Author Topic: Sticker shock coming with California's new pot market  (Read 658 times)

rcjordan

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Sticker shock coming with California's new pot market
« on: November 05, 2017, 08:26:10 PM »
Wait! You expected the government to be involved, levy huge taxes, set up a regulated & policed market AND have cheap marijuana? NFW!

http://abcnews.go.com/Politics/wireStory/sticker-shock-coming-californias-pot-market-50942926

ergophobe

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Re: Sticker shock coming with California's new pot market
« Reply #1 on: November 05, 2017, 09:53:56 PM »
For years, they've been saying "Legalize and tax it!"

It will be interesting to see the outcry when it happens. The problem with taxes that high is that they will inevitably create a black market (as exists for alcohol and cigarettes, but the differential being lower, it is not as large a market). So one of the main benefits of legalizing pot - decriminalization and taking away revenue from criminals/gangs/etc, will be lost.

littleman

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Re: Sticker shock coming with California's new pot market
« Reply #2 on: November 05, 2017, 10:09:20 PM »
Legal but expensive pot is probably the best scenario for the greatest public good.

Mackin USA

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Re: Sticker shock coming with California's new pot market
« Reply #3 on: November 06, 2017, 11:08:41 AM »
 ;D
Mr. Mackin

ergophobe

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Re: Sticker shock coming with California's new pot market
« Reply #4 on: November 06, 2017, 05:04:25 PM »
Legal but expensive pot is probably the best scenario for the greatest public good.

I agree in general and I think in general people will pay a little more for legal pot. The worry is that if it is too expensive, it doesn't kill the black market and you're back to a war on drugs situation.

Ultimately, that's the limit on any sort of excise tax. So your max public benefit for a "sin" tax (tax aimed at controlling behavior as well as raising revenue) when you tax it to the point just shy of where it would fuel a black market of cheaper, untaxed goods.

With the massive taxes on cigarettes in New York, for example, they may have gone past this limit.
 - https://www.vice.com/en_us/article/bn5333/i-spent-a-day-with-a-guy-selling-illegal-cigarettes-on-the-streets-of-nyc-1023

 - https://www.washingtonpost.com/news/wonk/wp/2014/06/25/why-the-massive-black-market-trade-in-cigarettes-affects-you-even-if-you-dont-smoke/

 - https://www.wsj.com/articles/SB1040938577857473793 (paywall)


My view on this is based on a couple of assumptions you may not share, which are

- the main benefit of legalizing something is to remove a source of revenue from gangs, mafia, criminal cartels, etc.

- the secondary benefit is public health, but I support the right of people to do stupid and risky things (I've engaged in a lot of "healthy" but risky activity in my life - essentially mountaineering stuff - and I always worry that telling people they can't smoke is just one step away from telling people they can't ice climb).

rcjordan

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Re: Sticker shock coming with California's new pot market
« Reply #5 on: November 06, 2017, 05:11:27 PM »
>My view on this is based on a couple of assumptions you may not share, which are

>- the main benefit of legalizing something is to remove a source of revenue from gangs, mafia, criminal cartels, etc.

I share your view. I have no trouble with taxing the hell out of something as a sin tax.  Growing up in tobacco- and moonshine-running country, my concern is the price spread. If the taxed price is too high, there is still a crapload of money to be make by going blackmarket. It's a different kind of crime, that's all.

littleman

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Re: Sticker shock coming with California's new pot market
« Reply #6 on: November 06, 2017, 05:43:28 PM »
Good points Ergo.  One thing about pot is that it is fairly easy to grow, it might be that a 'home-brew' market for marijuana would keep the black market from getting too rooted.  Maybe ideally policy would be to let it be legal to grow in small amounts but illegal to sell without a license and heavy tax -- something like the liquor industry today.

>main benefit

I also agree with those assumptions.

ergophobe

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Re: Sticker shock coming with California's new pot market
« Reply #7 on: November 06, 2017, 05:58:26 PM »
ideally policy would be to let it be legal to grow in small amounts but illegal to sell without a license and heavy tax

I think that's exactly where we will be come Jan 1 if I understand all the laws. But again, if the tax is too high, then it becomes worth it to produce "home brew" at scale without a license and sell illegally.

Maybe a better policy would have been a very high tax, but implemented in tiers over 10 years. Five years where you have low tax and give growers a chance to get up to scale and drop prices slightly overall so that it would undercut criminal growers, and then once you've destroyed the criminal infrastructure, you ratchet the price up for the social benefit.

Meanwhile, though, if you listen to some of the chatter out of Humboldt County, they are worried that legalization will put "mom and pop" illegal growers out of business.

I forget who said "No problem is so simple that, when looked at long enough, it does not become extremely complex."

gm66

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Re: Sticker shock coming with California's new pot market
« Reply #8 on: November 07, 2017, 12:06:27 AM »
Well said all.

Yes, home-brew is exactly the way it's going in the UK, groups of home growers selling in bulk to the dealer who distributes. At the moment the hothouses (rented properties with Vietnamese men installed to look after them) are still the main source and none of them want it legalised or decriminalised. I think the home-growers will win that battle in the end.

BTW i hope some of you bought some Potcoin when i posted about it, it had a very nice price-hike today and is settling down to a new stable line of around 0.00002 Bitcoin per Potcoin (about 14c or 11p).
Civilisation is a race between disaster and education ...

rcjordan

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Re: Sticker shock coming with California's new pot market
« Reply #9 on: November 11, 2017, 05:29:06 PM »
Quote
Colorado has essentially legalized the sale and cultivation of marijuana while creating a black market for use

In Las Vegas, you can buy pot, but there's nowhere to smoke it

https://www.usatoday.com/story/news/2017/11/11/las-vegas-you-can-buy-pot-but-theres-nowhere-smoke/845398001/

rcjordan

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Re: Sticker shock coming with California's new pot market
« Reply #10 on: July 01, 2018, 09:04:57 PM »

rcjordan

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Re: Sticker shock coming with California's new pot market
« Reply #11 on: July 05, 2018, 02:59:36 PM »
From our No-sh##-Sherlock Dept:

From the beginning, there was concern the legal market would be undercut by the massive black market that has existed for decades.

And that's what's happening.


https://www.miamiherald.com/news/business/article214354799.html