Laws Have Made Our B.C. Bud a Growth Industry

Laws Have Made Our B.C. Bud a Growth Industry
Posted by CN Staff on August 14, 2003 at 19:31:24 PT
By Fazil Mihlar
Source: Vancouver Sun 
Marijuana plays a surprisingly large role in the B.C. economy, according to a Simon Fraser University economics professor. B.C. residents grow about $4.8 billion worth of marijuana annually, a number that represents 3.6 per cent of the province's economic output.That's a staggering figure when one considers the fact that the fisheries and aqua-culture industry contributes only about $600 million annually, accounting for less than one per cent of the provincial economy.
How did SFU's Stephen Easton arrive at these numbers when marijuana cultivation, production and distribution are underground and not regularly reported?The economics professor did some excellent detective work, made some reasonable assumptions, did some fancy math and arrived at the total value of bud that B.C. produces each year.Easton estimates there are about 12,000 to 15,000 grow-ing operations in the province. A vast majority of them are indoor operations. That's not surprising, since outdoor growing operations produce just one crop each year. Indoor bud growers can harvest about three times a year.When harvested, each bud produces about 100 grams of usable marijuana. And the THC content, or potency, of marijuana hasn't changed much over the past few years.To have a successful indoor bud operation, a grower needs a house, hydroponic supplies, lights, fans, seeds and labour. It costs about $100,000 for an average-size greenhouse (100 plants).Such an operation can generate about 10 kilograms of marijuana that can be sold for about $5,900 per kilogram on the wholesale market. This sale will generate roughly $60,000 per harvest. The three harvests could, therefore, bring in $180,000 in annual revenues.Considering the lousy returns on the stock and bond markets these days, the return on investment in this illegal activity is a mind-blowing 80 per cent - and that's just In the first year.But since there is a chance that growing operations will get busted - a five-per-cent probability, going by the Vancouver police department's figures - the return on investment comes down to a measly 72 per cent.When the sale of marijuana is converted into street value (retail prices), the numbers get really big. If bud is sold by the ounce, the $5,900 wholesale value quickly climbs to $14,000 per kilo. That means the total value of bud rises to about $7.3 billion a year. And unlike most other economic activities that are concentrated in one part of the province, the marijuana industry is well spread out, from Greater Vancouver to the Thompson-Okanagan, the Kootenays, the Cariboo region and Vancouver Island.Just because all of this economic activity is underground doesn't mean society isn't benefitting. As a matter of fact, it is.A lot of this income stream from illegal marijuana operations actually ends up in the official economy. Bud producers spend their ill-gotten gains on houses, major household appliances, cars, in retail stores, restaurants and on travel, to mention a few activities. Jobs are created and governments get a small cut by way of income and sales taxes.If anyone is curious as to why marijuana growing and distribution is a growth industry in B.C., Easton has a simple answer: a lenient justice system.Specifically, while only 13 per cent of those caught with marijuana were charged in B.C. in 2001, the rest of the country had a charge rate of 60 per cent.Even for those who are charged and convicted of marijuana possession, the average fine amounts to about $1,167. These charge rates and fines simply aren't a strong enough deterrent when an average grow-op can make about $80,000 annually.Note: Analysis I SFU professor estimates pot accounts for 3.6 per cent of economy.Complete Title: Lenient Laws Have Made Our B.C. Bud a Growth IndustryB.C. Bud: The value of growing operations in millions of dollars.District         --      1997   	--  2000Greater Vancouver	-- $ 1,775		-- $ 2,266Fraser Valley         --   371		-- 474Nanaimo		 --   193  	-- 247Sunshine Coast	 --    33		-- 42Vancouver Island/Coast --  691		-- 883Thompson/Okanagan	  -- 443		-- 565Province overall --	$ 3,712		-- $ 4,739Source: Vancouver Sun (CN BC)Author: Fazil MihlarPublished: August 13, 2003 - Page D4Copyright: 2003 The Vancouver SunContact sunletters pacpress.southam.caWebsite: Articles & Web Site:Cannabis News Canadian Links Tourism: Gone To Pot? Tourism a Joint Effort Canada's Pot-Smoking Mecca
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Comment #3 posted by Trekkie on August 15, 2003 at 07:36:27 PT
Dang it!
When I was a kid, I used to live in Vernon, BC, which is at the northern tip of lake Okanagan.I guess we moved too soon...
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Comment #2 posted by FoM on August 14, 2003 at 19:54:13 PT
Have a wonderful time!
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Comment #1 posted by Robbie on August 14, 2003 at 19:42:09 PT
Seattle Hemp festival this weekend!
http://www.seattlehempfest.comI'm leaving the Bay Area tomorrow if someone needs a ride!
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