Grown in Oklahoma, Smoked in New York: Illicit Marijuana’s Legal Roots

In the dead of night last April, state drug agents in Oklahoma intercepted an 18-wheeler rumbling east toward the Arkansas border smuggling 7,000 pounds of marijuana hidden in security camera boxes.

The weed was from licensed farms in Oklahoma, according to the State Bureau of Narcotics. But the driver was heading to New York, where his cargo could fetch millions of dollars among legacy street dealers and new, rogue dispensaries that make up the illicit market, officials said.

The episode, which was part of a broader crackdown on Oklahoma’s rogue operators, offered a glimpse of a troubling trend that has emerged from the nation’s patchwork approach to legalization. New York, like other states, has legalized marijuana but has been very slow to allow licensed retail outlets to open and licensed producers to expand. As a result, many states with a surplus of legal weed, like Oklahoma, have found a lucrative market for their products on the streets and in unlicensed dispensaries in New York.

It is a paradox of legalization: What was intended to weaken the illicit trade has instead helped to bolster illegal sales that undercut the tax revenues and job creation that legalization has promised.

Nearly all of the weed in New York State arrives illegally, stashed in vehicles, parcels and cargo. But much of it is produced legally, dispatched from places like California and Canada. The attorney general of Oklahoma has claimed that 40 percent of marijuana consumed in New York City comes from his state.

By keeping marijuana illegal at the federal level, Washington prevents states from engaging in interstate commerce that would make trafficking less lucrative, said Jonathan Caulkins, a professor of public policy at Heinz College at Carnegie Mellon University. And the heavy state and federal taxes placed on weed push some state-licensed businesses to sell to the illicit market to survive, he added.