Quote:
Originally Posted by Sundancefisher
Anyone can grow a pot plant. Cost is low. Pot and dirt. Water and sun. Everyone has household plants.
When it comes to pot...price will pay a factor for many...especially low income. Quality will be key. Fact is however THC levels are through the roof compared to the 1960 & 70's. How is the government going to manage THC levels. That will be interesting.
In the US black market pot makes up a sizeable percentage of overall sales. That means supporting organized crime as well as lost revenue.
Only way to limit black market is to allow personal growing and keep prices really low.
Problem then is the tax base is tiny and pot becomes a cash drag on GDP.
There is a happy tax and cost medium which the formula has been studied in the US. Canada will surely adopt rather than think things will be different here.
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I have been asking and doing my own digging on these issues. Mainly from a curiosity and an investment view.....gotta know whether to buy stocks or short-sell the hell out of them.
Most conclude that in order for the black or grey market to die, pot needs to be closer to $50 per OZ retail.
Some of the questions that remain unanswered are:
1)How will the govt ever contain the grey market: nothing will stop the legal growers from backdoor selling to "friends/enterprising distributors" or even non-govt retailers, thereby avoiding all the up front new excise tax and of course ALL the income tax. Who controls the flow of pot out of the grow rooms? Is the government going to install their security guards/ controls to be able to tighten this gapping hole in their plans? Cant see this happening or the govt even remotely being able to stop the inevitable.
2)How will the govt be even capable of enforce any laws when everyone can grow 4 plants at home...tough to charge anybody with much when you're legal to grow and carry it (too a degree)
3)A household can legally grow a fair bit of quality pot with care and attention.....when they expect prices in the $250-280 per oz range.....thats quite the incentive to grow at home.....and sell grey market to all your friends. 4 plants averaging 5 oz every 3 months is 80 oz per year, at even $200 per oz that's a $16,000 after tax income incentive......equivalent to $20G or more. Even at California prices of $130 per OZ thats a $10-15G incentive. All with greatly reduced risk.
4) How can law enforcement even stop people from growing 10 plants instead. Before they could collect evidence from numerous methods that would indicate you are growing pot. Once its legal to grow, that evidence will not be sufficient to get a search warrant and prove you are growing more than 4 plants.
5) The planned law is 4 plants per household. Define household. Is your buddy renting a "non-cooking suite" a seperate household?? This one is sure to get some legal challenges should they ever be able to even charge someone.
So far the only two arguments FOR the govt are: convenience and safety.
Based on who consumes the majority of pot and their consumption habits and income levels, PRICE (like most other markets) is by far going to be the main determining factor of who has biggest the market share.....AND so far, I can't see it being the govt.
NOTE: I am not setting out to criticize the legalization of pot, just looking at trying to predict the longer term outcomes and how the market will react and how things are going to fall out from current decisions being made.