Study: Legalized Pot Would Lower Prices, Raise Use

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  Study: Legalized Pot Would Lower Prices, Raise Use

Posted by CN Staff on July 07, 2010 at 11:46:56 PT
By Josh Richman, Oakland Tribune 
Source: Oakland Tribune  

California -- Legalizing marijuana could cause the drug's price to plummet while increasing use by an uncertain amount, according to a new study from a respected public-policy think tank.RAND Corp. researchers say known production costs and surveys of marijuana's current price suggest the untaxed retail price of high-quality marijuana could drop to as low as $38 per ounce, compared to about $375 per ounce now.
"There is considerable uncertainty about the impact that legalizing marijuana in California will have on consumption and public budgets," said RAND Drug Policy Research Center co-director Beau Kilmer, the study's lead author. "No government has legalized the production and distribution of marijuana for general use, so there is little evidence on which to base any predictions about how this might work in California."Past research indicates marijuana consumption goes up when prices go down, they say, but the increase in consumption can't be predicted because nobody has ever studied potential prices so low. Consumption also might rise because of advertising or de-stigmatization, they said.The state Board of Equalization last year estimated taxing legal marijuana could raise more than $1 billion in revenue, but RAND warns revenue could vary widely according to levels of taxation, tax evasion and response by the federal government, which still bans all marijuana possession, cultivation and use.Proposition 19 on the Nov. 2 ballot would let people at least 21 years old possess, grow or transport marijuana for personal use, and would let cities and counties decide whether to regulate and tax commercial production and sale, most likely creating a system of "wet" and "dry" counties as in states with similar alcohol laws. It also would boost the criminal penalty for giving marijuana to a minor, prohibit consumption in public or while minors are present, and maintain existing laws against driving under the influence.Also, a pending bill by Assemblyman Tom Ammiano, D-San Francisco, would legalize marijuana for those 21 or older and task the state Department of Alcoholic Beverage Control with regulating cultivation and sale. AB 2254 would create a $50-per-ounce excise tax with proceeds used to fund drug education, awareness, and rehabilitation programs under state Department of Alcohol and Drug Programs.Even under a scenario with high taxes of $50 per ounce and a moderate rate of tax evasion around 25 percent, researchers can't rule out consumption increases of 50 percent to 100 percent and possibly larger, the study said. If use increased by 100 percent, that would be close to the levels of the late 1970s. The 2007 National Survey on Drug Use and Health said 7 percent of Californians age 12 or older reported having used marijuana within the previous 30 days, compared to 6 percent nationwide. That's compared to 1978, around the height of the nation's marijuana use, when the RAND study said about 13.2 percent of the population 12 and over reported past-month marijuana use. About 19.4 percent of high-school seniors reported past-month marijuana use at that time.The RAND study also suggests that the cost of enforcing current marijuana laws is smaller than sometimes suggested, probably totaling less than $300 million per year. Actually, the Control & Tax Cannabis 2010 committee that is supporting Proposition 19 cited a study by the California chapter of the National Organization for the Reform of Marijuana Laws which estimated the savings at over $200 million.It's unclear whether legalizing marijuana would increase or decrease drug treatment costs, the study says: More than half of the 32,000 admissions for treatment of marijuana abuse in California in 2009 resulted from criminal justice referrals, which would drop if the drug becomes legal, but increased use could lead to more people seeking treatment voluntarily. California's branch of the National Association for the Advancement of Colored People last week endorsed Proposition 19; President Alice Huffman called it a civil rights issue because prohibition disproportionately targets young men of color for prosecution, "the latest tool for imposing Jim Crow justice on poor African-Americans." Bishop Ron Allen of the International Faith-Based Coalition held a news conference Wednesday in Sacramento to oppose the NAACP's position and call for Huffman's resignation.Source: Oakland Tribune (CA)Author: Josh Richman, Oakland TribunePublished: July 7, 2010Copyright: 2010 MediaNews Group, Inc. Contact: triblet Website: -- Cannabis Archives

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Comment #18 posted by afterburner on July 09, 2010 at 07:31:14 PT
Welcome to cannabisnews. Nice handle - lol. Good point about the Gulf oil gusher as a result of cannabis prohibition.
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Comment #16 posted by burny72 on July 09, 2010 at 04:40:21 PT:

more than 20,000 studies all concur that cannibis use is safer than alcohol,tobbacco,even has been proven that it doesn't alter your mind to the point that you would be unsafe in any work environment.cannibis has been shown to be effective against cancers without the debilitating side effects.the latter was discovered in the 70's by our own gov't then promptly covered up because of the fact that they can get money for subjecting people to chemotherapy which is far less effective than cannibis.there are several uses for this plant in fact rudolf diesel originally designed the diesel engine to run on hempseed oil but the oil barons lobbied for their oil to be used.take a good look at the gulf now is the prhibition still worth it?
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Comment #15 posted by FoM on July 08, 2010 at 12:23:46 PT

Storm Crow
All fixed!
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Comment #14 posted by MaryjaneDaly on July 08, 2010 at 11:57:22 PT:

