Definition - What does Black Market mean?
A black market, also known as an underground economy or a shadow economy, refers to an economic marketplace that solely involves the sale of goods and/or services that are deemed illegal.
The drug trade is considered to be a black market, where profits are hidden from law enforcement and banks and are therefore difficult to quantify.
Marijuana became a black market item in the United States in the early 1900s after the country saw an influx of Mexican immigrants enter the US after the Mexican Revolution. These Mexican migrants moved into areas such as Texas and Louisiana and with them brought their culture of smoking cannabis through pipes and papers.
MaximumYield explains Black Market
Before it was a black market item, cannabis was a medicinal product in the United States, but only as hashish or oil. In the 1970s under US President Richard Nixon, as part of the War on Drugs, cannabis became a schedule 1 classified drug. In other words, it became illegal to grow and sell the plants, which created a black market for cannabis.
Many decades later, marijuana is now America's number one cash crop. The estimated worth of the plant's black market is $20 billion. The price on the east coast is much higher than on the west coast, due to a lack of abundance.
There are steep legal penalties for those caught moving significant amounts of cannabis across state lines, although with legalization it's becoming more accepted in more places. As long as marijuana remains illegal on a federal level, there will always be a black market for the plant.
This is because despite legalization efforts, black market marijuana grows continue to flourish across the country as government regulations currently eliminate people with certain criteria from participating in the legal growing and selling of the plants. For example, people who have felonies on their criminal records cannot apply to grow plants legally.
In certain areas of the world, black market cannabis powers a huge part of the economy. It is believed by many that legal marijuana grows, which are taxed heavily, won't do much to eliminate the black market of cannabis because it will still be more profitable for growers to grow and not report their activity.