Profits are the Problem

I am just going to come out and say it: Legal producers need to stop expecting prohibition-era profits for a now-legal commodity.


There have been a lot of complaints in the media about how legal cannabis businesses are suffering because the illegal cannabis industry is still thriving. There’s a pretty simple solution to this problem: The legal producers need to take the greed out of their game. Imagine if we all had to pay $100 per pound for organic broccoli in a legal broccoli market. It sounds insane, but we’re paying much more than that for flowers that literally grow on trees and it’s wrong. The illegal cannabis market is going to thrive as long as the legal cannabis market remains greedy and keeps trying to get prohibition-era profits for a legal commodity. 

In the summer of 1994, when I was on tour with Jack Herer and we were following around the Grateful Dead, an ounce of the very best kind bud cost $400, an eighth was $50, and if you were charged more than that, it usually meant that the person selling it to you didn’t know you or didn’t like you. 

It is now the summer of 2020, 26 years later, and the same is still true: an ounce of high-quality cannabis is still $400 and an eighth is around $50—sometimes more in many of the places that the Grateful Dead used to play. I think it is a reasonable question to ask why the prices are still so high. Is it because the local and federal police are hunting down legal and licensed cannabis growers and shooting their dogs, seizing their property, and putting them in prison for 5- to 10-year sentences? The answer is no.
 
Is it because the cannabis that is growing today is just so awesome that it deserves to be sold at a price so many times more than its cost of production? The answer is still no. 

In fact, I would argue that the legal cannabis available today and sold in glass jars an eighth at a time, is nowhere near as good as the illegal cannabis traded in Grateful Dead parking lots back in 1994 by connoisseurs who maintained the quality through proper handling techniques long after the harvest. Most of the legal cannabis I see on the market today is over-dried, lacking terpenes (which means that it is lacking flavor and body), and no longer maintains the correct moisture level that will ensure a quality smoke, and thus lacking the marks of true high-quality cannabis. 

In June 2020, a survey was released that asked 202 cannabis producers what the true cost of a pound of cannabis production was and the numbers are quite astounding. The average cost of producing a pound of cannabis outdoors is just $100. In a greenhouse, that pound goes up to $233 and up even higher when grown indoors/in a warehouse, where it costs an average of $400 to produce a pound. 

Those numbers turn into pretty high profits when you start looking at that same cannabis being sold on the market at $50 an eighth or $6,400 a pound. Organic, dried tomatoes grown in California retail for around $15 a pound and I would argue that most people would be happy to forgo having their buds neatly trimmed if it meant they could pick up a pound of organic dried cannabis for the same price.


Sunflowers are sold by the bushel for $20 at many grocery stores all over California and it takes between 85 and 115 days for that sunflower to complete its growing cycle. Fresh-cut cannabis flowers could be ready for the supermarket in anywhere from 56 and 70 days. Wouldn’t it be nice to be able to get fresh-cut cannabis by the bushel and bring it home to trim yourself and dry to perfection? 

Here in California, the “legacy market” as it is now called, has dropped its prices from $400 an ounce to, at the most, $200 an ounce for really high-quality cannabis. This readjustment in the market is one of the reasons why the black (ahem, legacy) market is still thriving—because it is changing with the laws while the legal market has grander expectations and is pushing profit margins on this now-legal commodity like it’s 1999. 

Hopefully it all changes soon, society deserves to be able to get cannabis at a reasonable price just with food and other necessities. The best thing you can do to combat this greed is to grow your own cannabis and not rely on the now-legal market. It does not take a corporation to grow a flower. Soon, the corporations will realize that.

As published in:
Grow Magazine, Vol.5 Issue 4
September 2020