South Carolina Cannabis Market Analysis: The Palmetto State's $700M Opportunity and the House That Won't Listen

Is weed legal in South Carolina? NO—but the state's prohibition creates a bizarre paradox where unregulated hemp-derived Delta-9 THC products sell freely at gas stations while 10,300 annual marijuana arrests criminalize identical behavior.

The Silent Majority 420 | November 2025

Executive Summary

South Carolina maintains complete cannabis prohibition despite overwhelming public support for medical legalization (93% Democrats, 74% Republicans, 84% independents), 10,300+ annual marijuana arrests, and an estimated $2 billion illicit market operating untaxed and unregulated. The state demonstrates prohibition's complete failure through a peculiar two-tier system: teenagers can legally purchase intoxicating hemp-derived Delta-9 THC beverages at convenience stores due to 2018 Farm Bill loopholes, while cancer patients face arrest and felony charges for possessing traditional marijuana.

The Legislative Absurdity: South Carolina's Senate has passed the Compassionate Care Act—comprehensive medical cannabis legislation—twice (2022, 2024). Both times, the House killed the bill without substantive debate. Senator Tom Davis (R-Beaufort) has spent 12 years crafting conservative, pharmacy-dispensed medical programs addressing every concern raised. In 2025, he reintroduced S.53 with bipartisan support. The House won't hold a hearing.

The CBDT Framework Prediction: IF South Carolina legalizes adult-use cannabis with evidence-based policy plus federal reform (Schedule III, SAFE Banking), the state could achieve 73-80% legal market share within 48-60 months. South Carolina possesses structural advantages: geographic population concentration along I-85/I-26 corridors, conservative fiscal culture favoring revenue optimization, and 40+ states' policy data to learn from. The state currently criminalizing cannabis consumers could implement one of the Southeast's most successful legal markets.

Current Reality:

• Legal status: NO recreational, NO comprehensive medical (only narrow epilepsy exception via Julian's Law 2014)
• Arrests: 10,300+ annually (65 per day, 40%+ of drug arrests, 91% simple possession)
• Penalties: First offense <1 oz = up to 30 days jail, $100-200 fine; over 1 oz = FELONY, up to 5 years prison
• Illicit market: $2.0-2.2 billion annually untaxed
• Lost revenue: $150-225 million annually (at competitive 18-22% tax rate)
• Hemp chaos: $50-100M unregulated Delta-9 THC market operates legally
• Border losses: $100-150M to North Carolina tribal dispensary and out-of-state purchases

Medical Cannabis Progress (S.53):

• Status: Passed Senate twice (2022, 2024), killed by House both times, reintroduced January 2025
• Provisions: 12 qualifying conditions, pharmacy dispensing, vaping/gummies/oils allowed, NO flower/home cultivation
• Potential impact: 85,000-132,000 patients, $51-106M market, 2.6-5.3% of total cannabis consumption
• 2026 passage probability: 55-65% (amended version likely)

The Framework Verdict: South Carolina demonstrates total prohibition failure. Medical cannabis (S.53) would help 85,000-132,000 patients but leave 94.7-97.4% of the $2B market illicit. Only adult-use legalization displaces the black market. South Carolina can maintain prohibition indefinitely—but it cannot eliminate cannabis consumption. It can only choose whether that market remains criminal or becomes legal, tested, and taxpaying.

Is Weed Legal in South Carolina? Current Legal Status (2025)

Recreational Cannabis: Illegal

NO, recreational marijuana is completely illegal in South Carolina. Possession of any amount for non-medical use is a criminal offense carrying jail time and fines.

Medical Cannabis: Extremely Limited (Julian's Law Only)

NO comprehensive medical program exists. South Carolina offers only Julian's Law (2014), which allows:

• Qualifying condition: Severe, treatment-resistant epilepsy ONLY
• Product specifications: Maximum 0.9% Delta-9 THC, minimum 15% CBD, oil extracts only
• Official name: Edward O. Hawkins and Thomas C. Slater Medical Cannabis Act
• Registered patients: Estimated 1,000-1,500 statewide
• Limitations: Not available to cancer, PTSD, chronic pain, multiple sclerosis, or any other condition

Julian's Law was inspired by Mary Louise Swing of Charleston, whose daughter suffered 150 seizures per hour. After gaining access to low-THC CBD oil, seizures reduced to 30-40 daily—a life-changing improvement. Senator Tom Davis authored the legislation, which passed with bipartisan support in 2014.

South Carolina Compassionate Care Act (S.53): Pending Medical Expansion

Senator Tom Davis—the same legislator who authored Julian's Law—has spent 12 years advancing comprehensive medical cannabis reform. The Compassionate Care Act would dramatically expand access:

Legislative History:

• 2022: Senate passed medical cannabis bill, House struck it down on constitutional grounds (tax provision violated revenue-raising rules)
• 2024: S.423 passed Senate 24-19 (February 14, 2024) after removing tax provision, died in House committee without hearing
• 2025: S.53 reintroduced January 14, 2025 (pre-filed before session), remains in Senate Committee on Medical Affairs as of November 2025

S.53 Provisions (2025 Version):

