Showing posts sorted by relevance for query marijuana. Sort by date Show all posts
Showing posts sorted by relevance for query marijuana. Sort by date Show all posts

Thursday, August 28, 2014

The market for marijuana in Washington State, prior to legalization.

A RAND report assesses the marijuana market in the State of Washington prior to the legalization of marijuana through Initiative 502. Among the key findings are that consumption was estimated at over 120 metric tons annually, and that King, Snohomish and Pierce counties are happening places.


Before the Grand Opening: Measuring Washington State's Marijuana Market in the Last Year Before Legalized Commercial Sales

by Beau Kilmer, Jonathan P. Caulkins, Gregory Midgette, Linden Dahlkemper, Robert J. MacCoun, Rosalie Liccardo Pacula

Research Questions: What is the size of the marijuana market of Washington state in 2013?  How much marijuana do users in Washington consume and how to they obtain it?

Abstract: In 2012, Washington state voters passed Initiative 502 (I-502), which removed the prohibition on the production, distribution, and possession of marijuana for nonmedical purposes and required the state to regulate and tax a new marijuana industry. Legalization of possession went into effect almost immediately, but the revolutionary aspect of the law — allowing businesses to openly produce and distribute commercial-scale quantities for nonmedical use — is expected to be fully implemented in 2014.

...This report estimates the total weight of marijuana consumed in Washington in 2013 using data from existing household surveys as well as information from a new web-based consumption survey. Although the principal motivation for the study was estimating the size of the market, the report also describes various characteristics of the market, including traits of marijuana users in Washington and how they obtain marijuana.

While the Washington Office of Financial Management projected that 85 metric tons (MT) of marijuana would be consumed in the state in 2013, this report suggests that estimate is probably too low, perhaps by a factor of two. There is inevitable uncertainty surrounding estimates of illegal and quasi-illegal activities, so it is better to think in terms of a range of possible sizes, rather than a point estimate. Analyses suggest a range of 135–225 MT, which might loosely be thought of as a 90-percent confidence interval, with a median estimate close to 175 MT.

Key Findings

Marijuana consumption in Washington in 2013 is larger than the 85 metric tons (MT) previously projected by the Washington Office of Financial Management.
Even before adjusting for survey undercounting, our estimates suggest a 90-percent confidence interval of approximately 120–175 MT. The difference is largely driven by our use of more recent data.

It is difficult to know by how much surveys understate actual consumption.
Many of the relevant studies were published over a decade ago and times have changed; the NSDUH methodology has been improved substantially, and a national increase in marijuana use over the 2000s may have influenced willingness to self-report.
It is also unclear how applicable national and regional studies are to the state of Washington. After reviewing the evidence and attempting to adjust for undercounting, results from our simulation suggest consumption likely falls within the interval of 135–225 MT, with a median estimate close to 175 MT.

Three counties account for about 50 percent of marijuana users in Washington.
King County accounts for about 30 percent of the marijuana users, while Snohomish and Pierce counties each account for roughly 11 percent.

The literature is surprisingly thin concerning how much marijuana users consume during a typical day of use.
That general deficit becomes all the more acute when focusing on a particular jurisdiction and time, such as Washington in 2013. The emphasis has traditionally been on counting users, not counting grams.
However, by augmenting that thin literature with data from the web-based consumption survey developed by RAND, we estimate that Washington residents who use marijuana 21 or more times per month consume, on average, 1.3–1.9 grams during a typical use day.

Multiple datasets provide information about the potency of the marijuana consumed in Washington.
None is ideal, and there is no way to take a random sample of the universe of marijuana that is sold or consumed. But the available information suggests that lower-potency forms account for only a modest share of the Washington market and probably a smaller share than they do nationwide.

Saturday, November 12, 2016

Repugnance and state elections...right to die, and marijuana

Several repugnant transactions became less so (at least they moved from illegal to legal) along with the other results of last Tuesday's elections.

After Colorado, right-to-die movement eyes new battlegrounds

"By an overwhelming vote Tuesday, Coloradans approved a ballot initiative allowing physicians to prescribe lethal drugs to mentally fit, terminally ill adults who want to end their lives. Colorado is the sixth state to allow the practice, following Oregon, Washington, Montana, Vermont and California. Washington, D.C., is poised to approve similar legislation as soon as this month.
Colorado’s ballot initiative proposal met resistance from religious groups with moral objections and disability advocates leery of abuse of power. Opponents raised over $2.6 million, the bulk of which came from the Archdiocese of Denver. Supporters, who argued that terminally ill patients deserve the option to “die with dignity,” raised over $5.4 million, mostly from the Compassion & Choices Action Network."
**********
 Arizona rejected marijuana legalization, and in Maine it passed by a hair, with a 50.2 percent majority finally counted on Thursday. Marijuana is now legal in some form in many more American states, with perhaps a quarter of the population. The Guardian notes the results of Tuesday's ballots...

