Kelly Coulter Price Crunching Legal Marijuana vs Black Market APRIL 09, 2017

Kelly Coulter Price Crunching Legal Marijuana vs Black Market APRIL 09, 2017

VICTORIA BC – Let’s just say that, hypothetically speaking, the current black market in Canada is based on three models of cultivation. The first model is the seasonal outdoor grower, the second is the hobby indoor grower and the third is the commercial indoor grower. Model one harvests every fall and sells his/her crop based on market prices which vary greatly from province to province, in the vicinity of 900-2500 dollars per pound. The second model harvests casually and sells privately and in small amounts ranging from 125-250 an ounce. The third group harvests every 3 weeks to 90 days and sells based on market prices ranging anywhere from $1400 to $3000.

According to a recent article in Lift, the average price of a gram of cannabis in a dispensary is $10, which equates to $4535 per pound. This price is based on a perverted/distorted marketplace and should not be taken into consideration when trying to set acceptable tax structure. Unfortunately, this is what is being done, and it is a critical mistake.

Examining the profit margins

If the average profit margin on 100 pounds of cannabis, based on an annual harvest for models one and two, is 90-250K and 2-10K respectively, cannabis cultivation would appear to remain profitable and worthwhile. For model three, an annual yield can bring in millions of dollars depending on the size of the operation. Model three also happens to be the most expensive cultivation method and the easiest to trace.

The only way the mandate to defund organized crime will be fulfilled is to effectively remove profit incentive. The fact that only 5% of the cannabis trade is affiliated with “organized crime” should make this goal attainable, but this does not mean that the black market is going anywhere at all. In the wild and wacky world of weed, the average cultivator, farmer and consumer are not gun-wielding gangsters, but ordinary folks who either enjoy farming and the additional income or are just growing a bit extra to subsidize their own consumption.

Defunding organized crime

If the federal government really wants to defund organized crime, two things need to happen. The government should do a cost analysis of what it really costs to produce a pound of weed and then tax accordingly at a rate, bringing the final retail price in under, or close to, what would make this commodity so profitable for the “bad guys.” The current large commercial indoor grow-ops that are typically favoured for covert operations are not the most cost-effective method. By adopting and incentivizing more visible, environmentally-friendly and naturally-grown cannabis the government will effectively kill two birds with one stone.

In the future, the price of cannabis will likely become more in line with other agricultural commodities.  If we approach this from a public safety standpoint, and not from a distorted version of what has been the norm for far too long, the potential for success increases. We have to be prepared to think differently—this is likely our greatest challenge moving forward.

Kelly Coulter leaning on a large tree.Kelly is the most published writer on the subject of environmental impacts of cannabis cultivation in Canada.  She has been working in this space for over 15 years.

She is a trained journalist and has worked in media and communications throughout her life.  She is one of the two women who met with Justin Trudeau in 2012 who he consequently credited with convincing him to legalize and regulate cannabis.

Kelly currently writes about cannabis, ranging from political commentary, feminist perspectives and environmental assessments.  She is an adviser to politicians, industry leaders and advocates in the cannabis sector.    

Ms Coulter graciously allowed us to reprint her story that originally was published  on LIFT NEWS.

To check out more of Ms Coulter’s work please visit www.kellycoulter.ca

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8 Comments on "Kelly Coulter Price Crunching Legal Marijuana vs Black Market APRIL 09, 2017"

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Jerry
Guest

Great article, and on point. I would like to grow and sell my own strains of high CBD, organic cannabis, focused on helping those with seizures, cancer, ADHD and any other illness that is managed by CBD. As of right now, the Canadian government only allows smoking as a way to ingest, which is wrong. Cannabis needs to be digested for the best and longest effect, saving lungs also.

jules
Guest

Canadians are so drugged up that they don’t know what is going on around them. So many walk around like a bunch of zombies not knowing where they are and where they are going. That garbage is only for those who are dying and nobody else. What a horrible society today and I say that every single day of my life.

jules
Guest

This morning there was an article on yahoo.ca about not letting kids get into marijuana because there is some that can be eaten and very dangerous. Some look like gummies and in the shape of animals and telling people that it is dangerous and to keep away from kids. Many kids wind up in the hospital.

Furtz
Member

Jules, I have an eighteen year old granddaughter who has suffered with Rett Syndrome (google it) since she was a year old. It’s a horrible condition that causes violent seizures and a myriad of other neural and physical problems. She lives at home and requires 24 hour care. So far, the only med that works to control her seizures is high CBD cannabis. Can you recommend a more effective med?

jules
Guest

Furtz I am really very sorry to hear that about your granddaughter and I know a little about Retz syndrome and my daughter worked with a girl for a short while who had that disease. If canabis works why not. I am for medical marijuana but not for leisure activity. I have said that before here on CFN. It is for people with serious health issues and not for fun. I am very sorry to hear that Fur

jules
Guest

Furtz and everyone I am for Medical Marijuana which has to be well regulated by a physician and pharmacist and not for recreation. I am sorry to hear that Furtz about your granddaughter. If marijuana helps then why not but regulated.

jules
Guest

Furtz do you know that the worst offence besides murder in Lebanon is the possession of drugs. Marijuana aka Hashish is mostly grown in the Bekkaa Valley of Lebanon and it is surrounded by armed guards. Many people are caught with possession as well as being big sellers to Europe and North America.

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