• 12 qualifying conditions: Cancer, epilepsy, PTSD, Crohn's disease, multiple sclerosis, sickle cell anemia, autism, ALS, Parkinson's disease, ulcerative colitis, terminal illness, chronic conditions where opioids are standard treatment
• Products ALLOWED: Vaping devices, gummies, oils, tinctures, capsules, lotions, patches (higher-potency therapeutic products)
• Products PROHIBITED: Smokable flower, food edibles, home cultivation
• Dispensing model: "Therapeutic cannabis pharmacies" regulated by State Board of Pharmacy (conservative approach differentiating from recreational dispensaries)
• Purchase limits: 1,600mg THC edibles, 8,200mg oils for vaporization, 4,000mg topicals per 14-day period
• No tax provision: Deliberately excluded to avoid constitutional challenge
• 5-year sunset clause: Program subject to review and reauthorization

Public Support: 93% of Democrats, 74% of Republicans, and 84% of independents support medical marijuana legalization in South Carolina, according to March 2024 Mason-Dixon poll.

Political Reality: Despite overwhelming support, the House leadership has refused to hold hearings on medical cannabis legislation for three consecutive sessions. Speaker Murrell Smith controls committee assignments and floor calendar—medical cannabis never reaches the floor for debate.

2026 Outlook: Political observers estimate 55-65% passage probability in 2026, likely requiring amendments to satisfy House concerns. If passed, S.53 would create a medical program serving 85,000-132,000 patients with estimated $51-106M annual market—but would leave 94.7-97.4% of South Carolina's cannabis market illicit (detailed CBDT analysis available in separate legislative brief).

South Carolina Marijuana Penalties: Among Nation's Harshest

South Carolina maintains extremely harsh cannabis penalties, with felony charges triggered at just 1 ounce—far lower than most states.

South Carolina Marijuana Possession Laws

South Carolina law (Section 44-53-370) maintains some of the nation's strictest cannabis penalties:

First Offense (less than 1 ounce):

• Classification: Misdemeanor
• Jail: Up to 30 days
• Fine: $100-200
• Criminal record: YES (affects employment, housing, education)

Second Offense (less than 1 ounce):

• Classification: Misdemeanor
• Jail: Up to 1 year
• Fine: $200-1,000

Over 1 Ounce or 10+ Grams Concentrate:

• Classification: FELONY (Possession with Intent to Distribute)
• Prison: Up to 5 years
• Fine: Up to $5,000
• Presumption: Amounts over 1 oz presumed PWID regardless of actual intent

Second Felony Offense:

• Prison: Up to 10 years
• Fine: Up to $10,000

Third Felony Offense:

• Prison: 5-20 years MANDATORY

South Carolina Marijuana Cultivation Laws

South Carolina completely prohibits home cultivation, with mandatory minimum sentences for large-scale operations:

Under 100 Plants:

• Classification: Felony
• Prison: Up to 5 years
• Fine: Up to $5,000

100-1,000 Plants:

• Prison: MANDATORY 25 years
• Fine: $25,000

1,000-10,000 Plants:

• Prison: MANDATORY 25 years
• Fine: $50,000

Over 10,000 Plants:

• Prison: MANDATORY 25 years
• Fine: $100,000

Critical Note: Even if S.53 Compassionate Care Act passes, home cultivation remains prohibited for medical patients. South Carolina's proposed medical program explicitly bans personal growing.

South Carolina Marijuana Trafficking Laws

Trafficking charges trigger at 10 pounds (significantly lower than many states' thresholds):

10-100 Pounds (First Offense):

• Prison: 1-10 years MANDATORY
• Fine: $10,000

10-100 Pounds (Second Offense):

• Prison: 5-20 years MANDATORY
• Fine: $15,000

10-100 Pounds (Third+ Offense):

• Prison: MANDATORY 25 years
• Fine: $25,000

100-2,000 Pounds:

• Prison: MANDATORY 25 years
• Fine: $25,000

Over 2,000 Pounds:

• Prison: MANDATORY 25 years
• Fine: $50,000

School/Park Proximity Enhancement: Possession, sale, or cultivation within proximity of schools or parks adds 10 years prison and $10,000 fine.

South Carolina sits on the I-95 corridor connecting Florida to the Northeast—a major drug trafficking route. Law enforcement focuses significant resources on interdiction efforts.

Comparison to Neighboring States

North Carolina decriminalized marijuana in 1977—48 years ago—yet South Carolina still criminalizes possession with jail time.

South Carolina Marijuana Arrests: 10,300 Annually, 65 Per Day

Enforcement Statistics (2023-2024 Data)

Annual marijuana arrests: 10,300+

• Per day: 65 arrests
• Percentage of drug arrests: 40%+ are marijuana-related
• Simple possession: 91% of marijuana arrests
• National ranking: 6th highest drug arrest ratio (575 per 100,000 residents, per Human Rights Watch)

Context: South Carolina ranks 5th nationally for violent crimes, yet dedicates substantial law enforcement resources to marijuana possession enforcement.

Incarceration costs: $20,925 annually per inmate ($57.33 per day)

Treatment alternative: Outpatient substance abuse treatment costs $17.78-26.72 per day—substantially less than incarceration. Research demonstrates every $1 spent on treatment saves $7 in societal costs (National Institute on Drug Abuse).

Enforcement Disparities

While this analysis avoids political commentary on enforcement patterns, the data demonstrates geographic disparities: Urban counties (Richland, Charleston, Greenville) account for 62% of marijuana arrests despite representing 48% of state population, suggesting resource allocation differences between urban and rural law enforcement priorities.

