Thank You DEA: Marijuana and Economics
You know, I went to college for business administration.
One of the first courses you take to earn such a degree is economics, more specifically, Intro to Economics. In this class they show you this graph. One axis has the supply of some imaginary product. The other axis shows the demand for this imaginary product. Some lines are drawn to show supply intersecting with demand to determine price. For example, if a company produces too much product, they may want to lower the price of the product so that they can sell the product faster. It makes sense.
Now, let’s apply this simple principle to the marijuana market. When dispensaries were going up in California, prices for marijuana around the nation went up. Why? Simple. California is one of the major producers of marijuana in the United States. You could get high quality marijuana ANYWHERE in the United States. But, when the dispensaries went up, marijuana distribution stayed local, for the most part. Lots of growers took a pay cut because it was safer to deal locally to the dispensaries. They were out of the “criminal” side of the business. In other words, the nationwide supply went down causing prices to go up.
Fifty dollars could get you an 1/8th of an ounce of marijuana; that’s 3.5g.
Usually the bags were between 3.2g and 3.5g. It was acceptable. Meet up with the dealer, ask for a “50” and you knew what we were getting. When dispensaries blew up, the “50” was not comfortably nestled between 3.2g and 3.5g anymore. The weight DROPPED. The “50” came in at 2.8 and dropping. The quantity dropped to about 2g, that’s TWO grams. To add insult to injury, the quality of the marijuana wasn’t always great (always better than schwag, of course). See, the dispensaries would turn away marijuana that wasn’t up to their standards. So, what’s a grower to do with marijuana that may have had a spider mite infestation? Answer: Off to NYC. Of course, someone else would buy it. So, we went from paying about $14.29 per gram to $25 per gram of LOWER quality marijuana. *DOUBLE SLAP*
However, a few weeks ago, I picked up a half-ounce of marijuana for $170 [Reddit]. If you’re from NYC, you know $170 for a half-ounce is wonderful. IN most parts of the US, $170 for a half-ounce is great. Typically prices for a half-ounce is in the range of $200-$250. As I pay attention to the marijuana market, we can see why prices are dropping and dropping quickly. I’ll get into that in a second. Today, I get a call from my dealer telling me that he’s moving ounces for $300 for me, $350 for friends. I’m special. He always has the high quality stuff. I’ve picked up Jack Herer, Blackberry, Strawberry Cough, Grape Ape, OG Kush, Hindu Kush, Pink Kush, Kush Kush (just kidding), Top 44, C88, C99, Hempstar/Brainstorm, Sour Diesel (Rezdog), NYC Diesel (Soma) and the list goes on and on. I’ve never gotten an ounce from him for less than $375 to about $410 at the extreme. But, here I am getting an offer for $300/ounce.
THANK YOU DEA!!
As the DEA shuts down dispensary after dispensary in California, the growers are stuck with an ever growing supply of marijuana along with an ever growing supply of bills to pay. So, what’s a grower going to do with his huge supply of medical marijuana? Remember, supply and demand; where they meet is the price. Demand is steady but the supply is high. This means that prices are going to DROP. This is all directly the fault of the DEA. They pushed the dispensary out of business and put the grower between a rock and a mouth to feed. That’s not smart on the part of law enforcement but they were never exactly the smartest group.
Consider this: A few weeks ago, I got an ounce for $170. Today, I can pick up an ounce for $300. What happened between NOW and a few weeks ago? What event could have caused the price of marijuana to drop so quickly, AGAIN; from $375-$400 to $300-$350?
Harborside happens to be one of the largest, in fact, THE largest marijuana dispensary in California.. no, the US.. no, the world.. no, the known universe (it’s true). If growers aren’t selling their marijuana through Harborside, where else can they sell it? Answer: Try the rest of the nation. And, we’re all too happy to purchase it. So once again, THANK YOU DEA!! You’ve made it easier on my pockets to buy marijuana in New York City.