Im just gonna go on the down low and buy from any good friend or person I know for a cheap price while avoiding the tax and giving him no money or little extra.
You are oh so very wrong. If company A and B are selling their product for 250 an ounce, someone will see they can take away all of their business if they took less of a profit margin and sold it for 150. Since A and B haven't established their brand, which is the only way people will pay 100 dollars more per ounce, company C takes all of their customers away, until they either lower their price to become equal or lower than company C. Do you know the reason WHY people buy clothes like 100 dollar jeans? It's because of the brand name and the 'coolness' factor. I actually had a plan to start a business out in California when prop 19 passed, but my reasoning of why I won't is because any companies that want to go big have a chance of getting busted by the feds. I did all the math, and I would end up selling my crop for 15 dollars an ounce. I wasn't going to get into packaging and distribution, but say those I distributed to would brand it and sell it for another 25 dollars an ounce, which is a very significant profit. That equates to 40 dollars per ounce. One year after prop 19 passes, if FEDS aren't doing a whole lot of raiding, you will see ounces at 50 dollars an ounce guaranteed. I'm even willing to make a little wager on it. If the cheapest high grade prices are 200 dollars an ounce or more one year after prop 19 passes, I'll ban myself from posting for 3 months. If not, you do the same.
If the producers try to keep prices of a commodity,any commodity,at an inflated price that is exorbitant in comparison to the cost of production,they are inviting a black market to sell the commodity for less than retail market price and still make money. So although local growers would like to keep prices where they are or as close as possible,as soon as commercial production on the large scale starts up,$250 oz is out the window. If the feds come in and bust the first commercial grows it will cause the price to remain at an elevated price because the supply will have to come from small growers and the cartels but when the feds run out of money building prisons,rehab centers and hiring more DEA/prohibition officers,it will drop.
Why would I ban myself from communicating from other people because of not being right on ounce prices? Why would you also? I'm not trying to say you guys are wrong, because I have also thought in those terms. I'm just saying in my opinion, knowing the greed people have and knowing they can get away with it, I don't think it will go down drastically from prices now in the near future. The whole analogy to the clothing company is because none of those companies "established" themselves before they started selling high prices; they've ALWAYS had high prices. Do you think Gucci or any of those fashion designers used to sell purses for $50 before they established themselves? No - they are just a company who had media hype and through that, they are able to maintain selling expensive clothing. I honestly just don't see prices curtailing that much, especially when medicinal marijuana that is supposed to be for suffering and ailing patients are still charged the same prices or higher for their medicine.
Medical Marijuana will be even cheaper than the high grade recreational marijuana, because taxes won't be applied to medical marijuana. They will be able to sell their marijuana for 50 dollars an ounce untaxed, which would make more and more people get MMJ cards.
You got me intrigued so I found this article about McDonald's profit margins on its double cheeseburgers... many locations won't even put it on their $1 menu because it costs more than that to make. Corporate pushes it because it's supposed to drive traffic, but sometimes you just don't want the cheapest customers around (see article).
Because they know that they could make much more money if they did lower their prices. Besides, no one would pay $250/ounce as that is an inflated price due to illegality. Look let's pretend there's 10 weed farmers in the world and 50 smokers. So let's say all ten growers charge $250/ounce and each grower sells to 5 smokers (in other words every grower sells the same amount to the same amount of people and for the same price). So if it cost the growers $150 to produce each ounce, they'd make $100 per ounce. Multiply that by five (because they're selling one ounce to five people) and each grower makes $500. So one grower says you know what, $500 isn't enough for me. He lowers his price per ounce to $200. All 50 smokers hear of this grower's cost reduction and say "hey, if it's the same stuff I'm going to only buy from this man from now on because he charges $50 less." So the grower who is charging less is now going to be selling to all 50 smokers, while the other nine can sell to no body as their pricing is too high. The grower who charges less makes $50/ounce now instead of $100, as he lowered his price $50. But, $50 x 50 smokers = $2,500. Thus, even though his price is lower, he's making $2000 more. Do you get it now?