The Absurdity: 10,300 Arrests While Hemp-Derived THC Sells Legally

South Carolina law enforcement makes 65 marijuana arrests daily for possession of cannabis flower containing Delta-9 THC. Simultaneously, gas stations and convenience stores throughout the state openly sell:

• Delta-9 THC gummies (10-15mg per serving, highly intoxicating)
• Delta-8 THC products (intoxicating cannabinoid)
• THCA flower (converts to Delta-9 THC when heated)
• Hemp-derived THC beverages

The 2018 Farm Bill legalized hemp containing ≤0.3% Delta-9 THC by dry weight. Manufacturers exploit this loophole to create highly intoxicating products that technically comply with the federal definition. A 10mg Delta-9 gummy weighing 3.5 grams contains 0.29% THC—legal under federal hemp law despite producing identical intoxication to marijuana.

Result: An 18-year-old legally purchases intoxicating Delta-9 THC beverages at a Charleston convenience store. A 30-year-old cancer patient possessing marijuana flower faces arrest, jail time, and a criminal record affecting employment and housing. Same substance, different form, opposite legal treatment.

South Carolina Hemp Laws and Delta-9 THC: $50-100M Unregulated Market

What's Legal Under Current South Carolina Hemp Law

Federal 2018 Farm Bill: Legalized hemp defined as cannabis with ≤0.3% Delta-9 THC by dry weight

South Carolina hemp law (aligned with federal): Products containing ≤0.3% Delta-9 THC are legal. The South Carolina Department of Public Health (now transferred to SC Department of Agriculture) defines hemp-derived cannabinoids and acknowledges their legal status under federal law.

Products currently sold:

• Delta-9 THC gummies (10mg per serving, clearly intoxicating)
• Delta-8 THC vapes and edibles
• Delta-10 THC products
• THC-O, HHC, and other hemp-derived cannabinoids
• THCA flower (high-THCA hemp that converts to Delta-9 when smoked)

Regulation status:

• NO age restrictions in state law (most retailers voluntarily require 18+ or 21+)
• NO testing requirements
• NO potency limits
• NO licensing requirements
• NO quality control standards
• Sales tax only (6% state + local)

Estimated market size: $50-100M annually, completely unregulated and minimally taxed

The Legal Chaos

Delta-8 THC Attorney General Opinion: South Carolina Attorney General issued opinion stating Delta-8 THC is illegal under state law despite federal hemp legalization. This creates confusion—some retailers still sell Delta-8 products, some have been arrested, enforcement is inconsistent.

Delta-9 THC from hemp: State has not issued opinion on Delta-9 THC derived from hemp (as opposed to marijuana). Retailers assume it's legal if <0.3% by dry weight, but legal status unclear.

Result: Consumers, retailers, and law enforcement operate in regulatory gray area. Some retailers face prosecution for products others sell openly.

Pending Hemp Regulation Bills (2025 Session)

S. 137 (Licensing and Age Restrictions):

• Requires state licensing for hemp-derived cannabinoid retailers
• Establishes 18+ age requirement
• Creates testing standards
• Passage probability: 80-90% (bipartisan concern)

H. 3935 (Taxation and Regulation):

• Imposes 2% excise tax on hemp-derived products
• Requires licensing
• Establishes serving size limits
• Passage probability: 70-80%

H. 4004 (Hemp-Derived Beverages Only):

• Regulates only hemp-derived cannabinoid beverages
• 10mg maximum per serving
• 21+ age requirement
• Retail licensing required
• Passage probability: 60-70%

H. 3924 (Most Restrictive):

• Limits hemp-derived products to 0.5mg THC per serving (99% reduction from current)
• Effectively bans intoxicating hemp products
• Industry opposition strong
• Passage probability: 30-40%

Legislative outlook: Some form of hemp regulation will likely pass in 2026. The question is whether South Carolina regulates sensibly (age limits, testing, licensing) or overreacts with near-total bans that drive consumers to continued illicit marijuana markets.

The risk: Overly restrictive hemp regulation without marijuana legalization pushes consumers from unregulated hemp to unregulated illicit marijuana—solving nothing while eliminating $50-100M legal economic activity.

South Carolina Marijuana Decriminalization: Repeatedly Proposed, Never Passed

Active Decriminalization Bills (2025 Session)

H. 3110 (Rep. Chris Hart, D):

• Decriminalizes possession of 1 ounce or less
• Changes penalty to civil citation
• Fine: $100-200
• NO jail time
• NO criminal record
• Status: Introduced, referred to Judiciary Committee

H. 3804 (Democratic Sponsors):

• Similar decriminalization approach
• 1 ounce or less = civil violation
• $150 fine
• Status: Introduced, referred to committee

S. 177 (Marijuana Odor as Probable Cause):

• Prohibits marijuana scent alone as probable cause for vehicle stops/searches
• Addresses pretextual stop concerns
• Requires additional evidence beyond odor
• Status: Introduced, Senate Judiciary Committee

Previous Failed Attempts

South Carolina has considered decriminalization repeatedly over the past decade:

• H. 3561 (2023) - Failed
• H. 3803 (2023) - Failed
• S. 335 (2022) - Failed
• S. 268 (2021) - Failed

Pattern: Democratic-sponsored decriminalization bills receive committee hearings but never reach floor votes. Republican supermajority opposes decriminalization as "soft on drugs."

