What Drives Medical Marijuana Prices In California?
When you take the time to look at what’s really going on with the suppliers of medical marijuana these days it’s no wonder that there is so much political opposition to medical marijuana dispensaries. What is really going on in the medical marijuana supply scene? GREED.
When the people passed Proposition 215, they did so believing that the spirit of the law they were voting for would be followed, and it would mean that seriously ill people would be able to obtain and use a natural medicine to relieve their suffering. They never intended to give rise to huge profit machines that only benefit those with the ability to grow and distribute medical marijuana.
As we look around the State of California, though, we begin to see that the spirit of the law that people so readily supported to help the suffering is falling by the wayside to make room for PROFIT.
Proposition 215 was written to allow people with the ability to grow medical marijuana to grow their own supply of medicine without fear of arrest. The law also intends to allow those persons to grow additional medicinal marijuana for others that are not able to grow it for themselves. The growers are supposed to provide the medical marijuana to those individuals at a price which allows them to recover their operating expenses (and maybe even make a small profit), but it was never intended to give rise to operations where the growers and distributers of the medical marijuana charge overinflated prices to those individuals who can least afford it.
All anyone has to do is look at the prices that are being charged by the medical marijuana growers and distributers in dispensaries all over California. Medical marijuana is averaging $60 for an eighth of an ounce, and there is no way that such prices can be justified without factoring in huge profit margins.
It is so often said that the medical marijuana suppliers of today are simply charging what they have to in order to keep afloat. What doesn't add up is that you can buy marijuana almost anywhere on the streets for around $5 - $10 per eighth ounce while supposedly legitimate providers are charging around $60 for the same amount.
Medical marijuana providers use the excuse that they have a lot of expenses like lighting, utilities, security, etc., and so they have to charge that much to cover their costs of operations. I ask you though… Who actually has the greater operating expenses; those who grow legally or those who grow illegally?
Medical marijuana providers no longer have to hide in the shadows to produce their product; they can grow it freely and they can organize in public storefronts and can advertise openly if they so choose. Shouldn't their operating expenses be quite a bit lower than those for the illegal growers who still have to hide their operations and activities in order to avoid arrest and prosecution, and that loose so much of their crops every year to police raids?
That brings us to wonder again why legitimate medical marijuana providers are charging six times or more what illegal growers are. There is one answer that keeps rearing its ugly head; GREED.
Discrepancy with your article
Comment posted by Anonymous on Sun, 11/08/2009 - 2:22pmNot sure where you are paying 5-10 dollars for a bag of nice herb but let me know. I do agree that the medical marijuana act and subsequent federal memorandum that stayed the federal prosecutorial powers should have lowered retail costs for dispensaries. However, every single dispensary must pay for it's staff(including security), building(rent), electricity, permits, taxes(where applicable), and any retail device used in display(cases, lights to examine products, shelves, store room, jars, bags). It's always been a better idea to do it yourself, but some folks don't have that convenience or time and a retail price(obviously inflated) is the most convenient and effective way to distribute a still illegal(under federal law) product. I would say an average size grow operation(3 1000 watt lamps flowering), after recouping grow equipment expenditures, would produce marijuana for somewhere around $50 or less an oz. It is a time intensive process to produce high grade marijuana, so obviously that time needs to be factored into the equation. Like I said before, where are you getting headies for 5-10 dollars a slice?
$10 an eigth?
Comment posted by Anonymous on Sun, 11/08/2009 - 5:06pmWhere did this twit get these prices? I can't find moldy brown for less than 20! Do your homework next time. U just don't think its right that people make ANY money on medical mj. Fresh Greenbud goes for no less than 30 an eighth on the street and that's just the stuff that people grow illegally.
$10 an eighth... Who are u tryin to fool jackass?
Wildly Inaccurate
Comment posted by DamianN on Sun, 11/08/2009 - 5:14pmHaving direct experience in the Sea of Green method of production, I can say that you're estimate of cost/labor/materials=$5-$10/3.5g "retail" is absurd. Even a large indoor operation(500-1000)plants cannot be sustained by those street prices. Not by a looooong shot. Those prices reflect 1970 high grade sinsemilla. $5-10/28g for low grade dirty weed. Id like to give you the benefit of the doubt and believe you didnt just pull those street values out of you rear end. Nope sorry, you made that up.
