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Illegal Pot Sales Continue Despite Legalization In Washington

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When Washington voters legalized recreational marijuana in 2012, the hope was that it would do away with illegal sales and bring in new tax revenue. But, an article in the May 9 edition of The Atlantic, tilted “The Failed Promise of Legal Pot” makes the case that a black market continues to thrive in the state, in part because taxes have inflated the price of legal pot.

In this interview with Seattle author Tom James, he tells KPLU's Paula Wissel about meeting drug dealers near a fast food joint in the University District. For many, he says, this is a second job, a safety net of sorts.

"These guys are doing something that is a very American thing and that's trying to make something out of nothing," James said.

In the article for The Atlantic, James praises the people who crafted I-502, the state initiative that legalized pot. But, he says setting the tax rate on the drug, so as not to make it too expensive, is tricky.

"As long as the legal prices are much higher than the cost of production, there's going to be a margin and that margin between the cost of production and the selling price is where black marketers live, James said.

James said, he came away from the story believing in the power of incentives. If there was no incentive to sell on the street, if the dealers couldn't be making $100 to $200, they wouldn't be doing it.

However, he also said setting tax rates too low could have negative consequences as well. For example, it could encourage overuse of marijuana.