said he is working on lining up investors. He was incarcerated for a year and a half for felony possession of marijuana. As a Latino with a drug record, he could qualify for priority consideration from the Cannabis Control Commission.
“I don't see any other reason to be in the illegal market if they are offering this way up,” Ortoll said. “So, it’s up to somebody to go and grab it, in my opinion, and that’s what I’m doing.”
But not everybody’s embracing the legal market.
'It’s a really Yankee part of me that likes to do business over a handshake'
Black market cannabis is still king. That’s because, like any business, it’s about convenience and price. Many towns have pushed back against legal marijuana – both medical and recreational.
A 56-year-old housewife from Franklin County, Massachusetts -- a medical user -- said she has visited a medical marijuana dispensary. But it’s a bit of a ride, and had long lines.
"When the dispensaries opened, they were slightly more expensive than black market weed," she said. "Pretty quickly, black market weed became less expensive."
A few years ago, an ounce of high-quality cannabis on the street went for $300 to $400. Now it’s down to $250 or even $150.
Some believe that’s because the overall supply has grown, either from people growing their own or Massachusetts medical dispensaries, or illegal shipments coming in from western states.
Prices at medical dispensaries have dropped. But at $300 to $350 an ounce, they still exceed the street price.
With no retail stores open, many are sticking with the unregulated market – including, at times, the Franklin County housewife, for several reasons.
“Quality, human connection, providence. I know where it comes from. Price. I think it’s a really Yankee part of me that likes to do business over a handshake,” she said.
But that loyalty is going to be tested, if what happened to marijuana prices in other states happens here. In its first two years, the legal retail price in Washington state dropped by nearly two-thirds.
If in time, the legal price shifts in Massachusetts, the 71-year-old builder said, he will too.
“If the prices are equal to or slightly above my prices,” he said, “I would have no reason to ever, ever, ever participate in sales. There would be no need.”
That’s a long way off. No one is even certain when the first retail marijuana store will open in Massachusetts.