Passage probability (2026): 15-25% for any decriminalization bill. House Republican leadership unlikely to allow floor vote.

CBDT Impact if passed: Decriminalization alone would provide +0.5 to +1.0 percentage point benefit by reducing arrest deterrent and enforcement friction. However, it creates ZERO legal market—illicit suppliers remain unaffected. Decriminalization is harm reduction, not market reform.

The North Carolina Contrast

North Carolina decriminalized marijuana possession in 1977—48 years ago. Possession of less than 0.5 ounces carries a $200 fine, no jail time, no criminal record for first offense. South Carolina's neighboring state demonstrates decriminalization is politically viable in conservative Southern states—yet South Carolina maintains 30-day jail sentences for first-time possession.

South Carolina Marijuana DUI Laws

Impaired Driving Statute

South Carolina Code § 56-5-2930: Illegal to drive while "materially and appreciably impaired" by any substance, including cannabis.

NO specific THC nanogram limit: Unlike Colorado (5 ng/mL) or Washington (5 ng/mL), South Carolina has no per se THC threshold. Impairment must be proven through:

• Officer observations (bloodshot eyes, odor, demeanor)
• Field sobriety tests
• Blood or urine toxicology (ANY detectable THC can support DUI charge if impairment shown)

Prosecution approach: ANY detectable THC level combined with evidence of impairment can support conviction. Unlike alcohol (0.08% BAC per se limit), cannabis DUI requires individualized impairment assessment.

Critical distinction: THC remains detectable in blood for days to weeks after consumption, long after impairment ends. Prosecution must prove impairment at time of driving, not just THC presence.

Penalties for Marijuana DUI

First Offense:

• Fine: $400+ (up to $1,000)
• Jail: Up to 30 days (48 hours mandatory minimum)
• License suspension: 6 months
• Ignition interlock: May be required
• Alcohol/drug education program

Second Offense (within 10 years):

• Fine: $2,100-$6,500
• Jail: 48 hours to 2 years
• License suspension: 1 year minimum
• Ignition interlock: Required

Third+ Offense:

• Fine: $3,800-$10,000
• Jail: 60 days to 5 years
• License suspension: 2-4 years
• Felony charges possible

Practical Concerns

Even if South Carolina legalizes marijuana (recreational or medical), DUI laws would remain fully enforced. Legal status does not create impaired driving defense—identical to alcohol.

Medical cannabis concern: IF S.53 Compassionate Care Act passes, registered medical patients could face DUI charges for driving with ANY detectable THC, even if not impaired. Oklahoma, Michigan, and other medical states have addressed this through medical patient exemptions for metabolites (non-psychoactive THC breakdown products), but South Carolina's proposed law includes NO such protections.

South Carolina Marijuana Employment Laws: Zero Worker Protections

South Carolina is an at-will employment state with NO protections for cannabis users, including registered medical patients.

Current Employment Landscape

Employer rights:

• Fire or refuse to hire for ANY marijuana use (even off-duty, legal in other states)
• Drug test applicants and employees
• Maintain zero-tolerance workplace policies
• No requirement to accommodate medical cannabis (even under Julian's Law)

Employee vulnerability:

• Julian's Law epilepsy patients using legal 0.9% THC CBD oil can be fired
• IF S.53 passes, registered medical patients can be fired for legal medical cannabis use
• No wrongful termination recourse for cannabis-related firings

Federal contractor exemption: Companies with federal contracts or safety-sensitive positions (DOT-regulated) maintain federal drug-free workplace requirements regardless of state law changes.

Comparison to States with Protections

Several states provide employment protections for registered medical patients:

S.53 Compassionate Care Act: The current version includes NO workplace protections for medical patients. A cancer patient legally using medical cannabis could be fired the day after registering for the program.

Policy gap: Medical cannabis legalization without employment protections creates illusory relief—patients risk losing jobs to access legal medicine. Montana, Arkansas, and other states demonstrate this flaw. Comprehensive reform includes reasonable workplace accommodations similar to prescription medication policies.

CBDT Framework Assessment: South Carolina's Structural Market Potential

The Consumer-Driven Black Market Displacement (CBDT) Framework, validated across 24 U.S. cannabis markets with 5% mean absolute error, predicts South Carolina could achieve 73-80% legal market share IF the state legalizes adult-use with evidence-based policy plus federal reform.

South Carolina's Structural Advantages (IF Legalization Occurs)

1. Geographic Population Concentration

Urban corridors serve 64% of population:

• Charleston metro: 800,000+ residents
• Greenville-Spartanburg metro: 1.4+ million residents
• Columbia metro: 850,000+ residents
• Myrtle Beach metro: 480,000+ residents

I-85 corridor (Greenville-Spartanburg-Gaffney): High-density commercial zone connecting to Charlotte, NC

I-26 corridor (Charleston-Columbia): Connects coast to capital

Framework significance: Population concentration reduces retail density requirements. South Carolina's corridors mean 90-130 dispensaries could effectively serve 75%+ of population. Comparable to Colorado (Denver metro 55% of population) and Nevada (Las Vegas metro 73%), both achieving strong legal market share through urban concentration.

2. Conservative Fiscal Culture

South Carolina maintains balanced budgets, limited taxation, business-friendly policies. This conservatism creates both obstacles (cultural resistance) and opportunities (revenue optimization).

