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Cannabis commercialization question

Good point, I have also heard from a Dutchman that it's still controlled by harsh men from criminal enviroments, so you may be onto something there.
Another problem is that even if you legalize bulk growing and selling to coffee shops, the problem is not solved. The amount of marihuana grown in the Netherlands is way more than what's sold. In other words, we're exporting weed to other countries. Making it legal to sell weed in bulk to coffee shops will only make our weed a bit cheaper. Police will still need to go after weed growers. In other words, not much will change.
 
As you can see from the data from above, we are talking about some big, big money and significant positive impact on the economy and society.

Hemp just isn't that popular of a cash crop now. We have much better alternatives.
 
http://stash.norml.org/tyler-texas-man-gets-35-years-for-4-6-ounces-of-marijuana

This man was sentenced to 35 years for 4.6oz of cannabis. I'm not sure about the cost of housing someone for that length of time but it surely has to be completely disproportionate to anything you might accomplish by getting this person off the street. You would think those millions could be better spent elsewhere.


There are probably quite a few police officers and prison employees whose livelihoods depend on prohibition who would disagree about that money being better spent elsewhere.
 
Another problem is that even if you legalize bulk growing and selling to coffee shops, the problem is not solved. The amount of marihuana grown in the Netherlands is way more than what's sold. In other words, we're exporting weed to other countries. Making it legal to sell weed in bulk to coffee shops will only make our weed a bit cheaper. Police will still need to go after weed growers. In other words, not much will change.
Unless it is legalized in the entire EU, or another solution would be to have a more harsh border control.
 
There are probably quite a few police officers and prison employees whose livelihoods depend on prohibition who would disagree about that money being better spent elsewhere.

Not only would such a law remove large swaths of prisoners - it would be removing prisoners less prone to violence, making the prisons a more dangerous place for guards.
 
There are probably quite a few police officers and prison employees whose livelihoods depend on prohibition who would disagree about that money being better spent elsewhere.

Broken window fallacy.

Just sayin' you could also say the same things on water bearer, and buggy whip car.
 
Hash is cheaper in Copenhagen - where it's illegal - than it is in Amsterdam - where it's legal.
It's not legal in Amsterdam, it's just tolerated. Thus the high price, since it must be obtained from illegal sources.
 
I have seen it estimated in a Danish newspaper that about 300.000 people are smoking it on a daily basis in Denmark, this is out of ~6 million people. Now let's do the math in DKK - simplified..

If they smoke at least one gram per day (and those I know smoke a lot more), and the price for one gram is 100 DKK with a tax of 40%, then we have this..

100*.4*300000*31*12 = 4.464.000.000 DKK (annual tax income)

That's ~4.5 billion DKK, which estimates to ~725 million USD per year - and this is just for little Denmark. Would you call that a significant number?
How could such a high price be maintained if it was legal?
 
Ineffecient, but it results in a different crop than you can breed outdoors. Skunk made with artificial lights is usually much stronger than "field weed" like Mexican or Bolivian, due to various properties.. Weed grown outside is half the price of skunk here in Denmark, and also about half as strong. You can rest assure that legalization won't stop the indoor production of skunk. Just look at Holland.
All other things being equal (seed stock, fertilization, etc) outdoor marijuana is superior in every way to indoor-grown.

Much like a hothouse tomato will never match one grown in your garden.
 
It's not legal in Amsterdam, it's just tolerated. Thus the high price, since it must be obtained from illegal sources.
Right, we've already been over this above.
How could such a high price be maintained if it was legal?
The calculation result is an underestimation due to the fact that people smoke more than a gram per day, so even tho it was simplified, then it still has a margin for overestimation of other factors.
All other things being equal (seed stock, fertilization, etc) outdoor marijuana is superior in every way to indoor-grown.

Much like a hothouse tomato will never match one grown in your garden.
Well, these are not tomatoes, so as you indicate yourself, then you have hydroponics as the strongest crop in regard to THC levels when advanced measures are taken of course.. As noted in this article..

"Indoors, high-powered lights that stimulate growth can remain on all day, their nourishing rays reflected off the metallic-coated paper covering walls. The chemical fertilizers used are just as powerful and nourishing, spawning fast-growing plants that produce more THC than those raised outdoors."

