Humboldt County News
If you live in Humboldt County, or any other California region where bulk marijuana sales account for a substantial portion of your community's revenue, then you have probably heard growers talking about how low the price of a pound of pot has fallen over the past couple of years.
Humboldt growers are currently facing buyers who refuse to pay more than $2500 for a pound of high quality indoor marijuana, and as low as $1200 for good outdoor buds. This is a massive market shift from just two years ago when growers could easily find buyers willing to pay between $3200 and $3800 for chronic indoor weed and as much as $2800 for good outdoor buds.
There are a couple of things we find interesting about this trend.
First, per-gram prices at MMJ dispensaries have not changed much, with most outlets still asking (and receiving) $50 or more for an eighth and $300 for an ounce on indoor strains, and roughly half that for outdoor (depending on where you shop). At $300 per ounce, those sellers are bringing in $4800 per pound -- almost a 100% markup. The same is true on the street, where the cost of an eighth of weed is still about $50 pretty much everywhere you go.
Second, demand is undoubtedly up nationwide, and prices most certainly have not fallen on the streets of, say, New York City or Atlanta, GA, where many buyers routinely pay $425 or more for an ounce of sticky California-grown pot.
So it's fair to say that prices have only really changed for marijuana producers, while end-users are paying the same amount as they always have. Which of course means that the market is just as strong, and the profits just as great, but the growers aren't seeing nearly as much of that revenue as they have in the past. Instead, middle-men and bottom-of-the-chain dealers are scooping up greater profits than ever before.
Of course, supply is up huge these days, too, as more Californians than ever are becoming marijuana farmers, and states like Colorado are quickly rising as major producers of quality pot, which ultimately takes export business away from California.
Kym Kemp (who we think is awesome), recently stated that prices are actually up this year compared with last year, but we believe that, in the big picture, she is incorrect, and that her report reveals more about the isolated and pocketed nature of the marijuana industry in California, where there are so many tiny little markets and circles of growers and buyers that it is difficult, if not impossible, to step back far enough to see the overall trends affecting widespread producers and consumers.
Regardless, you may be wondering what we at Humboldt County News think of all this. Sure, that makes us sound cocky and self-important, but the statement is based on the volume of hateful comments and threatening emails we routinely receive in response to this blog. Well, here goes.
Because we do know honest, good-hearted (and even income tax-paying!) marijuana growers who are being negatively affected by this trend in bulk pricing, we feel a bit bad for those guys and their families. But that sentiment is outweighed by the satisfaction we get from knowing that the brute force of the market is actually creating serious competition among growers. Why is that satisfying? Because it means there is less room for greed, less room for all the douchebags and assholes who spent the last decade or so reaping insane profits, driving up housing costs for the rest of us and essentially reducing the quality of life for normal taxpaying citizens.
As bulk prices fall and supplies increase, buyers will no longer settle for sub-par product. And that means those growers with real gardening skills, who are in the game to produce a high quality product for patients and operate a legitimate and sustainable business, will have little trouble selling their goods, while those who aren't actually good gardeners and just got into the business to make some easy money will find that the benefits no longer outweigh the costs. Yes, many "good people" are getting caught in the crossfire of this competitive market, but, well, thems the breaks I guess. What we like about this consequence is that, in general, the douchebags who are causing real problems in our community are way more likely to be in the bulk production business rather than the high quality, extra-care-taken-on-a-daily-basis-in-the-garden-to-produce-the-best-pot-possible business. Competition is always good.
And finally, we are greatly anticipating Kym Kemp's upcoming audio series, The Humboldt Chronicles, which will explore some of the unseen angles of Humboldt County's marijuana industry.
Finally, a crackdown on some serious marijuana-related fraud that we have all witnessed in California, especially here in Humboldt County.
PG&E is ready to go after abusers of its CARE program, and that's a big deal. It's a big deal because CARE fraud by for-profit indoor marijuana growers is just another way grower greed has been screwing the rest of us over for many years.
