To the People

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Wednesday, November 14, 2007

Drop in the Dollar Killing Canadian Pot Exports

From the Missoulian:
Suddenly, it's far more expensive to buy Canadian exports, legal or otherwise, and smuggling profits disappear.

“It's very simple,” said Stephen Easton, professor of economics at Simon Fraser University in Vancouver, B.C. “Canadian marijuana production costs are met in Canadian dollars, and those are worth more now.”

Previously, he said, pot growers could produce a pound of potent “B.C. bud” for about $2,000 Canadian and, with the exchange rate, smugglers buying with U.S. currency could sell it for a hefty profit south of the border. In those days, an American dollar in Canada was like a 50 percent discount card, and there's nothing like a wholesale discount to bolster retail profits.

Production costs remain in the range of $2,000 Canadian, Easton said. But with the currencies at par, the profit margin is completely gone, unless Montanans are willing to pay 50 percent more for the prime northern bud. A smuggler's risks and transport costs are no longer offset by profit.
Interesting, but this makes a good story more than anything else. The article goes on to quote the Canadian share of the US marijuana market at 3%. I'd be surprised if it was that much. Pot is everywhere. Good pot is grown everywhere. It's a blessing of the plant. Full article here.

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