Ports and pot

RGK's new "port" (plus "turkey" neck)

RGK’s new “port” (plus “turkey” neck)

I had fun yesterday.






Rhetorical question for  Doug Berman at Sentencing Law and Policy:



18 responses

  1. Listen to some Steve Wright or Mitch Hedberg. As for your question: take the monetary value out of the dope, totally. Sin taxes are regressive. Sinner’s capitalism foments violence. Pot makes you happy and hungry.

  2. The alcohol industry will never allow it. After all, the ability to sell pot at cost would put them out of business.

    The one good thing about this is that it puts downward pressure on the price of the illegal stuff. If you can buy legally, you have a lot less incentive to buy the moonshine.

  3. When you weigh the costs, Colorado’s policy makes intrinsic sense.

    Prohibition is expensive. As a result of it, we have a failed narco-state on our southern border in a de facto state of war. Beirut was safer than Juarez. It costs a small fortune for us to house all of our drug felons, and when they come out, their lives are ruined. They can’t get a law license unless their daddies happen to be judges, in which case, even getting busted for selling coke is not an impediment. http://www.rave.ca/en/news_info/196213/all/

    One would have thought that we would have learned our lesson in the ’20s. As a Coloradan, I am proud of my fellow citizens having the good sense to come face-to-face with reality. Now, if we can just get the Feds to follow suit, and Obama to pardon all non-violent drug felons who have done their time….

  4. We see this sort of things in other areas which have very high taxes. For example, in NYC, which has an incredibly high cigarette tax, there will be guys hawking loose cigarettes. These are sold at $.50-1.00 a piece, under the $12+ cost of a legal pack of 10 cigarettes.


    Now, for this to be a “win” for the cartels, they need to have higher profit than pre-legalization. I doubt very much that they have. Their sales clearly have not gone to zero, but I doubt they’re selling -more- illegal pot than they did pre-legalization. And if CO were to drop its taxes a bit, or more powerfully were to allow commercial scale marijuana farming, it would probably bite into the cartels much further.

  5. Peter, a rising tide floats all boats! If the total demand curve is going up, it can’t be a bad thing for the cartels as long as Colorado continues to view pot as a “crack” substitute for ordinary taxes.

    All the best.


  6. From an economic standpoint, the demand curve analysis is interesting. If you’ll indulge some wild speculation and a bit of economic hand waving, here goes:

    With a black market good, there is a risk to buyers in buying the product that they’ll get arrested/charged. That means the total cost to buyers = sale price + whatever the buyer perceives the risk of legal consequences to be. With legalization and the clever scheme described by your doc, the perceived risk of getting busted drops quite a bit, which all else being equal means the portion of the demand curve in dollars for illegal pot should move outward (more demanded at a higher price), even as the demand curve in dollars + risk stays the same.

    Now, this scheme also relies on buying some legal pot, and presumably our potheads will be smoking the legal stuff too, so that will pull demand in a bit.

    Now, of course, the question that’s interesting is why are the legal shops so much more expensive than the dealers? It doesn’t seem to be the taxes, which I researched and are about 30%. (2.9+10+15 plus some license fees
    that seem to be one time).


    All of that said, I suspect there is something other than tax which is making the legal retail weed so expensive, and that this is a supply curve question, not demand curve. I suspect a few things:

    1.) lack of farms is making the legal weed expensive to grow, especially when the cartelistas have no compunctions about ruining a national forest to grow their weed.

    2.) Lack of banking/federal legality is making legal weed businesses have a lot of extra overhead. I know if I were a commercial landlord, I’d want extra rent to compensate for the risk of DOJ seizing my building under federal forfeiture laws.

    3.) The fact of it being a new market with not many entrants and no big brands means shops can just charge through the roof and make huge profits. Competition should reduce this over time, if new entry is not too expensive.

    Phew, that was long. Apologies for the rambling.

  7. Neat. I kept looking for the line/tube before I read your description. Did you see Sanjay Gupta’s special on medical marijuana on CNN? Lots of interesting facets to think about.

  8. Peter,

    I agree with much of what you write. Indeed, perhaps you and I should go into the pot growing business in Colorado.

    Out in western Colorado (not too far from where I used to practice law), where land is relatively cheap, where there is ground water for center pivot irrigation and where the supply of undocumented migrants is abundant, there may be an unparalleled growth opportunity. We could raise the capital by forming a limited partnership and offering shares to the sophisticated investors who read this highly sophisticated blog. We could compete easily on cost so long as we really scaled up and used modern farming practices. The possibilities are endless and, better yet, consistent with the American dream.

    All the best.



    Why do you think ending pot prohibition is any more idiotic, RGK, than was ending alcohol prohibition? Just curious what drives your disaffinity for free markets and free people.

  10. Dear Doug,

    Thanks for being a good sport.

    I have to be in Omaha by 6:00 AM for a procedure. (Don’t you love my play of the cancer card as I stall for time?) Devastating response to follow.

    All the best.


  11. Take all the time you need, RGK, and also know I can also use the cancer card if/when needed: e.g., given your on-going medical issues, I hope/expect you will be especially able to explain why you think it wise and just that any/every person dealing with cancer and its traditional treatments who wants to grow/use a plant for personal pleasure/relief ought to be deemed a criminal and punished for trying to deal with cancer’s challenges this way.

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  13. One interesting feature of Gupta’s medical marijuana report is that (on camera, at least) a woman high up in NIDA appeared to entertain the idea that government restrictions that hinder medical research about marijuana should be loosened. That surprised me, especially if they follow through.

  14. Sounds lovely. We can watch the morning sun break over our field of bud as the DEA trucks come up the driveway.

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