Black market economics

Cannabis advocates are warning that the millions of dollars generated by Montana's legal medical marijuana industry will flood the black market if a law that aims to sap the businesses' profits is allowed to take effect.

"It will fuel the drug war even more," says Montana Cannabis Industry Association President Ed Docter. "It's going to mean more marijuana coming over the borders. These people are not going to stop smoking marijuana just because (the Montana Legislature) passed a law."

Republican Jeff Essman's Senate Bill 423 is slated to take effect this Friday. It calls for banning marijuana advertising, limiting marijuana providers to three patients each, and forbidding providers from making a profit. The Montana Cannabis Industry Association and eight other plaintiffs filed suit to stop the law. District Judge James Reynolds is currently deliberating whether to temporarily halt aspects of it.

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Bracing for what could be a complete overhaul of the medical marijuana industry, Docter finds himself crunching numbers. More than 30,000 individuals are registered with the state to legally use medical marijuana. Each of those patients purchases, on average, 24 grams of cannabis a month at $10 a gram, Docter says. "That comes to $7.2 million a month. That's amazing."

If profit is taken out of the legal medical marijuana equation, caregivers and cannabis users may head underground, Docter says, and that would hurt the people the industry currently employs. "I got into this to create jobs," he says. "Now, I'm in it to save these jobs."

Missoula Police Chief Mark Muir doesn't buy it. Marijuana is just like alcohol and tobacco—dangerous, he says. He believes it's better to nip the cannabis boom in the bud now rather than letting the for-profit industry groom a whole new crop of users via advertising and flashy dispensary storefronts.

The medical marijuana law voters approved in 2004 only authorized caregivers to provide services, not other pot shop employees. "Every one of those employees was committing a felony," Muir says. "Those weren't legal jobs."

The black market has always been there, Muir says. "And it will probably exist afterward."

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