First, for those who don't know, CARE is PG&E's California Alternate Rates for Energy program, and it was created to provide reduced/discounted energy rates to low-income families and individuals who actually could not otherwise afford to keep the lights and heat running in their homes. Qualifying households get a discount on energy rates of at least 20%, and in many cases that discount is as high as 70%. But PG&E doesn't provide the discounts out of its own pocket. Instead, CARE is subsidized by charging an additional 5% to all non-CARE customers.
So, take from the rich and give to the poor, sounds good, right? Not that we support that type of economic approach, but the concept isn't all bad in this case. The problem is that, while the rest of us are paying ever-increasing rates for our energy use, thousands and thousands of for-profit California pot growers are scamming us by participating in the program to lower the overhead of their illegal businesses. The fraudsters can do this because they do not report their marijuana-related income, and therefor can "prove" to PG&E that they are impoverished enough to take advantage of the discount program.
The problem is so bad, in fact, that the Eureka Times-Standard recently reported that "Arcata Police Chief Tom Chapman said that more than 70 percent of the grow houses searched by his department in the past two years have been utilizing the CARE program."
Which doesn't surprise us at all. Countless growers we have interacted with over the years freely admit to abusing the CARE program, and when questioned as to why they would fraudulently scam PG&E that way, the response generally amounts to "fuck 'em," which further illustrates the level of greed present among so many criminal indoor marijuana growers. We have even witnessed profitable pot farmers abusing other low-income programs like MediCal and CalFresh (food stamps), making thousands of dollars per month in pure black market profit and still stopping by the social services office to pick up their food stamps every two weeks, then using the benefits to buy lobster tails and fine cheeses at Wildberries. Hopefully that scenario is not common, but who knows? If a greedy grower is willing to steal from PG&E and the IRS, then why not also steal from other government programs?
Despite PG&E having little incentive to really crack down on CARE abusers (since they don't actually foot the bill for the program), we sincerely hope they give it a substantial effort. For those growers who follow the rules, pay taxes on their marijuana income, and bear the actual costs of all that expensive electricity they use, keep on truckin' and running your operation in an honorable fashion. For the rest of you, the greedy, tax-evading, douchebag growers degrading our community: Fuck you.
There are no accurate estimates of the number of marijuana growers operating in Humboldt County, much less the entire state of California. But we can be quite certain that the number is daunting, to say the least. There are about 78,000 people in Humboldt County between the ages of 18 and 65, and many locals would guess that, at minimum, 50% are involved in the marijuana production industry in some way.
We want to take a close look at marijuana growers in Humboldt -- the actual operators of indoor pot farms -- and examine how much money is involved in producing high grade marijuana here in California.
Like any business, there are many factors that go into running a production pot garden, so we'll end up with a range of income levels at the end of this article. Most importantly, not all growers use the same method, so timing and yields are kind of all over the place. Let's talk about timing first.
In our experience, more pot growers in Humboldt are concerned with quality and yield per plant rather than total yield per year, which immediately puts them at a disadvantage (from a business perspective). Growers are always bragging about how many pounds per light or ounces per plant they recently harvested, but generally ignore the amount of time it took their garden to produce those yields. There are also some very business-minded growers in these parts who measure their success and production in terms of pounds per year, and strive to produce the most product they possibly can each year so they can make as much money as possible. Either way, all indoor pot farmers must face the same expenses and similar market conditions, so we'll be looking at the cost of growing and the bulk price of high quality marijuana in the United States.
Let's look at two very different, but very common, garden scenarios. Garden A is a four-light operation in an average Arcata home. Garden B is a 15-light operation in an average Eureka home.
