Taxes will help keep prices higher but not sure how long those super high taxes will last as things become fully legal federally. Marijuana is a potentially big industry the main problem is it's really not THAT big as far as how much growing it takes to meet demand and once you have a market in oversupply price can drop to any ridiculous number. Farmers have bills to pay and if you have no money coming in you gotta take what you can get. I mentioned Oregon earier because Oregon has said they aren't going to set a limit on producer licenses and based on some quick analysis they're looking at a massive oversupply situation starting probably around November of 2017.You guys dont think taxes will inflate the costs associated with it? Not to mention for it to be sold publicly it needs to be lab tested, does it not?
History has taught us, and is teaching us, this will be a loooong drawn out process. As long as the Feds refuse to play ball prices wont fall like described.
Consider this:
Here is a very relevant paper on a study the University of Washington did:
http://www.cannalawblog.com/washington-state-cannabis-report/
Washington currently has 10 million "potential" square feet of total producer canopy space allocated for all cannabis markets. I say potential because they've set caps and haven't allocated all of that.
Based off that report at the link above the total canopy needed for current WA med cannabis market is 2 million square feet. The total market is estimated at 1/3 medical, 1/3 recreational, and 1/3 illicit, which would require 6 million square feet of total combined indoor/outdoor intra-state canopy square footage to service. 6 million square feet is roughly ~137 acres. As far as farming goes thats not jack! I grew up with at least 20 various ag crop fields bigger than that within 5 minutes of me. And that's 137 acres of combined indoor/outdoor weed needed for the entire state!
Next, relating this to the OR market. Oregon says there are no limits to how many producers can obtain licenses. If you go to the following link you can see there are currently 829 Oregon producers who have submitted applications:
http://www.oregon.gov/olcc/marijuana/Documents/mj_app_stats_by_county.pdf
If 1/2 of these are tier 1 (20 thousand square feet maximum) and half are tier 2 (40 thousand square feet maximum) that's already ~24.9 million square feet of total canopy space, or ~571 total acres. That's more than triple the canopy space needed to service the WA markets and likely over the next year there will be a lot more producers applying as they secure funding.
Washington - 6.9 million population
Oregon - 4.1 million population
That also doesn't factor in the more lax individual non-producer laws in OR. Any individual who wants can grow 4 plants.
It'll take a couple years for all those producers to get licensed and built out and rolling, but unfortunately I feel there are gonna be a ton of unhappy OR producers in the next couple of years as the OR market appears to be headed towards massive oversupply. Also consider Oregon producers were already struggling before all these producers started applying for licenses and doing massive buildouts.
http://finance.yahoo.com/news/even-with-legalization--making-money-from-marijuana-in-oregon-could-be-tough-190159408.html
The place to be IMO is in the service industries: packaging, edibles, concentrates etc. and various other service industries. Someone mentioned earlier the place to be during the gold rush was the guy selling shovels lol IMO the producers that thrive are gonna be the ones that can keep their costs down and cash flow at low prices while still producing high quality product.
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