Cannabis Lovers Beware - All Is Not Perfect Before November

Early Warning Signs for Weed Lovers

November elections are coming up fast and the news articles around the legalization of marijuana are doubling every 10 days per Google trends and alerts. The world is getting very excited about the next step in marijuana legalization and it is being told online through news sources, blogs, and video. Yet, with all revolutions for the greater good of humanity, as this one certainly is, there will be some collateral damage and “lives” will be lost. As the world is awash in good news about medical and recreational marijuana being approved in different states, as well as Canada in early 2017, and even a federal government rescheduling of the drug if President Hillary wins the office, there is a chance to pause and look at the “negative” issues around the subject right now.

ONE

The price of cannabis is dropping, and dropping fast. Per one wholesale website and a large grower in Colorado, the price of a pound of medical marijuana is down to about $800 in Colorado this grow season. While that may be great news for most of the population as prices are sure to follow on the streets and in dispensaries, it does create problems at the growers and dispensaries. At $800 a pound there is almost no profit left in that pound of weed. How can that be, you ask? When you factor in the cost of growing, materials, and then labor to trim and cut the bud, there isn’t much left of for the grower. At one conference, it was shown in a graph that once the price of a pound of marijuana went under $900, the grower would face loses on that pound. Again, great news for the end buyer, but overall when someone making your product is losing money on each sale, over time this is now good. It means they either stop growing that product, as we have seen with famers in Columbia and South America, or they must trim expenses. This means people lose their job.

The silver lining in lower pot prices is that edibles become more profitable for the dispensaries. Since the cannabis flower is an ingredient in the edibles, and that ingredient cost is coming down, it means your profit margin goes up on those edibles. One dispensary owner joked with me at a recent meeting that the day may come when they just give the flower away to a client to get them to come in to buy edibles and vape cartridges. Since you can use substandard marijuana plants and leaves in edibles, it means the margins can grow.

TWO

PROP 64 In California Could Be a Trojan Horse

California, the largest and most populated state in the US, is voting to add recreational marijuana to their state platform that already has medical laws. California has the largest GDP by state of any state in the USA. It has the 8th largest GDP in the world if it was a separate country. This will mean a massive increase in marijuana growing, usage, shipping, and companies involved in the space. So, what could be the problem?

According to those opposed to Prop 64, this bill is a Trojan horse that could do more damage than good. The way Prop 64 is written, none of the new tax revenue raised with would go to the California general fund, which helps fund schools, police, fire, support programs, etc. The bill would put all tax money into a general marijuana fund for educating the public about cannabis. This is ripe for cronyism and having a small pocket of people control an awful lot of funny. The bill also proposes a $9.75 sales tax per ounce on marijuana, which is nearly a 20 % increase for where it is now. This could be a hardship for patients already on a strict budget. The bill is also being presented to protect the small grower in California with “anti-monopoly” clauses, but by allowing commercial mega-farms to have unlimited size grow facilities, this will decimate the local grower.

Sine the bill does allow unlimited size grow facilities or farms, there is general concern about marijuana by environmentalists over the California water supply and eco system. California is just recovering from a 3-year long drought and the massive water usage and electrical usage from these mega grows could become a concern if California enters another dry season.

THREE

WikiLeaks may have been a headache for politicians this year but it did open a small window to Hillary Clinton’s marijuana policy. While Clinton was pushed to the left in the primaries by Bernie Sanders and his growing army of millennials, she seems to now be less keen on rescheduling the drug as she insisted during her campaign push. In a WikiLeaks memo from her private speeches to Goldman Sachs and other investment firms, she seemed to play down the idea of legalizing marijuana, in order to protect her donors interest which lie in the big pharma niche. Granted, these speeches were before she went toe to toe with Bernie for a few months. Let’s hope she sticks to her recent public decrees on marijuana and she reschedules the drug to a class 2 drug with the DEA and allows states to make their own decisions on the marijuana programs. If she does not reclassify the drug or drags her feet for years, we could see a slowdown the momentum that the marijuana movement has been building on for the last 3 years now.