Sorry to be late addressing your last post.
Maybe it’s just my interest in landscaping, but growing marijuana would seem much easier and convenient than brewing beer. Additionally, it doesn’t have to be very good to tolerate. I think most would tolerate a couple of hits off a bug eaten under dried plant more tolerable than 3 to 4 sour beers every night. I see there’re lots of online guides making both look easy to produce, but brewing just comes off to me as kind of a mess. Maybe apartment dwellers would see it differently…
The typical marijuana smoker you mention of 7 grams per month is consistent with what I read. I think a quarter ounce a month is daily use if put in a pipe, much less if the smoker’s rolling joints, bingeing or sharing with friends. I see estimates counting users from 14 to 25 million in the US. But I’m sure you know that we can’t just assume 20 million people smoking 7 grams a month will be paying those $30 a gram prices at government licensed smoke houses. For instance, if coffee were both illegal and hallucinogenic, I’m sure a few legal Starbucks could get $30 and up for cups of coffee, but that doesn’t mean we could extrapolate that to revenue potential of today’s number of coffee drinkers.
Let’s make some assumptions from what we know. In the 1980s, a quarter ounce of good marijuana was about $50. I have no idea what today’s price is so I need to go with that for now.
- 7.grams per month = $50.00 per month
- $50.00 per month * 12 = $600 per year
- $600 per year * 20 million US users = a $12 billion anual US market.
Assuming sales to minors will be illegal, let’s say they account for 10% and will still be buying off the black market or growing their own.
- $12 billion dollars less 10% = $10.8 billion
Every tax has an optimum level for revenue generation. For instance if taxes were just 10%, there’d probably be next to no black market and no reduction in usage. But if they were 100% of current prices, most of the dope might still be purchased legally. Lets assume that if taxes were 50% of the current price ($25 per quarter ounce), half the pot smoked illegally now would be purchased legally. We could both make arguments that it would be higher or lower, but for now let’s go with that.
- 50% of a $10.8 billion total market = $5.4 billion legal market.
- A 50% price reduction in a $5.4 billion legal market = $2.7 billion in legal sales.
Some portion of those $2.7 sales is going to go to production, administration and profit. Let’s assume 20%.
- $2.7 billion sales less 20% for expenses = $2.16 billion in tax revenue.
We can play around with the assumptions and bring $2.16 billion in tax revenue up or down, but it’s not going to change dramatically. But that’s not the end of the story because as good capitalist, we know that price, legalization and availability have an affect on usage. I’m not aware of anything with flat sales after its price is cut in half (especially if it’s also legalized). Let’s assume usage increases just 25%
- $2.16 billion in tax revenue * 25% = $2.7 billion in tax revenue.
Is $2.7 billion really significant motivation for legalizing pot? What are the other costs? A 25% increase in usage = 5.4 million more smokers (or some lesser amount at greater levels.) Let’s say that just 5% of that are chronic smokers who’d not otherwise have become alcoholics or junkies on something else. That’s 27,000 more people not contributing to society and becoming liabilities. It’s 27,000 lives that are ruined for just $2.7 billion a year. That doesn’t sound like a bargain to me. It just sounds like social decay.
Granted, I read there’s an additional $10 billion spent on marijuana law enforcement and incarceration yearly, but not all of that’s going to be recoverable. It’s not as if police and jails will cost $10 billion less a couple of years following legalization. Bureaucracies and fixed cost have a way of absorbing a large portion once their scope retracts.
Still legalization of dope is not a big issue with me. I could list a half dozen more reasons for legalizing it that chip away at any reason for keeping it illegal, but one of them isn’t revenue enhancement. I think the cost to society from the lives destroyed and productivity lost would more than make up for what little tax revenue is generated.
It’s really difficult though, if not impossible, to estimate with any degree of accuracy how much marijuana is consumed in this country. It would be even more difficult to accurately estimate how much tax revenues we would bring in. I think it would be several billion just on sales taxes and excises, but any numbers I came up with would just be guesses. I don’t think though that there would be that much of a black market provided taxes don’t send prices of the really cheap stuff a lot higher than current prices or keep the really expensive stuff as expensive as it is now.
You talk about marijuana being easy to grow and people being able to tolerate even crappy marijuana. I don’t think it’s so easy to grow, and I think that while people might tolerate crappy pot now, when it’s legal and there is a wide variety of higher quality product at the store consumers will become a lot more picky. They aren’t going to want crappy pot. You said people wouldn’t tolerate 3 or 4 sour beers, but look at the swill they’ll drink in prison. If they can’t get decent alcohol they’ll make their own and won’t care that much if it’s disgusting. They won’t drink that swill after they get out of prison though, even if it is dirt cheap to make. They’ll go to the store and pay good money for heavily taxed product. Or they’ll go to bars and easily spend as much in one or two nights what someone spend on marijuana.
