One effect of making alcohol illegal was that it became more potent. For a given “kick,” it was more efficient to use, say, vodka or rye, than beer or wine. Bootleggers could ship x amount of “kick” in a tinier space and with lower weight.

Many of us, therefore, were not surprised when weed, being illegal, became increasingly potent. Why increasingly rather than more potent all at once? Because technology takes time. It took time to develop more potent weed. A side effect of increasingly potent weed is an increasing incidence of psychosis. Julie Wernau, in “More Teens Who Use Marijuana Are Suffering From Psychosis,” Wall Street Journal, January 10, 2024, discusses the issue in some detail.

But wouldn’t one of the implications of making weed legal be that it should be less potent? Yes. But that’s in a world where weed is legal the way many other things are legal. We are not in that world. Instead, legalization has been accompanied by extensive regulation and high taxation. As a result, illegal weed still dominates. Economists Robin Goldstein and Daniel Sumner wrote about the issue in Can Legal Weed Win? Their answer, briefly, is no. I laid out their main argument in “Why Regulation Will Likely Keep Illegal Weed Dominant,” Regulation, Fall 2023.

Here is a key passage from my review:

Recreational weed in California was legalized in 2016 with the voter-passed Proposition 64. The good news out of Prop. 64 was that many people who would have been busted for weed would not be. We shouldn’t underestimate that increase in freedom. But the rest of the news was bad. Legal producers faced the usual regulation imposed on any business by Sacramento. On top of that, Prop. 64 singled out weed producers and distributors with additional regulation.

Business owners who wanted to obey the law had to get licenses and pay special taxes on weed. The state government set a “cultivation tax” at $9.65 per ounce and an excise tax of 27 percent of the wholesale price. Goldstein and Sumner estimate that the net effect of those taxes and local-government taxes is a tax rate of 35 to 50 percent of the retail price of legal weed.

There were other regulations. Starting in 2018, it became illegal to sell weed after 10 p.m. Also, write the authors, not just in California but everywhere in North America, weed retailers are prohibited from also selling alcohol and tobacco.

They note that two popular methods of consuming weed are illegal: One is the blunt, a hollowed-out cigar that is filled with weed; the other is the spliff, a hand-rolled joint that combines weed and tobacco. Although the authors don’t say this explicitly, it seems as if the authors of Prop. 64 and regulators in other states asked, what are the most popular ways to use weed so that we can ban those ways?

It shouldn’t be surprising, then, that illegal weed still dominates and that it has retained its high potency.

There’s an interesting “tell” about the importance of illegality in the graphic from the Wall Street Journal, reproduced above. The first graph is titled “Average percentage of THC in cannabis seized by the Drug Enforcement Administration.” Notice that in the 2020s, the DEA is still seizing weed. That’s not a typical event in a truly legal market.