Viewpoint: Marijuana, Market Forces and Why Colorado’s New Pot Law Could Actually Be a Black-Market Boon
The blackmarket for U.S. high-end ganj is supplied mainly by local, mom&pop, craft-closet croppers. The “Cartels” are a propaganda fabrication. The high-yielding outdoor, big biz growers make medium quality outdoor (seldom goes over 150$/oz.) Legalization could very easily hurt small farmers by driving price down and giving the entire legal market to those high yield, low quality biz growers. I think the discussion on economics in this article is pretty insightful. Sure the writer isn’t a stoner (give me 528$ and I’ll come back tomorrow with a phat z…haha) but economics have been overlooked in the rush to profit. The ganj standard is currently crashing in WA. The legal market looks like it might not break even ever.
Read more: Colorado Marijuana: New Pot Law Could Be Black-Market Boon | TIME.com http://business.time.com/2012/11/19/viewpoint-marijuana-market-forces-and-why-colorados-new-pot-law-could-actually-be-a-black-market-boon/#ixzz2oBPWyNbR
Sorry to repost someone else’s article, but the interface on this TIME page circumvents WordPress.- Annoying
“What’s the price of an ounce of marijuana in Colorado these days?” I e-mailed a friend who I thought might know. The reply: for the top quality stuff, about as much as a share of Apple stock. Apple shares were going for $528 recently, which raises an interesting arbitrage possibility: What’s your guess about the price of Apple and pot a year from now, when Colorado’s legalization of personal pot possession establishes a legitimate commercial market for weed?
My play would be to go long on Apple and short hemp.
Colorado has made the possession of marijuana legal but hasn’t figured out much else. Looking at it from a classical economics perspective, the legitimization of marijuana raises the issue of what happens to the demand, quality, supply and price of a product that has now become legal after decades underground.
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