IF South Carolina legalizes, fiscal conservatism would likely favor:

• Competitive tax rates (18-22%) maximizing volume over per-unit revenue
• Efficient regulation (lower compliance costs = lower prices)
• Business-friendly licensing (avoiding California delays)
• Revenue optimization through market design

Irony: Conservative culture maintains prohibition, but conservative fiscal principles could produce superior outcomes if applied to legalization. South Carolina could learn from Illinois's high-tax failure and implement Colorado-style revenue optimization.

3. Strong Law Enforcement Infrastructure

South Carolina Law Enforcement Division (SLED) coordinates multi-jurisdictional drug enforcement. Well-funded, cooperative state-local relationships.

Framework significance: Enforcement weighs 0.6× in market outcomes. States with strong enforcement (Nevada, Michigan, Colorado) consistently outperform states with deprioritized enforcement (California, New York) by 15-25 percentage points.

Post-legalization: South Carolina wouldn't need to build new capabilities—just redirect existing resources from arresting consumers to targeting large-scale illegal cultivation and unlicensed sales.

4. Clean Regulatory Slate

Unlike California's 20-year medical program transition or Illinois's complex social equity licensing, South Carolina starts with:

• No legacy medical program to integrate (Julian's Law covers only epilepsy)
• No existing licensees to grandfather
• Clean implementation from day one

Framework significance: South Carolina could implement coherent system from the start, learning from 40+ states' experiences. This advantage is temporary—the longer South Carolina delays, the more the hemp-derived market entrenches.

5. Fast Follower Advantage

By 2025, 24 states have legalized adult-use. IF South Carolina legalizes by 2030-2035, it would have 15-20 years of multi-state data demonstrating what works and what fails.

Clear lessons available:

• Price competitiveness critical: Illinois 25-40% tax ensures 55-60% share; Michigan 16% achieves 85%
• Access density matters: California's 61% local retail bans fragment market; Colorado's statewide coverage optimizes
• Enforcement must continue: Nevada's aggressive interdiction protects legal market
• 280E is the federal barrier: Schedule III rescheduling eliminates competitive disadvantage

6. Tourism Economy Amplification

South Carolina's tourism industry generates $28+ billion annually (Myrtle Beach, Charleston, Hilton Head). Legal cannabis could enhance tourism revenue through cannabis-friendly lodging, events, experiences.

Comparable: Nevada's tourism amplifies cannabis sales—Las Vegas dispensaries serve tourists and locals, generating higher per-capita sales than non-tourism states.

Potential impact: South Carolina's 15+ million annual tourists could boost cannabis sales 15-25% above resident-only market.

Predicted Market Outcomes Under Different Scenarios

SCENARIO 1: Medical Program Only (S.53 Compassionate Care Act Passes)

Policy design:

• 12 qualifying conditions
• Pharmacy dispensing
• Vaping/gummies/oils allowed, NO flower/home cultivation
• 20-30 pharmacies statewide initially

Framework inputs:

• Eligible population: 212,000-265,000 (4-5% of adults)
• Likely enrollment: 85,000-132,000 patients (40-50% penetration)
• Annual spending: $600-800 per patient
• Medical market size: $51-106M annually

Legal market share: 2.6-5.3% (leaves 94.7-97.4% illicit)

Economic impact:

• Tax revenue: $3-6M annually (sales tax only, no excise tax)
• Jobs: 800-1,500 (cultivation, processing, pharmacy)
• Arrests reduced: 200-400 annually
• Illicit market: $1.95-1.98B (essentially unchanged)

Verdict: S.53 helps 85,000-132,000 medical patients but leaves fundamental prohibition intact. 94.7-97.4% of cannabis consumption remains illicit.

SCENARIO 2: Adult-Use with Evidence-Based Policy + Federal Reform (Optimized)

Policy design:

• Tax rate: 18-22% total burden
• State-issued licenses: 90-130 dispensaries (1.6-2.3 per 100K)
• Statewide delivery mandate
• State preemption of local bans (municipalities control zoning only)
• Enforcement budget: $18-25M annually targeting illegal operations
• 280E eliminated (Schedule III rescheduling)
• SAFE Banking passed (card payments enabled)

Framework inputs:

• Price competitiveness: g = -0.15 (legal 15% cheaper than illicit after 280E elimination)
• Access density: D = 0.75 (90-130 stores + delivery covers 75%+ population)
• Safety/quality: S = 0.80 (rigorous testing, regulatory compliance)
• Convenience: F = 0.72 (card payments, normal hours, online ordering)
• Enforcement: E = 0.65 (strong interdiction redirected to illegal operators)
• Fragmentation: F_frag = -0.18 (minimal local bans, rural access gaps)

Predicted outcomes:

• Transaction share: 73-80% (consumers choosing legal over illicit)
• Volume share: 68-75%
• Timeline: 48-60 months to steady state

Economic impact (mature market, Year 5+):

• Adult consumers: 400,000-525,000 (10-13% of adults)
• Legal market size: $650-850M annually
• State tax revenue: $125-170M annually
• Jobs: 7,000-9,500 (direct + indirect)
• Illicit market: Reduced from $2.0-2.2B to $200-300M (70-75% reduction)
• Arrests: Near-zero for cannabis

Performance comparison:

• Better than: Illinois (55-60%), California (50%), Washington (60-65%)
• Comparable to: Ohio (65-70%), Missouri (68-75%), Colorado (73-78%)
• Below: Michigan (85%), Nevada (75-80%)

SCENARIO 3: Adult-Use with High-Tax Mistakes (Illinois Model)

Policy design:

• High tax: 28-35% attempting per-unit extraction
• Limited licenses: Artificial scarcity, political favoritism
• No delivery mandate: Local control prevents rural access
• Weak enforcement: Budget cuts or deprioritization
• 280E remains (no federal reform)

Predicted outcomes:

• Transaction share: 52-62%
• Volume share: 48-58%

Economic impact:

• Legal market: $420-580M annually
• Tax revenue: $120-175M (high rate, small base)
• Jobs: 4,500-6,500
• Illicit market: $450-650M (persistent competition)

Verdict: Policy failure—legalization without optimization. Fortunately, South Carolina's conservative culture may favor competent implementation if legalization occurs.

The Federal Policy Barrier

South Carolina cannot achieve optimized outcomes under current federal policy. Two federal reforms essential:

1. 280E Elimination (Schedule III Rescheduling)

Current problem: 280E prohibits cannabis businesses from deducting ordinary expenses, forcing 15-22% price premium just to survive federal tax burden.

Impact on hypothetical SC dispensary:

• Normal business profit: $230,000
• With 280E: Effective profit $9,500 (95% taxation)
• Must raise prices 15-22% to survive

Solution: Schedule III rescheduling eliminates 280E, allowing normal deductions. Legal prices drop 12-18%.

2. SAFE Banking Act

Current problem: No banking access, cash-only operations, security costs $45K-180K annually per location, consumer friction (Federal Reserve research: cash-only reduces transaction frequency 18-28%).

Solution: SAFE Banking enables normal banking, credit cards, reduced security costs, improved convenience.

Combined impact: State policy determines 70-75% of outcomes, but federal barriers create 20-25% handicap. South Carolina's optimized scenario (73-80%) requires BOTH state excellence AND federal reform.

Timeline and Political Reality: When Will South Carolina Act?

Short-Term (2025-2027): Medical Uncertain, Adult-Use Impossible

Medical legalization likelihood: 25-35%

Factors maintaining status quo:

• House leadership opposition (Speaker Smith controls floor)
• 2025 session (ending May 2026) unlikely to produce action
• 83% public support ignored by House
• Political calculation: House members fear primary challenges

What could accelerate medical:

• Federal Schedule III rescheduling (removes stigma)
• Budget pressure (tax revenue attractive during deficits)
• Constituent pressure (83% support should matter)
• Senator Davis persistence (12 years of advocacy)

Most likely: Medical stalls again. Senate passes, House blocks. Pattern continues.

Adult-use: Impossible. Medical must come first in conservative South Carolina.

Medium-Term (2027-2032): Medical Probable, Adult-Use Possible

Medical likelihood: 55-70% by 2032

Factors enabling change:

• Generational turnover: Younger legislators more pragmatic
• Federal reform: Schedule III normalizes medical nationally
• Neighboring states: If Georgia or North Carolina act, pressure intensifies
• Budget needs: Revenue shortfalls make medical attractive

Probable path to adult-use:

1. Phase 1 (2028-2030): Medical passes after House leadership change. Conservative program launches (pharmacy-dispensed, limited conditions, no smoking/home grow).
2. Phase 2 (2030-2032): Medical demonstrates success—revenue positive, no public health crisis, patient satisfaction high. Builds political will.
3. Phase 3 (2032-2035): Adult-use introduced, conditional on federal reform. Passes with moderate-conservative framework.

Timeline: 7-10 years from medical to adult-use, following traditional conservative state pattern.

Long-Term (2032-2040): Adult-Use Highly Probable

Likelihood: 75-85%

Factors making legalization inevitable:

• Federal legalization or Schedule III nationally accepted
• 35-40 states with legal adult-use by 2035
• South Carolina remaining Southeast holdout becomes economically untenable
• Lost revenue: $1.2-1.8B cumulative by 2035
• Demographic shift: Millennials/Gen-Z dominant voting bloc (65-75% support legalization)

Most likely: South Carolina becomes one of last 15-20 states to legalize, sometime 2032-2040.

Last-mover benefit: South Carolina can study 20+ years of experience, implement optimal policy from day one, avoid all documented mistakes. States legalizing in 2035+ should achieve 75-85% legal share minimum.

Economic Opportunity Analysis: The $850M South Carolina Ignores

Current State: The $2B Illicit Economy

Estimated market:

• Adult consumers: 400,000-525,000 (10-13% of 4.0M adults)
• Average annual spending: $800-1,200
• Total cannabis market: $2.0-2.2B annually

Where money flows:

• Illicit dealers: $1.85-2.05B (untaxed, unregulated)
• Out-of-state purchases: $100-150M (North Carolina tribal dispensary, travel to Virginia)
• Hemp-derived products: $50-100M (minimal tax, unregulated)

What South Carolina loses:

• Tax revenue: $150-225M annually (at competitive 18-22% rate)
• Jobs: 7,000-10,000 (cultivation, processing, retail, testing, security)
• Economic multiplier: $850M legal sales generates $1.1-1.3B broader economic activity
• Safety: Zero testing ensures no quality/safety guarantees

Law enforcement costs: $35-55M annually for enforcement/prosecution/incarceration

The fiscal absurdity: South Carolina spends $35-55M criminalizing behavior legal in 40+ states while forgoing $150-225M potential revenue. This is fiscal policy failure by any conservative standard.