Lights: 4 x 1000 Watt
Energy Consumption (veg): 504 Kwh
Energy Consumption (flower): 2400 Kwh
Energy Consumption (other): 114 Kwh
Annual Rent: $19,200
Annual Electrical Cost: $7,300*
Annual Materials Costs: $4,000
Annual Other Costs: $2,000
Total Annual Overhead: $32,500
Lights: 15 x 1000 Watt
Energy Consumption (veg): 1890 Kwh
Energy Consumption (flower): 9000 Kwh
Energy Consumption (other): 171 Kwh
Annual Rent: $16,800
Annual Electrical Cost: $26,900*
Annual Materials Costs: $13,240
Annual Other Costs: $6,000
Total Annual Overhead: $62,940
|* based on PG&E rates|
The table above pretty much lays out the costs associated with operating each grow house. We used PG&E rate information for the top tier of energy usage, because the vast majority of an indoor grower's electrical usage falls into this category. Material costs (soil, planters, fertilizer, new bulbs every 6 months, etc) are estimated and probably higher than the average grower incurs. We also ignored startup costs, since we're here to discuss how much an indoor garden can make after it is up and running, but for your information it generally costs about $1000-2000 per light to build out a new garden (construction materials, equipment, wiring, labor, etc).
Avg Yield (57 day cycle): 3.5 lbs|
Annual Yield: 22.4 lbs
Total Annual Revenue*: $71,680
Less Overhead: -$32,500
Net Profit: $40,180
Avg Yield (57 day cycle): 12.5 lbs|
Annual Yield: 80 lbs
Total Annual Revenue*: $256,000
Less Overhead: -$62,940
Net Profit: $193,060
|* at market price of $3,200/lb|
Two things become abundantly clear based on the examples above: 1) Net profit margins are greater than 50% for marijuana growers, which is leaps and bounds beyond the net margins associated with the vast majority of legitimate businesses in the United States; 2) Growers with larger gardens are enjoying incredible profit margins, as high as 75% in this scenario.
Of course, the primary reasons that profits are so high in the marijuana business are that prices are inflated to account for the inherent risk of operating in an illegal market, and, most importantly, pot growers aren't usually claiming the income on their federal and state taxes, which allows them to keep an additional 15%-35% of their gross profit compared to what a legitimate business would pocket.
To be fair, there are many other factors that determine how much a professional indoor marijuana grower makes each year. Not all growers run a 57 day cycle. Many veg for 2 weeks or more, and flower for up to 60 days, which ultimately reduces their annual production to less profitable levels, and some skilled growers run a 50 day cycle, boosting their annual yields to even higher levels while cutting down on cost per cycle. And not everyone's weed sells for $3200 per pound. Some growers unload their product at lower prices, while others are able to charge as much as $4000 per pound to out-of-state buyers. And we must not ignore the occasional failed crop, due to disease, infestation, burglary, or other problems, which probably occurs at least once every dozen cycles (much more for less experienced gardeners).
In any case, we hope this answers the question many Americans have been asking recently, with all the talk of marijuana in the news and on the streets: "How much money to marijuana growers actually make?" If you have relevant information on this topic, please leave a comment below.
The time of reckoning for marijuana growers in Eureka, California is right around the corner.
The Eureka City Council is about a week away from approving an ordinance that would effectively put an end to for-profit residential pot production. According to the Times-Standard, the council voted unanimously to introduce the ordinance for the city of Eureka, and they will convene again on August 3, 2010 to vote the ordinance into law.
Here's a quick summary of the new residential regulations outlined in the ordinance:
- Medical marijuana users may only grow for themselves in their residences
- Grow space limited to 50 square feet and 1200 watts
- Pot gardens must have a permit from the city for any special electrical wiring
- All CO2 use is banned
- Property owners will be forced to allow the city to inspect properties
This is a HUGE DEAL for Eureka, and it is very likely that the ordinance will pass early next month. This will pretty much shut down all black-market marijuana gardens within the city limits, and could become a huge problem for property owners who rent to growers, whether they are aware of gardens on their properties or not.
Once the city determines that a property might be housing an indoor pot farm, they will notify the property owner by certified mail. If the owner does not respond within seven days, the city seeks an inspection warrant to enter the home and check for compliance with the new law. After that initial seven days, the city will also hit the property owner with fines of $50 per day until it is inspected.
We're all for regulating marijuana production and eliminating the black market criminals who do little to support the community, but it seems a bit aggressive to be fining property owners on a daily basis over the inspections. What's more, it is unclear what kind of information the City of Eureka must obtain before it decides to perform an inspection on a property. We foresee unfortunate situations arising where nosy neighbors abuse this system to harass residents in their neighborhoods, forcing them to open their doors to city inspectors based on little more than hearsay or personal opinions.
