Marijuana Economics 101

Marijuana Economics 101
Marijuana remains America's most popular illicit drug, and the U.S. market has been valued anywhere between $10 billion and $120 billion annually. Here's more on how experts determine the numbers.
Why do estimates of the U.S. marijuana market vary so widely?

It's hard to get any degree of accuracy when the data is limited and the commodity illegal, but it hasn't stopped analysts from scouring the available data to draw a multitude of conclusions.

Pricing the market is important -- even if it's imprecise -- because it helps state legislatures forecast prohibition costs, as well as potential tax revenues if they were to legalize the drug.

What's the primary data for supply-side estimates?

Most of it comes from the amount of marijuana seized by federal agencies each year. The crude rule of thumb is that seizure numbers roughly translate to 10 percent of overall domestic cultivation.

But even though the feds' seizure numbers have more than doubled over the last few years -- giving the impression that marijuana production has skyrocketed -- the size of these hauls still depend on the amount of resources and effort put in by law enforcement each year, as well as how hard growers and traffickers work to conceal their product.

Academic and marijuana reform activist Dr. John Gettman explains one example of supply-side pricing methodology in his widely cited 2006 market study. At the time he did the analysis, numerous government reports put the overall size of the domestic marijuana crop at 22 million pounds (that's 10,000 metric tons or 65 million plants).

Gettman begins by assuming a yield value for each plant in cultivation. (The yield is the consumable part of the product.) He assumes outdoor plants yield 7 ounces and indoor plants yield 3.5 ounces.

Then using price and consumption data from the government's annual marijuana use survey, he sets the production cost of marijuana at $1,606 per pound. (The cost to distribute and the eventual retail price per pound are much higher.) Multiplying the price to produce by overall cultivation give him an annual cash crop value of $35.8 billion.

Note, this dollar value is only for marijuana cultivated in the U.S. Gettman puts the total marijuana market, including that shipped in from Mexico and Canada, at closer to $100 billion. Others analysts have used similar methodologies but assigned different variables, which account for the general spread of supply-side assumptions out there.

Are consumption-based estimates more reliable?

Experts generally prefer consumption-based valuations, but this approach also comes with a set of variables that make it difficult to determine an accurate picture.

The most reliable data comes from the U.S. Department of Health and Human Services' Substance Abuse and Mental Health Administration, which engages the American public in a yearly household survey of drug use, including marijuana.

Specifically, the survey collects data on how many Americans aged 12 and older have used marijuana during the last year, in what frequency, and what price they pay per gram. An average joint is thought to contain between 0.5g and 1g of weed.

Currently 17 million Americans are classified as regular users, though many experts suggest increasing this by an estimated 20 percent because government surveys generally underreport. The survey results are also not the ideal measure of consumer habits because the participants self-report. Most people can remember how much they pay for weed, but far fewer can accurately recall the amount or the frequency. There are also multiple ways to consume cannabis besides smoking it, and it's often a shared activity, which also makes reliable data tough to pin down.

With these caveats, estimates based on consumer use and price have put the market in the range of $10 billion to $40 billion annually.

How much does marijuana cost on the street?

As of July 2011, the street price of high-quality pot per ounce ranges between $250 and nearly $500 depending on where it's bought, according to PriceofWeed.com, a crowd-sourced website that bills itself as the "global price index for marijuana." It's cheapest in Oregon, where it's $258/ounce, and most expensive in Washington, D.C. at $486/ounce. (Note: Click here for more on the methodology.)

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Washington
Average price: $279


Read more: http://www.pbs.org/wgbh/pages/frontline/the-pot-republic/marijuana-economics/?utm_campaign=videoplayer&utm_medium=fullplayer&utm_source=relatedlink#ixzz1TwJ8esVg


Note: Click here for more on the methodology.)
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New Mexico
Average price: $361
How does potency affect price?
Potency depends on the amount of delta-9-tetrahydrocannabinol, or THC content, which ranges from low potency in commercial-grade cannabis to the high-grade, high-potency sinsemilla strain most often associated with medical marijuana use. The price per gram is roughly proportional to the THC content.
According to National Drug Intelligence Center research, the prevalence of higher potency products such as sinsemilla has increased the average overall potency, but these highly potent strains account for a maximum of 20 percent of the U.S. market. Jonathan Caulkins, the co-author of several studies for the Drug Policy Research Center at the RAND Corporation describes the marijuana market as a "Wal-Mart, not a Whole Foods market," where more than 80 precent of users are buying the cheaper, less potent commercial grades.
Where's all this pot being grown?
Based on federal seizure numbers, California is the top marijuana-producing state, and in a league of its own by one estimate. Within the state, the top cultivation counties are Lake, Tulare, Shasta, Mendocino and Humboldt counties, all located in Northern California.
The other top marijuana-producing states are Hawaii, Kentucky, Oregon, Tennessee, Washington and West Virginia, according to the most recent DEA numbers. Most of the trafficked marijuana from outside the U.S. comes from Mexico, Canada, Colombia and Jamaica.


Read more: http://www.pbs.org/wgbh/pages/frontline/the-pot-republic/marijuana-economics/#disqus_thread#ixzz1TwJfkUxJ

Horses and pot! Cheap or free fertilizer for cannabis!

SACRAMENTO, CA - Saddled with costly charges each month for manure removal, a Sacramento horse ranch recently decided to take a different approach toward getting rid of their excrement.

They began advertising for people to come by and pick it up to use as fertilizer. It didn't take long before the strategy began to work, though ranch operators were surprised when they learned how some people were using it.

"We had a sweet older lady actually say out loud that it was great for medical marijuana," said Paris Frazier of the Sacramento Horsemen's Association.

