Price War Heats Up Between Legal MJ & Black Market
function share_this(num) {
 tit=encodeURIComponent('Price War Heats Up Between Legal MJ & Black Market');
 site = new Array(5);
 return false;

Price War Heats Up Between Legal MJ & Black Market
Posted by CN Staff on July 09, 2014 at 06:49:57 PT
By Jacob Davidson
Source: Time
Washington State -- Recreational marijuana went on sale legally for the first time in Washington state Tuesday, and early reports indicate it’s not cheap to be an early adopter.The New York Times reports that a combination of tough regulations, financing troubles, meticulous inspectors, and tight land-use laws have severely slowed the rollout of recreational marijuana dispensaries. Of the 334 vendor licensees authorized for the first wave of stores, only about 20 have actually been granted.
A shortage of stores meeting an avalanche of new demand adds up to high prices for the state’s first recreational pot consumers. According to the Times, an ounce is expected to sell for at least $400. Based on numbers from, a site that crowdsources national marijuana prices, that’s over twice as much as Washington’s black market consumers pay for an ounce of average quality pot.If one point of marijuana legalization is to stamp out the unregulated black market, and thus avoid funding drug cartels that cause larger societal harms, sky-high prices for legal marijuana are a serious concern. Most consumers would prefer to purchase dope legally, but the corner dealer might be tempting if he’s selling at half price.Can legal marijuana compete on price with the black market? Colorado, which legalized recreational marijuana in January, is a the best case study available. There, in the early going, legal pot prices matched those of Washington’s new dispensaries. Medicine Man, a recreational marijuana shop in north Denver, started out selling marijuana for around $450 an ounce, including tax. “The first couple of months there was literally a line out the door, so we could make that profit,” says Kala Williams, the store’s receptionist and daughter of its owner.But prices soon dropped as more retailers opened shop. At least half a dozen recreational shops operate within five miles of Medicine Man, which has lowered prices to compete. It now sells a range of marijuana strains for between $198 to $340 per ounce, plus tax. Similarly, an analysis by FiveThirtyEight in late April, about four months after recreational marijuana shops opened, revealed the median sticker price for an ounce of recreational weed in Denver to be $200. After adding Denver’s 7.72% sales tax (most marijuana shops are located in Denver), a 10% marijuana state tax, and an additional 3.5% Denver city tax, a $200 ounce would cost about $242 out the door. Checking store menus online, $200 seems on the low end of the price spectrum, but we had no trouble finding stores offering an ounce for about $300, including tax.Gauging how these prices compare to the black market is difficult: Street prices vary widely; it’s hard to poll a large sample size; quality is difficult to account for; and drug dealers don’t send out earnings reports. But based on the limited information available, legal weed appears to cost more — but not a lot more — than its black market equivalent. Two Denver residents with knowledge of street prices say contraband pot tends to range from $160 to about $300 an ounce. That roughly correlates with PriceOfWeed’s numbers. If those figures are correct, legal marijuana in Colorado is priced in the upper end of the illegal market.Whether or not legal marijuana currently competes on price, UCLA’s Mark Kleiman believes it definitely will in the future. A professor of public policy at the Luskin School of Public Affairs, Kleiman says legal weed dealers have one thing the illegal market can never have: The ability to openly invest on machines and other labor-saving technologies that can build economies of scale. “If you have to hide, you have to pay premium wages because people risk going to prison,” said Kleiman. “You can’t invest in expensive fixed tech because you’re worried about a raid.” For example, one of the biggest costs for the illegal drug market is hand trimming the plant’s buds, a process that can be done far more cheaply with machines. Kleiman also believes street dealers will be driven out as concentrates and edibles—marijuana embedded in food—become more popular, as these products are even more difficult to produce without expensive equipment.His one caveat is that states could end up restricting the amount of land licensed for marijuana production to the point where supply cannot meet demand. That would keep prices permanently inflated, and give street dealers an edge.That aside, in the long run Kleiman thinks the days of black market pot will soon be over in states where recreational weed is legal, even if prices remain high: “I think illegally growing marijuana in those states will become as common as illegally brewing whiskey.”Source: Time Magazine (US)Author: Jacob DavidsonPublished: July 8, 2014Copyright: 2014 Time Inc.Contact: letters time.comWebsite:   -- Cannabis Archives 
Home Comment Email Register Recent Comments Help 

Comment #3 posted by FoM on July 09, 2014 at 17:59:54 PT
Heroin Major Focus of New WH Drug Strategy 
July 9, 2014URL:
[ Post Comment ]