Regardless, things are changing in a big way the Humboldt County Seat, and we expect to see many growers moving out of city limits as soon as possible.
And we can't help but wonder if this is ultimately good for the city? If growers can't turn a profit in the city of Eureka, will this lead to decreased demand for home rentals? Will it eventually lead to lowered property values because growers will no longer be looking to purchase homes or rent properties inside the city?
Let's face it, nobody is moving to Eureka, California for the great schools or the high paying jobs. They're moving here to grow pot or to service the pot growing industry. Or maybe to retire. That's it. Everyone knows our economy is based almost entirely on illegal marijuana production, whether we like it or not. If property values decline in Eureka, there will be less money for schools, less money for city services, and less money to pay for political positions like those held by our city councilmen.
Is this really what we want? Maybe there is a better way...
Not that it's very surprising, but marijuana's inevitable thrust into the national spotlight has nabbed the attention of Bloomberg Businessweek, who recently published a short article about various states' and localities' plans to begin taxing the controversial herb.
Their comment regarding Humboldt County, however, is both misguided and uninformed. Businessweek says "If the initiative passes, marijuana advocates and researchers describe a scenario in which drug tourism floods the state, resulting in tasting rooms and specialized bed and breakfasts in the Northern California counties of Mendocino and Humboldt, where the plant is cultivated."
Ok sure, there's been a lot of talk about "marijuana tourism", but seriously? It's not going to happen. Specifically, it's not going to happen in Humboldt County.
Why not? Think about it. Sure, Humboldt is great, it's beautiful and the doja is fantastic, but we are no longer the go-to headquarters for fine marijuana in the United States. The name might still carry some weight, but it is simply no longer the case that you can't get Humboldt-quality pot outside of the Redwood Curtain. Growers all over California have figured out how to grow world-class bud, and you can damn sure find a lot of it in the San Francisco Bay Area.
Now, if you are on vacation and you want to go to California to smoke some legal weed, you would probably fly into SFO or OAK. But then, why spend another 5-6 hours (and/or $200-300) to go all the way to Arcata? You're already in a world-class city, surrounded by amazing tourist attractions and unlimited supplies of high quality pot.
Indeed, it won't be Humboldt or Mendocino Counties that reap the rewards of a rush of pot tourists. It will be Oakland and the surrounding area. To back up this claim, just have a look at this Google Trends report, which pits the terms "humboldt marijuana" and "oakland marijuana" against each other. You can see from the data that Oakland is getting a lot more pot-related press these days, and that is certainly bound to continue. By the time people are actually booking flights and planning trips for their pot vacations to California, it will be all about Oakland, and very few will actually make the drive (or pay for the plane ticket) up to Arcata where it all started.
Anyway, maybe we need to let go of this fantasy where we envision pot tourism making up for the damage that legalized marijuana could do to our local economy. Indeed, if pot growers want to continue making the kind of money they do now, they probably ought to vote against Prop 19. How are you going to vote, and why?
Yes, Humboldt County really is the Marijuana Capital of the World. Where else would you read about a 30 year old woman busted with 45 pounds of pot, plus cash and live plants, when she was pulled over for speeding by a Sheriff's deputy?
We're all pretty used to reading about this kind of stuff here, because it seems to happen on a weekly basis, but let's take a moment to think about the implications of this arrest.
Tiffany Charbonneau, when pulled over, first told the cop that the smell of pot was from the young marijuana plants she was transporting in her vehicle. She showed the cop her 215 card, but it was expired, so she was detained and searched. Within the vehicle, the deputy found 45 pounds of herb, "a significant amount of cash", the live plants, and "a pay-out sheet detailing the sale of marijuana." Damn Tiffany, it ain't legal yet!
