AP Says Marijuana Prices Will Plummet After 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?
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