After-tax marijuana price target: $35 an eighth

I had the good fortune to be co-chair of the Regulatory and Tax Structure Working Group of the California Blue Ribbon Commission on marijuana legalization – a project of the Lieutenant Governor and the ACLU of Northern California.  In connection with that work, I spend two nights and parts of three days in Humboldt County, the heart of the cannabis-growing Emerald Triangle.  During a drive between San Francisco and Humboldt, I asked Terrance Alan, a long-time prominent member of the California cannabis community, what would be a fair after-tax price after legalization.  I got a quick answer: “$35 an eighth.”  That’s $35 for an eighth of an ounce.  With standard quantity discounts, that results in a full ounce selling for under $250.

Maybe my friend Terrance would like to keep the price high by providing income to growers; maybe I would just as soon see the government get a lot of the money.  But public health folks like high after-tax prices, too.

After-tax prices in California are still high, as the market gears up — in the range of $40 to $70 an eighth.  But in Oregon, where prices have collapsed, and with a low, price-based tax, grams are selling after tax for $4 – or $14 an eighth.

When I circled back to Terrance to confirm using that quote, he wrote:

“I do still stand behind my statement.  If prices drop as you see them in Oregon, the only growers California will have will be a couple of large corporate farms that did not exist 2 years ago.  No equity growers in SF, the entire culture, families, lives and a 40 year culture of medical cannabis wiped out in pursuit of profit and redistribution of wealth to the government in the form of taxes.  There is a balance, shouldn’t government temper a policy which effectively wipes out the life blood of thousands of families tied to smaller footprint growing.  I believe that we should have policy, with teeth,  to keep the best grower producing the most curious strains, which are really a host of brands, not just the different names on stickers propped up by marketing .  Oregon did not have a vibrant cannabis production chain to lose, they got the cannabis from California.  They lost in different ways, but not at the expense of a generation of growers.  California has the growers and a lot to lose in pursuit lower prices to the consumers who will receive the just passable quality.”