Optimized Legal Market: What South Carolina Could Gain

IF legalized with evidence-based policy + federal reform:

Year 1-2 (Medical Launch, IF it happens):

• Pharmacies: 20-30 medical
• Sales: $35-60M annually
• Tax revenue: $2-4M (sales tax only)
• Jobs: 800-1,500
• Legal share: 2.6-5.3% (medical patients only)

Year 3-5 (Adult-Use Launch):

• Dispensaries: 50-80 operational
• Sales: $280-480M
• Tax revenue: $55-95M
• Jobs: 3,500-5,500
• Legal share: 45-60% (building)

Year 6-8 (Growth Phase):

• Dispensaries: 90-120 operational
• Sales: $520-750M
• Tax revenue: $105-150M
• Jobs: 6,000-8,500
• Legal share: 65-75% (maturing)

Year 9+ (Mature Market):

• Dispensaries: 90-130 operational
• Sales: $650-850M annually sustained
• Tax revenue: $125-170M annually sustained
• Jobs: 7,000-9,500 sustained
• Legal share: 73-80% (optimized)
• Illicit market: Reduced from $2.0-2.2B to $200-300M (70-75% reduction)

10-Year Comparison: Prohibition vs. Legalization

Prohibition Path (2025-2035):

• Cumulative tax revenue: $0
• Cumulative arrests: 100,000-120,000 cannabis-related
• Enforcement costs: $350-550M wasted
• Illicit market: $20-22B untaxed criminal activity
• Jobs created: 0
• Community harm: 100,000+ criminal records affecting employment, housing, education

Legalization Path (2028 medical, 2033 adult-use optimized):

• Cumulative tax revenue: $750M-1.1B
• Cumulative arrests: Near-zero cannabis-related
• Enforcement redirection: Resources target illegal operators
• Illicit reduction: $14-15B in black market eliminated
• Jobs: 7,000-9,500 sustained
• Community repair: 100,000+ cannabis convictions expunged

The difference: Choosing evidence-based legalization over prohibition gains $750M-1.1B in revenue, creates 7,000-9,500 jobs, eliminates $14-15B illicit market activity, prevents 100,000+ arrests.

Policy Recommendations: IF South Carolina Chooses This Path

Priority #1: Competitive Tax Structure

Recommendation:

• State excise tax: 12-15%
• State sales tax: 6% (existing rate)
• Total state burden: 18-21%
• Local option: 2-3% maximum (capped)
• Total effective rate: 20-24% (competitive regionally)

Rationale: Revenue optimization through volume (market share), not rates. Lower taxes → lower prices → higher legal share → more transactions → more total revenue.

Regional competition: Must price-compete with illicit market ($8-11/gram), North Carolina tribal dispensaries, future Georgia/North Carolina markets.

Avoid Illinois mistake: 25-40% tax ensures 55-60% legal share. Target 18-22% sweet spot.

Priority #2: Statewide Access Without Fragmentation

Recommendation:

• State-issued licenses (SC Department of Revenue oversight)
• Target: 90-130 dispensaries (1.6-2.3 per 100K)
• Geographic distribution: Charleston 15-20, Greenville-Spartanburg 20-30, Columbia 12-18, Myrtle Beach 8-12
• Statewide delivery mandatory for rural areas
• Municipalities: Regulate zoning/hours, CANNOT ban retail outright
• Frame as economic development: cultivation jobs for rural, retail for cities

Rationale: Prevent California fragmentation disaster (61% local bans). South Carolina's traditional state authority enables preemption.

Delivery critical: 30-35% live in rural areas. Without delivery, fragmentation penalty reduces legal share 12-18 percentage points.

Priority #3: Leverage Enforcement Culture as Asset

Recommendation:

• Budget: $18-25M annually ($3-4.50 per capita)
• Focus: Large-scale illegal cultivation (500+ plants), unlicensed sales, interstate trafficking
• Avoid: Small-scale home cultivation, consumer possession
• Coordination: SLED coordinates state-local task forces
• Frame as business protection, not drug war continuation

Rationale: Strong enforcement culture is competitive advantage. States with vigorous interdiction (Nevada, Michigan) outperform deprioritized enforcement (California, New York) by 15-25 percentage points.

Conservative framing: Redirecting enforcement from consumers to criminal enterprises. Legal cannabis doesn't end enforcement—focuses it where effective.

Priority #4: Federal Reform Advocacy—Even Under Prohibition

South Carolina should support federal reform regardless of state legalization status:

Schedule III Rescheduling:

• Not federal legalization (maintains state control)
• Eliminates 280E (allows normal business deductions)
• Benefits South Carolina's eventual market

SAFE Banking Act:

• Public safety issue (reduces cash crime)
• Banking sector benefit (SC banks could serve industry)
• Economic development (enables normal operations)

Conservative case: Federal reform isn't mandate to legalize—it's removing federal barriers to state choice.