Read more: http://www.time.com/time/nation/article/0,8599,1913401,00.html#ixzz0qenAhfzr
 
How comparable is the cost of tobacco? In Arizona it's $2/pack excise tax plus $1/pack federal tax. So, a pack of smokes is about $5 before taxes. I believe a single stick is about a gram. That makes the cost of tobacco about 25 cents per gram, right? Loose tobacco is including taxes is about 5 to 10 cents per gram as best as I can figure.

What does pot cost these days? $10 to $20 per gram? I gotta figure that if it became legal in the USA that the economy of scale would kick in, and the prices would drop significantly. I would also think that once it's legal to start messing with the stuff, there will be lots of research done on refining production and making "good" varieties that can be grown inexpensively.

Once it's legal, the government will start applying friction in the form of taxes. I have no clue what that tax base would look like. Not only would there be sales tax, but there would be income taxes on the growers, manufacturers (chopping, bagging) and distributors that doesn't exist now. The retail chain probably wouldn't offer much new "legitimate" employment since it would probably be sold in all of the existing chains.

According to NORML (hot linking expressly permitted) there are about 900,000 marijuana arrests per year.
<a href="http://www.norml.org/index.cfm?Group_ID=7042" target="_blank"><img src="http://norml.org/share/marijuana_arrests_chart.gif" alt="US Marijuana Arrests" width="679" height="445" border="0"></a>

This will undoubtedly have an effect on the economy as well, for bondsmen to legal professionals to courts to jails to prisons. On the flip side, many of these people are probably contributing in the "legitimate" economy before their arrest and may not be doing so after their arrest. It boggles the mind to think about the financial ramifications of that cycle stopping dead in its tracks.

From a top-down perspective, I'd like to think that cutting spending by government while increasing tax revenues should deliver some sort of benefit, even if only temporarily.

Personally, I'd have no problem if it were legalized. My (non)usage wouldn't change much. While I found the effects pleasant, I found that about half the times I used it I was particularly cranky the next day. I found myself overly sensitive to criticism and jokes so much that others pointed it out to me, so I don't do it anymore (not that I did it all that much anyway).
 
How comparable is the cost of tobacco? In Arizona it's $2/pack excise tax plus $1/pack federal tax. So, a pack of smokes is about $5 before taxes. I believe a single stick is about a gram. That makes the cost of tobacco about 25 cents per gram, right? Loose tobacco is including taxes is about 5 to 10 cents per gram as best as I can figure.

What does pot cost these days? $10 to $20 per gram? I gotta figure that if it became legal in the USA that the economy of scale would kick in, and the prices would drop significantly. I would also think that once it's legal to start messing with the stuff, there will be lots of research done on refining production and making "good" varieties that can be grown inexpensively.
There are two things that talk against it being significantly cheaper as legit:


  • Legit medical marijuana is about the same price as black market marijuana
  • Cigarettes on the black market is cheaper than legit and taxed cigarettes.
I think this is data enough to suspect that it won't drop significantly in price. You could say that legalization already has occured with medical marijuana, and that it has shown no significant drop in prices.

Also, most people, in nothern Europe at least, don't smoke pot, but highly refined skunk or hashish. Which are both much more expensive than pot and stronger in THC levels.

Check out any marijuana/cannabis seed site for measures.
 
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There are two things that talk against it being significantly cheaper as legit:


  • Legit medical marijuana is about the same price as black market marijuana
  • Cigarettes on the black market is cheaper than legit and taxed cigarettes.

I think this is data enough to suspect that it won't drop significantly in price. You could say that legalization already has occured with medical marijuana, and that it has shown no significant drop in prices.

You missed the major point, which is the economy of scale. It is still illegal in the USA to grow marijuana. If it becomes legal and corporations are confident they can make the required infrastructure investments and not worry about it being made illegal again before they can recoup their startup costs, they will be able grow it orders of magnitude more efficiently. It's not going to be grown in some guy's basement with everything done by hand.

Granted, tobacco is not the same as marijuana, but the fact is they can do it legally with all the associated costs (tractors, drying houses, machinery, distribution, wages, insurance, etc) and sell loose tobacco for pennies per gram. Are you seriously arguing that once big corporations get involved it will still cost 100X as much as tobacco?


