[nine_k]

Black market has immense operation expenses. It won't be able to undercut a legal market, even very heavily taxed, but still free.

It's more profitable to just start a legal operation instead.

OTOH countries where a particular drug is illegal will feel a significant pressure if in a large neighboring country the same substance is legal. This.hopefully would provide both an example and an incentive to at least decriminalize the substance, too.

[PeterisP]

My observation about cigarettes is exactly a counterexample showing that, despite the criminal operation expenses, in practice the black market is able to undercut a heavily taxed legal market - not for everyone, probably not even for the majority of the market, but for a substantially large portion of population to have a meaningful consequences in corruption and organized crime.

It's getting better now, but mostly because cigarettes as such are being undercut by vaping that's cheaper.

[Hikikomori]

IDK about that. In Sweden tobacco is heavily taxed, border control sometimes stops trucks loaded with smuggled cigarettes, with the resources they have it's assumed that many times more get through. I know some small shops sell tobacco for cheap under the table.

[nine_k]

What I talked about: country A only has a black market, country B has a heavily taxed but legal market.

What you are talking about: country A has a legal and low tax market, while country B has a heavily taxed but legal market.

Apples and oranges fail to compare.