News stories often report the estimated street value of drugs confiscated. We can assume these values come from authorities who want to boast of their efficacy. What is your guess as to how much the *estimated *street value is exaggerated?
They never report on how much the crooks actually paid for the drugs confiscated either.
Even if the “retail” prices used in the estimates were accurate, that’s going to be much more than what the dealers in question (middlemen) could have actually sold for, let alone what their cost was.
And of course, the nominal “real” value of illegal drugs is a factor of illegality itself, and each quantity bust increases the profitability of the crime.
10 million times higher. 
It’s always vastly exaggerated but there’s no doubt drugs are big business. And lucrative because they’re illegal. I thought it was interesting that the marijuana farmers of northern California were opposed to to legalization because it would drive the price down and them out of business.
Here are the stats from 2006 courtesy of the DOJ.
Take crank for example. Low-end price from table 2 is about $10k/lb. One pound is about 454 grams. From table 7 you see that a gram generally goes for about $100. So the street value is about $45k for a gross profit from wholesale dealer to consumer of about $35k or about 4 times.
BUT - it’s probably even more since virtually all retail drugs like coke and meth have been stepped on, often multiple times. That $100 figure is only valid if it is the pure product. Of course this assumes that the wholesaler gets pure product and I suspect that is probably true but don’t really know.
You would need to have some idea of the purity of what the consumer gets. My guess is that it is 25% or less but I’m pulling that number out of my ass. It’s based to some extent on my experiences long ago though and if those were representative, I would say 25% is a good number to use. However there were times the shit I got hadn’t just been stepped on, but danced on.
In that case, the profit is really 4 times more. So while I do agree the reported numbers are certainly exaggerated, I don’t think it is necessarily by a lot.
When DEA busts large pot growing operations, they count anything on the plant as drugs (stems, roots, fan leaves), even though most of the plant is not smokable. The only thing of use is the female buds. So you’ll get a wet pile of 300 lbs of plant matter but only, say, 2 lbs of it would actually be smoked. That’s also including drying, since no one buys fresh wet pot. So then if a lb of pot costs $5000 wholesale, you get “$1.5 million pot bust” in the news rather than “$10,000 pot bust”.
About ten years back, I cultivated some pot in a sunny vegetable garden for an addicted friend. (Growing pot for personal use only is legal in the Netherlands). The allowed maximum of five plants, yielded about a pillowcase of smokable female plant-tops, and heaps of plant material on the compost heap (those plants are taller then a man and three times as wide, if properly cared for by a good gardener).
The street value of that pillowcase, sold in little plastic baggies, would perhaps have been 300 USD. I put no more money into it then into that year’s batch of tomatoes.
Someone’s old joke:
You know how they say the human body broken down into it’s chemical components would only be worth about $1.75? If they did that to David Crosby (Keith Richards, Whitney Houston, etc.) it would sell for $30 a gram on the street.