As for marijuana being easy to grow, I’ve never grown it myself but I have a pretty good understanding of the process. It involves a lot of work. If you’ve ever had a vegetable garden, you’d have some idea about the effort involved with a small outdoor plot of marijuana. It takes months of effort before they can get a finished product. They have to worry about having good fertile soil, plant diseases, getting enough sun, watering enough but not too much, fertilizing enough but not too much, making sure they use the right types of nutrients, etc., all the sorts of things you have to worry about with vegetable gardens.
There are also some extra things they have to worry about. If they grow from seeds they’re going to have to learn to spot the male plants early on so they can pull those before they fertilize the female plants. They’ll have to be extra careful too watching for hermaphrodite plants that will look female and then one day pollen sacks will open up on some of the tops and fertilize their entire crop. They have to watch for molds and fungus that can pop up in the final weeks of growing or while drying that will ruin the plants they’ve been babying for so many months. They have to know how to tell when the plants are ready to harvest. Online or in pot growing books you will read about people actually looking at the buds with jewelers loops, getting a magnified view of the pistols so they can see if just the right percentage have changed colors yet. Then they have to dry the stuff right, not drying it too fast and not too slow, not too much, and not too little. Those getting fancy with it even go through a curing process where they’ll put the dried buds in jars and “burp” the jars several times a day for weeks to get rid of any chlorophyll taste that might remain.
Growing indoors is a lot more difficult. The best marijuana is grown indoors. These plants have been bred and crossbred a number of times to have just the right characteristics. Many of these strains are no longer suitable for growing outdoors. They need a much more controlled environment. The growers have to gain a lot of specialized skills and knowledge to do it right. Most will grow from clones that they cut from mother plants that they sometimes keep alive for years. They have to control heat, humidity, light levels, C02 levels, etc. They have to learn all about various types of lights, about color temperatures, penetrating ability of lights, luminosity, etc. They have to vent the grow rooms just right, having the proper sized vent holes and intake holes, and fans that are rated to push the correct number of cubic feet of air per minute. If they are using hydroponics and artificial growing mediums they’ll have to know about all that too. There’s just a lot to learn and a it all involves a lot of work, more than the average pot smoker is going to want to mess with.
I think most people are going to want to take the easy route and just buy their pot at the store. There are some who smoke ridiculous amounts of marijuna who might want to grow their own or find a cheaper source, but most will want to go to a nice clean store and select from a wide variety of quality product.
I think marijuana would get cheaper too, even with taxes, regulatory costs, all the employee taxes businesses have to pay, insurance, etc. It is after all, a plant, and it is possible to produce many hundreds of pounds of finished buds per acre of and, maybe even more than a thousand pounds. An average of one pound every 43.56 square feet would work out to 1000 pounds per acre, with a square slightly larger than six feet by six feet to grow each pound. I can envision huge fields being grown using all the fancy farm equipment modern farmers use. The process will become highly mechanized. It will be grown on a huge scale and prices will drop considerably. The stuff now grown under lights will be grown in greenhouses instead. The outdoor stuff that sells for a few hundred dollars a pound wholesale now will only cost a few dollars a pound to produce at most. The indoor grown stuff that will then be produced in huge fields of greenhouses will cost more to produce, but still nowhere near the thousands of dollars a pound it now commands on the wholesale markets. It’s going to be far cheaper to produce it legally than it is to produce it in the small outdoor plots and tiny indoor gardens found today. I think it is quite likely that even with super high taxes, several times the wholesale price, the legal product will be a good bit cheaper for consumers than what is out there today. The cheap stuff shouldn’t cost too much more than tobacco which wholesales for somewhere around $3:00 a pound and even if the fancy stuff costs ten times as much to produce production costs won’t even be in the hundreds of dollars per pound. This is a product that is relatively cheap as it is even with artificially high prices created by prohibition. If legal prices end up being the same as current prices illicit producers would have to drop their prices a lot if they want any share in the market. If prices for legal product are much cheaper than current prices there won’t be much money in small clandestine illicit growing operations like we have today. It wouldn’t be worth it to be in illicit marijuana production and/or distribution.
You can’t just look at the sales and excise taxes. Even a few billion in sales and excise taxes wouldn’t be bad though. A few hundred million more in revenues would should help my state. But there is more to it than just sales and excise taxes. There will also be hundreds of thousands of people employed in the industry, maybe more. People have to grow it and process it and market it, etc. People have to transport it. There will have to be regulators to regulate the industry. These people are going to pay taxes on their incomes. They’re also going to pay sales taxes, property taxes, etc., and that money is going to come what they earn in the industry. They’re going to spend their money in our communities and those who get there money will end up paying taxes on it. It would be an infusion of many billions of dollars into our economy. We’re already getting some of that even though it’s an illegal industry, but of course a lot of that ends up in Mexico or Canada or some other foreign country, and a lot of that being made by all the perhaps millions of people involved to some degree in the industry now ends up going toward more illegal drugs or for some other illicit purpose.
There will also be a great deal of money saved. You are right I think that not all of the costs will be recoverable. Still though state, federal, and local governments will save billions, and they’ll have one less giant illegal industry to fight.
