Marijuana businesses near the Oregon/Washington border are experiencing whats called the "border effect" due to inconsistencies in price between the two recreational markets. The idea is not new, as both states have experienced the same effect with alcohol and cigarettes, but some effected marijuana shops are seeing 50% less sales. It doesn't make sense to have such varying taxes so close to eachother as consumers will most likely go for the cheaper price. The black market is also an important factor in determining taxation and overall pricing as legal businesses must be able to compete in price or users will not have much incentive to change.
Ultimately, states with the lowest taxes, he said, "will flood the rest of the country" with black market pot.
"This is something that the two governors should be talking about hard," said Kleiman, a professor at New York University's Marron Institute of Urban Management.
"It's crazy to have a big tax differential across a short border."