The cannabis industry is taking a hit from inflation. While costs of living have risen, people have had to take on more work and responsibilities with less time and money to spend on pleasure.
For most, saving money has always been a priority, but it is especially of key concern now. Buying cannabis legally means paying tax on the purchase, whereas buying cannabis through the illegal market cuts out the requirement to pay tax.
While discretionary wallets are being squeezed, most consumers are well aware that the illicit market existed long before cannabis became legalized in certain states. The legal market is effectively in competition with the illegal market, even more so now that some degree of legal consumption may be swapped for illegal purchasing. The triangulation of crime, economics, and marijuana is expected to drive cannabis facilities to reassess their security plans.
Cannabis growers and stores are already highly targeted by criminals, as theft can be lucrative. Due to regulations, some stores can only accept cash payments, rendering their brick-and-mortar locations storage for cash reserves. Products can also be easily resold on the black market, where demand may increase from those affected by inflation and are resorting to illegal purchases. This makes the pipeline of stealing and reselling attractive to criminals.
Furthermore, times of economic downturn often bring out an increase in crime. The danger is in the dynamic between consumers who want cheaper weed at all costs and the criminals who are willing to acquire products and steal the market share by any means.
Money is everything.
An article on economic progress by Brian Bell for the World Economic Forum reports that those “who leave school during recessions are significantly more likely to become involved in crime” than those who leave school when job opportunities are otherwise abundant.
“Recessions typically lead to an increase in youth unemployment rates, leaving young people to face more difficulties in finding jobs.”— Do recessions increase crime?, Brian Bell, Research Fellow, LSE Centre for Economic Performance
Unemployment rates tend to be 5 percentage points higher than normal during a recession. Arrest rates tend to be 10 percentage points higher than normal for a cohort entering the labor market during a recession This may be due to people having pessimistic outlooks on acquiring legal work or generating desired levels of income through legal means before resorting to criminal methods (Becker 1968).
These statistically significant findings are concerning. The highest share “of consumers in the United States who currently smoke marijuana as of July 2019, by age group” are 18-29 years of age, 22 percent.
“Although cannabis is still federally illegal, it has been legalized for recreational consumption in 10 states since 2012. Nationwide support for the federal legalization of cannabis has grown every year, with 18 to 34-year-olds being the biggest supporters. Seventy-eight-percent of Americans in that age group supported marijuana legalization in 2018, nearly double the level of support in 2003.”— U.S. consumers who use marijuana 2019, by age group, Statista Research Department
Cannabis businesses seeking to strengthen their security plans can give Cannabis Compliant Security Solutions a call today.
Cannabis Compliant Security Solutions