"Approved: California voters approved recreational marijuana, a huge victory in the fight for cannabis legalization, paving the way for the largest commercial pot market in the US.
Approved: Massachusetts also voted for recreational pot, extending legal weed from coast to coast.
Approved: Nevada became the third state to approve a recreational cannabis law, making the west an even stronger region for marijuana sales.
Approved: Earlier in the night, Florida voters passed a constitutional amendment to legalize medical marijuana, the first victory in a string of high-profile cannabis measures on Tuesday’s state ballots.
Approved: North Dakota was the second state to approve medical weed, with the approval of Measure 5, which approves the use of marijuana to treat a number of diseases, including cancer, Aids, epilepsy and hepatitis C.
Approved: Arkansas also passed a medical cannabis measure that would allow patients with specific conditions to buy medicine from dispensaries licensed by the government.
Rejected: Arizona was the first state to vote against its marijuana measure, with the news early on Wednesday morning that voters have rejected Proposition 205. The measure would have legalized recreational pot.
Approved: Montana residents voted to expand the state’s medical marijuana system with the passage of Initiative 182, which removes limits on the number of patients providers can serve. Proponents of the measure argued that the existing restrictions blocked patients from accessing care.
Advocates and opponents agree that California’s Proposition 64 is the most important cannabis measure America has seen and could be an international game-changer for marijuana policy in the US.
California, which recently overtook the UK to have the fifth largest economy in the world, is expected to have a recreational marijuana market greater than Colorado, Washington, Oregon and Alaska combined, said Ethan Nadelmann, executive director of the Drug Policy Alliance.
“When I talk to everybody from allies to government officials in Mexico and I ask them what’s it going to take to transform the debate,” he said, “the response to me is when California legalizes marijuana.”
Too close to call: As of Wednesday afternoon, a recreational measure in Maine was still too close to call.
Colorado and Washington became the first states to legalize recreational marijuana in 2012, paving the way for Oregon, and Alaska to follow suit.
As medical and retail cannabis operations have spread across the US, legal marijuana has become the fastest-growing industry in the US, with some analysts projecting sales to reach $22bn by 2020."

Friday, January 26, 2018

Vermont legalizes marijuana

The Washington Post has the story:

Vermont is the first state to legalize marijuana through legislature

"Gov. Phil Scott (R) signed a bill Monday legalizing marijuana for adults over 21. It allows for the possession of an ounce or less of marijuana, two mature and four immature plants. Vermont is the ninth state to legalize recreational marijuana for adults. The other states did so through ballot initiatives.

"But Vermont’s law is notable for what it does not do: create a state marketplace for the sale of marijuana.

Instead, it directs a marijuana advisory board to study what a legal marketplace where marijuana is taxed and regulated would look like in Vermont and report to the governor by Dec. 15.
...
"The measure creates a number of new marijuana laws, including stronger penalties for selling marijuana to people under 21 or enabling their consumption of the drug and makes it a crime to use marijuana in a vehicle where there is a child. It also makes the consumption of marijuana in public illegal.

"Scott said the commission must create education campaigns around marijuana and ways to keep the state’s roads safe.

“To be very direct: There must be comprehensive and convincing plans completed in these areas before I will begin to consider the wisdom of implementing a commercial ‘tax and regulate’ system for an adult marijuana market,” Scott wrote.

The law will take effect in July."

Sunday, February 2, 2020

Caught between a block and a high place: legal cannabis firms struggling to compete with the still thriving black market

Blocked from using federal bankruptcy protections, cannabis businesses that are legal under state laws but illegal under federal laws are facing financial difficulties.
Bloomberg has the story:

Pot Firms’ Grim Reality: Cash Crunch, No U.S. Bankruptcy Access

"It was only a year ago that exuberance enveloped the marijuana industry. Legalization was spreading and the growth potential seemed boundless.

"But that bubble has burst as the reality of a difficult regulatory landscape sunk in. Since March, stocks are down by about two-thirds. Capital markets have largely frozen for all but the strongest companies. And now a cash crunch is leaving some on the verge of going bust. Only, thanks to the illegal status of cannabis under U.S. federal laws, firms there are blocked from seeking protection in bankruptcy court."
*******
And this from the LA Times:
Two years in, California’s legal marijuana industry is stuck. Should voters step in?
 PATRICK MCGREEVY DEC. 24, 2019
" Two years after California began licensing pot shops, the industry remains so outmatched by the black market that a state panel recently joined some legalization supporters in calling for significant change
...
"In its annual draft report, the Cannabis Advisory Committee warned Gov. Gavin Newsom and California legislators that high taxes, overly burdensome regulations and local control issues posed debilitating obstacles to the legal marijuana market.
...
“as much as 80% of the cannabis market in California remains illicit.”
...
"The 22-member advisory panel — made up of industry leaders, civil rights activists, local officials, law enforcement and health experts — noted that California is expected to generate $3.1 billion in licensed pot sales in 2019, making it the largest market for legal cannabis in the world. But nearly three times as much — $8.7 billion — is expected to be spent on unlicensed sales."

*********
And in Canada (from the NYT):
From Canada’s Legal High, a Business Letdown
Investors poured money into Canada’s marijuana market, but one year after legalization, the euphoria has evaporated.

"...provincial governments in Ontario and Quebec, whose residents account for about two-thirds of Canada’s population, have opened or licensed legal pot shops at a glacial pace — despite a clear demand. Potential customers are still underserved with just 24 legal marijuana shops for Ontario’s 17.5 million residents. So many are still buying on the black market.

"And freed from taxation, the black market is generally cheaper across the country.
...
"Despite the crushing business disappointments, there has been a bright spot: Prime Minister Justin Trudeau’s experiment in legalizing cannabis has not turned Canada into a stoner nation, as was widely feared.

"Marijuana-impaired motorists are not menacing the nation’s highways, and workers are not getting high on the job. There has not even been much change in marijuana use, except for a small rise among people over 65, according to Statistics Canada, the government census agency.
**********

And, from the Washington Post, internationally:
America’s marijuana growers are the best in the world, but federal laws are keeping them out of global markets
Federal prohibitions are getting in the way of efforts to grow the U.S. marijuana business into a global industry. That’s allowed Canadian cannabis growers to dominate the export market.
Markian Hawryluk, Dec. 27, 2019

"Because marijuana is legal in many states but still illegal federally, marijuana growers are unable to ship their products to other countries or even other American states that have legalized the drug. So while U.S. cannabis firms have driven product innovation and mastered large-scale grow operations, they restlessly wait for the export curtain to lift.
...
"With 11 states plus Washington, D.C., approving recreational use and 33 states legalizing medical marijuana, industry insiders believe marijuana may be legalized nationally in the near future, greatly expanding their market.