"I personally think a more
Comment posted by Damian N on Sun, 11/08/2009 - 11:28pm"I personally think a more than fair price that shows compassion, taking into account the minimal cost to grow (and adding administrative and overhead costs), would be in the $100.00 to $150.00 an ounce range."
If my actual "cost" of production is $16.35/oz, wholesale to the dispensary would be at least $49.50/oz. This is assuming I am a sole operator and have no "employees", rent or food to pay for. Production is a full time job. "Wholesale" Price could be as much as $75-$100/oz. Still amazingly cheap. Now the dispensary needs to pay the bills as well, and even a non-profit makes some money. A reasonable markup over "wholesale" would be a factor of 2.5. $250/oz. $31.25/3.5g is significantly cheaper than street price and approaching a real life OTC price. $10-$15/g is a fair price for medicine.
On to the future of production. As more compassion centers b(l)oom, and demand increases exponentially, the small growers will be absorbed by ever larger industrial facilities. Those who are >1 acre outdoor, >2400 sq feet in doors, and of course the "back bedroom" growers will gradually fade. This inevitable expansion will furthur drive the OTC Price down, and one day we may see the $3.50/g head stash. Some folks will continue to grow their own as regulations are relaxed, though most will pay OTC. If I were a budding entrepeneur, I may look into the future of refining(hash/oils) or branding strains.
Here's the Cost
Comment posted by Anonymous on Sun, 11/08/2009 - 9:11pmA friend of a friend of mine decided to figure it out himself... using four 600 watt HPS lights covering 14 plants grown in organic soil pots, he ended up with 2.5 pounds of very good quality smoke after 100 days, with the ability to replicate this 3.5 times per year. Adding up the costs for a single harvest, not including the initial purchase of lighting equipment, which would include electricity used (14 hours per day average at 15 cents per kilowatt hour), water used, cost of pots (resusable), potting mix, and fertilizer... his total cost for 2.5 pounds was $654.00.
Or $261.60 per pound. Or $16.35 per ounce, cost. If he were to sell at a wholesale of $4400.00 per pound, his gross is $11,000.00. If he were to sell retail at $400.00 per ounce, his gross is $16,000.00. Minus $654.00 equals a nice net either way. The initial purchase price for the lighting equipment is between $1200 and $1500.00 and can be used for 10 to 15 years with only bulbs to replace every 2 years.
This friend of a friend wasn't a novice grower, but doesn't consider himself a "professional" by any stretch of the imagination. So at a middle of the road cost of $16.35 per ounce, the authors gripe seems to be justified, especially when viewed in the true sense of "compassion". Obviously, medical marijuana isn't covered by prescription coverage or health care plans, so I personally think a more than fair price that shows compassion, taking into account the minimal cost to grow (and adding administrative and overhead costs), would be in the $100.00 to $150.00 an ounce range.
Thanks for these numbers
Comment posted by Nayer on Mon, 11/09/2009 - 1:43pmGreed and weed don't match.
For an intelligent way to incorporate hemp back into our society so we can use it as the empowerment tool the Lord intended it to be, visit the USA Hemp Museum, www.hempmuseum.org and check out the HEMP FOR VICTORY books you'll find there.
1/8ths for $5-10?
Comment posted by Anonymous on Sun, 11/08/2009 - 11:19pmI don't know where you're from, but you can't get high quality cannabis (the only safe kind in my opinion, and the only kind that is useful medically) for $5-10 on the streets. Maybe you can get nasty, Mexican garbage pot for that price. On the streets, people charge $50 an eighth on the cheap side, $70 on the higher side. I don't know if these dispensaries are making a huge profit or are forced to sell at $60 just to stay afloat. I do agree that a legit price for a 1/8th of medical pot is probably somewhere around $30, but that would be with no profit whatsoever.
Adding to above post
Comment posted by Anonymous on Sun, 11/08/2009 - 11:28pmI wanted to add to my above post and just say that I think $25-30 per eighth is a fair price, but they would still be able to make a profit off of that.
