Pompo

As Budget Bleeds, State Is Begging for a Cash Crop
5/21/09|The UCSD Guardian| by Matthew McArdle, Hadley Mendoza, Simone Wilson, Reza Farazmand, and Alyssa Bereznak - Editorial Board



Things are looking pretty dicey on the state budget front these days. Then again, everyone pretty much knew that already.

But that didn’t stop voters on Tuesday from decisively rejecting five ballot measures designed to absolve at least part of the massive budget deficit that currently threatens to drag California’s ailing economy all the way to the floor.

Proposition 1A, backed by higher-education leaders and most state officials, gained less than 40 percent approval. Propositions 1B, 1C, 1D and 1E fared no better. The only measure that did pass was Proposition 1F, which will implement a largely symbolic and ultimately useless cap on legislative salaries during deficit years.

Admittedly, these measures were a rather meek attempt at repairing California’s leaky fiscal plumbing. With a budget deficit of over $20 billion, the damage is much too deep for any such cosmetic financial maneuvering to have a meaningful impact.

However, this somewhat ill-conceived ballot package would have cleared up at least $5 billion from the state’s unsightly deficit and 1A would have steered California on a progressive path to future savings.

Unfortunately, the resounding defeat witnessed in this not-so-special election means that all we have to look forward to now is a new round of painful cuts, massive layoffs and the sinking feeling that results from being hurtled decisively back to square one.

Worst of all, California’s seemingly perpetual budget drama means even less state funding for our cash-starved public universities next year. The University of California is facing at least $320 million in cuts for the 2009-10 fiscal year, cuts that UC President Mark G. Yudof said will lead to larger class sizes, the inevitable onset of additional student-fee increases and a significant reduction in student services.

The problem lies deep within California’s budgetary underpinnings. Right now, our state depends on volatile income taxes to provide over half of its annual revenue. There is little doubt that we need a more solid, more reliable, more consistent plan on which to base our economy. We need a regular source of income, one that doesn’t falter under hazardous national economic woes or depend on the shady wheelings and dealings of an unregulated financial sector.

It may be time now to consider a more immediate solution, one that will generate cash for our state when we need it most. It may be time to consider marijuana.

Before we get caught up in all kinds of stilted stereotypes, let’s do ourselves a favor and forget the goofy “legalize it” campaigns, the dreadlocked demonstrators and the age-old “it’s totally harmless” mantra.

Instead, let’s think of it like corn. Or potatoes. Or tobacco. Or just about any other lucrative cash crop that generates millions of dollars each year for the states fortunate enough to harvest these valuable commodities.

The undeniable fact is that marijuana has the potential to dramatically boost our state economy. It represents a market that consistently rakes in billions of dollars each year. The demand is there, and what’s more: The infrastructure is already largely in place. Expansive pot farms consume vast tracts of land in California’s northern regions — farms that look ripe for government support and regulation — and the controversial cannabis clubs that continue to spring up statewide could easily be converted to dispensaries geared toward mainstream consumption.

With a national economy that has rapidly come to value services over production, it would be refreshing to see California foster a more traditional, agricultural-based approach to generating revenue. And with a budget situation that seriously threatens to derail our state’s ability to provide for its citizens, it is necessary to consider new approaches to resolving this fiscal conundrum.

Buzzby

With legalization, the bottom would drop out of the cannabis market. It would have to be sold at a price related to the costs of production and distribution without the 90% black market bump. Who's going to spend $300 for an ounce of marijuana when they can grow it in their back yard for next to nothing?

I think the fantasies about the impact of legalization on the economy are greatly exaggerated. The only reason it's America's #1 cash crop is that it's illegal.

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SacredJellybean

Or the government could tax the living hell out of it and sell it for either black market prices (or a little less, to compete better) or prices currently held by cannabis clubs. I did a google search and found this link where someone mentions that $310 for an ounce of good strain is a favorable price at a club. What you said is a bit like saying "Who would pay $15 for a six-pack when one could just brew his own beer?"

Would you rather A) Grow your own and spend months and much careful patience and money with growing, drying, and curing a healthy female cannabis plant to smoke it, B) Find a connection in a place you might not know anyone, or find someone who might not be reliable, one with a schedule you have to work around, one who won't rip you off, and if you're getting it not directly from the grower as most sales are made, you might be looking at waiting time, or your middle man can't front you the money so you have to go with him and meet shady black-market people, etc., or C) Go to the store and pick some up. Hmm.

They can sell marijuana to people for money and shaft them out of just as much as they're used to being shafted, on the promise that picking up a bag won't be a pain in the ass. I sure as hell would. They can sell amounts of it that would roughly intoxicate you about the same amount as alcohol, and it would fit right in, I'm sure.

