How To Get Your Card in Oregon, USA. How To Get Your Card elsewhere in the USA, and around the World, also.

a Medical Cannabis Resource Center (MERCY) 2010 News Story page

Resources in Oregon, USA; Clinics, Forums and Meetings and Meet-Ups, Biz and Orgs.


Pioneering Common Sense Compassion in Oregon, across America and around the World
  Home   |   About   |   Contact   |   Donate   |   GuestBook   |   Action   |   Library   |   OMMA   |   Biz   |   Links   |   News   |   Legislation   |   Events   |   Calendar   |   Orgz   |   MERCY-TV   |
MERCY - the Medical Cannabis Resource Center * in Salem, Oregon, USA, call - 503.363-4588 * or email us.

this Page:

About this page About this page
The Story itself and Related links The Story itself and Related links
Post on the Bulletin Board Bulletin Board.
Give us feedback or info FeedBack for us.

this Section:

The MERCY News section home page News index and Home page
The MERCY News Report home page Newsletter pages. About, Lists and Back-issues.
The MERCY News Sources page Sources for News.
NewsLetters, and other Printed media N/L Lists, and other Printed media
NewsFeeds, and other Online media NewsFeeds, and other Online media
The MERCY News ToolShed - ToolShed for Making News Yourself The ToolShed, and other Resources for Making News Yourself

News Items past and present

News items from year 2010 2010, News items

   Another Dance Around Marijuana Prohibition, Oregonian Mocks Medical Cannabis Another Dance Around Marijuana Prohibition, Oregonian Mocks Medical Cannabis.

   Going For The Rest Of The Gold, Thiefs Family Sues Victim Going For The Rest Of The Gold, Thiefs Family Sues Victim.

   LAPD Reports Markup LAPD Reports Markup of 250%-265% (retail) at Los Angeles dispensaries.

Site Map:

go Home Home
About OMMA - the Oregon Medical Marijuana Act How to OMMA
Grow Tips - for Medical Marijuana Grow Tips - for Medical Cannabis (Marijuana)
Links to more information Links
click here to see more options for you within the Activist community ORGz
About the Org About
Making contact with MERCY, the Medical Cannabis Resource Center Contact
Making a Donation to MERCY, the Medical Cannabis Resource Center Donate
Want to help out?  Volunteers needed! Help Out
Sign the GuestBook GuestBook
Legislative News and Information Legislation
and other Taking Action Action

Bizness members who help out Bizness
Visit the Archives Library
go to the News pages News
the Media directory Media
Pick up a newsletter from the archives Newsletter
Whats Happening - Current Events Current Whats Hap
go to the Events pages all Events page.  Like ...
latest on the Excess Medicine Festivals XS+Med*Fest! and other items on the ...
Check the Calendar of Events for updates, Doctor clinics being scheduled now! Calendar view


Know the law to protect yourself and others! The LAW

Need more info?
Search the Net
with go to Excite search engine site.Excite!ment


Oregon state notes and information Oregon notes

[ Also this Section >     News Index   |   2014   |   2013   |   2012   |   2011   |   2010   |   2009   |   2006   |   Sources   |   NewsFeeds   |   ToolShed   |   NewsLetters   ]

Welcome to a Medical Cannabis Resource Center (MERCY), 2010 News Story. 

  About this page ...

This is a News Items from 2010.   You may comment on the story here,   or give us feed back, here.  


  The Story  
LAPD reports 250%-265% retail markup at Los Angeles dispensaries

By "Radical" Russ Belville: NORML Outreach Coordinator on January 28, 2010 | (LA Weekly) Despite the protestations of numerous medical weed store owners, who regularly gripe that they're just making ends meet, Los Angeles Police Department found a detailed list of the hefty profits made on different marijuana strains sold at three pot shops owned by the same man, Richard Khoury. Over 50 Los Angeles Police Department narcotics detectives and officers served search warrants today on Alternative Care Collective, 420 Discount Collective and Encino Discount Collective in the San Fernando Valley after neighbors complained about people selling pot to teenagers outside the locations.

Khoury, a 30-year-old former construction worker, bought a gram of Obama Kush for $10.71 from a pot vendor, then sold it to his patients for $37.50. That's a whopping profit of $26.79! Another strain, OG Skywalker, cost Khoury $10.49, and he sold it for $37.77 - a more than respectable return of $27.28.

