Sunday 15 August 2010

THE BUSINESS OF BUDS

The legalization of at least medical marijuana is long over due. And it appears to be happening in some places. NOT because the patients need it of course, the states want the cash. I have been saying for years that selling pot would make life much easier for so many, let alone those who rely upon it from relief from so many ailments. Then I realized, the REAL money from keeping pot illegal is the salaries of every person involved in the "illegal drug ring" from the arresting officers to the paper pushers, the jails and jailers, the counselors,not to mention the lawyers. It has been a great way to keep the prison factories well stocked with black and Hispanic worker slaves as well.

I do not see this being quite what I naively dreamt of as a child, however, read on and see what you think. As for the images, I just got a chuckle out of them so I hope you enjoy them as much as I did.

If you did not catch it the first time, Please read:

MARIJUANA BOMBS DROPPED ON TEL AVIV AND GAZA


Short excerpt:
Reporters who crashed the party saw Bibi toking with that Hezbollah guy and they were like “Dood, I am so sorry for throwing those missiles at Haifa” and Bibi was like “Dood, no worries, I mean what was I thinking invading Lebanon and blowing up all that stuff. Holy crap dood, we totally suck!”.
August 14, 2010
Daily Finance

WHY MARIJUANA PRICES MAY DROP LOWER

Marijuana legalization proponents see a day when the marijuana market looks like the alcohol industry. There would be a range of quality and prices among the products offered and there would be taxes assessed ~ perhaps even heavy taxes.

More sights like this would make the world a much happier place.

Pot is often called the biggest cash crop in America. The Fraser Institute, a conservative Canadian think tank, estimates that U.S. consumers spend as much as $110 billion a year on marijuana and cash-strapped state governments are starting to see marijuana as a potentially lucrative revenue source.

California, for instance, collects sales taxes on cannabis sold at its non-profit marijuana dispensaries.
Ramon J. Hirsig, Executive Director of the California State Board of Equalization said in testimony before the state Legislature that the state could reap as much as $1.4 billion in revenue on a "hypothetical" $50 per ounce tax that could be levied if a ballot measure called Proposition 19 allowing legalization passes.


Which Way Will Pot Prices Go?

As marijuana turns into an increasingly legit business, what will happen to the market price of pot? Wholesale prices in California have fallen by 50% since the 1990s to about $2,500 a pound thanks to a surplus in supply. Harborside Health Center of Oakland, Calif., the largest medical marijuana dispensary, has not raised its prices since opening four years ago.

One-eighth of an ounce there can cost anywhere from $16 to $60 depending on quality. Nationally, data reported anonymously to the pro-legalization site Dopestats.com shows that one ounce of low-grade pot sells for an average of $73.53 (up from $60 in 2008), $125.71 for mid-grade (versus $150) and high grade-pot selling for $280.58 (versus $337.50).

Possibly the only decent photo ever taken of the Gov. of CA. Obviously he inhaled. Prop 19 ~ on California's ballot this November ~ would allow adults 21 and up to buy marijuana for recreational use, and cause it to be taxed just like alcohol. If passed, this would be a HUGE step forward in the fight to end marijuana prohibition. The government can generate between $12-18 billion in tax revenue, save over $200 million in law enforcement costs, and create between 60-80k new jobs.

Keith Stroup, the founder of National Organization for the Reform of Marijuana Laws (NORML) says Dopestats figures are too low for the good quality marijuana, which he says fetches between $400 and $600 an ounce and sometimes.

"The issues of price are very complex. No one can accurately predict what's going to happen when the novelty wears off," says Stephen Gutwillig, California director of the Drug Policy Alliance. The Rand Corporation has given it a try.

Is this why Adam and Eve were cast from the garden? Or is it because pot makes one feel as if earth is heaven that it is banned?

The research organization argues that
even with a $50 per ounce tax, "researchers cannot rule out consumption increases of 50% to 100%, and possibly even larger." That would bring marijuana use in California to levels not seen since the 1970s. Moreover, Rand estimates that the price of high-quality pot would cost as little as $38 on a pre-tax basis, as the black market for pot dries up.

