High Economics: The Cannibis Industry Then and Now

Marko’s Take

High Economics Part 1: The Cannabis Industry

(Originally Written December 23, 2010)

Few national political issues are as clear-cut as the growing movement toward legalization of Marijuana.  The reasons for supporting this NOW are numerous and quite financially substantial.  With a few more votes and the stroke of a pen, we can take a major step toward trivial matters such as balancing the budget.

According to a recent article in Time Magazine, more than 500 prominent economists agree that the legalization case is a no-brainer (http://economics.about.com/od/incometaxestaxcuts/a/legalize_pot.htm).

Odd, that “Marko’s Take” was not consulted.

Public sentiment is growing tired of the vestiges of persecution for those involved in minor possession.  Recently, a jury in the conservative state of Montana, could not be assembled because of the virtually unanimous sense that it was an utter waste of private and public resources (http://billingsgazette.com/news/state-and-regional/montana/article_d6b1aaca-edfc-527f-ad11-f1691fdc6e3b.html).

Marijuana is a massive industry, even when compared to other substantial agricultural industries.  The largest countries growing crops, apart from the United States, are clustered in Central and South America (http://edition.cnn.com/2008/WORLD/americas/11/25/paraguay.mexico.marijuana/index.html).

In the United States, California is dominant, with nearly 50% of national production totaling a “paltry” $12 billion per year (http://www.drugscience.org/Archive/bcr2/domstprod.html).  Think citrus is big?  According to recent data, the total annual production of Florida’s ENTIRE citrus crop is a mere $9 billion (http://www.ehow.com/list_7344390_states-large-amounts-citrus-fruits_.html).

California is number 2 in citrus, meaning that marijuana is twice as big as this state’s citrus industry.

So, let me get this straight.  We have a $12 billion industry which is NOT paying taxes, hiring people who are NOT paying taxes, and selling a product which has NO sales taxes.  And, we have a state budget problem which is forcing cutbacks everywhere.  And, if one recalls, a ballot proposition to legalize that LOST?

So, if  you ever hear someone affected by the state cutbacks complain to you, ask them how they voted on the California referendum to legalize marijuana.  If they answer that they voted “no”, please send them this blog, so they’ll shut the hell up!

But legalization doesn’t just stop with selling the plants for medical or recreation use.  The fiber of the cannabis plant, known as hemp, has an amazing variety of uses from clothing, to paper, to biomass, to medical, and to even jewelry (http://en.wikipedia.org/wiki/Hemp).  The estimated size of the domestic market for hemp-based products is on the order of $500 million.

But, the benefits hardly stop there.  In the next part, we’ll discuss more fully the medical and criminal aspects, either of which, alone, would be enough to warrant its legalization.

 

High Economics (Part 2): The Cannabis Industry

Saturday, December 25, 2010

If the first economic arguments for legalization of marijuana (https://markostake.blogspot.com/2010/12/high-economics-part-1.html) didn’t persuade you, there are many more.

Incarceration for marijuana offenses is fairly small, accounting for less than 1% of the prison population, but it does still keep about 60,000 inmates supported at taxpayer expense.  It is believed that the annual cost is on the order of $1.2 billion.  That does not include scarce court time, legal resources, or police time which is allocated to enforcing an unpopular and needless code of law.

Then there is the medical aspect.  Marijuana is now used to treat nausea from chemotherapy, anxiety, pain, glaucoma, and insomnia.  But is it safe?  Remarkably so.  Of all the causes of death monitored by the Food and Drug Administration, marijuana comes in DEAD LAST, with NO fatalities (http://www.economicsjunkie.com/annual-drug-related-deaths-in-the-us-marijuana-ranks-last-with-zero/).  Even aspirin, which many doctor recommend be taken daily, accounts for thousands of deaths per year.

But, despite overwhelming societal and economic benefits, Proposition 19 did NOT pass in California.  What are the arguments against?  The main objections to legalization are focused on the belief that marijuana use is addictive, a “gateway” to more serious drugs, and a factor in greater crime.  There also exists the fear that once legalized, we’d become a nation of Cheech and Chongs.

The U.S. Drug Enforcement Agency (DEA) has issued this position piece outlining the arguments against: (http://www.justice.gov/dea/ongoing/legalization.html.  The addiction argument is absurd in light of legal alcohol, cigarettes, soft drinks, and prescription drugs, all of which are far more injurious to the user and most importantly, can be FATAL to abusers and second-parties.  Caffeine is addictive.  And, to some, so is shopping, sex, and gambling.  So is reading “Marko’s Take”!

