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Study: Nearly 1 in 5 California marijuana consumers buy from black market

A cannabis consumer survey commissioned by California-based Eaze Solutions supports what many licensed marijuana businesses in the Golden State already know: They’re losing market share to illicit companies that don’t care about regulations, and the main reason is cheaper prices. The study, conducted July 6-12 by New Jersey-based Marketview Research Group, collected responses from 1,419 California marijuana consumers and another 331 in Colorado, according to Peter Gigante, head of policy research for Eaze. The San Francisco-based company runs a website and smartphone app through which consumers can place delivery orders for cannabis. Among the findings: Eighteen percent of California respondents made a cannabis purchase from an unlicensed business in the previous three months, and 84% of those are “highly likely” to buy from that source again “due to the illicit market having cheaper products and no tax.” On the flip side, 96% of respondents made a purchase from a state-licensed business. Of those, 92% said they were definitely or probably going to buy from the legal market again. Taxes on cannabis products were a big reason consumers turned to the illicit market, and the study concluded that a 5% decrease in the California MJ tax rate could spur as much as 23% of black-market customers to buy from licensed cannabis businesses. Conversely, the survey found that a 5% tax increase on California marijuana products could result in as much as a third of the legal market’s customer base choosing to buy instead from illegal MJ retailers. The top factors for California consumers deciding patronize licensed cannabis companies include consistent product quality, affordability, customer support, lab/safety testing, accurate labeling, electronic payment options and brand-name recognition.