Train Wreck, a cheaper brand, costs $5.50, with the owner peddling it for $20.09 and making another nice gain of $14.59. Discount collectives?!? By my calculations, these discount collectives have been marking up their retail prices by 250% - 265% over wholesale. At over $1,000 per ounce, I hate to ask what the prices are at the non-discount collectives!

I've always believed that many dispensary owners have the best intentions of helping sick people, but also that a few carpetbagging greedy entrepreneurs looking to take their weed dealing to the storefront are going to create the backlash against the entire marijuana legalization movement. $1,000 ounces and not patrolling your exterior grounds for illegal sales to minors are not public relations stories that generate sympathy and appreciation from the general public.

For comparison's sake, here are some standard gross margins from the Retail Owner's Institute (defined as the amount of contribution to the business enterprise, after paying for direct-fixed and direct-variable unit costs, required to cover overheads and provide a buffer for unknown items):

    * Nursery, Garden Center & Farm Supply Stores = about 37%
    * Fruit & Vegetable Markets = about 30%
    * Beer, Wine & Liquor Stores = about 24%
    * Pharmacies & Drug Stores = about 25%

Now, to be fair, we don't know the other costs Khoury had to cover other than the price of the cannabis. Perhaps his rent/lease, payroll, advertising, utilities, and other costs are contributing to the price of his over $1,000/ounce cannabis. But if Khoury's shops were subject to the standard gross margins of a vegetable market (a fair comparison, I think), then a 30% margin would mean his total costs (using the Obama Kush pricing) would run $28.85/gram with $10.71 being the wholesale cost of the gram of cannabis and $18.14/gram being the overhead costs (check my math*). In other words, if Khoury were like an orange salesman instead of a cannabis salesman, we'd have to believe about half (48%) of his retail price is covering his overhead, about 29% is covering the wholesale cost of cannabis, and about 23% of his retail price is profits.

Speaking of oranges, in the United States the orange wholesale prices in real terms for major consuming markets from 1982-2003 hovered around $1.00 per kilogram, or about $0.45 per pound. At my local Safeway, I can purchase oranges at $0.99 per pound (and I'm in Portland, so they had to be shipped from somewhere a long distance south of me). That works out to a bit over a 100% markup from the grove to my store, assuming wholesale price hasn't skyrocketed since 2003.

And as I'm often fond of mentioning: Saffron, the world's most expensive legal plant material, a spice that is primarily grown in Spain and Iran, requires far more tending and processing than any marijuana plant: A labor intensive endeavor, when the saffron blooms (usually for 3 weeks) all the family's attention goes to harvesting and processing, working up to 19 hours a day. Open flowers are picked and then carefully dissected to extract the stigmas. They are dried over heat and then sealed in packages for sale to international brokers. How much saffron can be obtained from the flowers? The numbers are staggering. With 3 stigmas per flower it takes 75,000 flowers (225,000 stigmas) to make one pound of saffron. It is easy to see why it is so expensive.

Saffron is currently available in the US at $119/ounce, even after 19 hours a day of hand picking three stamens apiece from 4,687 flowers and then shipping it overseas. I am not at all against retail marijuana outlets. I am strongly against prohibition profiteering. The only reason these outlets can charge $37.50 / gram is because cannabis is still illegal for 95% of the market that demands it and nearly all the producers who supply it. A consumer doesn't have much choice; it's pay the "stick-up prices in a dispensary" or "pay the stick-up prices on the street" where you're not sure what you're getting. A dispensary owner doesn't have much choice, either; it's "pay the going black market price to a grower" or "watch grower sell his weed to the black market" for the price you weren't willing to pay.

Neither can the dispensary owner substantially reduce his price. Yes, $1,000 / ounce is outrageous, but he can't really get below $300 - $450 / ounce lest his customers take his product and resell it on the black market for profit. We're at a crossroads now where medical marijuana has debuted on the East Coast (New Jersey) and other states (NY, PA, AZ and others) are looking to the No-Garden State as a template for their bills,which do not allow for home growing and force a consumer to purchase medical cannabis from a dispensary. Whether run by the state or by "ganjapreneurs", the same laws of supply, demand, and black markets apply. Many people feel that the dispensaries are the logical next step to legalization, but are we ready to have legalization instituted in a retail system that ends up charging us more for a weed than did our black market dealers?

