On a happier note - California had a record year - 14 billion bucks worth

[truedelphi]

Of marijuana was harvested last fall.

And as the initiative to Legalize this crop now is assured of a place on the ballot, those who were hoping for record profits in selling the "weed" are wondering if there is indeed too much of this particular good thing.


There's A Pot Glut In California
Coastal Post, Don Deane
As the state and feds loosen their grip, California's marijuana supply has grown to new heights.
Marijuana is worth money, and in case you haven't noticed, there seems to be an overabundance of cannabis from this year's outdoor harvest. In fact, supply is outstripping demand in this multi- billion-dollar market, and the price on the street is dropping like a stone.

We're certainly not seeing the prices enjoyed before the Drug Enforcement Administration initiated the Campaign Against Marijuana Planting program in 1983, when a 1-ounce "lid" sold for $10. However, the long-standard street price of $50 for one-eighth of an ounce has fallen to as low as $35 in recent months. Steep discounts are available for those who buy larger amounts.

Exactly what's behind this apparently dramatic increase in the supply of marijuana? Two things. Since Proposition 215 (medical Marijuana legalization)passed in 1996, the number of people cultivating their own stash has increased every year. Precise numbers are notoriously hard to come by, but according to the DEA, the number of plants seized by CAMP per year from 1996 to 2006 increased sixteen-fold, from 94,221 plants to 1,675,681 plants. One marijuana study estimates the value of last year's crop at $14 billion in California alone.

The second factor leading to the state's present pot glut was the Obama administration's announcement last year that the DEA would no longer conduct raids on growers, collectives and patients operating within their state's medical-marijuana statute. As soon as that statement hit the airwaves, people rushed to obtain medical-marijuana recommendations and lined up at the hydroponics stores in hopes of cashing in on the movement, especially in light of the economic downturn and the real-estate market collapse.

Rest of the story is here:
http://coastal-post.com/index.php?option=com_content&view=article&id=115:theres-a-pot-glut-in-california&catid=41:top-headlines

[anigbrowl]

1. True that. Many dispensaries refuse about 80% of the mmj offered for sale.

It's a buyer's market right now, but a lot of would-be sellers are still piling in. And as with the gold rush, the easiest way to make money is to sell shovels - or in this case, lights and other growing equipment. One other factor the author overlooks a little is downward pressure on prices due to the recession as well - even if supply were constant Californian incomes have dropped by 2.5% in nominal terms during 2009, the first time since the depression. Obviously that puts pressure on suppliers to cut prices somewhat.

But since traffic over state lines is illegal, and will remain so even if the Tax and Regulate initiative passes with flying colors in November, and even if the DEA gives up on the domestic pot market to concentrate on other drugs and imports across the Mexican border, the oversupply has nowhere to go. You think prices are cratering now, by this time next year the median will be $200/oz at retail.

It's an extremely interesting economic situation. I estimate the legal market inside California is $6-7 billion annually, yielding a potential tax revenue of about $1.5-2 billion at best - more likely, it will be about half that amount (which would still cover about 5% of our state budget deficit). I don't know where this $14 billion estimate comes from, probably by extrapolation from drug seizures and based on the assumption that the rest is exported to other states, because otherwise >20% of the California population would have be going through 1/8th a week and I simply do not see that level of demand, here or in any other country where it is openly sold.

[jaysunb]

4. +1

Good post.

[inna]

2. Cool, thank you for posting this.

[autorank]

3. k*r inna and truedelphi, check out the new flag

So is it time, or what?

[truedelphi]

9. Oh mi gawd. Will weasels rip my flesh

or is that Zappa?

Love the flag.

[jotsy]

5. I'm glad we got here.

It has always been the sensible thing to do.

What's kind of notable for me though, is that after decades of bogus reefer madness hype, now that the crop can aid California in its hour of financial need, does it surface as something we might be more inclined to be more flexible about.

k and r

[truedelphi]

8. In a sense, Ahnold is one of the biggest helps to this effort.

He is A Republican, so there are few naysayers out there trying to convince us that the "Terminator" is soft on criminal pot smokers.
He smoked too. Probably still does. And he is well aware of how awful the deficit looming over California is.

[kestrel91316]

6. We're gonna legalize it in November. Just you watch. The prospect of all

those tax dollars to keep the state up and running is just too much for people to turn down.

If we do, I'll celebrate with a j.

ETA: California can be the first state to capitalize on MARIJUANA TOURISM. Come to the Golden State and enjoy all the pot you want while you're here, because it's still illegal back home.

We can be the new Amsterdam.

[truedelphi]

7. That's how I see it too. Tourism will go up and the

Whole legalization effort will help the economy.

Prisons with their over paid guards will see a reduction in numbers of inmates.(Many prison guards now take home OVER $ 100 K a year, if they work over time.)