Marijuana Prices will Plummet by as Much as 80% Says Rand Corporation
If legalized in California, marijuana “prices will fall to levels below those ever studied,” says the Rand Corporation, a well respected think tank. The organization, which describes itself as trying to “improve policy and decision making through research and analysis,” released a paper today describing a nightmare world for Humboldt County in which prices fall by as much as 80%. This will only be slightly mitigated by a large increase in consumption. The paper was an attempt by the group to lay out for policy makers and voters what California’s Proposition 19 could mean if passed.
The Prop. 19 initiative will be the first of its kind to allow people to cultivate cannabis legally. While it would only allow private grows of a 5×5 area, there is the possibility of commercial grows being allowed by individual cities and counties. These grows could be extremely large (see AgraMed which intends to pump out 58 pounds per day) and flood the market with low priced pot. Researchers for Rand say the “untaxed retail price of high-quality marijuana could drop to as low as $38 per ounce compared to about $375 per ounce today.”
If these numbers are true, Humboldt and the whole Emerald Triangle could face some very unpleasant facts this next year. Admittedly, the Rand Corporation has based its numbers on a variety of assumptions any one of which could be wrong and could radically change the outcome. Still, this is another reason for Humboldt and its growers to focus on how to move forward as the world shifts beneath their feet.
Here is another local blog discussing the same numbers.