Let's get out of the box canyon thinking that will turn most of us cannabis consumers from "illegal drug users" to "users of medical cannabis without a prescription", still subject to arrest and punishment. Let's get beyond medical marijuana laws that legalize cannabis for 5% but maintain the black market pricing structure and lack of free market competition. Until cannabis is legal for the healthy people that want it, it will always be overpriced and subject to ridiculous limits for the sick people who need it.

*Khoury Math:
    Wholesale Retail Markup [(Retail-Wholesale) / Wholesale]
Obama Kush   $   10.71 $   37.50   250%
OG Skywalker   $   10.49 $   37.77   260%
Train Wreck   $   5.50 $   20.09   265%

*Khoury as Orange salesman with 30% gross margins math:
  Obama Kush Percentage of Retail
Wholesale   $   10.71   29%
Overhead   $   18.14   48%
Total Costs (Wholesale + Overhead) $   28.85   77%
Retail   $   37.50   100%
Profit [Retail - Total Costs]   $   8.65   23%
Markup [Profit / Total Costs]   30%

About the Author:  Russ Belville is NORML Outreach Coordinator and Host of - NORML SHOW LIVE - which happens Mon.- Fri., 4p ET / 1p PT

back to [ Top of Page ]


also Information on
Directory of information on cannabis by region Cannabis by ...
Region

Information about Medical Cannabis in the United States of America MERCY in America; Medical Cannabis in the USA
  Information about Medical Cannabis in Alabama Alabama
  Information about Medical Cannabis in Alaska Alaska
  Information about Medical Cannabis in Arizona Arizona
  Information about Medical Cannabis in Arkansas Arkansas
  Information about Medical Cannabis in California California
  Information about Medical Cannabis in Colorado Colorado
  Information about Medical Cannabis in Connecticut Connecticut
  Information about Medical Cannabis in Delaware Delaware
  Information about Medical Cannabis in Florida Florida
  Information about Medical Cannabis in Georgia Georgia
  Information about Medical Cannabis in Hawaii Hawaii
  Information about Medical Cannabis in Idaho Idaho
  Information about Medical Cannabis in Illinois Illinois
  Information about Medical Cannabis in Indiana Indiana
  Information about Medical Cannabis in Iowa Iowa
  Information about Medical Cannabis in Kansas Kansas
  Information about Medical Cannabis in Kentucky Kentucky
  Information about Medical Cannabis in Louisiana Louisiana
  Information about Medical Cannabis in Maine Maine
  Information about Medical Cannabis in Maryland Maryland
  Information about Medical Cannabis in Massachusetts Massachusetts
  Information about Medical Cannabis in Michigan Michigan
  Information about Medical Cannabis in Minnesota Minnesota
  Information about Medical Cannabis in Mississippi Mississippi
  Information about Medical Cannabis in Missouri Missouri
  Information about Medical Cannabis in Montana Montana
  Information about Medical Cannabis in Nebraska Nebraska
  Information about Medical Cannabis in Nevada Nevada
  Information about Medical Cannabis in New Hampshire New Hampshire
  Information about Medical Cannabis in New Jersey New Jersey
  Information about Medical Cannabis in New Mexico New Mexico
  Information about Medical Cannabis in New York New York
  Information about Medical Cannabis in North Carolina North Carolina
  Information about Medical Cannabis in North Dakota North Dakota
  Information about Medical Cannabis in Ohio Ohio
  Information about Medical Cannabis in Oklahoma Oklahoma
  Information about Medical Cannabis in Oregon Oregon
  Information about Medical Cannabis in Pennsylvania Pennsylvania
  Information about Medical Cannabis in Rhode Island Rhode Island
  Information about Medical Cannabis in South Carolina South Carolina
  Information about Medical Cannabis in South Dakota South Dakota
  Information about Medical Cannabis in Tennessee Tennessee
  Information about Medical Cannabis in Texas Texas
  Information about Medical Cannabis in Utah Utah
  Information about Medical Cannabis in Vermont Vermont
  Information about Medical Cannabis in Virginia Virginia
  Information about Medical Cannabis in Washington State Washington State
  Information about Medical Cannabis in West Virginia West Virginia
  Information about Medical Cannabis in Wisconsin Wisconsin
  Information about Medical Cannabis in Wyoming Wyoming
  Information about Medical Cannabis in Washington DC, District of Columbia Washington DC (District of Columbia)

