California has too much pot, and growers won't be able to export the surplus

[Medfinder]

Devlin said estimates he has heard put California production at five times the state consumption; one consultant in the audience said the number may be 12 times what is consumed in the state.
A leader of California’s marijuana industry warned Wednesday that the state’s cannabis growers produce eight times the pot that is consumed in the state so some will face “painful” pressure to reduce crops under new state regulations that will ban exports after Jan. 1.

https://www.youtube.com/watch?v=a3IHijQ71uw
http://www.latimes.com/politics/ess...oducing-pot-surplus-1501101923-htmlstory.html

 

[armedoldhippy]

HAH! they have been "exporting" it for decades now. what will stop them? the law? LOL! they aint had much success over the years...

 

[shaggyballs]

I think Cali needs to stop the big commercial greenhouses from taking over or thing will just get worse.

 

[aridbud]

I think Cali needs to stop the big commercial greenhouses from taking over or thing will just get worse.

Not to mention what they are feeding and it goes in the ground water. But guess that's the way it's been done for decades in the salad belt.

 

[Limeygreen]

Commercial greenhouses should be recycling drain water and blending with fresh, In Canada it is forced for greenhouses to do so (they are behind but the majority do) to help with the pollution into waterways or even town water systems.

 

[resin_lung]

we shipped most of ours out of state back when Cali was hungry for it.

Atlanta got most of it.

 

[OregonBorn]

California weed glut. Nevada weed famine. Oregon and Washington are having stellar grow weather this year, so there will be a weed glut in the PNW as well. Prices can only fall further as supply floods the demand.

 

[pumpkinpie eyes]

Had mj mailed a few times from Calif years ago. Bet it will be busy at P.O.'s.

 

[Drewsif]

One time the PO put my LB in the wrong box. The woman who received it just happened to recognize the name, and knew my mother, brought it to her. Needless to say I was freaked out when the package was left on my porch by my mother hahaha. "Leave a note next time!"

Sometimes I miss small town midwest life.

 

[greenfox]

Too much cannabis? Quite the conundrum...

 

[soil margin]

Everyone keeps saying we're going to have too much weed but retail prices never seem to fall. Still paying the same or more for an eighth of MMJ at a dispensary as I was 10 years ago.

 

[theJointedOne]

Everyone keeps saying we're going to have too much weed but retail prices never seem to fall. Still paying the same or more for an eighth of MMJ at a dispensary as I was 10 years ago.

The bulk prices have fallen sharply each year. The highest grade indoor is no more than 19-2300 a lb, and outdoor and greenhouse flowers are anywhere from 700-1200 a lb. It wasnt too long ago those prices were doubled.

Yet what you say is correct, that people are still paying 50 for high grade 1/8ths.

So...what does that tell you? It tells me the middlemen fucked us...they fucked us hard.

 

[iBogart]

The money is going to ruin this plant like it does everything else.

 

[moose eater]

The bulk prices have fallen sharply each year. The highest grade indoor is no more than 19-2300 a lb, and outdoor and greenhouse flowers are anywhere from 700-1200 a lb. It wasnt too long ago those prices were doubled.

Yet what you say is correct, that people are still paying 50 for high grade 1/8ths.

So...what does that tell you? It tells me the middlemen fucked us...they fucked us hard.

View Image

In the case of the described-above Cali markets.... apparently... yep.

 

[OregonBorn]

Not just the middle man, but add the state, county and city taxes as well. The ONLY break that a medical card will get you in California when things settle out is a break on retail sales tax (a CA 7-1/4% sales tax 'discount'). Then there were other fees for doing business as a grower and retailer in California. The bottom line? *cough*

Growers will be taxed $9.25 per ounce of bud by the state.

Point of retail sale state taxes for all Mj sales will be:
CA state excise tax: 15%

Added point of sale state and local taxes for rec weed:
Sales tax varies by county/city: 7.25% to 9.25%

Add to that local businesses will have to pay local taxes ranging from 1% to 20% of gross sales receipts. Also growers will have to pay $1 to $50 per square foot of marijuana canopy areas. In Sac'to, all Mj business will be subjected to the city’s 4% standard business tax, and the city could bump that up with voter approval. Monterey Co. voted to start a local Mj business tax of 5% and ramping it up by 2.5% a year to 10%. In Monterey Co, there will also be a $15 a square foot canopy tax for growers to start that will increase to $25 a square foot.

Also do not forget the license and permit fees that the state and local governments will charge growers and retailers. The Mj related permit and license fees have yet to be set by all the state and local governments. But in Sac'to, first-year permit fees range from $9,700 for indoor grow rooms with up to 5,000 sq ft to $28,910 for facilities of up to 22,000 square feet, with the annual fees dropping to $8,240 to $26,630 the second year. NOT CHEAP!

Also do not forget the testing fees that will be incurred by growers and/or distributors/processors as well. They can be steep. And there is packaging and labeling, and transport. And its an all cash business, subject to theft (even by the FEDS).

Middle men you say? Not much room for them. In contrast, I paid $12 an eighth each here in Oregon for Cindy 99 and Durban Poison a few weeks ago. Mid shelf, but good. That was the out the door medical price. For rec sales they were still only $15 an eighth, out the door. These were sales prices for sure, but not uncommon here. So cheap it is almost not worth growing weed here any more. $100 lids.

 

[DuskrayTroubador]

This is why legalization is a scam. The mom & pops get bullied out, the people get shittier weed that's sprayed with shit, and the environment gets polluted.

Everybody gets fucked except for Freddy Fat Cat and Big Billy Business.

 

[OregonBorn]

Do not blame Fat Freddy's poor cat!

 

[OregonBorn]

But yes, Wall Street and the government will be all over legal weed like money on a hot stripper. If the fed ever legalizes it, you can count on a federal excise tax like there is on booze in the US. So then you can add another 5% federal excise tax on the top. The skim.

Wall Street corporations will also brand everything for retail. That is actually already happening here. I was at an old medical shop in town the other day and they had "Jim Belushi" brand weed there. It was really just Cherry Pie and some other strains, but it had Jim's signature and photo on it. I asked why they sold it, and they said that because they are by the airport, and it is mostly for out of town people that have never seen or been in a legal weed store before. I told them that they should sell Willie Nelson. Not the brand, the strain. Its a cross between Vietnamese Black and Nepalese. Has some of the highest THCv levels in weed that there is. Not sure anyone grows it in Oregon for commercial sale though. And not the Jim Belushi signature brand. Maybe Willie has branded it?

 

[DocTim420]

If the quality of all this "abundance" was equal in all circumstances, then I would be worried; thankfully, "quality" usually wins over "quantity" on matters like these.

Imo, those producing stellar weed (the few) will continue to command fair prices...while those producing commersh quality (the many) will continue to fight other bottom feeders for "scraps" (south of $1000/lb).

Just take a page from the wineries and micro brewers of Cali...and be prepared for a little consolidation of all those bottom feeders--while the top/best will be expanding their market $hare.

 

[theJointedOne]

...while the top/best will be expanding their market $hare.

Momma always said "cream and scum rise to the top".