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I-Team: Gray Market Emerges For 'Gifting' Marijuana

BOSTON (CBS) - It's nighttime in Boston's Back Bay. On a corner of Westland Avenue, money is handed off, and a black bag given in return. A closer look shows the bag is full of marijuana. It is a deal that WBZ's I-Team witnessed during the very same week Massachusetts' first recreational pot shops opened their doors.

Law enforcement officials call it "the gray market". Marijuana dealers who aggressively advertise online have found a way to avoid the costly and lengthy licensing process. They give customers less than an ounce of marijuana as a so-called "gift". The problem is, these deals involve the exchange of money, making it more like a sale.

"You have the legal retail side of things, and then you have the black market that has always existed that's been out there, and then you create what's called a gray market," said Walpole Police Chief John Carmichael, who spent months studying marijuana laws with the state's Cannabis Advisory Board.

A WBZ crew watched a customer order from a company claiming to deliver bottles of juice for $11. Once the juice was added to the online cart, the amount changed to $55. The next day, a delivery person texted the customer to meet outside a Boston store, where he never received juice. Instead, he got an eighth of an ounce of marijuana.

Marijuana gift I-Team
Marijuana delivered on Back Bay street (WBZ-TV)

According to Massachusetts marijuana laws, it is perfectly legal for an adult to give another adult less than an ounce of weed. But Carmichael says, this was clearly not a gift.

"At the end of the day, if there's a transfer of money, you're handing over marijuana, you're handing over money. That is still against the law."

It is the same argument prosecutors made in the case against Sandra Kattar of Haverhill. She is facing drug distribution charges. In court documents, police say she "sold bath salts" to an undercover officer in her Methuen gift shop, along with a "gifted" bag of marijuana.

It remains to be seen whether the charges will stick. A Lawrence judge threw the case out citing, "a lack of prosecution", but police re-filed the charges a month later.

In the meantime, the marijuana gifting business chugs along without the state-mandated inspections that dispensaries go through, and without the 20 percent tax.

"It hasn't been tested for pesticides or any type of chemicals," said Carmichael. It also concerns him that there is no storefront, especially since pot delivery services for recreational use are not legal.

"It's very dangerous," he said. "This was the real reason why people wanted to legalize it, and by going back to this type of market, you're really putting yourself in a lot of danger."

WBZ reached out to the delivery company that handed over that bag of marijuana. Even though its website even has an email set up specifically for media questions, we got no response.

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