"In November, the House Judiciary Committee passed a bill with more than 50 co-sponsors that would effectively make marijuana legal in the U.S. Though unlikely to pass Congress immediately, it is seen as a sign of hope for the future."

Monday, April 18, 2016

The California marijuana market: the hippies now have to compete with the agribusinesses

The NY Times has the story: In California, Marijuana Is Smelling More Like Big Business

"After decades of thriving in legally hazy backyards and basements, California’s most notorious crop, marijuana, is emerging from the underground into a decidedly capitalist era.

Under a new state law, marijuana businesses will be allowed to turn a profit — which has been forbidden since 1996, when California became the first state to legalize medical cannabis — and limits on the number of plants farmers can grow will be eliminated.

The opening of the marijuana industry here to corporate dollars has caused a mad scramble, with out-of-state investors, cannabis retailers and financially struggling municipalities all racing to grab a piece of what is effectively a new industry in California: legalized, large-scale marijuana farming.

And with voters widely expected to approve recreational marijuana use in November, California, already the world’s largest legal market for marijuana, gleams with the promise of profits far beyond what pot shops and growers have seen in Washington or Colorado, the first states to approve recreational use.
...
"Amid the frenzy, though, anxiety is growing in some corners of the state that corporate money will squeeze out not only the small-time growers, but also the hippie values that have been an essential part of marijuana’s place in California culture.

"Tommy Chong, of Cheech and Chong fame, has long been synonymous with California’s outlaw stoner culture, growing his own pot and crafting bongs from kombucha bottles at his Los Angeles home. Now he is negotiating with a corporate partner to license his own brand of legal marijuana.
...
"Twenty-three states* allow some form of legal marijuana, and up to 20 will consider ballot measures this year to further ease restrictions."

*

Saturday, January 8, 2022

Legally fragmented markets for marijuana create unusual alliances

 Who will be most in favor of eliminating the federal ban on marijuana in the US?  Not necessarily growers and sellers in the many states in which marijuana can legally be grown and sold.  There are some advantages to being in a legal market that is illegal elsewhere (and not just because of the possibility of illegally selling at the higher prices that black markets command...)

The WSJ has this story:

Cannabis Overhaul in Washington Is Only Getting Harder. Legalization agenda could be complicated by states that want to defend their nascent marijuana industries and associated tax revenues  By Carol Ryan

"To date, 18 states have legal adult-use cannabis industries, according to the latest tally from the Marijuana Policy Project. As the drug can’t be transported across state borders while it is still federally outlawed, anything that is smoked within a state has to be grown and sold locally. These independent fiefs, which are growing bigger every month, would be disrupted by national legalization.

"One of the biggest concerns is what happens when cannabis can be traded across the country. More mature marijuana markets such as California and Oregon see interstate commerce as an opportunity to get excess stock off their hands. For recent converts such as New York and New Jersey, a gush of cheap outside inventory would be a threat to their nascent industries. This is particularly sensitive for small, minority-owned cannabis businesses that are being given priority for licenses but would be rapidly undercut.

"States also want to protect the tax windfall that cannabis creates. Illinois has collected more taxes from cannabis than liquor every month since February, according to the Illinois Department of Revenue. Since 2014, when legal sales began in Colorado and Washington, cannabis has raised $7.9 billion in taxes for states, according to the Marijuana Policy Project. Sales levies should stay with local markets, but those associated with production could be hard for certain states to hold on to if the drug is federally legal. Cultivation is likely to shift to warm and low-cost states where cannabis can be grown cheaply outdoors."

***************

And then there's Oklahoma. The NY Times has the story:

How Oklahoma Became a Marijuana Boom StateWeed entrepreneurs have poured into Oklahoma from across the United States, propelled by low start-up costs and relaxed rules.  By Simon Romero

"Ever since the state legalized medical marijuana three years ago, Oklahoma has become one of the easiest places in the United States to launch a weed business. The state now boasts more retail cannabis stores than Colorado, Oregon and Washington combined. In October, it eclipsed California as the state with the largest number of licensed cannabis farms, which now number more than 9,000, despite a population only a tenth of California’s.

"The growth is all the more remarkable given that the state has not legalized recreational use of marijuana. But with fairly lax rules on who can obtain a medical card, about 10 percent of Oklahoma’s nearly four million residents have one, by far the most of any other state.

...

"That unfettered growth has pitted legacy ranchers and farmers against this new breed of growers. Groups representing ranchers, farmers, sheriffs and crop dusters recently joined forces to call for a moratorium on new licenses. They cited climbing prices for land, illicit farms and strains on rural water and electricity supplies as among the reasons. In some parts, new indoor farms are using hundreds of thousands of gallons of water.

...

"But unlike local businesses, where the customers are typically residents, critics assert that growers in Oklahoma are producing far more marijuana than can possibly be sold in the state and are feeding illicit markets around the country.

"Because of lower costs for licensing, labor and land, growers can produce cannabis for as little as $100 a pound, and then turn around and sell that for between $3,500 to $4,000 a pound in California or New York, said Mark Woodward, a spokesman for the Oklahoma Bureau of Narcotics.

