Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
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Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
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Re: Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
#2This is interesting for the fact of watching a black market item go to retail and the expectations of "street" price versus actual market price might have been just too high.
There will certainly be a niche market for gourmet, organic, homegrown and cared for buds, but for the remainder of products: oils, waxes, edibles, infusions - you are not going to notice the difference between a small business and a larger growing operation except on price.
It seems rather obvious when you think about it though. I would compare cannabis to produce rather than beer/wine/spirits, in the sense that your small growers are going to have a tough time competing with giant farm operations, and will really have to differentiate themselves in specific ways to actually make it worth while.
Re: Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
#3Two things of interest that the article doesn’t go into:
- Taxes on weed in CA are going to be very high, ~20%. This may drive black market sales.
- Online ordering through Eaze is popular, which might drive the familiar winner take all online commerce market dynamic. A lot of people don’t care for the dispensary experience.
At the end of the day, this is an agricultural product, and a commodity. It was optimistically compared with beer, but beer is made from a recipe, of which there are endless variations to try. Some heavy users care about certain strains and the like, but I have a feeling that for most people weed is weed. The new edible products are a development, but those too will be comoditized.
Re: Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
#4Two things of interest that the article doesn’t go into: - Taxes on weed in CA are going to be very high, ~20%. This may drive black market sales. - Online ordering through Eaze is popular, which might drive the familiar winner take all online commerce market dynamic. A lot of people don’t care for the dispensary experience. At the end of the day, this is an agricultural product, and a commodity. It was optimisticall…
Those taxes on weed don't look bad compared to what I think is the current equivalent product with even higher taxes - cigarettes - how is the situation different in your view?
Re: Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
#5Two things of interest that the article doesn’t go into: - Taxes on weed in CA are going to be very high, ~20%. This may drive black market sales. - Online ordering through Eaze is popular, which might drive the familiar winner take all online commerce market dynamic. A lot of people don’t care for the dispensary experience. At the end of the day, this is an agricultural product, and a commodity. It was optimisticall…
Those taxes on weed don't look bad compared to what I think is the current equivalent product with even higher taxes - cigarettes - how is the situation different in your view?
There’s a much more robust black market already in place for marijuana than for cigarettes. Washington has all the same products and is right next door, and taxes at 3% [1]. Also at least in CA municipalities are adding their own taxes, so the distance you need to travel to enable black market arbitrage might not be much.
1 - https://dor.wa.gov/sites/default/files/legacy/Docs/Reports/2...
Re: Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
#6Two things of interest that the article doesn’t go into: - Taxes on weed in CA are going to be very high, ~20%. This may drive black market sales. - Online ordering through Eaze is popular, which might drive the familiar winner take all online commerce market dynamic. A lot of people don’t care for the dispensary experience. At the end of the day, this is an agricultural product, and a commodity. It was optimisticall…
Taxes on weed in CA are going to be very high, ~20%. This may drive black market sales.
WA’s taxes are ungodly high for weed (EDIT: w/o looking it up, more than 20%, that’s for sure). Didn’t seem to slow down things much. A new store just opened closer to the house, and I don’t know of a single store that has closed. Personally, I’m more than willing to pay the “convenience fee” to just drive down the road any time I like and score some weed. That, and let’s do what we can to encourage the legal stuff, eh? We collectively get one shot at this, let’s not screw it up.
But if WA is any indication, give it a few years of high prices, then the prices will settle down. Pot was outrageously expensive in WA when it first legal, but it’s pretty reasonable now, I think.
As for online ordering, yeah, that’s going to be a thing. Because the experience of “here’s a menu, hurry and make a selection from 200 different items while you’re in line.” doesnt work for me, either. One local shop offers online ordering, and the only reason I don’t use them exclusively is that they’re out of the way.
But you’re right, pot isn’t beer, it’s corn. The only reason I don’t grow some next to the tomato plants is because WA says I can’t. So the only barrier from me taking production in-house is legal, which seems to be a pretty thin moat with which to protect your castle.
Re: Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
#7Two things of interest that the article doesn’t go into: - Taxes on weed in CA are going to be very high, ~20%. This may drive black market sales. - Online ordering through Eaze is popular, which might drive the familiar winner take all online commerce market dynamic. A lot of people don’t care for the dispensary experience. At the end of the day, this is an agricultural product, and a commodity. It was optimisticall…
Have you tried Eaze? Could you describe the experience? There's a couple of online sites in Oregon (where I am based) but they don't reach my area and the local dispensary is 10 minutes away.
Re: Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
#8Access to the banking services other small businesses enjoy would help.
I will pay tax on an 1/8th before I will subject myself to Criminal Prosection.
Re: Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
#9One of the things left out entirely is that WA state cannabis farmers are not yet allowed to grow outdoor under sunlight, so they're facing massive price pressure in wholesale $/gram sold to processors, but still have the huge operating costs of running indoor farms with electrical bills for lighting, lighting equipment, ventilation, climate control etc.
I honestly don't understand this, since it is a lot less expensive to build a highly secure double-perimeter razorwire fence around a farm than it is to pay $4500/month electrical bills.
Sunlight is free.
In Canada's recently announced system, which gives a lot of control to individual provinces, BC has announced that they will allow greenhouse based farms.
Re: Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be
#10This is interesting for the fact of watching a black market item go to retail and the expectations of "street" price versus actual market price might have been just too high. There will certainly be a niche market for gourmet, organic, homegrown and cared for buds, but for the remainder of products: oils, waxes, edibles, infusions - you are not going to notice the difference between a small business and a larger grow…
I think it is pretty similar to the boutique small volume/high-cost products sold in Whole Foods. There are still a number of small artisanal handmade soap manufacturers, and they command premium prices for what is perceived as a premium product. People buy them. People also buy giant packs of soap at Walmart. Both markets exist simultaneously. The small places will almost certainly not be able to compete in a race to the bottom on pricing with corporate entities that have the capital to spend several million on a farming facility.