Wednesday, July 7, 2010
New Marijuana FUD and Prop 19 Rand Reports
Prop. 19 approval could decrease marijuana costs, increase consumption report says
The story line is that marijuana price will fall and its use will skyrocket. The report says the price of marijuana may drop to $38 an ounce, though there is no time table to explain how many years this might take.
To calculate the price drop, researchers looked at the cost of growing marijuana in a 1,500-square-foot house.
Why are they basing costs on indoor crops grown in homes rather than outdoor, greenhouse or commercial indoor growing?
The researchers concluded that the wages paid to employees who tend the crop would slip from as much as $25 per hour to no more than $10, just a little above what nursery laborers earn.
Why should the employees of marijuana growers earn $25 an hour, over twice what nursery laborers earn?
If the per-ounce cost dropped to $38 and the Ammiano bill’s $50 per ounce excise tax passed, taxes would account for more than half the cost of the state’s marijuana, an observation likely to inflame marijuana idealists who see it as a natural weed that ought to be treated like an herb.
That high tax creates an incentive for tax evasion that is more financially rewarding than smuggling marijuana from Mexico to California and it could also encourage smokers to turn to the highest-potency marijuana to get more bang for their buck, the researchers concluded.
That would put Marijuana to less than $100 an ounce on store shelves, I think most people would be more than happy to pay said taxes to help the states economy.
As for Mexican pot smuggling, import it and tax it, since their pot is considered a lower grade it would have trouble competing as a black market product with legal products easier to find and purchase.
There is quit a bit written about Tax Evasion. After reading the report I noted in all the circumstance's listed the tax was forcing the products cost to rise. According to the PDF prices could drop 3 to ten times less than they are today. With prices dropping consumers would not be infuriated by the Taxation of marijuana.
Another point I think needs some thought is, will all marijuana prices be the same? Or will it become more like fine wine with quality being a desired trait and by thus demanding a higher price. I feel there will be a market that will support a commercial market as well as a connoisseur gourmet market.
As for the report in general, my opinion is it projects more of the downside of the facts. I think that there are so many possibilities for California to profit that the report did not include that it is hard to consider it anything other than a simple hypothesis and at that one shy of many facts.
From the actual Rand Report:
No modern nation has ever legalized commercial marijuana production, so there are literally no relevant data to guide estimates of marijuana-production costs after legalization. Although: (Citation listed on original PDF.)
Link to PDF
Rather than seeing growers shot or sentenced to jail or prison, it makes so much more sense to Tax Marijuana!
Taxation not Prohibition!