I have to agree with this. While pot is easy to grow, the yield is nowhere near that of tobacco, where most of the plant is used. And, harvesting buds requires a whole lot of manual labor.
I would also agree generally with those stating that the price of all drugs would not change dramatically (or might increase). After taking into account taxes, FDA regulations, OSHA requirements, minimum wage requirements, and other items (including market pricing) there would be a great deal of additional overhead. The great benefit of legalizing drugs is not a direct price break for the end user, but a nice tax break for everyone else. With the additional sin tax revenue and the reduction in the number of prisoners being kept for drug related charges, we could see a nice reduction in income and/or sales tax.
Hell, if California could pass a Proposition to tax medical marijuana to generate revenue for schools, they could reverse the Prop 13/98 damage and provide their residents with something better than a third-world education.
I think the comparison to tobacco is a good one. Until recently tobacco required a lot of manual labor, depending upon the type. I don’t know for sure these days but I’m pretty sure it still isn’t all done by machine. The major cost of cigarettes is in production, distribution and, of course, Uncle Sam’s cut. With modern methods I’m sure top quality pot can be grown for a small fraction of the current price. It would be major cash crop and the government would probably end up building in a quota system to keep the price from plummeting.
That said, I could grow tobacco in my back yard but I don’t. It takes a lot of work to make a tobacco leaf into something a person would enjoy smoking. Pot requires more care in growing, to get the best out of it, but less work in the curing. I suspect some people may stick a pot plant in their garden but will still buy the good stuff at the 7-11, just like we all do with cigarettes and beer.
Circa 1989, I was hanging out in one of the chemistry labs at UT Austin with a grad student friend of mine and perusing his copy of the Merck catalog (the only company in America that makes legal cocaine). It listed all kinds of cool stuff, including cocaine hydrochloride at $8/gram, IIRC.
I think the demand issue of pot is a bit more complicated than is assumed above. At least, in economic matters, it’s not comparable to tobacco. People smoke 1-3 packs of cigarettes per day, which is 20 - 60 cigarettes. I don’t know many HEAVY pot smokers, but those that smoke a lot smoke a joint or two, sometimes three in a day. Maybe some people smoke 5 or 10. But that’s still way below the number of cigarettes. A guy buys a $4 pack of cigarettes and it lasts him a day or two, maybe less. A guy buys a pack of joints and it lasts quite a bit longer. Hell, my friend, Ernie, (heh heh), can make 20 joints last a month. So at least on the demand end, once everyone has access to pot, the demand would seem to be lower than the demand for cigarettes.
I think the prices would stay roughly the same with the only end-user benefits being consistent quality and, of course, no risk of arrest. The market has already indicated what they will pay for this product.
Also, I think the normal free market rules wouldn’t apply because it almost certainly wouldn’t be a normal free market. It would be heavily regulated, no promotion/advertising allowed, and the government and various groups would actively be trying to decrease your sales every year. Also, from the drugmakers side, no patent protection on the products. It would be generics from the start (new production processes would be very lucrative, however).
The lowest online retail price for Oxycodone/Acetaminophen (generic Percocet) would be about 37 cents per pill. 60 cents from a hospital dispensary sounds about right. If it was the 10mg pill (10/325) instead of the 5mg pill (5/325) 60 cents is extremely low, as the 10mg pills are roughly five times as expensive for some reason.
That doesn’t imply anything as it’s not the same. They have a tourist-based marijuana economy. In the US, we probably would have nowhere near the amount of tourism just for the legal weed. It would be really cheap to grow at home, but at the stores, I think it’ll be cheaper than the current amount (which is marked up ridiculously), but not as cheap as some people in this thread are saying.
Percocet(10/325) generic costs 80-90 cents a pill at Costco, and around $1 to $1.25 at other pharmacies.
Instant release oxycodone 15mg is .50 at Costco, and $1 or so at other pharmacies
Instant release oxycodone 30mg is $1 or so at Costco, and typicall $1.50 at a few independent pharmacies. It’s selling for $2-$3 at most places. There was a recent shortage of IR oxycodone due to a manufacturers recall, and the result was pharmacies charging people $5-$10 per pill to fill their scripts. l
Look, pineapples are extraordinarily labor intensive. Each pineapple plant grows one damned pineapple, and it takes it like a year to do it. They have to be picked entirely by hand by people who wear a lot of protective gear against the rest of the plant, too. And pineapple is ridiculously cheap. So labor intensive crops don’t have to be expensive… but if the market will bear it, they will be.