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"Every age has its peculiar folly and if Charles Mackay, the author of the 19th century classic, Extraordinary Popular Delusions and the Madness of Crowds were alive today he would surely see 'cannabinophobia' as a popular delusion along with the 'tulipmania' and 'witch hunts' of earlier ages. ... I also believe that future historians will look at this epoch and recognize it as another instance of the 'madness of crowds.'"
~Dr. Lester Grinspoon

claygooding

Sorry Buzzby,but I disagree on the size of the market that would buy instead of grow their own. Some don't live in a setting making growing possible,others are too busy,but most people are so lazy,they would crap in
their own bed if someone else had too clean it up. And these couch potato
do nothing majority of Americans would be the customers of big business
and would buy enough to greatly help our economy.

Buzzby

The black market could afford to cut its prices drastically and still be very profitable. Legal marijuana would always be up against the possibility of being undercut by the black market and would, therefore, have to keep it's profit margin on the reasonable side.

Not me. If beer cost $15 for a six-pack, I'd brew my own. Every household can produce up to 200 gallons a year without being taxed. Hobby brewing is a big business, not because beer is so expensive but because it's fun. If beer prices tripled, brewing your own would become very common.

Of course, the disparity in pricing is much more severe with marijuana. An ounce that you could grow for $20 might well cost $400 on the street.

If would be A or C, depending on the price of C. Let's see... Would I rather spend a few months doing occasion labor to produce a pound of high-end bud for $400 or spend $6,400 for the same pound at the store? For a wealthy person, there might be a question. For me, there would be none.

SacredJellybean

You have a point there, though dealing with the black market is inconvenient enough that I would speculate that the only people who would continue to buy from it would be those who have good relationships with their dealers (moreso when the dealer is also the grower, I'd say) and don't want different weed. The black market may try to undercut it by selling it for cheap, but that won't help people who don't have connections to begin with. Legally sold marijuana would always have the upper hand for these reasons, unless the price disparity is so disproportionate that no reasonable person would throw their money away on it.

A six-pack of beer ranges from about $9-15 where I used to live, depending on quality. Economically, brewing your own beer makes sense, but from a convenience standpoint, there's no contest. To be honest, I haven't brewed my own, but considering that its expense includes attention (so you don't botch the job), money (for equipment), and time, I would instead be heading to the market or bar the night I felt like drinking, rather than waiting weeks or months to brew one batch.

You might be up to brewing your own, but keep in mind that not all of us are retired and have the time.

I don't think you'd see many people beyond the hobbyists/heavy pot smokers who would do it. Let's put it this way: how much does it cost right now for a person to find weed and buy some? How much time and energy does it take to grow your own? What percentage of marijuana-smokers grow their own right now? Black market prices are outrageous, as you said, and I agree. But when push comes to shove, I think that in reaction to high prices, most people would either just smoke less to fit their budgets or not smoke altogether, rather than growing their own.

LowRider

Buzzby, Not sure if your looking at bigger picture of legalization. It would open doors to just about everything. Example: Ethanol (better and cheaper) , ropes, clothes, ETC ETC......... I think you get the point. When you talk about just the buying of marijuana to smoke your probably right. But when we add the industries as a whole that the product could help with, its a very long list.

And clay mentioned a good point, who here grows there own tobacco or knows of someone? Besides farmers its not alot.

Buzzby

What would nicotine addicts do if the price of an ounce of tobacco went up to $300?

The reason most people don't grow their own tobacco, brew their own beer, or ferment their own wine is that store-bought equivalents are available at a price that makes producing your own more trouble than it's worth. At some price point, it becomes worth it to produce your own.

I'm sure that there are people out there to whom black market prices for marijuana appear to be reasonable. Perhaps they are - but only because it's a black market. Paying that much for a legal product would be as silly as paying $100 for a six-pack of beer. The price would have no relation to costs of production and distribution. What other legal product has a 1500% markup over the cost of production?

asfasdfsd23423

As any expert grower knows, it takes months of almost daily care, patience, and a whole bunch of know-how to produce top quality cannabis. There may not be any good way to tell, but I don't think it being legal will have much of an effect on the price. Look at the dispensaries in California, where it's legal under state law, the prices are extremely high ($100 is the highest I've ever seen for an eighth at some places). Even if prices get cut in half - it will still be extremely profitable.

Looking at BC Bud, you can tell pot grown in quantity is never of the same quality of a small grow where plants were taken care of daily, individually, instead of on a massive scale.

While I admit, there will probably be some sort of price drop, but 90% is waaaaaay off the mark. More like 15% - AT THE MOST.

Just my opinion, though, we'll have to wait and see what actually happens, obviously.

Mikeebud

Ai Ai, now who's going to grow it for those, without backyards?

or those who are to sick, someones got work to do.

If you live in apartment with no medical reason. You'd still have to get your supply some way, without any backyard.

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