U of I Drug Bust

[santo=dorf]

I happen to agree with legalization, but, this statement is pure conjecture. Since its not legal now, how could you possibly know what taxes would be applied to it? Where did you get the $2B number?

From what I read, it would be $1 billion in revenue with a $50 per ounce tax.

 

AHR-nold is supposedly willing to debate/discuss it. Perhaps someone should show him at the end of his lifting documentary from the 70's where he tokes up at the end.

[Texsox]

From what I read, it would be $1 billion in revenue with a $50 per ounce tax.

 

AHR-nold is supposedly willing to debate/discuss it. Perhaps someone should show him at the end of his lifting documentary from the 70's where he tokes up at the end.

 

There is no way that pot smokers will accept the price increase that would come with legalization. People forget that with legalization, will come product liability costs, marketing, distribution, FDA controlled manufacturing, multiple profit centers, and other costs. Then add a sizable "sin-tax" and you have a price far higher than what is paid now.

 

Add to that the ease in which a quality product can be grown at home. The already in place black market, and I just do not see all this tax coming in.

[RockRaines]

There is no way that pot smokers will accept the price increase that would come with legalization. People forget that with legalization, will come product liability costs, marketing, distribution, FDA controlled manufacturing, multiple profit centers, and other costs. Then add a sizable "sin-tax" and you have a price far higher than what is paid now.

 

Add to that the ease in which a quality product can be grown at home. The already in place black market, and I just do not see all this tax coming in.

First, its not that easy to grow at home since seeds are also illegal and not exactly easy to find.

 

Second, with the legalization comes increased quality and availability, both of which would be worth a price increase. Right now pot isnt exactly a cheap drug, you still pay on avg 15-20 dollars a gram street price, with total inconsistent quality and brand control. (for folks that dont know, a bag of weed isnt the same no matter origin, strain, method of growth etc.) Like any drug, regulation has its ups and downs, but i think that the ups far outweigh the downs.

[Texsox]

First, its not that easy to grow at home since seeds are also illegal and not exactly easy to find.

 

Second, with the legalization comes increased quality and availability, both of which would be worth a price increase. Right now pot isnt exactly a cheap drug, you still pay on avg 15-20 dollars a gram street price, with total inconsistent quality and brand control. (for folks that dont know, a bag of weed isnt the same no matter origin, strain, method of growth etc.) Like any drug, regulation has its ups and downs, but i think that the ups far outweigh the downs.

 

Would you pay $50 to $60?

 

I'm not saying there are not advantages, but the tax revenue figure is a joke. And the savings in law enforcement are not complete either. Someone has to enforce the tax laws, someone has to be certain the marijuana is legal and not black market. So the law enforcement cost may go down, but it will not be zero. The biggest cost savings may be the prisons will have a few less inmates, but even there the marijuana lockups are very small.

[StrangeSox]

There is no way that pot smokers will accept the price increase that would come with legalization. People forget that with legalization, will come product liability costs, marketing, distribution, FDA controlled manufacturing, multiple profit centers, and other costs. Then add a sizable "sin-tax" and you have a price far higher than what is paid now.

 

Add to that the ease in which a quality product can be grown at home. The already in place black market, and I just do not see all this tax coming in.

 

You're forgetting that illegality adds its own large price inflation.

[RockRaines]

Would you pay $50 to $60?

 

I'm not saying there are not advantages, but the tax revenue figure is a joke. And the savings in law enforcement are not complete either. Someone has to enforce the tax laws, someone has to be certain the marijuana is legal and not black market. So the law enforcement cost may go down, but it will not be zero. The biggest cost savings may be the prisons will have a few less inmates, but even there the marijuana lockups are very small.

Im not sure the cost would go that high, but there would be an increase. Right now alot of the cost is bundled in the transportation of the substance which is where the hike comes. The tax revenue figure has been researched at ends by several organizations. Also it doesnt totally figure in the actual taxes of companies which may start to produce and distribute marijunana which could increase the number. I would really check out the documentary that I cited earlier on Mendocino county. 3/4 of their county revenue is from marijuana growth I believe.

[Texsox]

You're forgetting that illegality adds its own large price inflation.

 

I did not forget that at all. Compare cigarette and alcohol prices in Mexico versus the US. US liability laws, taxes, and other costs almost double the prices from Mexico.

[Soxbadger]

Tex,

 

Why do you think that prices would increase?

 

From everything I understand about the marijuana trade, the biggest cost to the consumer is risk. Most grow houses can start with less than $10k of capital and can churn out 50 + plants which can be harvested every 6-9 months.

 

Those plants depending on strain and weight can in turn produce in excess of $1,000 of marijuana in each plant. (Im severely lowballing this estimate in that an high quality ounce can go for $350-400 and a single plant will most likely yield multiple ounces, unless your growing in a closet or trying to do some size limitation on the plant. A 3-4 foot tall plant can yield at least an ounce.)

 

I know that people who drive from Cali to Illinois can be paid thousands of dollars just to be the "mule".

