Sunday, May 16, 2010

Plummeting Marijuana Prices In California

NPR -- "Legal pot, under the guise of the California's medical marijuana laws, has spurred a rush of new competition. As a result, the wholesale price of pot grown in California is plunging.

Prices are now much less than $2,000 a pound, according to interviews with more than a dozen growers and dealers. Sheriff Tom Allman of Mendocino County says some growers can't get rid of their processed pot at any price."

30 Comments:

At 5/16/2010 10:39 AM, Blogger Bill said...

Unfortunately, legalizing a problem doesnt make the problem go away.

 
At 5/16/2010 10:45 AM, Anonymous Anonymous said...

lower prices drive up the consumption.
More and more people will be stoned for a greater portion of the day.

 
At 5/16/2010 11:16 AM, Blogger PeakTrader said...

Anon is correct. When you legalize it, increase the supply, and lower the price, you get more of it.

UN reports reveal global growth of drug abuse
28 August 1999

"Many of the world's opiate addicts can be found close to these producing areas, where half of all opium is consumed.

The report establishes that poor people use the most drugs. Unemployed people make up a large proportion of cannabis users.

By far the most ubiquitous drug is cannabis...Amongst young adults, usage is far higher—37 percent in the UK for example.

In Kenya, chewing qaat is culturally acceptable. It causes insomnia, so users need other drugs like cannabis to get to sleep. A survey of young Kenyans suggested that 63 percent regularly used drugs."

 
At 5/16/2010 11:29 AM, Anonymous Anonymous said...

Blood in the streets from gang violence is preferred to legalization.

 
At 5/16/2010 11:31 AM, Blogger PeakTrader said...

The Explosive Growth Of Gambling In The U.S.
Report To The Senate Of Senator Paul Simon
July 31, 1995

"What we know as casino gambling was legal only in Nevada, then in New Jersey and now in 23 states. From a small enterprise in a few states, gambling has matured. In 1974, $17 billion was legally wagered in the nation. By 1992, it reached $329 billion, and it is now over $500 billion.

The distinguished Nobel Prize-winning economist, Paul Samuelson, has warned us: "There is a substantial economic case to be made against gambling. It involves simply sterile transfers of money or goods between individuals, creating no new money or goods. Although it creates no output, gambling does nevertheless absorb time and resources. When pursued beyond the limits of recreation...gambling subtracts from the national income.

A high official in Nevada told me, "If we could get rid of gambling in our state, it would be the best thing that could happen to us. They [corporations] know that gambling brings with it serious personnel problems."

 
At 5/16/2010 11:32 AM, Anonymous morganovich said...

on the other hand, there is considerable evidence that decriminalization and legalization of drugs decreases abuse and violence.

http://www.scientificamerican.com/article.cfm?id=portugal-drug-decriminalization

i don't think that anyone argues that drugs cannot have harmful effects. alcohol certainly does. however, as we saw in the US, banning it not only did not stop people from drinking, but gave rise to a violent criminal class.

after the 21st amendment, it's not as though alcoholism rates suddenly skyrocketed. why would other substances behave differently?

even if there were some issues with increased use, 1. it's a personal choice, and 2. the money we saved from the drug was and drug incarceration alone would allow anyone who needed it to hit betty ford. a tax on the drugs would create a massive surplus from the overall drug issue.

whatever your opinion of drug use, i find it impossible to argue that the current policy has not been an abysmal failure and caused far more harm than good.

 
At 5/16/2010 11:58 AM, Blogger Ron H. said...

>"Unemployed people make up a large proportion of cannabis users."

One has to wonder, which came first? Are they cannabis users because they are unemployed, or unemployed because they are cannabis users?

 
At 5/16/2010 12:55 PM, Blogger Ron H. said...

>"...Samuelson..."There is a substantial economic case to be made against gambling. It involves simply sterile transfers of money or goods between individuals..."

Then the same case could be made against most forms of entertainment: rock concerts, sporting events, movies, etc. and, why are voluntary "sterile transfers of money" a bad thing?

>"...creating no new money or goods..."

Let's HOPE no new money is produced, there's plenty of that going on already.

>"Although it creates no output, gambling does nevertheless absorb time and resources."

So do crossword puzzles. And most times when I go fishing, no output is produced. Why is this a bad thing?

>"When pursued beyond the limits of recreation...gambling subtracts from the national income."