Information about Medical Cannabis around the World The World of MERCY; Medical Cannabis around the Globe

Information about Medical Cannabis in Africa Africa
  Information about Medical Cannabis in Angola Angola
  Information about Medical Cannabis in Cameroon Cameroon
  Information about Medical Cannabis in Cape Verde Cape Verde
  Information about Medical Cannabis in Egypt Egypt
  Information about Medical Cannabis in Morocco Morocco
  Information about Medical Cannabis in Mozambique Mozambique
  Information about Medical Cannabis in Senegal Senegal
  Information about Medical Cannabis in South Africa South Africa

Information about Medical Cannabis in Asia Asia
  Information about Medical Cannabis in Cambodia Cambodia
  Information about Medical Cannabis in China China
  Information about Medical Cannabis in India India
  Information about Medical Cannabis in Indonesia Indonesia
  Information about Medical Cannabis in Israel Israel
  Information about Medical Cannabis in Japan Japan
  Information about Medical Cannabis in Malaysia Malaysia
  Information about Medical Cannabis in Nepal Nepal
  Information about Medical Cannabis in Pakistan Pakistan
  Information about Medical Cannabis in Philippines Philippines
  Information about Medical Cannabis in Russia Russia
  Information about Medical Cannabis in Taiwan Taiwan
  Information about Medical Cannabis in Thailand Thailand
  Information about Medical Cannabis in Turkey Turkey
  Information about Medical Cannabis in Vietnam Vietnam

Information about Medical Cannabis in Caribbean Caribbean
  Information about Medical Cannabis in Bermuda Bermuda
  Information about Medical Cannabis in Jamaica Jamaica
  Information about Medical Cannabis in Puerto Rico Puerto Rico
  Information about Medical Cannabis in Trinidad and Tobago Trinidad and Tobago
  Information about Medical Cannabis in US Virgin Islands Virgin Islands (US)

Information about Medical Cannabis in Europe Europe
  Information about Medical Cannabis in Albania Albania
  Information about Medical Cannabis in Austria Austria
  Information about Medical Cannabis in Belgium Belgium
  Information about Medical Cannabis in Croatia Croatia
  Information about Medical Cannabis in Cyprus Cyprus
  Information about Medical Cannabis in Czech Republic Czech Republic
  Information about Medical Cannabis in Denmark Denmark
  Information about Medical Cannabis in Estonia Estonia
  Information about Medical Cannabis in Finland Finland
  Information about Medical Cannabis in France France
  Information about Medical Cannabis in Germany Germany
  Information about Medical Cannabis in Greece Greece
  Information about Medical Cannabis in Hungary Hungary
  Information about Medical Cannabis in Ireland Ireland
  Information about Medical Cannabis in Italy Italy
  Information about Medical Cannabis in Lithuania Lithuania
  Information about Medical Cannabis in Luxembourg Luxembourg
  Information about Medical Cannabis in Macedonia Macedonia
  Information about Medical Cannabis in Netherlands Netherlands
  Information about Medical Cannabis in Norway Norway
  Information about Medical Cannabis in Poland Poland
  Information about Medical Cannabis in Portugal Portugal
  Information about Medical Cannabis in Romania Romania
  Information about Medical Cannabis in Spain Spain
  Information about Medical Cannabis in Sweden Sweden
  Information about Medical Cannabis in Switzerland Switzerland
  Information about Medical Cannabis in  the United Kingdom (UK) United Kingdom (UK)
    Information about Medical Cannabis in England England
    Information about Medical Cannabis in Northern Ireland Northern Ireland
    Information about Medical Cannabis in Scotland Scotland
    Information about Medical Cannabis in Wales Wales

