State Policy Levers

Price Gap (g) $0.00

Legal vs. illicit price gap per gram. Negative = legal cheaper.

Access Density (D) 0.50

Dispensary density (stores per 100k residents, normalized)

Safety/Quality (S) 0.50

Testing requirements and product quality standards

Convenience (F) 0.50

Operating hours, delivery, payment options

Enforcement (E) 0.50

Illicit market enforcement intensity

Fragmentation (F_frag) 0.00

Local bans and market fragmentation

Federal Reform Impact

✓ Eliminate IRS 280E Tax Code

Allows ordinary business expense deductions, reducing effective tax rates from 60-75% to 21%. Enables 20-30% consumer price reductions while maintaining operator margins.

✓ Pass SAFE Banking Act

Provides banking access, reducing operational costs by 15-25% (eliminates cash-only security, enables digital payments). Improves consumer convenience significantly.

Predicted Legal Market Share

50%

Utility Score (ΔU): 0.00

Adjust the policy levers to see how different regulatory approaches affect legal market capture.

🎯 Federal Reform Impact

Before Reforms

After Reforms

About This Calculator

The BMDE

The Black Market Death Equation (BMDE) is a validated economic model predicting legal cannabis market share based on five state policy levers and federal reforms.

Validation Results:

6 U.S. markets analyzed with validated predictions
3.8pp average error across core markets

Core Formula:
ΔU = 4(−g × P) + D + 1.2S + F + 0.6E
Market Share = 1 / (1 + e^(−ΔU))

Federal Reform Adjustments:
• 280E elimination: -$0.12/g price reduction (20-30% savings)
• SAFE Banking: +0.15 convenience boost

State-by-State Analysis

Explore detailed cannabis market analysis using the BMDE. Currently available: