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Legalizing pot and the small-time grower

January 3, 2018

In the next few weeks, Vermont is almost certainly going to become the first state to legalize marijuana through legislative action rather than through a ballot initiative. But if supporters of legal pot think that this is going to be a boon for the small-time grower, they may want to think again.

According to this article at the website, in those states where pot has been legal, small-time growers have largely been displaced by massive grow operations.  That has, in turn, significantly reduced the price of pot which has, in turn, made the small-time pot farms even less lucrative.

Consider: when pot was first legalized in Washington in 2014, only a handful of farms and stores were licensed to sell it. In such a constricted market, the average retail price for a gram of pot was $32.48. Within six months, the average retail price had dropped to $21.07 a gram; a year later, pot was averaging just $12.32 a gram; and by September of 2017, the average retail price for a gram was $7.45, or 77 percent cheaper than when the legal market first began. Producers in September were getting an average wholesale price of $2.53 a gram of pot. Meanwhile, in 2017, the 10 largest pot farms in Washington harvested 16.79 percent of all the dry weight weed grown in the state, more than the share produced by the 500 smallest farms combined (13.12 percent).

There are many reasons to support legalizing pot (and a few sound ones in opposition), but with legalization will almost certainly come market domination by a few very large growing outfits.

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