Friday, February 5, 2016

The high end marijuana market in New York City

Jacob Leshno draws my attention to this article on how the legalization of marijuana in some U.S. locations (like Colorado, where I am this morning) is changing the black market in NYC:

Step inside New York City's marijuana black market in the era of legalization
Marijuana is a $2 billion-a-year industry in NYC. Like other small businesses, the city's dealers are adjusting to changing tastes and shrinking margins

"The city is full of high-end pot-delivery services in addition to solo dealers who make house calls. But with its gourmet edibles and pharmacy-like range of products, Zach’s business illustrates what the legalization wave nationwide is doing to the black market in New York.

"Zach collaborates with a professional pastry chef on the edibles but gets most of his inventory from California, where a lax medical-­marijuana program going back two decades has fueled a bustling gray market. Colorado, which has legalized recreational use, is another source. A network of local wholesalers saves him the trip out West."
*************

And NYC now will have medical marijuana dispensaries as well...
First Medical Marijuana Dispensaries in New York Open
By JESSE McKINLEY and ELI ROSENBERG JAN. 7, 2016

"Permitted under a 2014 law signed by Gov. Andrew M. Cuomo, New York’s entry into the medical marijuana marketplace comes after years of lobbying by lawmakers on behalf of patients, including children, for whom the drug is a palliative to debilitating illnesses. Yet even after the law’s adoption, some supporters of the concept criticized its stringent regulations, including that only a limited number of conditions qualify for medical use of marijuana and that it is sold in only 20 locations statewide. The drug also may not be smoked in New York, a stipulation of Mr. Cuomo’s approval, and must be processed into other forms by the companies that grow it.
...
"A late adopter to a trend that is now 20 years old, New York, in allowing medical marijuana, joins states as varied as conservative Montana and liberal California, which in 1996 became the first state to legalize the drug’s use as medicine. Alaska, Colorado, Oregon, Washington and the District of Columbia also allow the drug’s recreational use."

Friday, January 21, 2022

Black market marijuana coexists with legal marijuana in Oregon, and competes with it in California

In a growing number of U.S. states, it is legal to grow and sell marijuana. But the price remains highest in the states where it is illegal, and so black markets persist alongside legal markets. 

Politico has the story:

‘Talk About Clusterf---’: Why Legal Weed Didn’t Kill Oregon’s Black Market. Legalization was supposed to take care of the black market. It hasn’t worked out that way.  By NATALIE FERTIG

"Over the last two years, there’s been such an influx of outlaw farmers that southern Oregon now rivals California’s notorious Emerald Triangle as a national center of illegal weed cultivation. Even though marijuana cultivation has been legal in Oregon since 2014, Jackson County Sheriff Nate Sickler says there could be up to 1,000 illegal operations in a region of more than 4,000 square miles. The Oregon Liquor and Cannabis Commission, which oversees the state’s $1.2 billion legal cannabis industry, estimates the number of illicit operations is double that.

...

"What is happening in the woods of the southern Oregon represents one of the most confounding paradoxes of the legalized marijuana movement: States with some of the largest legal markets are also dealing with rampant illegal production — and the problem is getting worse. Oklahoma, where licenses to cultivate medical marijuana are some of the easiest to get in the nation, has conducted more than five dozen raids on illicit grows since last April. In California, meanwhile, most of the state continues to purchase cannabis from unlicensed sources — straining legal operators already struggling with the state’s high taxes and fees.

...

"One of the underlying promises for legalizing cannabis was that legalization would make the illegal drug trade, with all its attendant problems of violent crime and money laundering, disappear. But 25 years into the legalization movement, as 36 states have adopted some form of legalized marijuana, the black market is booming across the country. Legal states such as Oregon and California — which have been supplying the nation for nigh on 60 years — are still furnishing the majority of America’s illegal weed.

...

"Oregon’s weed is some of the cheapest in the nation, and Oregonians predominantly purchase weed from licensed dispensaries. Economist Beau Whitney estimates that 80-85 percent of the state’s demand is met by the legal market. But most of the illicit weed grown in southern Oregon is leaving the state, heading to places where legal weed is still not available for purchase such as New York or Pennsylvania — or where the legal price is still very high, like Chicago and Los Angeles. In Illinois, which legalized medical marijuana in 2013, only about a third of the demand for cannabis is satisfied by legal dispensaries, according to Whitney. Differences in tax rate and regulations plays the major role in differences from state to state, Whitney explains.

*************

And in California it appears that high taxes on the legal market allow the black market to exist alongside. NBC has the story:

Craft cannabis industry in California is 'on the brink of collapse,' advocates say. Small cannabis growers and operators say the state's hefty taxes are shutting them out despite promises to expand the industry and make it more inclusive.  By Alicia Victoria Lozano

"Last month, marijuana companies warned Newsom in a letter that immediate tax cuts and a rapid expansion of retail outlets were needed to steady an increasingly unstable marketplace shaken by illicit dealers and growers.

"More than two dozen cannabis executives and legalization advocates signed the letter after years of complaints that the heavily taxed industry is unable to compete with the widespread illegal economy, which offers far lower consumer prices and has double or triple the sales of the legal market."


Sunday, October 17, 2010

The market for marijuana in CA--buying is almost legal, selling and growing not

Another transaction takes another step from repugnant to not: Schwarzenegger approves bill downgrading marijuana possession of ounce or less to an infraction

"Gov. Arnold Schwarzenegger, who opposes legalization of marijuana for recreational use, has approved legislation downgrading possession of an ounce or less from a misdemeanor to an infraction.

"Supporters say the change will keep marijuana-related cases from becoming court-clogging jury trials, even though the penalty will remain a fine of up to $100, with no jail time. Violations will not go on a person's record as a crime.