I was talking with one of our drug interdiction officers the other day. We have a patch of interstate highway going through my county and we always have several officers patrolling that patch whose main function is to interdict drug shipments. They pull vehicles with out of state tags over left and right and run the dogs around them. I always see them out there with vehicles pulled over being searched. Every time I see this I wonder how many big huge loads of pot, cocaine, meth, whatever, are going by while they are tearing the vehicle apart on the side of the road. The officer was telling me he wished that he could just write tickets for marijuana possession offenses because it takes him a good hour or more to arrest someone and do his paperwork and he hates to waste all that time over a few joints. What’s worse than that is that a lot of the time when the dogs alert they don’t find anything. They’ll spend all that time searching and come up with nothing. Usually that’s probably because someone had rolled a joint in the car or something recently and there is still some residual odor. If marijuana was legal, the dogs wouldn’t even alert to it because they wouldn’t be trained to alert to marijuana. It would save our interdiction officers a lot of time, keeping them out on the highway more where they’ll be able to pop a higher percentage of the loads of meth and cocaine that come through, which in turn I would hope would bring the price of these drugs up even higher. The same principles would apply at airports and international borders. Marijuana is far and away the most used of all illegal drugs. It is also the one law enforcement finds the most, both in large quantities and in small personal use amounts. And it’s the one that’s going to cause the most “false positives” with dogs or electronic sniffers due to residual odor or small bits and fragments they can’t find. If it was legal it would save law enforcement a lot of time that they could be spending on far more important matters.
You worry about lives destroyed and productivity lost and so on. Even though millions and millions of people use it, marijuana is not destroying that many lives or causing us that much in lost productivity, certainly not nearly as much as drugs like meth, cocaine, and heroin, or even prescription drugs and alcohol. It’s just not. Most pot smokers are occasional or at least moderate smokers. They work, do what they’re supposed to do. They aren’t causing a lot of problems. If you were to work my job for a while I think you’d soon see that the biggest threats are meth, cocaine, prescription drugs like Oxycodone, hydrocodone, and even Xanax, and alcohol. We don’t have much heroin around here but I’m sure it’s a big problem where it’s prevalent. What you’d see though is that these substances I’m talking about cause an awful lot of problems. Most of the people out there forging checks for instance are going to be meth addicts or pill addicts. (We don’t have much cocaine around here either but where cocaine is as prevalent as meth it’s every bit the problem meth is.) I represent an awful lot of people and it’s getting to the point now that I can pretty much look at their picture and their criminal history and even if there are no drug offenses I can make a pretty good guess as who has a drug problem before they even come in my office. Those with a lot of thefts and forgeries. etc., on their records are in most cases going to be addicted to highly addictive expensive drugs like meth or pain killers. Those with a lot of domestic batteries on their records in most cases have a problem with alcohol. A good 75% or 80% of all my domestic violence cases are cases where some jerk can’t handle his liquor and he feels compelled to beat up on people when he gets drunk. Meth will contribute to some of that too. And drugs like Xanax, I’m always getting some chick whacked out on that crap who will black out out and walk out of a store without paying for something and drive home and get into a wreck or something like that. That drug is abused like crazy and doctors are practically handing it out like candy. These are the drugs I see causing the most problems. I’ve never once heard a woman say that my husband is a great guy until he starts smoking pot and then he gets mean and beats on me. I here that all the time about alcohol and some of these other drugs. And you don’t see a lot of cases where people are stealing to buy marijuana either. People steal cigarettes like crazy though, and more drunks than you would think will try running off with a case of beer or a bottle of liquor without paying for it. Marijuana just doesn’t contribute to a lot of crime.
As for lost productivity, there probably is some of that but not a tremendous amount. According to the government surveys most all people who report that they smoke marijuana also claim to have full tie jobs. People don’t get too hungover to go to work from pot like they do from alcohol. Some probably do smoke pot and go to work and don’t do as good a job as they could, but I don’t think there is any evidence that a significant portion of marijuana smokers go to work stoned or get high while at work. I would think that would probably be something stupid teenagers working at fast food restaurants would be likely to be more than adults who need their jobs and have a lot more to lose. That would never be legal though, and of course employers could drug test employees if that becomes a problem. I tend to think though that most who would be problem drug users are already using drugs. I think some people are just built that way. They have some need to get wasted, and are likely to take just about any kind of drug they can get their hands on. That type of person isn’t deterred by drug possession laws and I think for the most part are already using drugs. Those few out there who don’t smoke marijuana simply because it is illegal are I would think going to be more responsible type folks who if they did smoke marijuana would be less likely to be stupid about it than those at the opposite end of the spectrum and those in between who are already using marijuana. Even if we had another 5 million or so smokers I don’t think we’d see any tremendous loss in productivity because I think the vast majority of them would handle it just fine and be able moderate their use and not let it become a major problem.
I need to close. I’ve got way too much work to do. I think Freerepublic probably causes more loss in productivity for me at least than if I were to smoke pot in the evenings. I just don’t care for smoking pot, and I what little free time I have I like to spend sober and with my family.
Have a good one.