The crime argument is equally absurd.  Marijuana is a sedative.  How many stoners pull off a bank heist or hold up a 7-11?  And, should marijuana become legal, the price would certainly drop.  So, the notion that one has to go rob a gas station for a few joints becomes preposterous.

According to federal statistics, nearly 100 million Americans, or 1/3 or the population, have, at least at one point in their lives, imbibed.  Cigarette smokers make up about 25% of the adult population, while drinkers make up more than half.  Experience with both prohibition and other countries experimenting with legalization have shown that very few NEW people will become users.  And, so what if they do?

Merry Christmas!

Marko’s Take

High Economics Now: The Cannabis Industry Today

September 27th, 2018

The skepticism which accompanied the push for legalization has proven itself, for the most part, abysmally wrong.  Law enforcement, which is desperately in need of reading the “Nine Laws of Markonomics” (https://markonomics101.com/wp-admin/post.php?post=1654&action=edit) fought legalization.  Their contentions was that legalization would lead to greater crime rates.  That contention is absurd.  During the prohibition era, when alcohol was banned, a new power was allowed to proliferate in order to illegally meet the demand for alcohol.  The chief opponents to alcohol were the Ku Klux Klan and we have them to thank for Organized Crime, which now includes the Federal Government.  Prohibition was a disaster.

The vast preponderance of evidence indicates that crime has fallen substantially, especially among the Mexican Cartels who were transporting marijuana across the border.  Legalization has taken the profit entirely out of providing that service.  Early on, the Police were adamant about keeping it illegal (https://californiafamily.org/2016/marijuana-leads-to-soaring-crime-rates/) and(http://www.latimes.com/local/lanow/la-me-pot-legal-police-20171229-story.html).  The concerns raised, have been contradicted by virtually EVERY single study that has been performed, such as in Colorado (https://realfarmacy.com/colorado-crime-rates-down-14-6-since-legalizing-cannabis/) and invalidated by FBI crime stats.

The Police, now sing a different tune.  Legalized marijuana is a windfall for the possibility of more DUI arrests.  And, a very potent way to increase their compensation by making their quotas.  Oh, yes, and they “Protect and Serve” their wallets.  The active ingredient in marijuana, THC, remains in a user’s blood stream for up to 3o days, but the psychotropic effects last for no more than a few hours.  Double time is being put into developing a THC breathalyzer, so that the arrests for DUI can be used in court and thus have more people paying fines or going to jail.

My have things changed since 2010.  Cops LOVE DUI’s for the plain reason that the financial penalties which go into the city coffers for violations, also benefits them through pay increases and bonuses.  In California, “probable cause” is a thing of the past.  And, in total violation to the Constitution of the United States, a driver is presumed guilty and must prove their innocence.

A DUI is a FIVE FIGURE payday for the city with mandatory sentences.  With half the state’s citizens imbibing, the Police can smell those enormous fines a mile away.  DUI’s are now handed out even if the driver is parked, on a scooter, or a bike.  There are no comprehensive stats for DUIs issued to marijuana users but they are rising rapidly https://420evaluationsonline.com/health-and-news/marijuana-dui–drug-testing-cali-2018 and have very little to do with the intoxication of the driver.

Since before the birth of Jesus, there have been a grand total of ZERO overdoses and the medicinal benefits continue to get broader.

The Marijuana Industry

Cannabis related stocks trade at phenomenal multiples and are frequently pushed as the “next big thing” such as in this advertisement(https://pro.technologyprofitsnewsletter.org/p/TEK_secretpot_0818/LTEKU984/?s1=&s2=&s3=&h=true).  Grand View Research projects that the $10 Billion industry will grow to nearly $150 Billion by 2025 (https://www.grandviewresearch.com/press-release/global-legal-marijuana-market).  An article in Fortune magazine predicts that marijuana sales will soon surpass beer and wine (http://fortune.com/2018/08/22/legal-marijuana-market-size/)!

Today, 9 states have legalized marijuana and 4 have upcoming ballot measures.  A disproportionate number of prisoners, 57%, who were convicted of the heinous crime of possession are black or Latino.  The decriminalization or legalization of possession, an admission that the states are holding innocent people behind bars, has NOT led to the release of these people who were convicted of a non-crime.  The absolute inhumanity of continuing to incarcerate individuals who have been convicted of a violation, WRONGLY considered criminal, is one factor in the United States needing serious review by all of us and a reasonable resolution, in a short amount of time!

 

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