Frazier said they never ask people how they plan on using the manure. Most of the usage is for plants or crops, Frazier said, but she's heard some people say they use it to help grow medical marijuana.

Frazier said the money her association saves by giving away horse manure, instead of the $700 per month they spend to have it hauled off, helps fund riding programs for underprivileged kids.

Medical Marijuan Ordinance Passed...

Butte county passes Ordinance some agree, some dont!
What do you think? Speakout @rx215.com


Medical Marijuan Ordinance Passed...

A rude federal awakening for medical pot dreams

A rude federal awakening for medical pot dreams
A rude federal awakening for medical pot dreams
Posted By Patrick O'Callahan on April 16, 2011 at 5:24 pm Share this
This editorial will appear in tomorrow's print edition.

The feds have come down – hard – on the Legislature’s plans to expand medical marijuana far beyond the voters’ original mandate. Marijuana enthusiasts have only themselves to blame.

Gov. Chris Gregoire did the state a favor Wednesday by trying to clarify how the U.S. Department of Justice might react to the free-wheeling dope industry many lawmakers having been pushing to legalize with a new bill.

The two U.S. attorneys who cover Washington quickly spelled out their likely response: fines, property forfeitures, lawsuits and possible criminal prosecutions. Individual state officials might be targeted if they licensed grow operations and dispensaries, as the measure proposes.

Later Thursday, Gregoire said she would veto the legislation as written.

Read the U.S. attorneys’ letter and you’ll see where they’re coming from. The Justice Department, they said, isn’t interested in pursuing “seriously ill individuals who use marijuana as part of a medically recommended treatment regimen in compliance with state law.”

But marijuana profiteers – be they enabling doctors, retailers, wholesalers, processors or growers – are a different story.

In Washington and elsewhere, they have defied both state and federal law to turn medical marijuana into a commercial industry replete with marijuana shops, festive farmers markets and clinics that do nothing but prescribe marijuana – often quite loosely. The City of Tacoma alone has recklessly licensed 35 dispensaries, with seven more on the way.

Thumb your nose at the feds often enough and openly enough, and sooner or later you wind up in their cross hairs. It was foolish to extrapolate the Justice Department’s sympathy for legitimate patients to a tolerance of any kind of trafficking that labeled itself “medical marijuana.”

For lawmakers, it’s back to the drawing board. Sick people who genuinely need marijuana should be able to get it, legally, without having to grow it themselves.

Shared gardens, nonprofit dispensaries and co-ops might not have triggered federal scrutiny if big money hadn’t been changing hands – and they would have reflected the spirit of the 1998 initiative that legalized medical marijuana under tight restrictions.

The state Senate would have addressed some of the federal concerns. Its version of the marijuana bill would have banned for-profit dispensaries and dope docs. It also wouldn’t have forced dispensaries on unwilling cities and counties.

The House bill leaned more toward the Hempfest vision of medical marijuana; it would have licensed profit-driven dispensaries, let medical enablers keep on enabling and forbidden local communities from saying no.

Both bills envisioned large-scale commercial pot farms, which were never going to happen.

Congress ought to amend the Controlled Substance Act to permit bona fide therapeutic use of the cannabinoids in marijuana, which can help patients with a narrow range of medical conditions. But the Justice Department was already permitting such use; it drew the line only after traffickers started operating as if they were immune from the law.
To the extent that “medical marijuana” reflects actual medical practices and controls, it’s not likely to run into trouble. But if the industry walks and talks like a grand drug-dealing scheme, it shouldn’t be surprised to find itself treated like one.

Categories: Sneak preview
Tags: Contolled Substance Act, Gov. Chris Gregoire, Justice Department, Legislature, medical marijuana





Read more: http://blog.thenewstribune.com/opinion/2011/04/16/a-rude-federal-awakening-for-medical-pot-dreams/#ixzz1JkgeZJDv

The Hemp and Cannabis Foundation President Arrested

The Hemp and Cannabis Foundation President Arrested
Posted March 10, 2011 2:14PM PST
The president of The Hemp and Cannabis Foundation (THCF) in Portland, Oregon, was arrested on charges of failure to pay personal income taxes in 2008 and 2009, according to Oregon Attorney General John Kroger.

Paul Stanford is scheduled for arraignment on March 21 in Marion County Circuit Court, the Oregon Department of Justice said in a statement Tuesday. A department spokesman declined further comment until after the arraignment.


The arrest on Monday follows an investigation by the state justice department's Charitable Activities Section and Criminal Justice Division. Last year, the Internal Revenue Service revoked THCF's status as a 501(c)(3) tax-exempt charity.

According to its website, THCF was founded by Stanford in 1999. THCF also has an affiliated political committee, Campaign for the Restoration and Regulation of Hemp, which was founded in 1990 to promote a legislative model called the Cannabis Tax Act.


THCF claims to be "the nation's premiere physician's clinic helping patients obtain their state's permit to legally possess, use and grow medical marijuana." THCF says it has helped more than 150,000 patients "get legal" in Washington, Oregon, California, Hawaii, Colorado, Michigan, Montana and Nevada.

A spokesman at THCF told The MJ Business Update that it charges $180 for a visit to a clinic, or $120 for patients on welfare. He declined to comment on Stanford's arrest. Stanford could not be immediately reached for comment.

Sources: Press Release, IRS

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IRS tells Fairfax medical marijuana dispensary it owes millions in unpaid taxes - Marin Independent Journal

IRS tells Fairfax medical marijuana dispensary it owes millions in unpaid taxes - Marin Independent Journal
Marijuana tax laws and issues for California dispensaries!