Also, most people, in nothern Europe at least, don't smoke pot, but highly refined skunk or hashish. Which are both much more expensive than pot and stronger in THC levels.

Check out any marijuana/cannabis seed site for measures.
How is that relevant? The fact is that in the few places you can grow it, production is severly limited. If they open up the USA market and allow large scale production, technology will make it much less expensive to produce.
 
You missed the major point, which is the economy of scale. It is still illegal in the USA to grow marijuana. If it becomes legal and corporations are confident they can make the required infrastructure investments and not worry about it being made illegal again before they can recoup their startup costs, they will be able grow it orders of magnitude more efficiently. It's not going to be grown in some guy's basement with everything done by hand.

Granted, tobacco is not the same as marijuana, but the fact is they can do it legally with all the associated costs (tractors, drying houses, machinery, distribution, wages, insurance, etc) and sell loose tobacco for pennies per gram. Are you seriously arguing that once big corporations get involved it will still cost 100X as much as tobacco?



How is that relevant? The fact is that in the few places you can grow it, production is severly limited. If they open up the USA market and allow large scale production, technology will make it much less expensive to produce.
I'm not missing any major points, it's you who don't understand that it already is legit in several states in USA, and that you can grow it and buy it legit for medical marijuana use.. No big corporations has apparently - then - shown interest, as no huge drop in prices has been recorded. How can that not be relevant when you claim the exact opposite? I don't know how many patients some of these primary caregivers are holding tho.
 
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I'm not missing any major points, it's you who don't understand that it already is legit in several states in USA, and that you can grow it and buy it legit for medical marijuana use.. No big corporations has apparently - then - shown interest, as no huge drop in prices has been recorded. How can that not be relevant when you claim the exact opposite? I don't know how many patients some of these primary caregivers are holding tho.

Did you read your citation? The most anyone can possess under state law is 24 ounces. Most states limit you to 6 plants or less. And it's still illegal under federal law. So, you have no evidence whatsoever to refute the notion that if legalized in the USA (not state laws for just medical pot) that corporations are not going to get involved.

About the closest thing we have for comparison is alcohol, which can be created in large quantities without the need for a lot of land. The raw ingredients are available legally. Even then, it appears that the price increased substantially.

http://www.druglibrary.org/Schaffer/alcohol/pa-157.html
Fisher used retail alcohol prices to demonstrate that Prohibition was working by raising the price and decreasing the quantity produced. However, his price quotations also revealed that the Iron Law of Prohibition was at work. The price of beer increased by more than 700 percent, and that of brandies increased by 433 percent, but spirit prices in creased by only 270 percent, which led to an absolute increase in the consumption of spirits over pre-Prohibition levels.

Pot has no infrastructure in place for mass production. It's very difficult to grow it in large quantities without being detected. And technology has improved dramatically since the time of prohibition, so the differences between home-grown (brewed) and mass production is vastly different.
 
Did you read your citation? The most anyone can possess under state law is 24 ounces. Most states limit you to 6 plants or less. And it's still illegal under federal law. So, you have no evidence whatsoever to refute the notion that if legalized in the USA (not state laws for just medical pot) that corporations are not going to get involved.
I didn't claim that they wouldn't get involved, just that they weren't involved at this point if your price hypothesis should be corrent. And no, they limit you to between 6-24 plants but not per person, only per person the primary caregiver is holding. How many patients a caregiver can hold varies from state to state. It's you who didn't read it.
About the closest thing we have for comparison is alcohol, which can be created in large quantities without the need for a lot of land. The raw ingredients are available legally. Even then, it appears that the price increased substantially.
The raw ingredients are available for marijuana as well, as both seeds and soil is quite legal. And alcohol and spirits was large scale smugled in from Canada and elsewhere during the days of your prohobition - sea or land. It wasn't just homebrew that was involved.

Pot has no infrastructure in place for mass production. It's very difficult to grow it in large quantities without being detected. And technology has improved dramatically since the time of prohibition, so the differences between home-grown (brewed) and mass production is vastly different.
I don't know what operations count as large scale for you, but here's an example from Santa Fe where:

"A longtime Santa Fe resident has applied to be the second medical marijuana provider in the state. If approved, he'll operate a 2,400-square-foot indoor growing operation somewhere in Santa Fe County and deliver marijuana to the doorsteps of registered patients."

http://www.santafenewmexican.com/Local+News/A-budding-business

It obviously differs from state to state how much you are allowed to grow at a time, i.e. how many patients you are allowed to serve. But large scale operations does seem to take place legally.
 