Information about Medical Cannabis in Latin America Latin America
  Information about Medical Cannabis in Mexico Mexico
  Information about Medical Cannabis in Central America Central America
    Information about Medical Cannabis in Costa Rica Costa Rica
    Information about Medical Cannabis in Guatemala Guatemala
    Information about Medical Cannabis in Honduras Honduras
  Information about Medical Cannabis in South America South America
    Information about Medical Cannabis in Argentina Argentina
    Information about Medical Cannabis in Brazil Brazil
    Information about Medical Cannabis in Chile Chile
    Information about Medical Cannabis in Ecuador Ecuador
    Information about Medical Cannabis in Peru Peru
    Information about Medical Cannabis in Uruguay Uruguay

Information about Medical Cannabis in North America North America
  Information about Medical Cannabis in Canada Canada
  Information about Medical Cannabis in the United States the United States

Information about Medical Cannabis in the Pacific (Oceania, Rim) the Pacific (Oceania, Rim)
  Information about Medical Cannabis in Australia Australia
  Information about Medical Cannabis in New Zealand New Zealand

... plus Information on
Information about Cannabis Cannabis for ...
Information about Cannabis for Doctors Doctors
Information about Cannabis for Nurses Nurses

also Information on
Directory of information on cannabis and conditions Cannabis and ...
Conditions

Information about Cannabis and ADHD ADHD Attention Deficit / Hyperactivity Disorder
Information about Cannabis and AIDS AIDS
Information about Cannabis and Alzheimers Alzheimers
Information about Cannabis and Anxiety Anxiety
Information about Cannabis and Arthritis Arthritis
Information about Cannabis and Asthma Asthma
Information about Cannabis and Autism Autism
Information about Cannabis and Bipolar Disorder Bipolar
Information about Cannabis and Cancer Cancer
Information about Cannabis and Cachexia Cachexia
Information about Cannabis and Crohns Crohns
Information about Cannabis and Dementia Dementia
Information about Cannabis and Depression Depression
Information about Cannabis and Diabetes Diabetes
Information about Diffuse Intrinsic Pontine Glioma ( DIPG )  DIPG (Diffuse Intrinsic Pontine Glioma)
Information about Cannabis and Epilepsy Epilepsy
Information about Cannabis and Fibromyalgia Fibromyalgia
Information about Cannabis and Glaucoma Glaucoma
Information about Cannabis and High Blood Pressure (Hypertension) Hypertension (High Blood Pressure)
Information about Cannabis and Lupus Lupus
Information about Cannabis and Multiple Sclerosis Multiple Sclerosis
Information about Cannabis and Myasthenia Gravis Myasthenia Gravis
Information about Cannabis and Nausea Nausea
Information about Cannabis and Pain Pain
Information about Cannabis and Parkinson's Parkinson's
Information about Cannabis and Pregnancy Pregnancy
Information about Cannabis and Post Traumatic Stress Disorder (PTSD) PTSD (Post Traumatic Stress Disorder)
Information about Cannabis and Seizures Seizures
Information about Cannabis and Spasms Spasms
Information about Cannabis and Tinnitus (Ringing in the Ears) Tinnitus (Ringing in the Ears)
Information about Cannabis and Tourettes Tourettes Syndrome


Information about CannaButter CannaButter - a cannabis-infused medicinal application
Information about Cannabis Tea Canna-Tea - Tea, a cannabis-infused medicinal application
Information about Cannabis Ticture Ticture - a cannabis-infused medicinal application
Information about Canasol Canasol - a cannabis-based medicine
Information about Rick Simpson Oil (RSO) - Rick Simpson Oil
Information about Golden, Honey Oil (GHO) - Golden, Honey Oil
Information about Cannabis and Tar (Resin) Tar (Resin)

Information about Seeds for Medical Cannabis Seeds - for Medical Cannabis and related info
Information about Strains of Medical Cannabis Strains - of Medical Cannabis and related info

INSTRUCTIONS Enter the NotePad! Enter questions, comments and link info in the NotePad, NOTE - we do NOT automatically capture e-mail address - you must enter it.   EDITing is up to you, what you submit is what gets posted.   If you leave info for the above section here, It will be transfered up to the main list as soon as we can.   To request further maintenance -or- for more private communications, use the FeedBack form below.
  NotePad section  

Who are you:
Where are you from:
What would you like to say:


  Comments  

next Comments go here.