Forty-five pounds. Even with marijuana prices at all-time lows due to the supply glut created by thousands of pot growers rushing into the scene (many of whom moved to California recently for the ongoing Marijuana Gold Rush), decent nugs can still bring about $3200 per pound in-state. So this lady is rolling around with $144k worth of pot, plus a bunch of cash, some live pot plants, and she even has records detailing sales of her weed? No question about it, that's just stupid. Seriously, even if this weren't the black market, if she were a legitimate businessperson running normal day-to-day operations, since when does anyone drive around with six figures worth of goods, without any protection or even an attempt to mask the odor?
But this story, like so many similar tales of late, helps illustrate how unlike any other market the marijuana scene in California has become. For every Tiffany Charbonneau, there are presumably hundreds of other big-time black-market transports on the road at any given time.
And what does it all mean? For starters, it means there is an unimaginable amount of cash being made on the marijuana black market in Humboldt County. And that means significant losses in tax revenue for our community and our state. But will legalizing marijuana resolve that issue? We have doubts. Even if prices decline, which they most assuredly will, the black-market producers may still be able to compete with white-market prices, particularly because they won't pay the required taxes, and it stands to reason that we won't ever be able to eliminate the underground market and extract tax revenue from it.
This is all totally new and unprecedented in the US. We have a product that can be manufactured on a small scale, inside peoples' homes, with a quality that rivals even the most professionally grown stuff. Getting rid of the black market, and tapping into that tax revenue source, is probably going to take more than just passing a new law. It's going to be quite interesting to see what happens after California voters finally pass some sort of marijuana legalization.
According to a recent Reuters poll, 48% of California voters support Proposition 19 to legalize marijuana state-wide. Here at Humboldt County News, we are actually quite surprised by this. We really thought that it would take a few years before voters pass this kind of measure. Of course, the survey only polled 600 voters, so it is by no means an accurate representation of the entire state, but it still raises concerns for the marijuana industry in California.
Associated Press reported today that marijuana prices would nose dive to ridiculous lows if the substance becomes fully legalized in the state. They claim that pot could end up selling for $38 per ounce before state-mandated taxes.
And that, of course, is absolutely ridiculous. There are few growers who can produce marijuana for less than $75 per ounce, and the vast majority of growers are probably spending $100-$180 on each ounce of bud they produce. Granted, that is for top quality weed, not the mass-produced crap that we can only assume the major tobacco companies and other large corporations will eventually manufacture on a large scale once pot really is legalized in California.
But this whole thing leads into another, very interesting area of California's marijuana culture. We have been keeping quiet around here for the past year, taking a cue from the (sometimes aggressive and threatening) readers who have commented on many of our posts. But to hell with you idiots, we gotta report on what's really going on here in Humboldt County.
Pot growers here in Humboldt, at least those with some business sense, are suddenly finding themselves having very capitalistic, even republican-esque, thoughts about Prop 19. There is no question that all-out legalization will change the economic landscape of the marijuana market. No doubt, many well-funded and large-scale growers already have plans for how to expand their businesses once legalization finally happens. And it's all about money, right? But look at Humboldt County, where, like many other parts of California, small-time growers are making serious money. We've already covered the numbers behind pot growing in other posts, so we won't get into that here. We'll just remind you that growing pot, if you actually have a clue what you're doing, can bring in profit margins of 300%, easily. That means for every $10,000 it costs to grow, the best growers are making $30k profit, and for many of them, that happens six times per year, and most don't bother paying income taxes.
Anyway, lots of growers are planning to vote against Prop 19 because it threatens their livelihood. If everyone suddenly has to go legit, and turning a profit becomes a matter of running a profitable business according to state laws, these little guys who are currently running lucrative black-market operations will quickly be pushed out by professionals who have the capital to open up 100,000 square-foot marijuana production facilities, bringing the prices down and making up for the margin difference with sheer quantity.
From what we have been hearing among some of the grower circles here in Humboldt, some people think it won't affect anything, while most are worried about the futures of their gardens, worried that it simply won't be worth it to grow pot in their homes anymore.
So we ask you, the readers of this blog who still subscribe to our RSS feed or stop by to see what kind of crap we're publishing, to weigh in on this topic. Do you think prices will change much? Do you think legalizing will actually put an end to tax-evading indoor growers who are the bane of Humboldt's law-abiding citizens' lives? Growers, we invite you to cuss at us and make violent threats! I mean, you're going to do it anyway, right?
