Jul 132014
 July 13, 2014

marijuana cash industry banking“Twenty dollars a gram?  Ain’t no way I’m spending five hundred and sixty dollars per ounce on weed!”

My friend was reading the coverage of the opening of legal marijuana shops in Washington State, shocked at the high prices being paid for pot.  Sure, not as high a price as ten years in prison, but a steep price for my friend who’s getting pot from Oregon dispensaries at $180 per ounce.

“Actually,” I reply, “the CBS affiliate in Portland says pot is thirty-three bucks a gram at Main Street Marijuana in Vancouver, once you figure in the tax…”

“Geez, that’s…” my friend pauses, looks up and to the left, and continues, “…that’s like nine hundred twenty-four dollars an ounce!”

I’m always amazed at how my buddy never managed to grasp algebra in high school, but can run imperial to metric conversions and double-digit multiplication in his head when it comes to weed.

“Look, dude, nobody’s forcing you to overspend on weed,” I counseled.  “But if some people want to just so they can be the first to do it legally, what’s the problem?”

“Because, dude,” he answers in our dude-speak, “they’ll get all addicted to that tax money and they’ll keep the price high, making money off these tourists and newbies, and then they’ll just want to crack down harder on people growing their own.”

There’s always a “they” when I talk to this friend.  Smoking weed doesn’t make you paranoid, but some paranoid people do smoke weed.

“That’s not going to last forever,” I explained.  “Remember when we did that band tour our junior year, all across California in a damn school bus?  Remember how everyone teased me because I was the poor kid who had to pack a week’s worth of groceries in a cooler because I couldn’t afford to eat out on the road?”

“Yeah, dude, it was freakin’ hot in that bus!”

“And then I got the bright idea to buy a case of soda instead, and sell it for a buck a pop to the rest of the kids on the bus?  Back when it was like eight bucks for a case and you could buy a cold soda out of a machine for fifty cents?”

“That was pretty brilliant, dude.”

“Yeah, but remember what happened next, how two other kids then decided to buy coolers and sodas?  Boom, from that moment, I couldn’t sell sodas for a buck, because those other guys dropped theirs to seventy-five cents.”

“It was that Craig dude, the one with the really hot cheerleader girlfriend, right?”

“Right… but what I’m trying to tell you is that this is just a supply and demand thing.  You wouldn’t line up for the new iPhone or Star Wars movie, but some people will.  But that’s going to fade.  Soon enough, more of these shops will open.  They’ll have much more marijuana to sell.  They’ll have to drop prices to compete.”

“Sure, but those Washington taxes, twenty-five percent three times!  That’s gonna keep the prices high,” my friend warned.

“Maybe, but remember, not only do Washington growers and retailers have to compete with each other, the medical market, and the black market, which will eventually bring down the price, but Washington will soon have to compete with Oregon.  When we pass legalization in November, it will have home grow, eight ounce possession, thousand-dollar commercial licenses, no limits on number of producers, processors, and retailers, no limits on where investment comes from, no limits on how many licenses or types you can own, and a flat tax on flower at a buck twenty-five per gram.  Do you think those Vancouver pot shops selling at thirty-three a gram with tax will be able to compete with Portland pot shops across the river selling at five to ten bucks a gram?  Do you think a lot of business owners who enjoyed a first year or two of big marijuana sales won’t put some political pressure on lawmakers in Washington to change how they tax and regulate marijuana?”

He paused and took a hit off his vaporizer pen.  “Ah,” he exhaled slowly, “it’s the long game.  That’s why I like talking to you, dude; you see these things.”

“It’s pretty simple, really,” I offered.  “It’s just the law of supply and demand, and the supply is a weed that grows anywhere.  Without absolute prohibition, it can’t help but become much cheaper.”

Source: International Cannabis Business Conference

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About Russ Belville

Executive Director: Russ Belville has been active in Oregon marijuana reform since 2005, when he was elected second-in-command of the state affiliate, Oregon NORML. After four years with Oregon NORML, Russ was hired by National NORML in 2009, working as Outreach Coordinator and hosting the NORML Daily Audio Stash podcast until 2012. Since then, Russ launched the 420RADIO marijuana legalization network and is the host of The Russ Belville Show, a live daily marijuana news talk radio program. Russ is also a prolific writer, with over 300 articles posted online and in print in HIGH TIMES, Huffington Post, Alternet, The Weed Blog, Marijuana Politics, and more.
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  14 Responses to “Why High Washington Marijuana Prices Are Not A Bad Thing”

  1.  

    Is this article from The Onion?

  2.  

    We are told that the reason for high prices is supply and demand and that pot shops don’t have enough stock when they open for business. Why don’t they have enough? Washington has had some twenty months to launch the program and Colorado had fourteen. Jeez!!! Of course, the underlying problem are the politicians and bureaucrats whose dark ages licensing policies mean that plants can’t be grown until the last minute, hence the shortage. It’s not rocket science to set a program in place that allows cultivation (but not sale) in order that there will be enough supply on opening day. But the higher the price, the more tax revenue goes to the government. Hmmmmm.

