Unintended consequences

From the Los Angeles Times:

Legalization could slash the price of pot 80%
California's cash crop could become dirt cheap if the state legalizes marijuana.

Researchers associated with the Rand Corp.'s Drug Policy Research Center said Wednesday that not much is certain about the potential impact of Proposition 19 except that the price of California's choicest weed could plunge more than 80%, down from $300 to $450 per ounce to about $38.

"That's a significant drop," said Beau Kilmer, co-director of the center. "We're very clear about the fact that the price will go down."

The implications of such a drop would be profound. Kilmer and four other researchers who analyzed marijuana legalization said consumption would rise, but they could not determine with any certainty by how much. "We cannot rule out increases of 50% to 100% or perhaps higher, but we just don't know," he said.

Such a low price could also affect pot prices across the nation, encourage marijuana tourism in the state, increase the amount of pot shipped out of state, disrupt the smuggling of marijuana from Mexico and stimulate an underground market designed to avoid high taxes that might be imposed.

Rand, the Santa Monica-based nonpartisan research institute, had five prominent drug policy experts spend about six months examining what might happen to marijuana use and tax revenues if Californians approve the measure on the November ballot or the Legislature passes a bill introduced by Assemblyman Tom Ammiano (D- San Francisco) that would legalize pot and impose a $50-per-ounce tax.

Of course, the Rand study doesn't take into account the gobs of hard money that the growers in CA are currently making. I posted about this on March 25th quoting from an Associated Press news item -- the link to the AP story now suffers from link rot but here is what I quoted:

Outlaw pot growers in California fear legalization
The smell of pot hung heavy in the air as men with dreadlocks and gray beards contemplated a nightmarish possibility in this legendary region of outlaw marijuana growers: legal weed.

If California legalizes marijuana, they say, it will drive down the price of their crop and damage not just their livelihoods but the entire economy along the state's rugged northern coast.

�The legalization of marijuana will be the single most devastating economic event in the long boom-and-bust history of Northern California,� said Anna Hamilton, 62, a Humboldt County radio host and musician who said her involvement with marijuana has mostly been limited to smoking it for the past 40 years.

Local residents are so worried that pot farmers came together with officials in Humboldt County for a standing-room-only meeting Tuesday night where civic leaders, activists and growers brainstormed ideas for dealing with the threat. Among the ideas: turning the vast pot gardens of Humboldt County into a destination for marijuana aficionados, with tours and tastings � a sort of Napa Valley of pot.

I wonder how much lobbying money is coming from these growers...