Yeah, but that’s only what some people are willing to pay. The ones who aren’t willing to pay that much aren’t buying, and the ones who are willing to pay more would pay more if the risks increased. Free market prices in equilibrium aren’t based on what some fraction of customers are willing to pay, they’re based on the underlying costs.
A significant amount of the costs of illegal drug production and distribution are due to the legal risk. So the price should fall by that proportion if the legal risk went away. I’d expect to see illegal drug prices fall by a factor of 10 or so.
When it comes to illegal drugs, e.g. pot, isn’t another factor in the cost the number of times it is broken into smaller and smaller proportions? If a cartel moves three tons of it, they get a lot of money for it. If a large distributor moves it in smaller quantities, he gets as much as he paid for it, plus a profit. Then the next guy and the next guy, and so on, until kids are selling individual joints for probably $2 each. I would think that in a legal system the distribution of pot from grower to consumer would go through fewer hands, meaning fewer opportunities for mark-up.
If you could bring it from Peru (let’s say we legalize production) you’d have scale economics, cargo ships, trucks, no kickbacks, the ability to produce in better fields…the cost of making cocaine drops dramatically
Strangely enough, I was thinking of this very question, and came to this very conclusion.
The question of legalizing meth and cocaine/crack is a much tougher one than pot. Who would manufacture and sell legal meth? Say Wyeth or Pfizer started manufacturing and selling it. Within a year, they are inundated with lawsuits charging that whatever black-box warnings they used were inadequate, and the class plaintiffs suffer from a debilitating addiction and associated health problems.
Then there would be two potential outcomes: either 1) the drug companies win, and get some kind of insulation from this kind of liability, or 2) the drug companies lose, and are subject to massive liability.
In scenario #1, the addicts – due to the particular nature of a meth addiction – are unlikely to be able to bear the financial burdens of their own addictions, so it will fall to the government. The government will, in turn, tax the shit out of meth sales to balance this out. Legal meth prices go astronomical … a black market appears … we’re back to square 1.
In scenario #2, the manufacturer, to offset the costs of the constant lawsuits, will raise the prices. The price increase, to truly offset the cost of liability, will have to be astronomical. A black market appears … yadda yadda yadda … nuclear war.
Long story short, no sane drug manufacturer would touch this with a ten-foot pole. So since all the actual meth will be sold on the black market, I’d say the cost of meth (and probably crack, since it seems to have some of the same problems) will stay exactly the same as the current black market prices.
Dutch guy here. Depending on quality, 1 gram of marijuana or hashish is going to cost somewhere between 5 and 15 euros over here (rough estimate, it’s actually been a while since I bought any, one article I found claims an average price of 7.70 euros in 2007).
Prices over here have gone up in the last couple of years, and one possible reason for that is that although owning and selling small quantities of marijuana is decriminalized, growing is prosecuted, especially for large operations, but the last couple of years have seen an increase in prosecutions even for “small-time” / “home” growing (reasons for that are that home growing is often associated with welfare fraud, and many “home” growing operations are actually staged by professional organizations that just “rent” attic space from people).
End result is that it’s impossible to produce large enough quantities of marjijuana even semi-legally. If production was fully legalized, and as socially acceptable, and as well organized as tobacco growing, I would suspect prices of medium-quality weed to fall to about a euro per gram (about 5 times the price of tobacco), maybe less.
This is but one example of the current system whereby retail prices are comparatively large in relation to production costs.
It is extracted from a report by the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) published in 2008 and relating to Morocco.
To translate, the farmer sells 1kg of resin for $183. This is worth $3,823 wholesale and can fetch $6,173 on the streets of Spain. From farmer to user the value has risen by a factor of 34. The prices given seem to concern a third-rate product, as opposed to top quality hashish. As noted by the EMCDDA, export prices in Morocco vary considerably, depending on quality, amount purchased, and place of acquisition.