"Plastic please"
Further proof that "marijuana is illegal because billionaires want to remain billionaires", there's no real money in it once it's legal, it is after all a weed!
Perhaps the alcohol lobby and legal drug pushers and big oil are not the only ones lobbying against the legalization of Cannabis. It's to bad politicians don't have to disclose if they get donations from Cartels (I'm guessing it be a shit load)I've read that 50% of the oil we use goes to making plastic,
non biodegradable plastics. Hempen plastics are biodegradable --- Think of a world with biodegradable plastic --- Imagine saying "plastic please" at the store, even it it's only grown and used to make bottles and grocery bags it's a greener future, right? a YES ON 19 (CA's control & tax Cannabis initiative) will not only legalize the psychoactive Cannabis ( THC levels 5% ^ ) but more importantly it opens a wider door to legalize Industrial Cannabis ( THC levels 0.03% ) that can be used to make thousands of biodegradable items THINK GREEN and VOTE YES ON 19 and U.S. - Please Write to Your Senators in Congress and ask them to support HR1866 (The Industrial Hemp Farming Act of 2009).President George Washington said, "Make the most of the Indian hemp seed, sow it everywhere."Have a great day kittensoh and more food for thought we give more than 50 million dollars a year to Canada for their hemp products. peace out
 more information on Cannabis
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Comment #13 posted by Cheebs1 on July 08, 2010 at 11:30:07 PT:

Another Ploy
Heya folks :)!!!It seems to me that this article is actually an attack by the prohibs. The reasoning I used is simple. I think they are appealing to the actual growers in California and by publishing this tripe are trying to capitalize on their fears of no profit. Why spend millions of dollars fighting this initiative when disinformation will make a large percentage of the people vote against it because they might lose their jobs. It is sad that the movement can be so easily divided. I hope beyond hope that people actually vote the way that they feel and relegalize cannabis and think about the rest of the country and world and not just their own immediate futures.
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Comment #12 posted by Storm Crow on July 08, 2010 at 10:59:39 PT

Got distracted and posted twice! Sorry FoM!
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Comment #10 posted by FoM on July 08, 2010 at 10:45:21 PT

Storm Crow
I agree with you. People that think the prices will always stay up don't realize how easily things could change.
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Comment #9 posted by Storm Crow on July 08, 2010 at 10:40:54 PT

As I have pointed out before....
Ginseng farmers get about $35 per POUND with a crop that takes years to produce, is fussy about soil and growing conditions- yet they manage to make a profit! Ditto with blueberry farmers, only they get less than ginseng growers! Tomatoes need similar growing conditions to those of cannabis. Tomatoes were on sale yesterday for 99 cents a pound! But tomato growers manage to make a profit! What other crop stands to sell at $38 per OUNCE and has the growers griping? Totally ridiculous! I think the cannabis growers will soon be having a great big reality check, right after the "mini-boom" that legalization will bring! I foresee a short flurry of higher prices followed by a big crash for the pot growers. Cannabis is just too easy to grow, to maintain that artificially high, "prohibition-fueled", price!FYI, it costs me about $25 per month to grow sufficient (indoor) cannabis for my hubby and me! If I could grow outside, it would be even cheaper, with more produced!  
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Comment #8 posted by konagold on July 07, 2010 at 21:11:43 PT

4000+ sq meters per acre times 1000 times 80% crop acres [area actually growing pot] = 3.2 million sq meters times 1 lb per meter per harvest [ just one example of many   1 lb per sq meter]= 3.2 million lbs per harvest times 3 harvest per year = 9.6 million lbs per year times $2 19.2 million per year1000 acres of grapes gross' $6 million a year 
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Comment #7 posted by John Tyler on July 07, 2010 at 20:50:22 PT

I like the price point for high grade cannabis, but the article does not indicate what data they used, where they got their data, how they got their data, or how current it was. This study sounds like little more than speculation to me. I’m sure prices will go down, but how much? How can they tell if actual usage will rise? There is no accurate base line to compare to now and later in the future. Maybe today’s closet users will come out, which would skew the numbers. I suspect that some people will give it a try, and decide they like drinking better. I don’t know why the media types are trying to create such unrest about this issue. Cannabis was legal before 1937 or was it ’33, anyway, it used to be legal, and it was no big deal. When it gets legal again, it will go back to being “no big deal” again. If you like it, it will be legal and available, if you don’t care for it, that’s fine too. Today is Ringo’s birthday. He is 70 years old and he looks really good (for Ringo). He suggested that at 12 noon today that everyone say “Peace and Love”. So here is a belated wish to you all of Peace and Love on Ringo’s birthday.

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Comment #6 posted by konagold on July 07, 2010 at 20:50:06 PT

$2 lbs
if a farmer in Modesto grew 1000 acres of cannabis and sold un-manicured buds at $2 per pound that farmer would gross 3 times the gross of 1000 acres of grapes$38 an oz. is way more than what cannabis is worth as a common farm crop
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Comment #5 posted by b4daylight on July 07, 2010 at 19:26:35 PT

I would like to see the formula behind that. These people need to go to Amsterdam. Taxes would be easier to fight (hand outs) than illegality. 
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Comment #4 posted by FoM on July 07, 2010 at 15:47:35 PT

That's very true.
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Comment #3 posted by josephlacerenza on July 07, 2010 at 14:20:50 PT

Just a thought.....
I could see the "use" of marijuana going up. People, for one, would be more apt to tell a polling organization, "Yes, I do consume cannabis." It is well known that the statistics are far lower than what we all know to be the truth. So, I put little weight to the announcing of numbers rising. This will be the case, not because more people are "using", but because more people will be willing to share the info. 
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Comment #2 posted by NoCowLevel on July 07, 2010 at 12:50:33 PT

Could someone explain how this "study" reflects real data, such as that shown in the Netherlands where it's legal? The use among teenagers is significantly lower and the use among adults is about the same. That's the objective with legalization, right? To get it out of the hands of adolescents?
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Comment #1 posted by FoM on July 07, 2010 at 11:49:06 PT

Just a Comment
If the people that grow cannabis would only get $38 and then they charged a $50 tax a black market would remain. Paying more tax then for the cannabis is not logical to me.
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