The thing is gucci probably represents .000001% of the global clothing market. It's target market is extremely small and very demographically specific - aka it's targeted to the very wealthy with intentions of having a very high profit-ratio for each item they sell. I can definitely agree that some manufacturers could sell marijuana at a higher price due to a "premium" image once legalized. BUT, that "premium" price would probably be no more than maybe $100 an ounce. I mean think about it if you could buy an ounce of top notch bud for $40, then you could get 2.5 ounces for $100. The thing about weed is that it's not a "connoisseur" product. Weed has a relatively short shelf-life and is obviously better fresh. It's more comparable to gasoline or milk than it is to a gucci bag. Premium gas is much better but certainly not exorbitantly expensive, as organic milk is better yet it is only a slight price increase from normal milk, not $20 / gallon like it probably would be if milk was illegal. A gucci bag is a symbol of wealth that one can flaunt continuously. Weed is not something that shows thus it really wouldn't have the same appeal. Weed is simply smoked and therefore is essentially judged solely on quality and perhaps appearance / taste etc. While a gucci bag is of course quality, the price truly reflects the consumers willingness to pay not the sellers cost.
This. Anyone who can't comprehend that the price of marijuana will decrease dramatically once its legalized has no understanding of economics whatsoever. It is due to an illegal market that the price remains as inflated as it is. Why can't people get that.
I would've thought the same thing about medical marijuana being legalized in California, but it costs more than getting it off the street, and guess what? People would rather pay higher prices at the dispensary that going to a street dealer with cheaper prices. Imagine that.
I'd happily pay 10% tax if it meant I didn't have to buy my weed from a dealer. Those guys are so fricken unreliable, and the quality of the weed is all over the map. We have already decriminalized possession, now it's time to Legalize it, and fix the supply side. Shooting at people and invading their homes for growing a plant is just stupid. Pot is here to stay, I just hope we here in Cali aren't so short sighted as to let this opportunity slip away. Keep in mind, city councils are actively trying to quietly kill Medical Marijuana and make it almost impossible to get unless you are literally DYING. It's already happened in a few places and the "citizens" are cheering. They HATE it that medical mary isn't just for sick people. They HATE it and they blame it for the rise in popularity of Cannabis. They know if they can kill off Medical Marijuana it will also kill off the legalization movement. The irony is, that people within our own circles are helping it get defeated and they are the ones who will be out in the cold once Medical Marijuana laws are brought under stricter control. Legalize it now while we have the chance.
There has already been many studies if Prop 19 pases that prices will drop to $38 / oz. If this happens then California won't get the revenue they were hoping for, so they are already working on a flat $50 / ounce tax, so that their revenue does not fluctuate with the market. Still at $88/ounce......
would you have paid 100 for somebody to grab you an 18 pack in highschool? no. maybe throw whoever got it for you a few extra bucks or let them in on it. the idea that prices of weed will be above 100 an ounce (when its legal) baffles me. i say the price is gonna go waaaaay down. legal= cheaper oh and about the whole people not going back to get more for months or weeks... not everyone smokes at the same rate. take alcohol for example, my dad goes through a 12 pack in a few days... my friends mom goes through a 12 pack in an hour. where the company loses in one area (my dad) they make up for and then some with others (my friends mom)
People pay higher prices at the dispensary right now because it's STILL ILLEGAL outside of the limited medical supply. With the medical market, there aren't enough people allowed to be buying or selling to push prices down. When anybody with a patch of soil can grow it and sell it, there's no way that prices can stay above $100/oz.
When marijuana is legalized across the country,and it will be some day,the price will drop to $10 to $20 per oz. Because when hemp production kicks in and every farmer across the US is raising it,they will be planting high thc strains,not the industrial low thc strains,because when he harvests he will want to get as much as he can for his crop,including making money off the flowers and foliage for medicine and recreational,the seeds for food and oil and the stalks for hemp fiber. The farmer will bring his crop in and it will be graded and sold to the distributers to package and get out to the stores. The fibers in the stalks of your favorite strain are the same as the fibers in the industrial hemp. Most farmers will raise Sativa though because of the increased fiber yield. And that may make a niche for the small grower,,,,tee hee.
I had a hour long conversation with my grandfather about alcohol during the prohibiton. He being a young rebellious chap, bought it frequently when it was illegal, for aprox 5$ a beer. Do you know how much money that was during the great depression...... he said about six months after they lifted it, alcohol was 1/10th of the price.
God I hope it's only 10%. I'd happily pay that for the privilege of legal weed. If it goes much higher than that put on Booze, it will lead to lawsuits that Cannabis users are being targeted unfairly. I expect when it all shakes out, we'll be looking at similar taxes on Pot that we have now on Booze. Higher than normal, but still WAAAAY cheaper than we can buy for now.