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      UHHHH Seven Thousand applictions filed might have something to do with it. Out of 334 allowed? They were caught off guard on licence demand. I’d shit-can most of them but the FED’S have made the state vet everyone of them. Colorado was able to sell faster because their dispensary’s are heavily regulated. I don’t want the state to regulate my fucking dispensary. they’re fine as is, do you?

  3.  

    So, the moron who wrote the article likes price gouging and inflation? Must be a dispensary owner.

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      No what he’s saying is pot’s already so culturally accepted in Seattle, even if it weren’t legal in Seattle for newbies and tourists. it’s already available everywhere. Fly to Denver. That boring as shit over-grown cow-town. They had to legalize and rush like they did because there’s nothing else to do there in that ugly ass town except go to the mountains. That gets old after a few days. Who gives a shit if the cruise-ship tourists, and middle-adged people who haven’t smoked since 1969 don’t mind paying those taxes. I don’t.

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      A realist

  4.  

    High prices are a bad thing, period. They will stop being a bad thing when they stop being high.

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      Thank you. The dude is right. There’s a dispensary downstairs in my building. I agree the stores are a novelty here in Seattle. That over-grown cow-town (AKA Denver) is a bit different. They had Republican dip-shits running that state until just a few years ago. Thats why they had to rush as they did. Clocks ticking there with the Tea-party on their asses. A chunk of Colorado Counties still want to secede because all of a sudden cow-poke land isn’t as conservative as it used to be. That could never happen in Seattle.

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      Not if the cruise ships tourists don’t mind. They didn’t open these retail for the locals. Why can’t people fucking get that!

  5.  

    I think “they” would be the political party/ies who lobbied this bill into existence. In Washington at least, this is almost purely about tapping a new revenue siphon and hardly about freedom of choice. Although I admit, it’s become the first step towards freeing ourselves of harsh penalties associated with marijuana usage. I however believe the marijuana advocates such as NORML have sold out just for a win. To me a true win is a win/win situation. In this case we have too much to lose and pay to high of a price for our freedom. My only hopes are “they” (our policy makers/enforcers) will strive to better regulate DUI in a more scientific and moral fashion; as well as make sure the tax and business infrastructure is more equitable. The current model is backwards in an unprecedented way, in that the taxes collected on each qty of marijuana produced, wholesale, retail: equate to more than the revenue that the producer who produced the produce will have produced. So what I’m saying is that gram for gram “they” (state/city) make more from the produce than the producer, not even considering costs and income tax which are currently a nightmare. We have a long way to go NORML. While you’re riding off state to state, strutting around on your high horse, claiming your long deserved victory; we’re here dealing with the realities of the situation.

    •  

      It’s better than being on the “hoe line” at Angola prison farm for having one joint my friend forgot he had in his shirt pocket. Ten years. He’s three in. I read these to him but he can only take so much listening to people nit pick about high taxes and bitch about how everyones doing it wrong. To quote him :”Everyone’s a fucking expert now, Let ’em trade place’s with my ass”

  6.  

    Washington is going to be a disaster. The state, after several years of sharply declining revenues, saw marijuana taxes as a panacea. The problem is that they were so greedy with their tax structure that they didn’t realize that the majority of marijuana users are not rich and can’t afford $25-$30 a gram. If you are an average, not wealthy user of half a gram to a gram a day, which many people do use that amount daily, you cannot afford that price.
    So the majority of users are going to stay away and if Oregon does start selling it to all users at $10 a gram, then anyone anywhere close to Portland is going to go there to buy.
    It’s not like all of the producers who are selling their product at the price they need to sell it at now to be successful, lets say $5 a gram to a processor, can eventually go down to $1.50 to $2 a gram in order to compete with Oregon and still stay in business. It cost them so much to comply with the state standards that their costs are high and they need to charge what they are charging now just to make it work. Cut their price by 50% or more and they close their doors.
    I predict that the Washington experiment, which I think is the worst of the bunch, will fail miserably due to the state’s greed. The biggest mistake the state made, it’s a fatal mistake in business, was not understanding the market for the product. The majority of the pot market is made up of middle to lower class folks with little disposable income. If you price their entertainment too high they will look elsewhere for that product or buy another product, liquor. With their exorbitant prices they have already driven the majority of the smokers I know, right back to the black market.
    Legal now and great if you are rich but it’s really no different than before for the average guy. Yeah he won’t go to jail for having pot but now he can’t afford to have it. So what the state created is legal pot for rich people. Washington is betting that a lot of rich people will frequently buy a great deal of pot. Honestly I don’t see the Country Club crowd flocking to pot stores.
    Washington government, here’s hoping you fall hard on your greedy ass. I thought loan sharks charged a high rate of interest. They have nothing on Washington and it’s 85% pot tax scheme. It’s one of the most amazing things I’ve ever seen a governmental agency do and that’s saying something.

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