I don't know what operations count as large scale for you, but here's an example from Santa Fe where:

"A longtime Santa Fe resident has applied to be the second medical marijuana provider in the state. If approved, he'll operate a 2,400-square-foot indoor growing operation somewhere in Santa Fe County and deliver marijuana to the doorsteps of registered patients."

http://www.santafenewmexican.com/Local+News/A-budding-business

It obviously differs from state to state how much you are allowed to grow at a time, i.e. how many patients you are allowed to serve. But large scale operations does seem to take place legally.


Large scale? 2400 square feet is a 40 foot by 60 foot pole barn. That's about a sixteenth of an acre, a quarter of a small urban residential lot. It would take a kid with a push mower less than a half hour to mow it. As far as agricultural production goes, you wouldn't grow 5 apple trees in that tiny space. You might get a couple of dozen cantaloupes out of it, or three bushels of tomatoes, or maybe one cow. Large scale? :p
 
I didn't claim that they wouldn't get involved, just that they weren't involved at this point if your price hypothesis should be corrent. And no, they limit you to between 6-24 plants but not per person, only per person the primary caregiver is holding. How many patients a caregiver can hold varies from state to state. It's you who didn't read it.
The raw ingredients are available for marijuana as well, as both seeds and soil is quite legal. And alcohol and spirits was large scale smugled in from Canada and elsewhere during the days of your prohobition - sea or land. It wasn't just homebrew that was involved.

I don't know what operations count as large scale for you, but here's an example from Santa Fe where:

"A longtime Santa Fe resident has applied to be the second medical marijuana provider in the state. If approved, he'll operate a 2,400-square-foot indoor growing operation somewhere in Santa Fe County and deliver marijuana to the doorsteps of registered patients."

http://www.santafenewmexican.com/Local+News/A-budding-business

It obviously differs from state to state how much you are allowed to grow at a time, i.e. how many patients you are allowed to serve. But large scale operations does seem to take place legally.

Large scale illegal operations take place too.

But are you seriously denying that legalization wouldn't reduce the cost of production significantly?


Do you think all of that risk and secrecy doesn't have a huge cost? I would consider growing marijuana and selling it, were the risks of imprisonment and violence not so high.

You don't think farmers all across the U.S. would start growing it if it were legal? You don't think an increase in supply, and a decrease in cost of production would lower the price?
 
Some good points brought up here, thanks. Let me define my terms a little bit more to see if we can get this more spefic.

1. By medicinal, I mean having the proper scientists research its various areas of effectiveness and come up with actual medicines. I suspect that whatever ailment it is being sold for as by smoking it could probably be administered by a type of derivative that would be more efficient and wouldn’t be as much fun as smoking it. Don’t know if this would actually produce patentable products for Big Pharma to make money on or not, but it least it would be a boon to some degree for the people.
2. Recreational - When people say that the price would go down because production costs would down are right, but the way I would address that is to keep the price per oz. pretty much the same as now (assume $200 per oz.). In return you would give the consumer an overall better end product in that it would come in all the flavors as now and more. Everything you bought would be perfectly manicured with no pieces of unnecessary stemage/little leaves, year around supply, never a drought. It would be sold from grams on up with the smaller units being charged more per unit that larger purchases.

Now, to counteract someone selling it illegally for less money I would deal with it this way: make the laws similar to the ‘moonshine laws’. By law, you would be able to grow enough for your own consumption (3-5lbs. per yr.), but would face stiff penalties for selling your own homemade ‘shine. Just like they have it today controlled by the ATF.

I don't understand this one bit.

First of all, you admit that the production cost would go down. And then you follow by saying, to address this ....

What needs to be addressed? Production cost going down is a good thing.

And what do you mean that you would keep the price the same? Do you mean if you were the dictator of the U.S. and had the ability to set prices?

Or do you mean if you were the leader of a cartel and had the ability to set prices?

You go on to say "To counteract someone selling it illegally for less money..."

???

Aren't we talking about legalizing it?
 

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