In response to the person who said that his grower friend can only repeat the process 3.5 times per year, this is not true. Cannabis growers use a technique called "cloning" which shaves off a huge amount of time and allows them to generally harvest once per month or once every 2 weeks if they have a perpetual grow going which I'm sure that all medical dispensaries or their suppliers do. With a perpetual grow, dispensaries suppliers can harvest anywhere from 1-4lbs spending less than $500 in most cases or $1000 with higher-quality, professional equipment.
If they were truly doing it out of compassion and nothing else (which I'm not sure is possible, given that they have to stay afloat monetary wise) they could practically give the stuff away without much trouble.
Edit From Above
Comment posted by Damian N on Mon, 11/09/2009 - 12:40am"On to the future of production. As more compassion centers b(l)oom, and demand increases exponentially, the small growers will be absorbed by ever larger industrial facilities. Those who are >1 acre outdoor, >2400 sq feet in doors, and of course the "back bedroom" growers will gradually fade. This inevitable expansion will furthur drive the OTC Price down, and one day we may see the $3.50/g head stash. Some folks will continue to grow their own as regulations are relaxed, though most will pay OTC. If I were a budding entrepeneur, I may look into the future of refining(hash/oils) or branding strains."
> meant to be
about time!
Comment posted by Zach on Mon, 11/09/2009 - 2:49amYes, its ALL ABOUT GREED. I could understand if they charged that when the club was first starting up, but for gods sake, what do they think patients are, MADE OF MONEY? I quit the whole club scene, because I can get it much cheaper from friends. Besides, my friends usually let me try the weed first, but the clubs have sold me weed in the past that was junk! It looked good, but I actually got pissed once and went back to the club, and demanded a trade in or refund. They refused. So I left the crap behind. I told them too, that I have a lot of experience with cannabis, and I know the good from the bad. Anyways, ROCK ON to who wrote this article, except for the part about 10 dollar eighths, har har har! : )
As for $10 eights...
Comment posted by thawkinsjr on Tue, 11/10/2009 - 9:55amAll I can add to this is that here in Fresno, CA, I can easily find Mexican brown weed for about $130 a quarter pound on the streets. So that averages out to what... about $8.13 or so per eighth.
Granted, it is dirt weed that can never compare to good quality medical cannabis, but consider this...
There's a patient that can only afford to spend about $100 - $150 per month on medicine. This patient knows that without at least a daily dose their medicine they will be violently ill and vomiting.
Now that patient considers whether they should buy the Q.P. of brown, which they know will at least baseline keep them from throwing up and will last all month, or do they buy a quarter ounce or so of medical grade cannabis that will be nicer to smoke but will only last maybe a week (leaving them to puke for three weeks)?
I'm sure there are a lot of medical marijuana patients out there who face this very dilemma every month.
=====================================================
Tommy Hawkins Jr.
Americans for Safe Access Fresno Chapter Community Liaison
www.ASAFresno.org
The ultimate wisdom is knowing that you know nothing. - Socrates
sliding scales?
Comment posted by David Borden on Tue, 11/10/2009 - 1:05amI haven't specifically looked into this, but I imagine that many of the dispensaries offer sliding scale arrangements, using the higher amounts paid by those who can afford it to subsidize others who can't.
David Borden, Executive Director
StoptheDrugWar.org: the Drug Reform Coordination Network
Washington, DC
http://stopthedrugwar.org










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Ca. med. mj article
Comment posted by Anonymous on Sun, 11/08/2009 - 1:57pmI find your article HIGHLY inacurate....
as a cardholding med mj user in CA. for the last 9 years, i have had the pleasure of getting to see many cannabis clubs..... you might find $60 eighths but most are $40 OR LESS (as low as $10 an eighth). I would assume an acurate average would be closer to $30 an eighth!
also Where in the world? can you find $5 or $10 eighths on the street?????
Please let me know cuz i will head there imediately......and even if you could find that price, it's probably dirt weed.
where i come from the street cost just as much as the clubs but on the street you dont have to go to another city to get it!