A Facebook correspondent writes in response to this:
I’m not sure the health impact has been proven one way or the other, but the supply demand issue is interesting given the demand for non medical use would theoretically still exist.
Colorado legalized for recreational usage, but I think the key here is that production is also legal – if limited. Because production is local, you’d think prices would be lower than Mexican imported, but in this article The Cannabist republished from the Associated Press detailing a row over production regulation, this is not alway true:
When the market opened to all adults over 21 in January, those production caps stayed in place as regulators feared a market flooded with more pot than they could regulate. But the result has been a pot market so limited that marijuana can sell for nearly $500 an ounce, far more expensive than black-market prices. Those prices don’t include taxes that can exceed 30 percent in some jurisdictions.
Colorado’s marijuana market is opening to new growers in October, prompting a need for production caps that aren’t tied to a medical-marijuana patient count. The state won’t necessarily produce more pot. Instead, commercial growers will need to prove they’re selling 85 percent of their inventory before getting permission to add plants.
In a sense, we’re seeing the age old story of capitalism and opening markets – those who benefit are not necessarily in favor of them!
But smaller pot growers lined up to complain that the rules amount to state-sanctioned protections for industry veterans.
A major chafing point is a proposal to allow indoor warehouses to grow twice as many plants as greenhouses, 3,600 versus 1,800.
Colorado’s medical pot growers were required to use energy-intense closed warehouses using grow lights. Now the state allows greenhouses and even limited outdoor growing, depending on local zoning. Many argued the state should be encouraging marijuana production that uses less energy. Large marijuana warehouses sometimes have five-figure monthly power bills.
If production is tightly regulated, then prices will remain high and outstate sources may hang on. But if regulation is relaxed and the market is flooded by local production, then the outstate sources may give up and turn to other crops, legal or otherwise. That would be a standard economic outcome.
