How Americans Are Profiting from Marijuana Sales

The legalization of recreational marijuana in many US states has enabled enterprising Americans to develop a new way to profit from marijuana sales, balancing risk and reward.

How Does the Innovative Marijuana Sales Scheme Work?

This original method of selling marijuana involves four main steps:

1. A so-called “broker” with black market connections finds someone willing to obtain a marijuana distribution license for a cash reward.
2. They apply to the Cannabis Control Commission and pay a small fee ranging from $200 to $1,000 (in California).
3. After receiving the permit, the broker rents a space and registers a company at that address.
4. The broker then buys marijuana in bulk from farmers and sells it to accomplices, who in turn illegally distribute the cannabinoid products.

The distribution license only allows for the transportation of cannabis, but it is very inexpensive. The transporter is permitted to purchase marijuana and resell it to legal commercial establishments. To cover their tracks, the broker either fails to report the purchased marijuana or claims in documents that the shipment was damaged, explaining the missing product. The license is valid for one year, and the fraudsters do not renew it. Instead, they obtain a new permit and, over the next 12 months, sell cannabis acquired from farmers to black market dealers.

This scheme allows them to avoid paying high taxes. For example, in California, taxes can reach 38.52% of the cannabis’s value. The average wholesale price for 1 gram of marijuana in the state is $4.41. On the black market, 1 gram sells for $8–$10. Assuming a large purchase, the cost per gram could be about $6. This means sellers can make a 36% profit with minimal effort.

How Are Dishonest Cannabis Sellers Punished?

Due to insufficient oversight of marijuana transporters, scammers often get away with their schemes. Last year, government agencies inspected only 50 out of 1,179 companies registered in California. Officials found several violations and issued seven regulatory non-compliance orders, but did not revoke a single license.

However, the first precedent for an underground marijuana resale case may occur this year. In the summer, police received information that the company Blue Tree was buying cannabis from legal farmers and selling it to black market dealers. On September 7, law enforcement officers visited the company’s office, checked invoices, and copied surveillance footage from the warehouse. No charges have been filed against the company’s employees yet, but an anonymous source claims that Blue Tree resold marijuana by the ton, earning billions of dollars.