To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Sunday, January 25, 2009

Pot: A Recession-Proof Industry?

Maybe so. It now accounts for two-thirds of the economy in Mendocino County, California:
[Ukiah Morrison, a Mendocino pot grower] walks a fine line. He grows as much marijuana as he can without triggering a legal crackdown. He can do that because authorities here are overwhelmed by the sheer number of growers. They’re also hampered by conflicting state, federal and county laws governing marijuana.

Marijuana is the major cash crop here. A county-commissioned study reports pot accounts for up to two-thirds of the local economy.

“I don’t think there’s anything more important in this economy. To take this out would be a major blow,” said Morrison.

Though reliable numbers are hard to come by, marijuana growers in Mendocino County generate an estimated $1 billion a year. That makes the area home to a sizable chunk of a national market for marijuana believed to be in the tens of billions of dollars.
Interesting Libertarian tidbit from the story: The market share for northern California product has grown since the state began cracking down on the U.S.-Mexico border. This had the effect of cutting off the supply of Mexican weed.
[Mendocino grower Eric Sligh, pictured above] “There’s a very developed system of brokering marijuana that exists all throughout California; it’s just like a commodities broker on Wall Street,” he said. “They’re getting it for the lowest price they can get it, and they’re bringing in the buyer and trying to get the buyer to pay the highest price they can. So, the margin in between is where they make their money.”

The economics of this drug are simple and attractive. It costs an estimated $400 to grow a pound of pot. One pound sells for $2,500 to a middle man. It then yields $6,000 on the street. With low start-up and overhead costs, marijuana is the most profitable drug of all, according to local law enforcement officials. With that kind of profit margin, marijuana is increasingly filling the gap left by other failing industries like lumber and fishing.

“If we didn’t have marijuana, what would this county be like?” said Sligh. “I think we’d all be selling Amway. I mean what else are we going to do?”

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