It's pretty rare that Humboldt County gets national media attention for non-marijuana news. It's also a big deal when Humboldt gets mentioned on a blog like Perez Hilton.
Today we get both! Brian Slayton's OctoMom kinetic sculpture vehicle made it to Perezhilton.com, which then caused the photos to be replicated throughout the blogosphere. Slayton built the OctoMom vehicle after local hero Duane Flatmo talked him into it.
This year's Kinetic Sculpture race was awesome! If you missed it, here's a link to the official race page for photo galleries and details on the event.
Good god, man! What a story!
A 14-pound pot deal went south Monday night when two heavily armed men first stole the ganja at gunpoint, then raced away in a Jeep while shooting at coppers in pursuit with an AK-47!
This is a big deal, even for Humboldt County! We all know we live in a modern wild west, a place where lawlessness abounds and law enforcement is frowned upon, but damn, how often do a couple of guys strap on body armor and rob pot dealers with assault rifles, then shoot at the police before committing suicide and driving off a 130-foot embankment? It's straight out of a bad action movie!
Anyway, one of the robbers didn't really want to die, so he shot himself in the chin (while his partner in crime put a bullet in the side of his own head), and now he's at the Redding hospital awaiting charges. Oops!
On the lighter side, it's good to hear that the sellers in this deal played it safe and simply turned over the pounds of marijuana to their attackers. And why wouldn't they? Fourteen pounds of herb isn't really that much around here.
Just look at the most recent grow op raid in McKinleyville. This couple had 900 plants in three grow rooms, some pounds of weed, and even a good quantity of hash just lying around the house. What's interesting about that one is that they are being held on $20,000 bail, but the cops found $15k in cash in their residence. You'd think the bail would be a little higher considering growers of this caliber generally have five or six figures buried in their backyards.
Anyway, don't sell weed to people you don't know. And don't freaking grow 900 plants in your house! That's just greedy! Get your card, grow your own smoke, and stay within the law--Humboldt County will be a better place if all you growers just quit with the rampant greed.
We have probably all heard the story by now, but just in case, here's the paraphrased version:
Man and girlfriend are at their home in Cutten, there is a knock at the door just after 9 p.m. They answer. It's a guy with a gun in a black stocking cap. He comes in, tries to tie the couple up, struggle ensues, multiple shots fired, man who lives at home is pronounced dead at the hospital 2 hours later. Cops arrive and find "a large amount of marijuana" at the residence.
Still think marijuana production in Humboldt County is a good thing? Does anyone believe that this would have happened if there was no marijuana involved?
Please remember that Humboldt County, and especially Eureka, is a very dangerous place. Never, ever, under any circumstances, answer your door (day or night) without finding out who is knocking first. Home invasions happen here on a daily basis, but we generally don't find out about them until someone gets assaulted or murdered.
If you have an alarm system (and if you're in Eureka, you probably do have one), it is wise to set it every night when you go to bed. Not a convicted felon? Go buy a shotgun or handgun, then practice with it out at Fernbridge or down at the Shootery. The criminals here are bold, and getting bolder. They'll rob your ass while you're asleep in your home. They'll cut a hole in your garage if they think there might be a marijuana garden in there. And they will definitely home invade your sorry ass if you make the mistake of answering your door without determining who is on the other side knocking. Be safe, Humboldt, it's a war zone out there.
Sadly, Proposition 8, the measure to ban same-sex marriages in California, seems to have passed by a pretty decent margin. It's a sad day for California, and a dark day for gay rights everywhere.
The SF Chronicle says "The flood of dollars that poured into the state from every part of the country made Prop. 8 the most expensive social issue race the nation has ever seen."
That flood of dollars they mention amounted to over $70 million, with the Yes side inching ahead by a few hundred thousand dollars. Either way, it is shocking that the same Californians who voted for Obama would deny homosexuals the right to marriage. Especially considering that Obama supports gay rights and equal right for all humans.