 

Bottom line,

 

There would be a massive increase in supply, demand would stay constant. Therefore prices should dramatically drop, my estimate is that street prices would be cut in half or more, and that the govt could easily tax it at something like 25% still making it cheaper for the end user.

 

 

 

[RockRaines]

Tex,

 

Why do you think that prices would increase?

 

From everything I understand about the marijuana trade, the biggest cost to the consumer is risk. Most grow houses can start with less than $10k of capital and can churn out 50 + plants which can be harvested every 6-9 months.

 

Those plants depending on strain and weight can in turn produce in excess of $1,000 of marijuana in each plant. (Im severely lowballing this estimate in that an high quality ounce can go for $350-400 and a single plant will most likely yield multiple ounces, unless your growing in a closet or trying to do some size limitation on the plant. A 3-4 foot tall plant can yield at least an ounce.)

 

I know that people who drive from Cali to Illinois can be paid thousands of dollars just to be the "mule".

 

Bottom line,

 

There would be a massive increase in supply, demand would stay constant. Therefore prices should dramatically drop, my estimate is that street prices would be cut in half or more, and that the govt could easily tax it at something like 25% still making it cheaper for the end user.

You should get quite a bit more than a few ounces from a plant of that size. But on the whole you are correct. I would estimate prices actually being similar to what they are now to be honest, and alot high quality and choice of product.

[Texsox]

With revenue being the #1 driver of this discussion, who, between the manufacturers and the government, benefits from a price reduction? Since y'll know what is being paid by consumers, shall we assume that the government and manufacturers are also equally informed? I just do not see prices being reduced. The tax will be set too high for a price reduction.

 

Consider the massive lawsuits that the tobacco industry paid over the past two decades. Consider what money the industry will be forced to set aside for treatment, education, etc. before the laws would be changed. Those programs were forced upon every sin industry from liquor to gambling, from porn to smoking. Pot would be subjected as well. Think about the massive product liability insurance that will need to be paid. Let's also consider workers that now will receive unemployments insurance, workers comp insurance, social security benfits, FICA, etc etc etc

 

Plus if Rock is correct, pot smokers will gladly pay more for a legal product.

 

Price decrease?! no way. If it stayed the same, I would be shocked.

[santo=dorf]

There is no way that pot smokers will accept the price increase that would come with legalization. People forget that with legalization, will come product liability costs, marketing, distribution, FDA controlled manufacturing, multiple profit centers, and other costs. Then add a sizable "sin-tax" and you have a price far higher than what is paid now.

 

Add to that the ease in which a quality product can be grown at home. The already in place black market, and I just do not see all this tax coming in.

You apparently aren't aware that pot currently sells at all sorts of different prices because not all the quality is the same. I imagine companies that would go into manufacturing pot would make different flavors and potencies to capture as large of the market as possible.

 

Most people don't buy moonshine or brew their own beer to avoid taxes.

 

Look at the large market in bottle water and other items that are freely available at the supermarket. It's all in how you sell it.

[santo=dorf]

Also, what is wrong with people growing their own stuff for personal use? It takes money out of the black market, the true criminals.

 

Take a look at Alaska's current pot laws:

 

_________________________________Incarceration Fine

1 oz or less in your residence or home no penalty N/A N/A

1 oz to 4 oz misdemeanor 90 days $1,000

More than 4 oz, or 25 or more plants felony 5 years $50,000

Any amount within 500 feet of school grounds or rec. center* felony 5 years $50,000

* If charged with possession of marijuana in a school zone, an affirmative defense may be raised in court that the conduct took place entirely within a private residence.

 

Sale or Cultivation

Sale less than 1 oz misdemeanor 1 year $5,000

1 oz or more felony 5 years $50,000

Miscellaneous (paraphernalia, license suspensions, drug tax stamps, etc...)

Maintaining any structure or dwelling for keeping and distributing marijuana felony 5 years $50,000

 

 

Seems like they have it figured out. Grow it for your own use in your house. No reason to have more than 1 oz. to yourself.

[Texsox]

You apparently aren't aware that pot currently sells at all sorts of different prices because not all the quality is the same. I imagine companies that would go into manufacturing pot would make different flavors and potencies to capture as large of the market as possible.

 

Most people don't buy moonshine or brew their own beer to avoid taxes.

 

Look at the large market in bottle water and other items that are freely available at the supermarket. It's all in how you sell it.

 

Which is the same with beer and every other product. I took that into account.

 

Water is an interesting example. Do people pay more, or less, for bottled water? Again, I do not see a cost savings to pot smokers if it was legalized. There will be way too many new sin taxes and costs and no real incentive to lower prices. Plus, even if manufacturers could lower prices, there will be increasing taxes added to the product. Sin taxes, from cigarettes to gambling, are very popular with law makers.

 

After reading your post again, yes, I could see the worse legal product equaling, or cheaper than, the current "premium" product. But quality for quality, I see price increases, not decreases.