Priority #5: Social Equity and Expungement—Justice First

IF South Carolina legalizes, must address past enforcement harms:

Automatic Expungement:

• All cannabis convictions cleared immediately
• No petition process (automatic = no barriers)
• Restore employment, housing, education eligibility
• Priority: Repair harm before profiting

Social Equity Licensing:

• Preference points for conviction records, high-arrest zip codes, underserved communities
• Capital access fund: $20-40M for low-interest loans, technical assistance
• Ownership transfer restrictions (prevent MSO takeover)

Price Justice = Social Justice:

• Keep taxes moderate (18-22%)
• Ensure legal prices accessible to working-class consumers
• High-priced markets exclude disadvantaged communities

Tax Revenue Reinvestment:

• 25-30% to communities with high historical arrest rates
• Job training, education, small business development
• Measurable outcomes tracking

Conclusion: South Carolina's Choice—Keep Pretending, or Act on Reality

South Carolina faces a stark choice, though political reality suggests years before it's made.

The Current Reality (2025)

South Carolina maintains complete prohibition despite:

• 83% public support for medical cannabis (74% Republicans)
• $150-225M annual lost revenue
• 10,300+ annual arrests creating lifelong barriers
• $2.0-2.2B illicit market untaxed and unregulated
• Hemp-derived THC chaos (gas station sales, no regulation)
• North Carolina tribal dispensary capturing upstate customers
• Zero evidence legalization increases teen use or causes public health crisis

The Legislative Absurdity

Senate passed medical cannabis twice (2022, 2024). Senator Tom Davis spent 12 years crafting conservative, pharmacy-dispensed medical program addressing every concern. House won't hold hearing.

This isn't deliberation. This is obstruction.

83% of voters—including 74% of Republicans—support medical cannabis. House leadership refuses democratic process, fearing primary challenges more than voters' actual preferences.

Meanwhile, cannabis consumers exist regardless of prohibition. The only question is whether their market is taxed, regulated, tested, safe (legalization) or criminal, unregulated, dangerous, untaxed (prohibition).

The Framework Prediction

IF South Carolina legalizes adult-use with evidence-based policy + federal reform:

• Legal market share: 73-80% within 48-60 months
• Annual sales: $650-850M (mature market)
• Tax revenue: $125-170M annually sustained
• Jobs: 7,000-9,500 direct + indirect
• Illicit market: Reduced 70-75%
• Arrests: Near-zero for cannabis
• Performance: Outperforms Illinois, California; matches Ohio, Missouri; trails Michigan

South Carolina possesses structural advantages: geographic concentration, conservative fiscal culture, strong enforcement infrastructure, clean regulatory slate, 40+ states' data.

IF South Carolina acts by 2032-2035, it would have 15-20 years of evidence. No excuse exists for policy failures—data demonstrates clear success pathways.

But Prohibition Cannot Last Forever

Economic pressure intensifies: By 2030, cumulative lost revenue approaches $1.5B. Equivalent to raising income tax 0.8 percentage points—South Carolina effectively taxing residents through prohibition while generating zero revenue.

Demographic inevitability: Millennials/Gen-Z support legalization 65-75%. By 2030, they're dominant voting bloc. Even young Republicans favor legalization 55%+.

Federal reform probable: Schedule III rescheduling likely 2025-2028. Federal normalization removes primary excuse.

Neighboring pressure: If Georgia or North Carolina legalize, South Carolina becomes isolated prohibition state watching neighbors prosper.

Political unsustainability: How long can House ignore 83% support, $150M+ annual revenue, 10,300+ arrests, and reality that prohibition doesn't eliminate markets—only ensures they're criminal?

The Conservative Case

South Carolina should legalize NOT as progressive social policy, but as sound conservative governance:

• Fiscal responsibility: $125-170M annually vs. $0
• Personal freedom: Adults making own choices
• Law and order: Legal markets eliminate crime more effectively than enforcement
• Economic development: 7,000-9,500 jobs, business opportunities
• States' rights: South Carolina choosing own path
• Criminal justice reform: Stop criminalizing 400,000+ South Carolinians

Evidence is clear. Policy pathway validated across 24 states. Economic opportunity substantial. The only missing ingredient is political will.

Senator Tom Davis has provided that will for 12 years. It's time for the House to stop pretending cannabis consumers don't exist and start crafting policy acknowledging reality.

South Carolina can maintain prohibition indefinitely—but it cannot eliminate the market. It can only choose whether that market is criminal or legal, dangerous or tested, untaxed or generating revenue, destroying lives through arrests or creating opportunity through jobs.

The Palmetto State can lead the Southeast in evidence-based cannabis policy—or be the last holdout clinging to failed prohibition while neighbors prosper.

The choice belongs to South Carolina's legislators. The data shows the path forward. The voters have spoken (83% support). The question is: Will the House finally listen?

CBDT Framework Citation

This analysis applies the Consumer-Driven Black Market Displacement Framework:

The Silent Majority 420, "Consumer-Driven Black Market Displacement (CBDT) Framework: A Behavioral-Utility Heuristic for Illicit-to-Legal Market Transition," Zenodo, 2025. DOI: 10.5281/zenodo.17593077

Validation data: Harvard Dataverse, DOI: 10.7910/DVN/MDVDTQ

Related State Analyses: Utah | New Hampshire | Iowa | Florida

The Silent Majority 420 is an independent cannabis policy analyst. The CBDT Framework represents the first validated consumer-utility model for predicting market outcomes in vice legalization.

Analysis licensed CC BY 4.0