"I am signing this measure because possession of less than an ounce of marijuana is an infraction in everything but name," Schwarzenegger wrote in a message released after he signed the bill. "In this time of drastic budget cuts, prosecutors, defense attorneys, law enforcement and the courts cannot afford to expend limited resources prosecuting a crime that carries the same punishment as a traffic ticket."
...
"The governor's action immediately became a point of contention in the campaigns for and against Proposition 19 on the statewide November ballot, which would legalize marijuana for recreational use. Schwarzenegger opposes the measure."

At the same time, marijuana cultivation remains illegal in CA, e.g: Mendocino officials pursue third day of marijuana eradications
"Mendocino County Sheriff's officials, assisted by state and federal agencies, made several more arrests in the third day of eradicating illegal marijuana grows and sales in Round Valley on Thursday.

On Tuesday 17 people were arrested, and another 20 were arrested on Wednesday, officials reported."

Saturday, December 5, 2020

Marijuana in the House (but not yet in the Senate)

 The NY Times has the story:

House Passes Landmark Bill Decriminalizing Marijuana  By Catie Edmondson, Dec. 4, 2020

"The House passed sweeping legislation that would decriminalize marijuana and expunge nonviolent marijuana-related convictions. The measure is all but doomed in the Republican-led Senate.

"The 228-164 vote to approve the measure was bipartisan, and it was the first time either chamber of Congress had ever endorsed the legalization of cannabis. The bill would remove the drug from the Controlled Substances Act and authorize a 5 percent tax on marijuana that would fund community and small business grant programs to help those most impacted by the criminalization of marijuana.

...

"The legislation intends to give states power and incentives to enact their own reforms, and its passage came as states around the county, including some conservative-leaning ones, have become increasingly open to decriminalizing marijuana amid a growing consensus that the war on drugs has been destructive. Fifteen states have legalized recreational cannabis, and voters in five states last month voted on legalization issues, bringing the number of states where medical marijuana is legal to 35."

Tuesday, November 9, 2021

Marijuana black markets are coexisting with (poorly designed, over-regulated, highly taxed) legal markets in California

 The Guardian has the story:

California legalized weed five years ago. Why is the illicit market still thriving? by Amanda Chicago Lewis

"Voters passed a law in November 2016 making recreational marijuana legal. But today, the vast majority of the market remains underground – about 80-90% of it, according to experts.

"Because that 2016 law, known as Proposition 64, gave municipalities the power to ban weed as they see fit, the majority of cities and counties still don’t allow the sale of cannabis, inhibiting the growth of the legal market.

"In the places that do allow pot shops and grows, business owners say high taxes, the limited availability of licenses, and expensive regulatory costs have put the legal market out of reach. 

...

"The story of California’s legal weed chaos dates back to 1996, when voters passed a law allowing medical marijuana. At the time, Bay Area Aids activists saw the way pot relieved pain and stimulated hunger among their emaciated and desperately ill friends. That led to a grassroots campaign to get Proposition 215, a measure legalizing the medical use of cannabis, on the California ballot.

"However, Prop 215 only allowed doctors to recommend that patients and their caregivers grow their own weed. Essentially, it legalized a commodity without legalizing the business side of it.

"For the next 20 years, a laissez-faire, gray market for medical marijuana flourished and became entrenched. With doctors’ recommendations for medical marijuana easy and cheap to come by, cannabis entrepreneurs practiced a lucrative form of civil disobedience, opening dispensaries, manufacturing edibles and growing acres of plants that brought in enough money to offset intermittent law enforcement crackdowns. The industry developed protocols to get a business back up and running right after a raid, such as keeping cash offsite and obscuring ownership through a series of management companies.

"If you could withstand the legal uncertainty, it was a good time to make money in marijuana. By 2010, the city of Los Angeles had about 2,000 pot shops illegally selling cannabis. Statewide, the total illicit market surged, causing Mexican cartels to either stop growing weed or to relocate their grows to California.

...

"For a marijuana enterprise today, becoming legal has often meant sacrificing a good deal of profit. Businesses frequently pay an effective tax rate of 70%, in part because they are breaking federal law and therefore aren’t able to take tax deductions, but also because politicians see the industry as a source of tax revenue and set higher rates.

...

"But the longer we allow cannabis to remain state-legal and federally illegal, the harder it will be to fix. Though botching weed legalization sounds like a trivial issue, it intersects with many of the issues that are fundamental to our lives, from criminal justice to public health, gang violence to economic inequality, the opioid crisis to the wellness craze. Cannabis is the second-most-valuable crop in the country, after corn and ahead of soybeans. It’s the most common reason for arrest in America. And despite marijuana’s dubious reputation, research has shown the plant “may have therapeutic potential in almost all diseases affecting humans”.

Wednesday, June 20, 2018

Canada legalizes recreational marijuana

First, a thoughtful tweet from the Prime Minister, about markets and black markets:
Here's the story from the CBC:

Senate passes pot bill, paving way for legal cannabis in 8 to 12 weeks
Federal government's bill legalizing recreational cannabis passes 52-29

"Now that the bill has passed, it's up to Prime Minister Justin Trudeau and his cabinet to choose the actual date when the legalization of recreational marijuana becomes law of the land. Bill C-45 comes with a provisional buffer period of eight to 12 weeks to give provinces time to prepare for sales of recreational marijuana."


And here's the NY Times:
Vote in Canada Paves the Way for Legalization of Marijuana

"Canada’s Senate passed legislation on Tuesday that will make Canada the first country with a major economy to legalize recreational marijuana use.