Results in California:
Voted for Barack Obama: 61.3%
Voted for Prop 8: 52.1%
At least here in Humboldt 60% of us voted against this hateful ballot measure. Shame on the other 40% for perpetuating hatred and denying a large group of Californians equal rights based on their sexual orientation. Way to push the human rights movement back a decade or so.
Here it is again, that one day out of the year when kids get to eat loads of free candy, parents can be thankful for the fluoride in our drinking water, and all the young girls of America dress themselves up like prostitutes and go out to get macked on by drunk dudes in costumes.
We used to love Halloween. But then a couple of years ago while we were handing out candy to the local children who came to our door, we were unexpectedly rushed by a group of 10 teenage boys who weren't even wearing costumes. At first we tried joking with them, "Ah you guys aren't even in costume! Gotta save this candy for the children who dressed up!" But they just started grabbing the treats from our bowl and shoving their way into our home. These kids were probably 16 or 17 years old. A couple of them looked like they were on the high school basketball team.
That was the last time we participated in Halloween in Humboldt County. We have never had such a negative neighborhood experience (daytime home burglaries excluded), and we don't plan on ever again opening our door up to the local youths after sundown.
So, to celebrate Halloween this year, we found this ridiculous photo gallery of dogs dressed up in hilarious costumes. We sincerely hope you enjoy. And please, be safe tonight if you go out. Have a designated driver, be aware of your surroundings, and watch out for STDs. ;)
Not that we're very surprised, but this month's electricity rate hike is so substantial and well-targeted that we just had to tell everyone about it.
Growers looking closely at their power bills this month might notice a marked increase in the rates for top tier power usage. PG&E likes to divvy up your electricity charges into different "Baseline Quantities", charging more per Kwh when you use more power than they think you need.
This is fine for those of us who turn our lights off when we leave the room, shut our computers down at night, and keep our thermostats set low. But for the many thousands of households where residents are running multiple high wattage horticulture lamps, dehumidifiers, and industrial exhaust fans, those baseline charges could be a big deal.
This month PG&E increased rates for the "Over 300% of Baseline" tier by nearly 15%, and the next tier down by over 13%. The bottom two tiers, aka the non-grower tiers, actually went down in price by a couple hundredths of a penny.
Last month's power rates
This month's new prices
This is kind of a big deal, but only for growers. For the rest of us it's actually a little satisfying to know that pot growers who are using 100 times the amount of electricity as a normal household (no joke) now have to pay an additional 15% premium for their excessive consumption. But is it right for PG&E to purposefully implement what is essentially a grower tax? We would much rather see a real tax where the money comes back to the community somehow, but for now it's nice to know that at least someone out there is skimming a little off the top of the most profitable (and questionable) industry in California.
Should pot dealers and smokers expect prices of indoor marijuana to increase this year because of the beefed up electricity charges? Definitely not, because the profit margins on marijuana are still so astronomically high that an additional 5 cents per Kwh is quite literally a drop in the bucket for these guys. Consider that a 4-light indoor pot garden will generally yield 4 pounds of bud every 60 days. Running that garden will cost about $1000 in electricity each month, plus maybe $1500 in rent per month, and maybe $350 in supplies and upkeep. Oh let's throw in $40 for water, too. So it's about $2890 per month to operate that grow house. But quality indoor marijuana sells for at least $3600/pound these days, and this house is producing 4 pounds every 2 months. That leaves the grower with a profit of $8620 every two months, or $4310 a month.
And that is a really small grow scenario. Most growers would laugh at 4 lights because they're probably doing twice that, and you don't even want to start speculating about how many growers here in Humboldt County have multiple grow houses, each with 8 or more lights.
Speaking of marijuana prices this year, word on the street is that the big outdoor harvests from Southern Humboldt and Mendocino County are far, far bigger than ever before. Last year it rained early and caused lots of losses, but this year the rains have been light and the weather has been warm and sunny, allowing many growers to leave their crops in the ground much longer than normal. We have been hearing reports of double-sized yields over last year, and quality is unbelievable. As a result, prices are looking to be a bit lower this winter, which might put a strain on some indoor growers looking to unload their goods. But uh, we're definitely not offering any sympathy, seeing as how margins in the pot business are so ridiculously high it actually makes us sick.