1/28, 11:32a Gee, I keep forgetting that only the corporations who create toxic cocktails for all of us to take, that only THEY, can make greedy buttload gobs of money. I'm over this about making money. Good for anyone who makes money to pay their bills and take care of their family and friends. And if you have some left over, just like the drug cartels in Mexico, get some new history books into those school libraries and feed the poor and build a church or whatever they need. Hemp Hemp Hooray

Maybe the Vatican owns your Mortgage.... All Roads Still Lead to Rome

Cannabem liberemus,

mary mary @AZ4NORML Tucson, AZ www.az4norml.org

Thatís one way to look at it: Big Pharma gets to get rich off patients by overcharging them for toxic medicines, so why shouldnít we get rich off overcharging patients for a non-toxic herb?

Iíd kind of prefer that all medical care was moved out of the realm of for-profit enterprise, like fire and police protection. You can make a good living as a cop or firefighter, but you have to fight all the crimes and fires, and you donít profit if there are more crimes and fires. Likewise, illness and disability are ďfiresĒ that threaten the whole of our citizenry; sickness doesnít discriminate and not helping the disabled deprives us of talent.

The beauty of marijuana is that it is a house plant that heals. Letís not turn it into another overpriced bottle of pills.

I think thereís a large degree of difference between someone growing their own, selling some to friends to help pay bills, and multi-million dollar enterprises.

And again, I love multi-million dollar enterprise, so long as it is truly an equal playing field and everyone gets a fair chance to play. When everyone is allowed to grow, buy, and sell marijuana, I will be the first to praise the marijuana millionaires.

Russ Belville

1/28, 1:48p I agree with you Russ....it's always about where a person's heart is....are they a giver or a taker. Our Michigan MM Law was writin the way it is to discourage profit-driven caretakers. But cannabis will never become reasonable in price until we end prohibition. Only then will it join the competitive world of legitimate business.

Rev.Steven B.Thompson,Executive Director Michigan NORML 6215 Smeltzer Rd. Benzonia,MI 49616 (231) 882-4496 www.minorml.org

1/28, 3:38p Doesn't I-28 require records be kept of income/expenses, and audited regularly, as well as inspected? I think part of why "green medicine" is so expensive at "buyers' clubs" in California is because producers grow under the medical marijuana law protections, then, at harvest, tell shop buyers, "Either pay black market prices, or we'll just sell it on the black market". No oversight of producers like I-28.

...Clifford

1/28, 6:12p Anthony Johnson wrote: I28 sets up a supply system for non-profits, unlike California. Also, producers trying to sell at black market prices can be undercut by compassionate Oregonians who will be able to produce more medicine than under the status quo. > On Jan 28, 2010 3:39 PM, "Clifford Spencer" > wrote: -----------------------------------------------------------------------> Doesn't I-28 require records be kept of income/expenses, and audited regularly, as well as inspected?

1/28, 4:29p Russ F.Y.I., Mark up can never exceed 100% because the formula for calculating mark up is cost divided by sale subtracted from 100. Since cost can't be lower than zero, markup can never exceed 100. Once a true markup is known, it can easily be used to calculate gross profit with this formula, sale price times markup= gross profit. Below is the actual markup for the prices given.

Wholesale Retail Markup [(Retail-Wholesale) / Wholesale] Obama Kush $ 10.71 $ 37.50 250% the actual markup is 71.44% multiplying this number by sales price = $26.79 equals gross profit.. To check the math, sales minus cost also equals gross profit, 37.50 minus 10.71=26.79 OG Skywalker $ 10.49 $ 37.77 260% the actual markup is 72.33% Train Wreck $ 5.50 $ 20.09 265% the actual markup is 63.48%

Mark Ocnorml.org

1/28/2010 8:00 PM Speaking from experience, I wouldn't trust economic figures from the cops. They state gross revenues as if they were profits without deducting the costs. Without knowing a collective's costs, it's impossible to pass judgement on markups.

More to the point, who buys a gram of pot for $37.50 as claimed by the cops in this report? LA dispensaries sell at prices of $45 - 75 per eighth, which works out to $15 - 25 gram tops. If this club is really trying to sell grams at $37.50, they're not going to have many customers. Brett Stone may be right that the cops confused gram prices with eighth prices.

