Monday, July 12, 2010

Projecting Marijuana Prices Post-Legalization

The RAND Corporation has completed a study of the projected effects should California legalize marijuana
Legalizing the production and distribution of marijuana in California could cut the price of the drug by as much as 80 percent and increase consumption, according to a new study by the nonprofit RAND Corporation that examines many issues raised by proposals to legalize marijuana in the state. . . .

RAND researchers say one effect of legalizing marijuana would be to dramatically drop the price as growers move from clandestine operations to legal production. Based on an analysis of known production costs and surveys of the current price of marijuana, researchers suggest the untaxed retail price of high-quality marijuana could drop to as low as $38 per ounce compared to about $375 per ounce today.

1 comment:

  1. I don't understand the RAND conclusion. The plants are weeds and given commercialization could grow almost as plentiful as hay. It would seem that the marginal cost would fall to essentially zero. Also, it would seem the market would segment like the alcohol and there would be a huge range from "ripple" to "Dom".