"Right now part of what you are compensating [black market sellers] for is their risk of arrest and risk of incarceration," says Beau Kilmer of Rand. Prices will fall because of common business phenomena such as economies of scale and greater automation that allows growers to produce pot on a much larger scale without the fear of being caught.


Dispensary Economics

California law requires that marijuana dispensaries be organized on a not-for-profit basis which is how Harborside is organized. At Harborside, which serves 58,000 patients, the average customer spends about $60 a visit.

In one year, Harborside has pulled in sales of $20 million. Harborside Health's executive director, Steve D'Angelo, tells DailyFinance that his dispensary charges a flat 40% mark-up to its customers, whom it prefers to call patients, and that its highest price is $60 for one-eighth of an ounce.

Stroup believes that Harborside overcharges customers. His group, NORML, estimates that it costs about $25 to produce one ounce of cannabis. "They are still charging black market prices," he says. D'Angelo refutes this idea. "I barely stay in the black," he says, adding that Harborside pours most of its profits back into the business, which provides free acupuncture, chiropractic, hypnotherapy, and yoga sessions.

See full article from DailyFinance: http://srph.it/cLlKA1

July 2, 2010

Rand Objective Analysis

Legalizing the production and distribution of marijuana in California could cut the price of the drug by as much as 80 percent and increase consumption, according to a new study by the nonprofit RAND Corporation that examines many issues raised by proposals to legalize marijuana in the state.

While the state Board of Equalization has estimated taxing legal marijuana could raise more than $1 billion in revenue, the RAND study cautions that any potential revenue could be dramatically higher or lower based on a number of factors, including the level of taxation, the amount of tax evasion and the response by the federal government.

Past research provides solid evidence that marijuana consumption goes up when prices go down, but the magnitude of the consumption increase cannot be predicted because prices will fall to levels below those ever studied, researchers say. Consumption also might rise because of non-price effects such as advertising or a reduction in stigma, researchers say.

In addition to uncertainty about the taxes levied and evaded, researchers do not know how users will respond to such a large drop in price. Even under a scenario with high taxes ($50 per ounce) and a moderate rate of tax evasion (25 percent), researchers cannot rule out consumption increases of 50 percent to 100 percent, and possibly even larger. If prevalence increased by 100 percent, marijuana use in California would be close to the prevalence levels recorded in the late 1970s.

The analysis, prepared by the RAND Drug Policy Research Center, was conducted in an effort to objectively outline the key issues that voters and legislators should consider as California weighs marijuana legalization.

"There is considerable uncertainty about the impact that legalizing marijuana in California will have on consumption and public budgets," said Beau Kilmer, the study's lead author and a policy researcher at RAND. "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,"

The analysis also suggests that the annual cost of enforcing current marijuana laws is smaller than suggested by others. The RAND study estimates that the cost of enforcing the current laws probably totals less than $300 million.

"It is critical that legislators and the public understand what is known and unknown as the state weighs this unprecedented step," said Rosalie Liccardo Pacula, a study co-author and co-director with Kilmer of the RAND Drug Policy Research Center.

Two proposals are pending that would legalize the production and sale of marijuana in California. Assembly Bill 2254 authored by Assemblyman Tom Ammiano (D-San Francisco) would legalize marijuana for those aged 21 and older and task the state Department of Alcoholic Beverage Control with regulating its possession, sale and cultivation.

The bill would create a $50 per ounce excise tax and these funds would be used to fund drug education, awareness, and rehabilitation programs under the jurisdiction of the State Department of Alcohol and Drug Programs.

One of God's finest gifts to Humanity, Marijuana, which is capable of curing so many ills. How can the law tell God He made an illegal plant?!

In November, California voters will consider a ballot measure titled the Regulate, Control and Tax Cannabis Act of 2010 that would make it legal for those aged 21 and older to cultivate marijuana on a 5-foot-by-5-foot plot, and possess, process, share or transport up to one ounce of marijuana.