- Dale G. Calif.

1/28/2010 11:45 PM I do NOT agree that 'the importing CA prices argument has been adequately rebuffed through the drafting of this initiative...'

There is nothing in the initiative that ensures that prices will not be inflated, and it is quite likely that those that are willing to invest the $1000 per year into the licensing fee are going to want to turn a decent profit on production. In fact, with everyone I have spoken with about I-28 that has any intent to try to become a producer, that is exactly their intent. In most "potential" producer's minds - there is no reason that they cannot sell to dispensaries at prices comparable to the black market currently.

At even 1/2 that price, dispensaries in Oregon would still nearly have to charge CA prices in order to maintain the minimum requirements set forth in I-28 (even though general, it requires security measures, licensing fees, employee taxes, non-profit compliance among other things - all obvious "overhead" in the ears of this bookkeeper...). Anthony himself quoted me an approximate figure of $200-400 per ounce as a realistic expectation of pricing when I discussed the initiative with him early this month (aka CA prices, also known as Oregon black market prices).

I find myself supportive of the idea of dispensaries; yet at the same time, I find myself appalled because this initiative will prevent many from entering the market due to the inability to acquire not-for-profit status, which can be a very complex and costly pursuit for many who would otherwise do wonderful in a dispensary/producer environment. Because of these additional obstacles, the "market" will be limited in terms of dispensaries (even in the most basic economic terms - any restriction will limit the available market, which has the potential to create supply shock, which increases prices - basic economics). From this angle, I believe that it is quite likely that Oregon prices will be even higher than California, if those who end up in the role of producers or dispensaries want them that high.

And so far, everything I have heard on the topic of the initiative tells me that $200-400 per ounce is just the "starting price," but the market will determine where it goes from there. My economics understanding tells me that "from there," it can only go UP.

Personally, I find the requirement to be "not-for-profit" is a deterrent in supporting this measure, as it only serves to reduce the availability of the medicine. And yet, the purpose of the initiative is supposed to be to make the medicine more readily available to those that need it. I understand that there are a number of agencies that are already not-for-profit and involved with medical marijuana reform who would likely adapt quickly to the passage of this initiative with the grand opening of a dispensary or two - to those agencies, this probably doesn't seem restrictive. But to me, this would be like letting the electric company sets its own prices based on supply and demand - everyone needs electricity! There are regulatory agencies that keep these prices in check, in that instance however.

This dispensary initiative has nothing of the sort that ensures that patients won't pay super-inflated prices. And most patients are unwilling to trust any organization, even an MMJ friendly not-for-profit, to represent their individual interests, especially where money is concerned. Russ commented on it just in the last few days - even NORML has the continuing accusation to be full of "rich lawyers" that don't really want it legalized - they just want to get rich.

You don't have to agree with these perspectives - but it is worth noting that these are the views that represent many that will make or break a vote on this issue. These things need CLEARLY ADDRESSED. So far, they have been swept under the carpet and ignored - not addressed.

In my humble opinion, Jennifer Alexander

1/29/2010 4:42 AM Here's a neat 20-minute podcast from NPR and Jeff Miron about why prices will come down, but not as much as you might think: http://www.npr.org/blogs/money/2010/01/podcast_an_economist_gets_ston.html --

John Masterson Montana NORML - Working to reform marijuana laws in Montana. Web: http://montananorml.org Blog: http://blog.montananorml.org Facebook: http://www.facebook.com/pages/Montana-NORML/178715305628 Twitter: http://twitter.com/mtnorml

1/29/2010 7:08 AM Can someone please explain to me the need to be Non-Profit to dispense? And the growers for the Non-Profit dispensaries are they growing for free? Are Herb Shops and Pharmacies Non-Profit? Why does should Cannabis be treated so differently than an other medicinal treatment available? These are questions from Patients/Growers alike whom I work with everyday in clinic.