What, exactly, are the "limits of recreation"? I can't find Samuelson's definition anywhere.

 
At 5/16/2010 1:13 PM, Blogger Ron H. said...

>"A high official in Nevada told me, "If we could get rid of gambling in our state, it would be the best thing that could happen to us."

This official is recommending the elimination of his own job. Without gambling in Nevada, there wouldn't be much government.

 
At 5/16/2010 1:25 PM, Blogger PeakTrader said...

Ron, perhaps he meant gambling doesn't raise the aggregate standard of living, unlike "rock concerts, sporting events, movies, etc." Also, there are many positive forms of leisure that spill into labor.

 
At 5/16/2010 1:35 PM, Blogger PeakTrader said...

The "high official in Nevada" may believe Nevada's economy would be more like Arizona or Colorado without gambling. For better or worse is uncertain.

 
At 5/16/2010 2:46 PM, Blogger rjs said...

thats cheap? it used to go for $250 a kilo..

 
At 5/16/2010 2:58 PM, Anonymous Anonymous said...

Is marijuana in the CPI?

 
At 5/16/2010 3:20 PM, Anonymous grant said...

Afghanistan is an inland landlocked south east Asian country which is located on the eastern border of Iran and the western border of Iraq.
Most of the country is a waterless arid barren desert and lies generally 3,000 ft above sea level and its low lying areas about 1.000 ft above sea level.The highest mountain is 24,000 ft
There is a very small area of excellent arable farmland in the north of the country along the Amu river fed from the high melting snow covered peaks of the Himalaya mountain range.
For a third world country it has an incredibly high GDP income of $28 billion US dollars which must be due to the drug trade as there doesn't seem to be any other source of income to explain it.
The country is rich in undeveloped natural resources which includes gold silver copper zinc iron ore uranium coal chromite and potentially petroleum and natural gas.
The country is unmined but plans are being sought to mine them.
It seems to me that if the US withdraws from the country without developing the economy then the opium trade will continue to flourish because there is no other source of high income.
So maybe they have inherited another long term source of unending aid programs or long term connection to the country to develop it.

 
At 5/16/2010 3:23 PM, Blogger Ron H. said...

Peak, you said:

...perhaps he meant gambling doesn't raise the aggregate standard of living, unlike "rock concerts, sporting events, movies, etc." Also, there are many positive forms of leisure that spill into labor.

I must then be missing something. I constantly struggle with Keynsian economics. Maybe it's the terminology.

When you say "spill into labor" do you mean "creates jobs"?

I can't for the life of me see any substantial differences between businesses whose product is entertainment such as "The Rolling Stones", "Dreamworks" or "Lakers Basketball", and "MGM Grand".

One difference, is that a sports franchise may ask taxpayers to help finance a new stadium that may never be profitable, while I'm not aware of any casinos asking for such help.

The phrase "positive forms of leisure" sounds more like a moral judgment than an economic term.

Any form of leisure I can think of is positive when compared to going to work.

 
At 5/16/2010 4:00 PM, Blogger PeakTrader said...

Ron, hiking up and down mountains is a form of leisure and the benefits to health "spill over" into labor (e.g. higher productivity).

Gambling in itself doesn't produce anything. "Rock concerts, sporting events, movies" reflect the creation of goods. The only thing creative about gambling is cheating.

 
At 5/16/2010 4:35 PM, Blogger Ron H. said...

>"...hiking up and down mountains is a form of leisure and the benefits to health "spill over" into labor (e.g. higher productivity)."

Well, that may work for you, but for me, hiking up & down mountains usually causes aches & pains, or even injuries that cause me to miss work, or at least work more slowly. No productivity gains there.

On the other hand, honing my cheating skills through gambling has allowed me to advance much faster in my career than I would have otherwise, and to seemingly produce much more than I actually do.

OK, I'll concede intellectual property as a product, but what is produced by a sporting event, or by stream fishing? Please don't say "fish", as that's seldom an outcome. I might name "good memories" as psychic profit, but I don't believe Keynsians consider that an economic good.

 
At 5/16/2010 4:51 PM, Blogger PeakTrader said...

Sporting events reflect skills or talent. Gambling events reflect luck or odds. You can learn more from sporting events or fishing.

You already know not to stand in an open field during a lightening storm :}

 
At 5/16/2010 5:09 PM, Anonymous Lyle said...

