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  • That's a lot!

    Marijuana top US cash crop, analyst says

    Originally posted by Reuters
    Gettman's figures were based on several government reports between 2002 and 2005 estimating the United States produced more than 10,000 metric tons of marijuana annually.

    He calculated the producer price per pound of marijuana at $1,606 based on national survey data showing retail prices of between $2,400 and $3,000 between 2001 and 2005.

    The total value of 10,000 metric tons of marijuana at $1,606 per pound would be $35.8 billion.

    By comparison, the United States produced an average of nearly $23.3 billion worth of corn annually from 2003 to 2005, $17.6 billion worth of soybeans, $12.2 billion worth of hay, nearly $11.1 billion worth of vegetables and $7.4 billion worth of wheat, the report said.
    Linky
    A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

    "$250,000 a year won't get me to Central Park West."

  • #2
    Re: That's a lot!

    Yeah, so... I know a guy...

    Goes by the name of Sam. They call him 'Uncle Sam'.
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    • #3
      Re: That's a lot!

      Yet somehow even these profits aren't enticing enough to encourage legalization of it? I know, what a horrible reason to make it legal but even still it is one that might actually have some standing ground.
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      • #4
        Re: That's a lot!

        Originally posted by Zephyr View Post
        Yet somehow even these profits aren't enticing enough to encourage legalization of it? I know, what a horrible reason to make it legal but even still it is one that might actually have some standing ground.
        -Zephyr
        I'm all for decriminalization of marijuana, but it isn't going to increase anyone's standard of living. :)

        The bright side is that less of the income from sales would go toward "bling" and more would go toward things which benefit society. The not-so-bright side is that all those "bling-wearers" would be looking for another way to supply their money addiction.
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        • #5
          Re: That's a lot!

          Think of all that untaxed and unspent income though. It makes my entitlement programs quiver just thinking about it.
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          • #6
            Re: That's a lot!

            Originally posted by icky View Post
            I'm all for decriminalization of marijuana, but it isn't going to increase anyone's standard of living. :)
            Sure it would. Just think if the only thing that law enforcement had to do was go after pot growers that were trying to evade taxes, instead of trying to arrest everyone that possesses pot. That frees up a lot of LE resources, no? Then, imagine how much our income taxes could be lowered (yeah, right, more likely Steeler's intitlement programs would be expanded...) if we taxed all of those sales at 50%! That's $18 billion just from domestic stuff. I wonder how much gets imported from our Northern and Southern neighbors....

            One way or another, it relieves the average person's tax burden...
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            • #7
              Re: That's a lot!

              $36B wholesale = $53B at retail. That's using the lowest retail value given, and not even counting the goods arriving from north and south of our borders. Black market transactions in general - and black market drug transactions in particular - are notorious for their violent side effects. Think of the increased quality of life created by sucking out $53B++ in illicit drug transactions?

              There's a reason that I will neither dirt bike nor hunt in the mountains seperating Palm Desert from San Bernadino, and it ain't the heat. It's the threat of being spotted and killed by the marijuana growers whom are known to operate wildly in the area.
              A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

              "$250,000 a year won't get me to Central Park West."

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              • #8
                Re: That's a lot!

                I think your accounting is optimistic, but the point about freeing Law Enforcement resources is good.

                No comments on what Lefty is gonna do to earn cash for his gold teeth? He sure isn't gonna get a job selling pot in a store for minimum wage.
                Peace through fear... since 1947!

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                • #9
                  Re: That's a lot!

                  My accounting uses the lowest numbers available, both in dollar figures and in the amount of marijuana involved. The real numbers, especially regarding the amount of marijuana, should be far higher indeed. This is because I based my calculations solely on domestically grown marijuana, leaving all imported merchandise completely out of the calculations. My accounting is extremely conservative.

                  To your other point, I'd ask, 'What did Lefty's great grandpa do after prohibition ended?'

                  Wikipedia only provides a brief description - and at that only of rum-running. I don't know what real criminal networks, such as Al Copone's, did after prohibition, but I do know that their most notorious days ended with the 21st ammendment.

                  edit

                  This article discusses Capone's organization, the Chicago Outfit, in some detail. But comparisons between pre- during- and post- prohibition activities seem lacking. Apparently the organization continues to this day, albeit in a much weaker form.
                  Last edited by Nikolas; 12-19-2006, 08:11 PM.
                  A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

                  "$250,000 a year won't get me to Central Park West."

