Legal weed is failing

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fc2112
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5:47a, 4/23/23
No one coulda seen this coming, no?

No, you can't just legalize it, tax it heavily and move on. Economics happen.

https://abcnews.go.com/US/wireStory/ganja-glut-excess-weed-growers-seek-interstate-sales-98705910

Quote:
Across the Columbia River in Oregon, where the state's top marijuana regulator recently warned of an "existential crisis" in the industry, it's an open secret some licensed growers have funneled product to the out-of-state black market just to stay afloat.

California's "Apple store of weed," MedMen, is teetering with millions in unpaid bills, while the Canadian cannabis company Curaleaf has shuttered most of its cultivation operations in California, Oregon and Colorado.

Along the West Coast, which dominated U.S. marijuana production long before states began to legalize it, producers face what many call the failed economics of legal pot.

"I'm at rock bottom," said Jeremy Moberg, who owns CannaSol Farms in north-central Washington and, like many licensed growers, complains that the state's 37% cannabis tax leaves virtually no profit margin for producers. "I'm tired of running a failing business."
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doubledog
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6:04a, 4/23/23
Like alcohol, marijuana must be legal nationwide to slow down "black market" sales.
My advice... Keep a high tax rate on all sales, legal and illegal and let the pot smokers pay off Biden's debt.
Drug pushers can be prosecuted for tax evasion.

Sorry Grape...
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Owlagdad
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6:10a, 4/23/23
Maybe not so many pot smokers after all? Appeasing a screaming minority, and media feeding it?
Lol, just let us smoke, get married and we will leave you alone.
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B-1 83
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In reply to Owlagdad • 6:50a, 4/23/23
AG
Owlagdad said:
Maybe not so many pot smokers after all? Appeasing a screaming minority, and media feeding it?
Lol, just let us smoke, get married and we will leave you alone.
Totally the same thing…………
Being in TexAgs jail changes a man……..no, not really
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Kansas Kid
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In reply to Owlagdad • 7:01a, 4/23/23
Owlagdad said:
Maybe not so many pot smokers after all? Appeasing a screaming minority, and media feeding it?
Lol, just let us smoke, get married and we will leave you alone.

The bigger problem is the shear number of people that entered the market to grow and market weed. The free market is working as intended, costs are coming down and the inefficient producers are being driven out of business. The same thing happened in the refining and E&P business back in the 1800s. There are numerous other examples.

I do think the growth in usage that some predicted hasn't happened. Those that were going to use it were already doing it before it was legalized.
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Sumlins Pool Guy
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In reply to Kansas Kid • 7:12a, 4/23/23
Eh I know several people who started smoking when it became legal


Also 37% sales tax isn't the free market
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The Fall Guy
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7:16a, 4/23/23
AG
Potheads!!! Never trust skunky smelling losers
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Buford T. Justice
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7:21a, 4/23/23
AG
It's simple economics….supply is greater than the demand.
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Kansas Kid
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In reply to Sumlins Pool Guy • 7:22a, 4/23/23
Sumlins Pool Guy said:
Eh I know several people who started smoking when it became legal


Also 37% sales tax isn't the free market

Have you seen the taxes on your cell phone bill or taxes and government fees on rental cars? Yes it is high, but I don't see how that affects the issue of the free market resulting in way too many getting into the business resulting in inefficient businesses shutting down.
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PA24
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7:22a, 4/23/23
AG
Stuff is one of the reason we are heading to hell at warp speed.

Will absolutely slow your development especially in the brain.
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Franklin Comes Alive!
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7:25a, 4/23/23
Sounds like it's time for a bailout from the big guy!

