The Silent Majority 420

CONSUMER-DRIVEN BLACK MARKET
DISPLACEMENT THEORY (CBDT)
The Black Market Death Equation

A Behavioral Framework for Predicting Legal Market Capture
in Regulated Vice Markets

Consumer-Driven Black Market Displacement Theory—known as the Black
Market Death Equation—provides a mechanistic model for understanding
how policy optimization drives commercial black market collapse in
legalized cannabis markets.Unlike industry consensus projecting 20-30% persistent illicit share,
CBDT predicts that mature, optimized markets converge to 1-5% commercial
black market share by user count within 5-10 years—following the same
localized collapse pattern observed in Nevada gambling, post-Prohibition
alcohol, and state lotteries.The framework integrates five consumer utility levers (price, access,
quality, convenience, enforcement) into a calibrated behavioral model:ΔU = 4(-g) + D + 1.2S + F + 0.6EThis equation accurately predicts observed market outcomes across multiple
states and explains why black markets "die" when legal alternatives become
superior on price, access, and convenience—not through enforcement alone.Empirical validation includes:
- Oregon market dynamics (75-85% legal capture, inferred from price and
density data)
- California policy gaps (40% legal share, consistent with model predictions
for unoptimized markets)
- Independent peer-reviewed confirmation via discrete choice experiment
(Xing & Shi, BMC Public Health, 2024, n=963)CBDT is distinguished by:
- Falsifiable predictions with specific dates and thresholds
- Cross-state validation methodology
- Explicit measurement taxonomy (participation vs. retail choice vs. economic
activity)
- Transparent weight calibration aligned with established demand elasticity
researchThis site provides the complete framework, state-by-state predictions,
policy simulation tools, and ongoing empirical validation against real-world
market data.[Download White Paper] [Access Calculators] Explore Framework

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