"The bill, which was approved by the House of Commons on Monday, goes next to the governor-general, the representative of Queen Elizabeth, as a formality. Once it is formally approved, the legislation is expected to create a multibillion dollar industry, with Canada joining Uruguay as the only countries to allow their citizens on a national level to use marijuana without fear of arrest."

Thursday, June 16, 2016

The marijuana business in the U.S.: legal in some states, but still illegal under Federal law.

The Guardian suggests that Canada may soon find commercial opportunities in marijuana :
Will Canada become America's cannabis capital?
Plans to legalise recreational marijuana in Canada have those south of the border worried they’ll lose their lead in the emerging pot industry

"He may be the chief executive of Denver’s largest marijuana dispensary, ground zero for America’s fastest growing industry, but Andy Williams struggles with a lot of financial hurdles.
The First Bank of Colorado closed the accounts of everyone in the family business, Medicine Man Technologies, including children who have no part in the industry. Williams can’t take on any investment and needs to fund expansion through personal loans from friends and family.
Customers can only pay in cash; banks refuse to hold his money and everyone from employees to contractors need to accept cash payments. Employees, who can’t prove their income as a result, often struggle to get loans and mortgages.
Furthermore, section 280E of the US tax code prohibits the deduction of expenses related to controlled substances for tax purposes, and Williams predicts that he gives the internal revenue service an additional $600,000 each year as a result of business expenses that can’t be written off.
While recreational marijuana legalisation is well on its way in states like Colorado, it remains illegal at the federal level, stifling the growth and innovation of the industry’s first movers.
Meanwhile, north of the border, Canadian prime minister Justin Trudeau has vowed to legalise recreational marijuana consumption on a federal level, opening the door to investment, less restrictive tax policies and banks that can treat the marijuana industry like any other. While legalisation hasn’t yet taken place in Canada, when it inevitably does American marijuana businesses may suddenly find themselves at a disadvantage. "

Monday, July 26, 2021

Does legal marijuana lead to the use of more dangerous drugs, or increase crime?

 It appears that the short answer is "No," according to this recent NBER working paper

Is Recreational Marijuana a Gateway to Harder Drug Use and Crime?  by Joseph J. Sabia, Dhaval M. Dave, Fawaz Alotaibi & Daniel I. Rees

WORKING PAPER 29038, DOI 10.3386/w29038,  July 2021

Recreational marijuana laws (RMLs), which legalize the possession of small quantities of marijuana for recreational use, have been adopted by 18 states and the District of Columbia. Opponents argue that RML-induced increases in marijuana consumption will serve as a “gateway” to harder drug use and crime. Using data covering the period 2000-2019 from a variety of national sources (the National Survey of Drug Use and Health, the Uniform Crime Reports, the National Vital Statistics System, and the Treatment Episode Data Set) this study is the first to comprehensively examine the effects of legalizing recreational marijuana on hard drug use, arrests, drug overdose deaths, suicides, and treatment admissions. Our analyses show that RMLs increase adult marijuana use and reduce drug-related arrests over an average post-legalization window of three to four years. There is little evidence to suggest that RML-induced increases in marijuana consumption encourage the use of harder substances or violent criminal activity.

Sunday, August 6, 2023

Growing pains for legal marijuana, in California and beyond

The market for legal marijuana in the U.S. is suffering from (literal) growing pains, as large scale legal cultivation runs into both crop diseases, and zoning issues.

As a crop that is legal at the state level in many states, but still illegal under federal law, large cannabis farms don't get some of the benefits regarding the spread of plant diseases that are provided for other crops by the U.S. Department of Agriculture.

The WSJ has the story:

Cannabis Industry Confronts Billion-Dollar Threat: Weak Weed. Pathogen spreading among crops is cutting recreational drug’s potency, forcing growers to cull ‘dudded’ plants.  By Dean Seal

"A pathogen is contaminating cannabis crops around the country and threatening to leave billions of dollars of losses in its wake. 

"Cannabis researchers and experts are sounding the alarm for what is known as hop latent viroid, or HLVd, and cultivators are stepping up efforts to discover whether their plants are infected. The pathogen can drastically reduce the potency of the psychoactive compounds in marijuana, a phenomenon that growers have long called “dudding.”

...

"Plant pathologists and cannabis experts say the spread of the viroid was likely accelerated by the popularity of weed from California, which legalized cannabis for medical use in 1996.

"The spread also reflects the evolution of the cannabis business into a major agricultural crop. The risk of a new disease expanding increases for any crop that goes from low to high production, as cannabis has in the past two decades, said Jeremy Warren, Dark Heart’s director of plant science.

“You saw the spread happen in the legal states first, like California, where you started having bigger grows and bigger greenhouses that are making thousands and tens of thousands of plants,” Warren said. “In that system, it’s harder to maintain sanitation and it’s easier for a pathogen to take off.”

"The U.S. Agriculture Department typically sets quality standards and inspection requirements for agricultural products, but marijuana’s illegality at the federal level keeps it out of the agency’s purview."

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And big farms mean that agriculture and expensive housing may rub shoulders in California. Here's the Guardian on Santa Barbara County.

A beachside city became California’s legal cannabis capital. Not everyone is stoked  by Nicholas Schou

"Thanks to the most lenient policies in California for recreational marijuana, Santa Barbara county is now the state’s undisputed capital of legal cannabis, boasting more acres than the storied Emerald Triangle of Humboldt, Trinity and Mendocino counties.

"Santa Barbara voters overwhelmingly backed California’s legalisation of recreational marijuana in 2016, with hopes that the cannabis boom would bring tax revenue and new jobs to the county. The transformation has been fast and furious. Santa Barbara county is now home to around a third of all cultivation licenses issued in California, despite making up only 1.8% of the state’s land, with some megafarms stretching over dozens of acres.