Good Bull!
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G. hirsutum Ag
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7:26a, 4/23/23
AG
People are learning that farming is a lot harder than they realized. Razor thin margins are the only way we survive. That and the entire nations supply of hemp can be grown on like 27,000 acres which is nothing
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Jack Boyett
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7:32a, 4/23/23
AG
Farming is hard. Margins are slim. There was no way mj was going to be a lucrative business. Niche commodity that can be grown anywhere.
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Actual Talking Thermos
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7:38a, 4/23/23
The dot-com bubble burst and we still have the internet and e-commerce. Circuit City, CompUSA, Fry's and Future Shop all went out of business, but we still have consumer electronics. There was a gold rush with cannabis legalization, and as always with a gold rush, there's not enough gold for everyone to strike it rich, and even when you strike gold it tends to run out eventually. Boomtowns become ghost towns. But you can still buy gold. The market will stabilize where it should be.
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Detmersdislocatedshoulder
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In reply to Owlagdad • 7:40a, 4/23/23
Owlagdad said:
Maybe not so many pot smokers after all? Appeasing a screaming minority, and media feeding it?
Lol, just let us smoke, get married and we will leave you alone.


this is a terrible analogy. comparing homosexuals and what that has turned into with transsexual terrorist is not the same as pot. as others have explained it is Supply vs demand. you can't have a shop for every 3 people that buy MJ. the market is totally saturated due to the novelty and recent legalization. coupe that with 37% taxes and you will have an economic problem.
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rocky the dog
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7:47a, 4/23/23
AG
Elections are when people find out what politicians stand for, and politicians find out what people will fall for.
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D-Fens
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8:23a, 4/23/23
You can already buy Detla 8 THC (from hemp) in flower, gummy, vape form almost everywhere. Why not make Delta 9 THC (from weed) legal also?
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Ornithopter
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8:26a, 4/23/23
AG
It's not called weed because it's hard to grow.
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Adverse Event
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In reply to Sumlins Pool Guy • 8:26a, 4/23/23
Sumlins Pool Guy said:
Eh I know several people who started smoking when it became legal


Also 37% sales tax isn't the free market


I'm sorry, but 37% is low. You get taxed at every opportunity and the final bill in Colorado in taxes and fees is something like 50-75%. It's absolutely atrocious.

It's also why so many jumped into the hemp business, less rules fees and taxes.
What bitcoin’s detractors don’t understand is monetary economics, computer science, software engineering, network protocols, and electrical systems.

It ain't much, but it's honest Proof of Work.
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Actual Talking Thermos
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In reply to D-Fens • 8:30a, 4/23/23
D-Fens said:
You can already buy Detla 8 THC (from hemp) in flower, gummy, vape form almost everywhere. Why not make Delta 9 THC (from weed) legal also?
You can actually also buy farm bill compliant hemp-derived Delta 9 gummies in (I think) every state. And you can get vapes that are pure THCA. That's D9-THC with an extra carboxyl group on it. THCA is the vast majority of the THC that naturally occurs in flower, but it decarboxylates and becomes D9-THC when exposed to heat . That's why you can't eat just straight flower and have it work, you have to cook it first. And obviously smoking or vaping applies heat and accomplishes the same thing. So a pure THCA vape cart is actually legal despite producing pure D9-THC vapor when heated.

For example:

https://www.drganja.com/single-source-staylit-delta-9-gummies-cherry-250mg-10ct

https://www.binoidcbd.com/collections/thca-products/products/thca-vape-cartridge?pid=1912&oid=132&tid=10227305067b3cd24f5785d16962e4

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Definitely Not A Cop
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In reply to Kansas Kid • 8:33a, 4/23/23
AG
Kansas Kid said:
Sumlins Pool Guy said:
Eh I know several people who started smoking when it became legal


Also 37% sales tax isn't the free market

Have you seen the taxes on your cell phone bill or taxes and government fees on rental cars? Yes it is high, but I don't see how that affects the issue of the free market resulting in way too many getting into the business resulting in inefficient businesses shutting down.


I can't build my own phone or my own car.

The dumbest person from high school can grow weed in their backyard.

That's the difference.
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Pumpkinhead
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In reply to Ornithopter • 8:35a, 4/23/23
AG
DubFalls said:
It's not called weed because it's hard to grow.