In case you were wondering exactly what goes into setting up, managing, and financing a marijuana grow house, How Stuff Works has published a 6-page article describing all the bits and pieces that go into running a real indoor pot garden for profit. The article is titled Setting Up A Grow House.
According to the website, "HowStuffWorks, a wholly owned subsidiary of Discovery Communications, is the award-winning source of credible, unbiased, and easy-to-understand explanations of how the world actually works." We seem to recall that this site started out as a resource for school children, which is why we're a bit surprised to see them explaining commercial marijuana gardening.
The in-depth article references the LA Times story from a few months back and some bits from the Arcata Eye to back up their facts, and they throw down some numbers in the beginning, too. Of course, those numbers are way off. For example, they state that one marijuana plant grown indoors can yield half a pound of pot, but any grower in Humboldt will confirm that actual realistic yield from a single plant is between 30 and 90 grams, and rarely more. Nobody gets more than a quarter-pound of weed from a single plant in an indoor garden in a normal grow cycle.
The article also claims that a single 1,000 watt grow light can sustain 15 to 20 plants, but most pro growers won't do more than 9-16 plants per light, mostly to keep the number of total plants down so they don't exceed the legal limit for Prop 215 cultivation, and also to curb the complexity of their operation.
All in all, Setting Up A Grow House is an informative read, and the author, Robert Lamb, either did a lot of research before writing it or he has first hand experience with indoor pot gardening. He even mentions that grow house operators are less likely to interact with their neighbors, which is probably true. Maybe that has something to do with #12 in this morning's post?
Isn't it interesting that marijuana growing has become so prolific and commonplace that our children can now read about the inner workings of illegal pot gardens at their favorite Discovery website? It turns out this is nothing compared to their article on Manufacturing Crack Cocaine, which is complete with photos and step-by-step instructions on how to turn regular old coke into crack rocks! Yay for education!
Ekovox recently posted an email that is circulation entitled "You know you're from Eureka if...". We thought it was a good idea, so we're taking it one step further and doing a list for all of Humboldt County. Here goes:
You know you're in Humboldt County if...
- One out of every three vehicles you see on the road is a gigantic pickup truck with a 12" lift and a 20-something pot grower's girlfriend behind the wheel.
- Your internet and long distance connectivity is severed every few months when Caltrans digs up the fibre to San Francisco.
- Everyone you know has been robbed or burglarized at least once.
- You never leave your car unlocked, not even for a couple minutes while you run into the gas station for smokes.
- The sun only comes out once a week, maybe less.
- The pungent smell of fresh marijuana wafts through your neighborhood on a regular basis.
- You don't bother calling the cops, ever, because you know they won't show up for at least two hours.
- There's an indoor marijuana garden related house fire at least once a month.
- Every person under the age of 30 you see walking around town is wearing a hooded sweatshirt.
- Every person under the age of 24 has their hood pulled up over their head, even when the weather is nice.
- You fully expect every driver on the road to be uninsured and driving an unregistered vehicle without a valid license.
- Nobody smiles at you or says hello.
- White people with super gross dreadlocks are everywhere. The longer the dreads, the more disgusting the person wearing them seems to be.
- At dusk, only half the drivers on the road use their headlights. The other half are divided into two groups: those who refuse to turn their lights on until it's actually pitch dark, and those who think it is acceptable to drive around with only their parking lights on.
- Every house has the curtains drawn or the shades closed to hide the marijuana growing activity within.
- Locals are outnumbered 4-1 by out-of-towners who moved here to grow pot.
- There are hundreds of restaurants, but only about 5 that are worth eating at.
- You can't walk down the street without some homeless 19 year old with dreadlocks asking you for spare change. When you refuse, he cusses at you and says something about capitalism and greed.
- Nobody drives the speed limit. They either go 5 mph under the limit, or they go 10-20 mph over.
Did we miss any? Feel free to add yours in the comments section!
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