California is considering legislation that would put pot essentially in the same category of alcohol, legalizing the sale of weed to anybody at any time, not just for medicinal reasons. Research indicates that if marijuana goes fully legit, an ounce of the choicest bud could cost just $38, down from the current rates that range from $300 to $450. It’s unclear how much the decrease in cost could result in a rise in consumption, but it wouldn’t be unreasonable to think the number of people smoking pot in California would more than double. And, if the change occurs, there is also expected to be a rise of “marijuana tourism,” with visitors making pilgrimages to the Golden State on quests for weed that’s not only cheap, but legal.
While the price to produce pot could drop as low as $38 an ounce, the retail price for consumers would probably be more than double that due to taxes. One of the reasons California is considering the legalization of marijuana is because of the tax revenues the cash-strapped state could generate from a pot tax—most likely a $50-per-ounce tax. Even with the tax, marijuana would cost significantly less than it does now.
According to the LA Times, a study from the Rand Corp. demonstrates that the legalization of marijuana is likely to result in a steep price drop for weed, but many factors are still unknown, and unpredictable:
The report noted that it was impossible to predict tax revenues from the initiative, which leaves that decision to cities and counties, but concluded that revenues from a statewide $50-per-ounce tax could range from $650 million to $1.49 billion.
It’s also impossible to predict what the scene in California would be like if it turned into the Amsterdam of North America.
But why would the price of pot dip so significantly if it was legalized? Many reasons, including an increase in the efficiency of producing the crop and a decrease in wages for the growers:
To calculate the price drop, researchers looked at the cost of growing marijuana in a 1,500-square-foot house. The researchers concluded that the wages paid to employees who tend the crop would slip from as much as $25 per hour to no more than $10, just a little above what nursery laborers earn.
Bummer for the workers. On the plus side, even though they’d be making less money, they could afford to smoke more weed once it’s cheaper.