Re the comment about Nevada and Gambling. If Nevada abolished gambling, Las Vegas and Reno would join the loneliest road (US 50 thru Fallon, Austin, Eurka, and Ely) Most of Nevada is just empty. Drive US 50 to see). Nevada does not have the water for ag which is a base industry in Az and Co. Recall that before gambling the pop in 1940 was about 8k and 24k in 1950. Las Vegas is a typical Nevada Boom town but instead of mining metal it mines gamblers pockets. If the vein of wallets dries up Vegas will be like Virgina City, Austin, Eureka ...

 
At 5/16/2010 6:22 PM, Blogger Ron H. said...

>"If the vein of wallets dries up Vegas will be like Virgina City, Austin, Eureka ..."

you're right about that, Lyle, but I can't imagine that happening anytime soon.

 
At 5/16/2010 8:26 PM, Anonymous morganovich said...

ron-

as someone who owns a house at tahoe (nevada) i can tell you that whoever that official is, he's not representative of the state nor it's populace.

i love gambling in nevada even though i rarely participate in it. it keeps the rest of the taxes low and creates piles of subsidized food.

without gambling, nevada would become another big underpopulated state that sucks federal resources and pays little in. it would also need an income tax.

i like it the way it is, and so do most nevadans.

 
At 5/16/2010 11:48 PM, Blogger Ron H. said...

morganovich,

I may be living in ether Nevada or Texas soon for the reasons you point out. California really sucks anymore.

 
At 5/17/2010 7:46 AM, Blogger juandos said...

Well the only business opportunity I see besides reefer paraphernalia would be to sell 'munchies' to the stoners...

 
At 5/17/2010 8:33 AM, Blogger juandos said...

Radly Balko over at reason posted a letter from some military person regarding the drug bust in Columbia, Mo where the dog was shot: I am a US Army officer, currently serving in Afghanistan. My first thought on reading this story is this: Most American police SWAT teams probably have fewer restrictions on conducting forced entry raids than do US forces in Afghanistan...

 
At 5/17/2010 9:23 AM, Anonymous Rand said...

Sheriff Tom Allman of Mendocino County says some growers can't get rid of their processed pot at any price."

Couldn't they just burn it!

 
At 5/17/2010 10:14 AM, Blogger juandos said...

"Couldn't they just burn it!"...

Pipeful by pipeful or burn it like a bonfire?

 
At 5/17/2010 6:43 PM, Anonymous Anonymous said...

If they burn it like a bonfire... everyone within a 5 block radius would just end up getting a free high off the 2nd hand smoke.

On the other hand, Morganvich hit the nail on the head with his/her (?) post.

The US's current "war on drugs" crusade has been a HUGE failure. I'm for legalization and I've never smoked once in my life.

 
At 5/17/2010 6:45 PM, Anonymous Anonymous said...

"Unfortunately, legalizing a problem doesnt make the problem go away."

- Likewise, keeping it illegal hasn't exactly been an impediment on consumption.

"lower prices drive up the consumption.
More and more people will be stoned for a greater portion of the day."

- Hence legalization. Just like a bar can cut you off after (insert number) of drinks, legalization can create better tracking efficiency and can also curb how much marijuana an individual can buy during a certain time frame.

 
At 5/18/2010 3:42 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

When one discusses the "drug problem," one must break that into two categories.

1. The drug ABUSE problem -- which is very real, but relatively minor compared to --
2. The problems caused by drug PROHIBITION. Most of what we incorrectly call the drug abuse problem is really the result of prohibition.

Prohibition does not make the drug abuse go away. But it is the driving force behind our modern mass incarceration system in America -- for drug PROHIBITION consequences.

 
At 5/18/2010 10:29 PM, Blogger Dan Ferris said...

Quite right, Richard. Bill and Anon in their above comments conveniently fail to acknowledge the murder and violence caused by prohibition, which far outweighs the effects of a few drug abusers. There'll be no more or less people abusing drugs than abusing alcohol, and everyone knows if you abuse alcohol, it's your fault and no one else's. Yet somehow we're supposed to believe drugs are insidious and magical and evil in a way booze isn't. It's absurd. Grown men don't need leaders, and they don't need government or other busybodies telling them how to live. This isn't even a debate. It's silly. Consensual crimes aren't crimes. They're what you get when you have a population of dependent, politically indoctrinated children, instead of a population of thinking, self-reliant adults.

 

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