                  Comment


                  • #10
                    Re: That's a lot!

                    If it was ever to become legal the price would drop a whole lot because people wouldn't be buying it they would be growing it. There would be little money made by the government if they did it.

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                    • #11
                      Re: That's a lot!

                      Legalization and Regulation
                      Legalization means controls and regulations are put in place, which may mean that homegrown mary jane is still not permitted. There may be purity or toxicity requirements, and the burden of proof may well rest with the supplier to show that the product meets the mandated grade. This entails further costs (inspectors and testing equipment or contractors) to meet those regulated standards and may require specialized (read: very expensive) facilities to produce product to meet code.

                      Predicted Economic Activity
                      Also, once the industrial growers start into this business - and they would, with a vengeance - they would have the ability to provide more product at a higher grade, and for a lower cost than could be produced by anyone besides the hobbyist, who could likely only compete on the grade. Of course, the hobbyist isn't in it for the money.

                      There are also a good number of obstacles to setting up your own grow-op, legal or not. I believe that hydroponics setups require a voracious amount of energy, which would further drive the costs up.

                      For these reasons, I strongly suspect that the home-grow market would be much like the home-brew market already in force.

                      Other activity that I could easily see happening with legal marijuana include micro-grow ops (like micro-breweries) which would provide unique products not produced by Budweiser or General Foods. An easy pairing for an MGO is with a bakery, baking THC into a variety of foods - brownies, breads, etc. Also, I think that tobbaco firms would immediately begin developing the most addictive marijuana that they could, much like the development they already carry out with cigarettes, and likely achieved by lacing the marijuana with nicotine.

                      Economic Calculations
                      One thing to note about the original post (didn't read the seed article); it looks as though the calculations are being made using black market prices to infer legitimate market activity and revenues. This seems to overlook the fact that black market pricing functions much like legit market pricing - which factors risks into the cost of an item. If the risk associated with producing marijuana goes down and the quantity goes up - both of which would happen if marijuana were legalized - then the price ought to drop precipitously.

                      While I've not studied the economics of other products that have made this transition, I am highly suspicious of the numbers for that reason. In this vein, I'm not sure if alcohol and the prohibition can be taken as the only measure of how successful the transition to legal marijuana would be. It would be best if we could look at a variety of products which were illegal then became legal and see what happened to the relevant economic factors.

                      Law Enforcement and Social Issues
                      As it relates to law-enforcement, while I agree that the costs of busting marijuana operations would go down dramatically, I wonder if those gains would be negated by the increased need to run check stops, to have more varied equipment and the increased delay experienced by drivers as they are searched for more and more toxins in their blood stream.

                      There are also privacy concerns. In Alberta, as far as blood tests are concerned, if an officer asks you to take a breathalyser test and you decline, you can be charged and convicted with DUI. As far as I'm aware, denying a breathalyser is seen as equivalent to an admission of guilt. So if (this is a hypothetical only; I don't know how to test for marijuana sobriety) the only test for determining if you are "too high to drive" is a blood test, then we are talking about a different level of invasiveness. I know that I would be mighty displeased to have to submit to a blood test at the demand of a law enforcement officer. I wonder how the masses in general would react.

                      Conclusion
                      All in all, the blanket legalization of marijuana makes me nervous. There are simply too many unanswered questions regarding public health (addictions, cancer, and the associated medical costs) and safety (impaired driving, mainly) and their ramifications (more invasive checkstops, and the privacy and security concerns that arise from that) for me to support the idea. On the other hand, legal prescription marijuana is something I have little problem with.
                      Last edited by Diceman; 12-20-2006, 02:04 AM. Reason: Always got more to say...

                      [drill][medic][conduct][tg-c1][tpf-c1]
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                      Principles of good Sandbox Etiquette:
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                      • #12
                        Re: That's a lot!

                        Actually dice, in reference to your law enforcement section, most of the states in the US have similar laws regarding DUI. Refusing a breathalyzer test in florida gets your license revoked for a year and a DUI on your record, as well as you spending the night in jail and mandatory commitment to a detox/rehab course as well as any applicable fines (set by the individual county in the state).