Comment #2 posted by FoM on July 09, 2014 at 17:09:12 PT
2014 National Drug Control Strategy
White House Releases 2014 National Drug Control Strategy - Steps in Right Direction but Largely Kinder, More Gentle Drug WarJuly 9, 2014Drug Policy Alliance Press Release:, D.C.— The White House Office of National Drug Control Policy (more commonly known as the Drug Czar’s office; ONDCP) released its 2014 National Drug Control Strategy today. The strategy has shifted some from previous years in that it more clearly focuses on reducing the harms associated with substance misuse, such as overdose and the transmission of HIV/AIDS, hepatitis C, and other infectious diseases, while also reducing the harms associated with punitive drug policies, such as reducing the use of mandatory minimum sentencing. The Administration’s rhetoric has evolved over the last couple of years – reflecting the fact that three-quarters of Americans consider the drug war a failure – emphasizing the need to treat drug misuse as a health issue and stop relying on the criminal justice system to deal with the problem.The strategy, however, calls for the expansion of drug courts, which continue to treat drug users in the criminal justice system, where punishment is often the response to addiction-related behaviors such as positive urine screens or missed appointments. It discourages the use of words like “addict” and “substance abuser”, noting that such stigmatizing words may make people less willing to seek treatment, but continues to embrace arresting and criminalizing people who use drugs despite evidence that fear of arrest is a major reason why people with substance misuse disorders don’t seek help.“The Administration says drug use is a health issue but then advocates for policies that put people in the criminal justice system,” said Bill Piper, director of National Affairs for the Drug Policy Alliance. “Until the Drug Czar says it is time to stop arresting people for drug use, he is not treating drug use as a health issue no matter what he says. I know of no other health issue in which people are thrown in jail if they don’t get better.”The strategy, however, does take important steps in the right direction including advocating for greater access to naloxone, a low-cost opiate antidote that reverses the effects of an opiate overdose; endorsing state 911 Good Samaritan laws which provide immunity from arrests to people who call 911 to help someone who is overdosing; strongly supporting the expansion of syringe exchange programs to reduce the spread of HIV/AIDS, hepatitis C and other infectious diseases; and acknowledging that the U.S. has the largest per capita prison population in the world, which is costly in both money and societal impact. In particular, the strategy notes that the agency will be setting 5-year goals for reducing overdose fatalities, a goal that drug policy reformers had been seeking.“Director Botticelli should be applauded for taking strong steps to reduce drug overdose fatalities and the spread of HIV/AIDS, hepatitis C and other infectious diseases,” said Piper. “His leadership on these issues, and his work overall to reduce the stigma associated with substance misuse, are encouraging”.But advocates say simply expanding public health interventions is not enough given that this Administration’s drug policies remain focused on punitive approaches – including arresting more than 750,000 Americans annually for low-level marijuana possession and refusing to recognize the medical value of marijuana.Every independent commission to examine marijuana policy has concluded that its harms have been greatly exaggerated – including the 1944 LaGuardia Report, President Nixon’s 1972 Schaffer Commission report, and the 1999 Institute of Medicine report commissioned by the Office of National Drug Control Policy. 23 states and the District of Columbia have legalized marijuana for medical use. 17 states have decriminalized marijuana, and voters in two states – Washington and Colorado – regulate marijuana like alcohol. Polling shows that a majority of Americans support legalization of marijuana and believe the federal government should not enforce federal laws in states where it is legal.“The Administration continues to keep its head in the sand when it comes to marijuana law reform,” said Piper. “Hundreds of thousands of Americans are being arrested each year for nothing more than possessing small amounts of marijuana for personal use. Once arrested they can be discriminated against in employment and housing for life. The Administration can’t ignore the destructive impact of mass arrests forever.”Contact: Tony Newman (646) 335-5384 or Bill Piper (202) 669-6430
[ Post Comment ]

Comment #1 posted by observer on July 09, 2014 at 17:01:37 PT
Thank BOTEC's Soviet Rationing
Nice try at trying to pump up Kleiman's soviet socialist central planning Commissar Special there, Jacob Davidson at Time MSM Magazine. But wait ... What? No mention of Kleiman's BOTEC by name? Too obvious a disaster? Didn't want to make those links? I understand: the point of this article is to aggrandize government power and servile followers thereof, not question it. Simple farmer's markets (i.e. freedom) would alleviate the situation. Such is not complicated - except when gov't mouthpieces and drug war camp followers pretend it is complicated. Usually for monetary and political gain. We all know how farmer's markets work. Free markets aren't rocket science. Farmer McDonald pulls his pickup into a parking lot, puts out a little sign that says, "Tomatoes" or "Cannabis", etc. (With permission of parking lot owner of course.) Just like for anything else. (Except you must be 21 or whatever to buy it. If you don't look 21, seller asks for ID.) It only becomes complicated when some witch doctor points the bone at marijuana and imbues the plant with Magical Powers (of the child-corrupting wicked kind), and makes the situation way more complicated than it need be. Most of that weeping and wailing is a show; crocodile tears, and a cover for the naked profits when gov't guns are made to do the bidding of the special interests of the police state.
[ Post Comment ]

Post Comment