12/13/2012 04:28 pm ET Updated Dec 13, 2012

Where Pot Is Legal, Dealers Brace For Corporate Takeover

On the social news site Reddit, dozens of members who identified themselves as street-level marijuana dealers in Washington and Colorado revealed how they’re preparing for a new crop of competitors after both states last month legalized the drug for recreational use.

Ahead of the states implementing the new laws and legitimate pot sellers moving into town, existing black-market dealers are considering new ways to advertise, distribute and price their product, the Reddit thread showed.

“Call your product ‘organic weed’” and “launch a smear campaign against ‘Big Cannabis,’” one Redditor suggested. “Nice. Or ‘artisan’ marijuana, ‘handcrafted,’” another commenter replied.

The passing of Amendment 64 made it legal immediately for Colorado adults to possess, grow and consume certain amounts of marijuana. But it could take almost a year before pot is sold in stores, according to the Colorado Independent. Seeing marijuana on store shelves could take over a year in Washington as well.

Still, dealers on Reddit were already worried that large pot businesses will soon undercut their prices and put them out of business. Someone “with a bunch of seed money might open a 7-11 weed store and shut me down,” one dealer wrote. “I never will be able to compete though, and I have no idea how to run a legal business. Corporate pot is coming, and it scares me. It should scare all of us.”

Others said they see the imminent “green rush” as an opportunity to distinguish their services. “People still want to know where the smoke is coming from, delivery options, 24 hours of operation, anonymity and most importantly IOU’s which big businesses won’t cater to,” one Redditor wrote. “I do.”

Experts have said it's difficult to predict how legalization will affect demand. But some dealers on Reddit noted positive changes in consumer sentiment as states have begun to permit usage. "Older-aged customers are more frequent now 'cause they are no longer scared of losing their jobs/lives/etc. over weed," one commenter said.

Since the new laws only legalize recreational use for marijuana users aged 21 and older, one dealer said he or she planned to target younger buyers. “People under 21 will still need to buy weed,” the Reddit user wrote. “High school kids are still gonna be buying weed. I might need to mark my prices down or really start hooking people up, but that remains to be seen.”

Street dealers aren't the only ones bracing for the onslaught of new competition. Marijuana dispensaries that already had the right to sell the drug for medical use spent hefty sums on lobbying to strike down full legalization. Now, much like their black-market counterparts, dispensaries hope the looming wave of private pot retailers won't snuff them out.



Legal Marijuana Across The U.S.