In addition, the initiative would authorize cities or counties to allow, regulate and tax the commercial cultivation and sales of marijuana. Such activities would remain illegal in jurisdictions that do not opt in.

It took only a few weeks to make weed illegal. Several corporations saw the threat this plant posed to their profits a month or two before it was legalized on recommendation of the AMA. Hearst handled the propaganda, DuPont feared its chemical properties, big Pharma feared its medical properties, the oil companies feared the fact that the first Model T Ford ran on hemp oil, the logging companies feared its effect on logging because it makes excellent paper and grows at such a swift rate compared to a tree. Suddenly there were headlines such as: "Black jazz musician dies in car crash killing three blonde beauties. In his wallet were found 3 marijuana cigarettes." Not a word that he was inebriated! And so the war has continued since the late 1930's, ruining millions of lives.

In only two countries have there been changes in the criminal status of supplying marijuana. The Netherlands allows for sale of small amounts of marijuana (5 grams) in licensed coffee shops and in Australia four jurisdictions have reduced the penalties for cultivation of a small number of marijuana plants to confiscation and a fine. Neither has legalized larger-scale commercial cultivation of the sort California is considering.

In 1975, California was one of the first states to reduce the maximum penalty for possessing less than an ounce of marijuana from incarceration to a misdemeanor with a $100 fine. In 1996, California became the first state to allow marijuana to be grown and consumed for medical purposes.

RAND researchers say one effect of legalizing marijuana would be to dramatically drop the price as growers move from clandestine operations to legal production. Based on an analysis of known production costs and surveys of the current price of marijuana, researchers suggest the untaxed retail price of high-quality marijuana could drop to as low as $38 per ounce compared to about $375 per ounce today.

RAND researchers caution there are many factors that make it difficult to accurately estimate revenue that might be generated by any tax on legal marijuana. The higher the tax, the greater the incentives would be for a gray market in marijuana to develop, researchers say.

The original David as sculpted by Michelangelo before "improved" by the Feds.

"A fixed excise tax per ounce may give producers and users an incentive to shift to smaller quantities of higher-potency forms of marijuana," said study co-author Jonathan P. Caulkins, the H. Guyford Stever Professor of Operations Research at Carnegie Mellon University's Heinz College and Qatar campus. Such a shift is another factor that could lower revenues collected from marijuana taxes.

In addition, since the November ballot initiative leaves it to local governments to set tax rates, the size of any levy could vary broadly. A jurisdiction with a low tax rate might attract marijuana buyers from elsewhere in the state or even other states, further complicating efforts to predict government revenues from the sale of legal marijuana, according to researchers.

The RAND report also investigates some of the costs to the state and society in general, such as drug treatment and other health expenses, that may change if marijuana is legalized in California.

It's unclear whether legalizing marijuana may increase or decrease drug treatment costs, according to the study. More than half of the 32,000 admissions for treatment of marijuana abuse in California during in 2009 resulted from criminal justice referrals, which could drop if legalization is approved. However, an increase in marijuana use could cause a spike in those who voluntarily seek treatment for marijuana abuse, researchers say.

The report, "Altered State? Assessing How Marijuana Legalization in California Could Influence Marijuana Consumption and Public Budgets," can be found at www.rand.org.

Funding for this study was provided by RAND's Investment in People and Ideas program, which combines philanthropic contributions from individuals, foundations, and private-sector firms with earnings from RAND's endowment and operations to support research on issues that reach beyond the scope of traditional client sponsorship.

Other authors of the study are Robert J. MacCoun of the University of California, Berkeley, and Peter H. Reuter of the University of Maryland.

The RAND Drug Policy Research Center is a joint project of RAND Health and the RAND Safety and Justice program within RAND Infrastructure, Safety, and Environment. The goal of the RAND Drug Policy Research Center is to provide a firm, empirical foundation upon which sound drug policies can be built.

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