"But the sudden influx of growers has inspired a broad coalition of frustration that spans local high schools, uber-wealthy homeowners and the region’s influential wine industry, who argue the pungent industry threatens to ruin their cherished lifestyle in a region dubbed the “American Riviera”.

...

"The tensions underscore a wider drama playing out in California over the promises of legal weed. Despite broad public support for bringing the industry out of the shadows, seven years on the illicit market is thriving, businesses are struggling to turn a profit, and many on the frontlines of the transition say they have yet to enjoy the returns.

"In fact, for the first time, officials in Santa Barbara are acknowledging that if market trends continue, the cost of the program both to public finances and to quality of life may outweigh any actual benefits.

...

"California’s cannabis market has been operating in a quasi-legal sphere since 1996, when medical marijuana was decriminalized. In 2016, advocates for Proposition 64 successfully argued that decriminalizing all cannabis use would create lucrative tax schemes and rewrite the historic injustices of policing such a widely used drug.

"But Prop 64 allowed cities to choose whether to allow cannabis businesses or not. Many refused to, banning both cultivation and dispensaries. Others, with varying degrees of success and scandal, sought to cash in on the “green rush”.

...

"Santa Barbara is alone among counties in that it taxes farmers based on the value of the marijuana they sell, as opposed to the acreage of their farms. While that strategy works when cannabis values are high, the industry has experienced a massive decline in profitability during the past year. With the sale price of cannabis in the state at roughly a third of its value just a year or so ago, many corporate investors have pulled out of the market entirely, and the number of licensed growers in Santa Barbara county has declined by about 25%.

"As a result, the county is expecting to earn just $7.5m in cannabis tax revenue this year, a 54% decline from 2022 and only half the $15.2m that was expected to fund the county’s latest budget, according to a county report."

Tuesday, January 12, 2010

Medical marijuana laws

Laws about marijuana give a different window on repugnant transactions.

Jan 12: N.J. approves medical marijuana bill "The Legislature approved a bill yesterday that would make New Jersey the 14th state to allow chronically ill patients access to marijuana for medical reasons."...

"Chris Christie, a former federal prosecutor who is the incoming governor and a Republican, said he supported the concept of the bill but remained concerned that a loophole could lead to abuses.
A compromise bill was worked out after some lawmakers expressed similar concerns. For example, a provision allowing patients to grow marijuana was removed.
Driving while high would continue to be against the law.
The other states that permit medical use of marijuana are Alaska, California, Colorado, Hawaii, Maine, Michigan, Montana, Nevada, New Mexico, Oregon, Rhode Island, Vermont, and Washington."
...
"Gusciora said the legislation, titled the Compassionate Use Medical Marijuana Act, would be the nation’s strictest such law."

"Strict" isn't an adjective you often hear paired with "compassionate."

Wednesday, July 31, 2019

Mark Kleiman (1951-2019)

From the NY Times:
Mark Kleiman, Who Fought to Lift Ban on Marijuana, Dies at 68
"Kelly Kleiman, his sister and only immediate survivor, said the cause was lymphoma and complications of a kidney transplant he received from her in April.
...
"Beginning in the mid-1980s, Professor Kleiman was best known for what was then a cry in the wilderness: a thesis that wars on drugs waged on the basis of enforcement had failed; that alcohol does more harm than cannabis; and that the cost of banning marijuana altogether outweighed any of the benefits of prohibition. At the same time, he warned that complete legalization remained a high-risk gamble."

From Reason magazine

RIP Mark Kleiman, Who Brought Rigor, Dispassion, and Candor to a Frequently Overheated Drug Policy Debate
The widely quoted and consulted academic died yesterday at the age of 68.
JACOB SULLUM | 7.22.2019 12:50 PM

"Back in 1989, Mark Kleiman published a book, Marijuana: Costs of Abuse, Costs of Control, that exemplified his calm, methodical, just-the-facts approach to drug policy. Kleiman argued that federal efforts to curtail cannabis consumption were ineffective and diverted resources from programs that had a better public safety payoff. Three years later, in Against Excess: Drug Policy for Results, he came out in favor of legalizing marijuana, arguing that the costs of prohibition outweighed its benefits. At a time when three-quarters of Americans still supported marijuana prohibition, Kleiman's position was striking, especially coming from a widely quoted and consulted academic who had the ear of policy makers."
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From The Intercept:
Remembering Mark Kleiman, a Relentlessly Thoughtful Scholar of Drug Policy, by Maia Szalavitz

"As an opponent of drug war dogma, he was willing to explore alternative approaches to punishment, rather than argue for it to be abolished entirely. That’s a sharp departure from much of the left, which has often been content to firmly oppose the moral stain that is mass incarceration without seriously grappling with what alternative policies might look like. At its best, Kleiman’s work and teachings made people on all sides think much more deeply about their positions, regardless of where they ultimately came down.

"Kleiman supported going after drug dealers, but selectively targeting only the most violent and disruptive, to avoid, essentially, creating evolutionary pressure in markets that would favor the most ruthless and cause the most harm."
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From the National Review:

Mark Kleiman Was the Nation’s Greatest Thinker on Drug Policy

By GABRIEL ROSSMAN

"As expressed in its most programmatic form in Against Excess, Kleiman applied rigorous economic logic, but with the curious inversion that the markets he studied have severe externalities and ruin the lives of their most devoted consumers. Market failure and high transaction costs are policy successes when the commodity is poison, and so good policy means encouraging bad market design. For instance, Kleiman favored a noncommercial approach to marijuana decriminalization precisely because he expected nonprofit or state-operated dispensaries to be less efficient than for-profit firms, and in particular less likely to grow the user base through advertising and make intense use more convenient. The billboards advertising dispensaries, and even marijuana delivery, that saturate Los Angeles are exactly what Kleiman thought sensible decriminalization should avoid.

