Buzzby

Cash Crop: Marijuana Adds $1.5 Billion To County Economy
Mike ADair | The Willits News | 10/25/2005

In Mendocino County, the marijuana industry this year will contribute roughly $1.5 billion to the countys economy. Thats an estimated two-thirds of the countys legal economy, which in 2003 was about $2.3 billion.

Although marijuana is thought to be a huge part of the local economy, it is impossible to know how big it is exactly. The crop is illegal; there are no crop reports, and production and sales records are not collected and authenticated by the county.

For that reason most of the people contacted by this writer were unwilling or unable to speculate on the dollar size of it. Agriculture Commissioner Dave Bengston, Economic Development and Finance Corporation Director Madeline Holtkamp and Bank of Willits President Richard Willoughby were not able to even hazard a guess.

Sheriffs Office Sergeant Rusty Noe, commander of the County of Mendocino Marijuana Eradication Team (COMMET), also declined to give an opinion.

That would be impossible to answer, said Noe. Between the illegal growing, both outdoor and indoor, and the medical marijuana, both outdoor and indoor, it would be impossible to estimate.

Third District Supervisor Hal Wagenet, however, indicated a rough estimate could be made by making a few simple, back-of-the-envelope calculations. Wagenet arrived at a working number based on the number of plants seized by COMMET, which,

according to Noe, is 144,000 marijuana plants for 2005. (Last year, he said, police seized about 92,000 plants. Plant seizures this year are up 56.5 percent over the 2004 figure.)

In calculating the size of the countys marijuana industry, The Willits News used Wagenets formula. However some of the figures were revised and our assumptions differed slightly from Wagenets.

According to District Attorney Norman Vroman, COMMET normally seizes between five and eight percent of the total crop grown in the county. We used that number instead of Wagenets 10 percent. We also thought it reasonable to include a spoilage figure of 20 percent, since nothing in agriculture is perfect.

The only unknown in this equation is plant yield. Traditionally, Mendocino County law enforcement has estimated plant production at one pound of pot per plant. But according to grower Dionysius Greenbud--not his real name--the average dope plant yields about half a pound of grass.Greenbud cautioned, however, that number too is a rough estimate.

I think an estimate of a pound per plant is high, he said. I usually get around a quarter pound a plant. But I was talking to a friend of mine who told me that he has these huge monster plants that give him about eight pounds a plant. So maybe a half a pound a plant is a little light.

Former Third District Supervisor John Pinches agreed that an estimate of a pound of marketable marijuana per pot plant may be a little high. We decided to use the half a pound per plant figure, while admitting that our numbers are rough.

The last element in the equation is the dollar value of the marijuana. According to Greenbud, the wholesale price of marijuana has been plummeting in recent years.

In 1995, the wholesale price was $5000 a pound, Greenbud said. By 1999, it was $3500 a pound. Last year, in Willits it was down to $2500 a pound. The signs are showing that it is going to be less this year. It is looking like it might be $2200 a pound.

Assuming a COMMET seizure rate of 8 percent, 1.8 million marijuana plants were grown in this county this year. Twenty percent were lost to spoilage, and eight percent were grabbed by law enforcement. That leaves 1,324,800 pot plants which produced an average of half a pound of pot per plant, yielding 662,400 pounds of cannibis. Assuming a wholesale price of $2200 per pound, this years harvest should yield a profit of $1.5 billion. A higher estimate would be reasonable if one assumes that some of crop is sold for a higher retail price, or if one assumes a higher yield than half a pound per plant, or both.

By comparison, in 2004, raw timber brought an income of $66.6 million to timber producers and wine grapes brought in $60.1 million to grape growers. Marijuana, therefore, is at least 12 times larger than wine grapes and timber together.

Richard Willoughby said that he did not know to what extent the marijuana economy penetrated the legal economy. He said growers were wary of depositing their money in local banks, because federal law requires banks file cash transaction reports for every deposit over $10,000. He also said that, based on the financial records of the three Willits banks (Bank of Willits, North Valley Bank and Washington Mutual) there was only about $125 million on deposit between the three institutions

If you assume a marijuana economy of billions of dollars a year, to have $125 million on deposit isnt very much, he said.

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Cassius

The only number I can find to disagree with is her "spoilage figure". Not only do I think 20% is very high to people who are very particular about their plants, which marijuana growers usually are, but even if the number were accurate -- how can 20% be figured into the marijuana economy if those plants were, in fact, spoiled? That's like taking the percentage of dollar bills that are misprinted and figuring them into the circulation, when in fact those bills are destroyed as soon as they are misprinted. It doesn't work like that, and any marijuana plants "spoiled" (even if they existed, which 20% I think is about ten times too high) wouldn't be distributed anyway and so I don't think figure into the economic dollar amount.

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Abomonog

I agree that 20% is way high. Closer to 5% spoilage is probably the correct figure. (The 20% figure is probably taken as an example from corn or wheat.)

What they mean by factoring that 20% into the economy, is that they accounted for the loss when adding up the numbers. It's one of those english language oxy-morons.

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faulninja

just think if this money, even half of it were put in to social programs, i think it is more detrimental to socieity to have this substance be illegal, then if it were regulated and taxed, or even grown by the government.

ChronicSmoke7

yea, alot of taxes would disappear.

kb_chronic

Their is alot of spoilage in mass outdoor grows, which account for most of the pot supply .

Cassius

Why should they? I grew a million pounds of marijuana yesterday. I also printed a million $20 counterfeit bills. I then proceeded to immediately destroy them, and as of today they do not exist. They were "spoiled".

So how exactly did that $20 million dollars or those million pounds of pot affect the economy in any way?

Thus, why are they adding in a 20% spoilage figure when they're trying to figure out how it affected the economy, unless they're just looking for some excuse to artificially inflate the numbers?

ChronicSmoke7

20% would actually deflate the numbers, becuase lost crop means, business would have better conditions and most likely wouldnt have any spoilage. So they are actually decreasing the numbers by 20%

Im not a mathematician but i think that was what they were goign for.