                        Another nifty thing the cops have here (i was informed of this by a good friend of mine from high school who is now a cop in Tampa) in preparation for any eventual legalization is what they call a "tongue stick". It's basically a little disposable plastic testing strip that you put in your mouth for 90 seconds and if you have smoked or eaten marijuana in the last 2 hours the end of the stick turns pink. If no THC (tetrahydracannabinol, the ingredient in marijuana that actually gets you high) is present, the tonguestick remains unchanged in color. The interesting thing is that where the breathalyzer can be misjudged because of things like mouthwash or cold medication, the tonguestick is accurate because nothing else of any normal consumption contains THC. Also, nothing short of a strong acid (think muriatic acid for cleaning swimming pools) being swished in your mouth can get the THC out, so you cant fool it by sucking on a lemon or mouthing pennies or anything.

                        I found it kinda interesting.

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                        • #13
                          Re: That's a lot!

                          Originally posted by Ferris Bueller View Post
                          Another nifty thing [...] is what they call a "tongue stick".
                          Interesting. I hadn't heard about the tongue stick and, provided it's effective, that would certainly do a lot to clear up my concerns about roadside blood tests.

                          This is somewhat off topic, but can anyone shed any light on whether two hours is long enough to detect marijuana? Specifically, could you still be under the influence of marijuana after the tongue stick ceases to register a hit?

                          [drill][medic][conduct][tg-c1][tpf-c1]
                          [ma-c2][taw-c1]

                          Principles of good Sandbox Etiquette:
                          Assume good faith - Be polite, please! - Work toward agreement. - Argue facts, not personalities. - Concede a point when you have no response to it, or admit when you disagree based on intuition or taste. - Be civil. - Be prepared to apologize. In animated discussions, we often say things we later wish we hadn't. Say so. - Forgive and forget. - Recognize your own biases and keep them in check. - Give praise when due.

                          Treat others as you would have them treat you

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                          • #14
                            Re: That's a lot!

                            Excellent post, Dice. I enjoyed reading it.

                            I'd like to focus on two things from your post, though:

                            I. Economics

                            ...it looks as though the calculations are being made using black market prices to infer legitimate market activity and revenues. This seems to overlook the fact that black market pricing functions much like legit market pricing - which factors risks into the cost of an item. If the risk associated with producing marijuana goes down and the quantity goes up - both of which would happen if marijuana were legalized - then the price ought to drop precipitously...I am highly suspicious of the numbers for that reason. In this vein, I'm not sure if alcohol and the prohibition can be taken as the only measure...
                            First of all, I agree completely that the calculations will not accurately infer legitimate market prices. Insofar as I am aware, there is no way to accurately estimate the cost of legalized marijuana - places such as the Netherlands, where marijuana is de facto legal, do not use industrial growing techniques and thus do not provide the kind of price analogy we're looking for here.

                            However, my own personal points were twofold: 1. That marijuana is currently the largest cash crop in America - which it still appears to be, as the black market numbers indeed should be used in calculating this; and 2. Legalizing marijuana would remove, at least, $53B in black market transactions - this also still appears quite true, and would remain true even if marijuana accounted for only $5B in transactions were it legal. It is also a conservative estimate.

                            II. Law Enforcement

                            As it relates to law-enforcement, while I agree that the costs of busting marijuana operations would go down dramatically, I wonder if those gains would be negated by the increased need to run check stops, to have more varied equipment and the increased delay experienced by drivers as they are searched for more and more toxins in their blood stream.
                            Your objection here, whilst totally understandable, is in fact quite easily responded to: It is already illegal to drive while under the influence of marijuana. As the use of marijuana is already widespread, checking motorists for marijuana intoxication (as well as methamphetamine, hallucinogen, cocaine, heroin... etc...) is already standard. Now, if use increases with legalization, which I presume it would, then cops might want to keep an eye out for marijuana intoxicated drivers more, but seeing as intoxicated drivers of all stripes and substances are already an extremely high priority for our police (at least in the USA), this still would not amount to much of a change from the status quo.

                            Could Magnum or Cing chime in to inform us how LE checks for illegal substance intoxication?
                            A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

                            "$250,000 a year won't get me to Central Park West."

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                            • #15
                              Re: That's a lot!

                              You could still be impaired after two hours, since, like alcohol, each person reacts differently. However, the average length of time someone is feeling the effects of marijuana, as posted in a NIH study, based on average consumption is 1.75 hours. So theoretically, MOST people should be fairly sober by the 2 hour mark. My guess would be that it wont matter though, because just like a DUI now, regardless of whether you appear to be under the influence or can pass roadside sobriety tests, over the limit is over the limit.

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