"But just as good market design has to be careful, so does deliberately bad market design. A major argument in Against Excess is that if you make selling drugs risky by locking up drug dealers (or encouraging them to shoot each other over territory), you build in a risk premium to the price, which draws in suppliers who don’t mind risk. The better approach is to create a deadweight loss so you don’t encourage more supply. For illegal drugs, make it a time-consuming hassle to score. For legal drugs like tobacco and alcohol, impose stiff excise taxes. In both cases the consumer faces costs that do not benefit, and therefore encourage, sellers. These costs might not discourage addicts in the short run, but long-run demand is relatively “elastic”: Increased costs from hassle or taxes can discourage potential users from starting and encourage existing addicts to quit.

"A curious consequence of Kleiman’s logic is that he consistently preferred an emphasis on retail markets rather than high-level distributors or source-country trafficking. His reasoning was that street prices substantially reflect retail markup. In the United States and most European countries, retail markup is about half of the purity-adjusted street price for cocaine and heroin, and the domestic wholesale price itself is about five to ten times higher than the wholesale price in source countries. Source-country interdiction efforts do increase wholesale prices, but this has little effect on retail prices and destabilizes countries. For instance, if you have read Killing Pablo or seen Narcos, you know about the escalation of the dirty war against the Medellin cartel by American intelligence and the Colombian National Police in the early 1990s, but this bloodbath had only a trivial and short-lived impact on retail cocaine prices in the United States, which is still cheaper than it was in the crack era."

Saturday, November 21, 2015

Making the market for medical marijuana a little less medical

The NY Times has a story on how easy it is to get a prescription for marijuana in states like California, where medical marijuana is legal but recreational marijuana is  not supposed to be:
Silicon Valley Tries to Alter Your Perception of Cannabis

"One morning in September, I logged on to the website of HelloMD, a medical start-up that promises to connect patients with doctors instantly over the Internet. I filled out my personal details, explained my ailment — I often get heartburn — and entered in my credit card number to cover the $50 consultation fee.

"Within 10 minutes, a pediatrician based near Washington who is licensed to practice medicine in my home state of California popped up on my screen. ...

"The doctor asked about my medical history, current symptoms and familiarity with certain medicines. The interview lasted about three minutes, after which she announced what everyone who visits HelloMD expects to hear: According to her diagnosis, my heartburn made me a candidate for medical marijuana, which has been legal in California since 1996."
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Marijuana may eventually be legalized for recreational use in California (as it already is in Colorado, Oregon and the state of Washington). But the market isn't waiting for that:

Prescriptions: HelloMD: "Join and get a Doctor recommendation for medical marijuana. Fully Legal. 100% Online. Secure. Approved in 20 mins."

Find a medical dispensary: Weedmaps

Friday, April 27, 2018

Marijuana markets--States' rights?

The Trump administration has an ever more complicated relationship with the growing legalization of marijuana by American states (see previous posts). The Attorney General is an ardent opponent of these legalizations, and seeks to actively enforce the still-on-the-books federal bans  (marijuana is a Schedule I drug, like heroin, according to federal law).

However there are indications that President Trump may not support this any longer:
The Motley Fool (that's the name of a news outlet, not an administration figure) has the story:
President Trump Flip-Flopped on Marijuana, Again

"What's interesting about the marijuana industry is that, while Canada is leading the charge, it's the U.S. that could be the world's most lucrative market for weed -- if it were legal, that is. Despite an overwhelming number of respondents in U.S. surveys in favor of legalizing cannabis nationally, the federal government has remained steadfast in maintaining a Schedule I classification for pot.
...
"Attorney General Jeff Sessions is very much at the heart of marijuana's lack of progress at the federal level. As no fan of pot, Sessions has repeatedly attempted to thwart expansion at the state level. In May 2017, he sent letters to a few congressional colleagues requesting that the Rohrabacher-Farr Amendment be repealed. This amendment, passed with each and every federal spending proposal, is what disallows the Justice Department from using federal dollars to prosecute medical marijuana businesses. Sessions' request has repeatedly fallen on deaf ears in Washington.
...
Last week, after consulting with Sen. Cory Gardner (R-Colo.), President Trump came to an agreement to end any potential federal crackdown on legal cannabis industries in states that have legalized in some capacity."
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We'll see what this means, given that not everyone involved has a long attention span...

Tuesday, December 28, 2010

Medical marijuana in NJ

Marijuana--an herb whose recreational properties became well known before its medicinal ones--continues to be regarded as a repugnant transaction even in places where laws are being adapted to make marijuana available as a prescription drug.

Democrats Shape Marijuana Law: A Challenge to Gov. Christie's Approach

"New Jersey Senate Democrats are pushing ahead with a challenge to the Christie administration's rules for the state's new medical marijuana program, despite a supposedly bipartisan compromise the governor announced earlier this month.

"Democrats are unhappy with regulations to implement the program, saying it falls short of a law already described as the most restrictive in the country. The rules would limit the potency of marijuana, among other specifications contrary to the law signed in January just before Mr. Christie took office.

"In putting his own stamp on the program, Mr. Christie says he is trying to make sure New Jersey doesn't become another California or Colorado, where critics say it is too easy for healthy people to buy pot intended for those with medical problems."