This tickled my funny bone. Good one.
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Cyprian
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8:51a, 4/23/23
AG
This article reads like a basic economic tale of over supply in the market. Supply should go down, then it should stabilize like any other market.
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Reno Hightower
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8:51a, 4/23/23
This stinks, just like pot.
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B-1 83
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In reply to Definitely Not A Cop • 8:54a, 4/23/23
AG
Definitely Not A Cop said:
Kansas Kid said:
Sumlins Pool Guy said:
Eh I know several people who started smoking when it became legal


Also 37% sales tax isn't the free market

Have you seen the taxes on your cell phone bill or taxes and government fees on rental cars? Yes it is high, but I don't see how that affects the issue of the free market resulting in way too many getting into the business resulting in inefficient businesses shutting down.


I can't build my own phone or my own car.

The dumbest person from high school can grow weed in their backyard.

That's the difference.
How I know you really don't know what you're talking about in the year 2023. In 1983……..maybe.
Being in TexAgs jail changes a man……..no, not really
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Funky Winkerbean
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9:01a, 4/23/23
AG
Where's he wrong?
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Definitely Not A Cop
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In reply to B-1 83 • 9:02a, 4/23/23
AG
B-1 83 said:
Definitely Not A Cop said:
Kansas Kid said:
Sumlins Pool Guy said:
Eh I know several people who started smoking when it became legal


Also 37% sales tax isn't the free market

Have you seen the taxes on your cell phone bill or taxes and government fees on rental cars? Yes it is high, but I don't see how that affects the issue of the free market resulting in way too many getting into the business resulting in inefficient businesses shutting down.


I can't build my own phone or my own car.

The dumbest person from high school can grow weed in their backyard.

That's the difference.
How I know you really don't know what you're talking about in the year 2023. In 1983……..maybe.


Well sure, I'm not in the business. But you understand the point right? It's much easier to have a black market on an item that is easily created with high government restrictions placed on it.

If you want to get rid of the black market, get rid of the issues that create them.
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B-1 83
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In reply to Definitely Not A Cop • 9:03a, 4/23/23
AG
To some degree, yes. If you've ever been to a big grower, you'd see it is a complex operation with climate control and lots of inputs. The Wife and I went through one for the heck of it in Pagosa Springs. For an agronomist, it was pretty fascinating, and not your mom/dad's little "secret garden".
Being in TexAgs jail changes a man……..no, not really
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ToddyHill
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9:04a, 4/23/23
AG
I don't buy the high tax comment at all. One gallon of 193 proof food grade Ethanol costs about $2.75 to $3.00 (less than a gallon of milk). The Federal excise tax on that gallon of alcohol is about $26. And that tax doesn't stop people from buying vodka, bourbon, etc.

To me this is all about the lack of demand.
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cecil77
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In reply to Owlagdad • 9:11a, 4/23/23
AG
Owlagdad said:
Maybe not so many pot smokers after all? Appeasing a screaming minority, and media feeding it?
Lol, just let us smoke, get married and we will leave you alone.

That's the perfect argument for legalization.

If it's legal and still can't make money, what does it matter if it's legal?
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Teslag
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9:13a, 4/23/23
AG
Another thread where small government "conservatives" want to ban a ****ing plant
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tysker
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9:20a, 4/23/23
AG
Over supply because mj is an easy to grow commodity plus lower demand and consumers have a variety of substitutes. Seems like market is working as expected
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OregonAggie
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In reply to ToddyHill • 9:21a, 4/23/23
AG
ToddyHill said:
I don't buy the high tax comment at all. One gallon of 193 proof food grade Ethanol costs about $2.75 to $3.00 (less than a gallon of milk). The Federal excise tax on that gallon of alcohol is about $26. And that tax doesn't stop people from buying vodka, bourbon, etc.

To me this is all about the lack of demand.


I think it's a bit of both Lack of Demand and also the sheer number of entrants to a market.

Every state looked at the revenue of Colorado and thought they could replicate it, but Colorado is an interesting example because of the tourism aspect of the state. Oregon and Washington just aren't as easy to access as Colorado and people don't flock there for wi yet or summer vacations. I think that's really helped Colorado.

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AggieVictor10
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9:23a, 4/23/23
AG
Weed
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American Hardwood
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9:23a, 4/23/23
AG
I don't smoke pot and never have, but when this whole thing kicked off, I always assumed it would fail because the black market isn't going to go away. I don't know the street price of pot, but it seems the black market could undercut the cost of any highly regulated, highly taxed product.
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