Thank you, Kim Broadhead

1/29/2010 8:39 AM I personally do not believe that it is necessary in this election cycle to make a choice at this juncture whether to support I-28 (which I do)or go for legalization, apparently through one of Paul and Madeline's filed initiatives (which I worked on and also support). It will take a flood of signature gatherers to qualify either of the two measures by the deadline. Should one of thoses measures make the ballot along with I-28 such a choice could be made, but I do not see any serious conflict between the two even if both pass. I-28 amends OMMA law and both of the two legalization measures leave OMMA law alone. If both models pass, then the two systems are set up in some degree of opposition to each other with the consumer base determining which model works best. If a dispensary system becomes superfilouos because of the other sales regime then that's how supply and demand works.

I do not find that "costly and complex" accurately describe the process of obtaining non-profit status, especially in Oregon or even at the Fed level. While some prefer an attorney handle the latter, the fee for that is not usually very onerous.

my $.02, Laird

1/29/2010 9:42 AM > When I reflect on the costs I am reminded of how we got into the whole state > of prohibition in the first place....Capitalism.

That hypothesis doesn't stand up in the cold light of history. It was under 19th century laissez-faire capitalism that Americans last enjoyed freedom of choice in drugs. As late as 1887, a conservative California Supreme Court struck down a local ordinance against opium use, arguing that that such laws were beyond the normal scope of government. It was conservatives who opposed the first anti-narcotics laws as unconstitutional infringements on freedom of commerce, while progressive advocates of activist government supported them. It was liberal progressives (including Oliver Wendell Holmes and Louis Brandies) on the Supreme Court who upheld the constitutionality of the Harrison Act over conservative dissenters in the 5-4 Doremus decision. And it was New Deal advocates of expanded government who passed the Marihuana Tax Ac, by using a prohibitory tax that violated conservative constitutional doctrine on the limited federal powers over commerce.

Now that the drug war is a century old, positions have evolved. Right-wing conservatives now embrace prohibition as part of the status quo, while liberals are more inclined to question it. But the differences have nothing to do with capitalism. Otherwise, Lenin would never have supported alcohol prohibition.

- Dale Gieringer

1/29/2010 11:28 AM Brett, very good points about the dispensaries having to defend themselves. Indeed, those lawyer fees and such could be looked at as variable operating expenses that make a $360-$600 ounce defensible.

But really, it just further underscores the point that the dispensary system is beholden to black market economics and the only true solution is legalization, which, Iím happy to note, some dispensary owners have kicked in a lot of moolah to accomplish this year. Iíd happily buy a $360 ounce if I knew 20% of it was going to marijuana reform orgs.

Russ Belville

1/29/2010 11:52 AM Dear advocates of price caps,

Please provide the language for how you would cap the price of medical cannabis.

Please provide examples from the history of economics of where price caps have worked? If they are a good idea why don't we have price caps on all sorts of things? Why not cap the price of milk at $1/gallon? Why not cap the price of a doctor visit at $25? Why not cap the price of gas at $1/gallon? Hell, why not cap the price of everything at $1/gallon - life would be nice and simple that way.

Price caps are an arbitrary human invention trying to defy the laws of economics.

I just think if you say medical marijuana must be $50/oz but don't create a supply system where that is possible you are just blowing smoke.

I don't mean to be facetious here. My limited understanding of economics is that we live in a sort of free market economy. Other than in extraordinary circumstances (and I can't think of any at the moment) price fixing just never works.

Price and quality are intertwined in complex ways. If you set the price of marijuana, then you will just lower the quality to meet that price. Maybe people will be able to sell untrimmed bud for $50/oz. but I doubt they will be able to sell hash for that. Hash is higher quality and probably will cost more. Some strains are better. Maybe they are harder to grow because they yield less. Maybe growers won't be able to provide the highest quality products at the price you set. Maybe economic conditions will require the price to be adjusted periodically. Who does that? Hmm. The government. I just don't think it would work.

I also think that opposing an initiative that creates a regulated supply system, maintains every positive aspect of the current system, assists poor patients, and allows research because the price MIGHT be high is missing the forest for the bush.

Thanks, John Sajo Voter Power

1/29/2010 12:18 PM Steve writes: But in my opinion, Madeline has raised serious and reasonable questions about how we will insure that what happened in Los Angeles and other cities in California and Colorado does not happen in Oregon.

JS replies: I don't like some aspects of what is going on in California. I don't like bad people who never lifted a finger to reform the laws making a quick buck off patients. But saying that California is so terrible we don't want to be like that is adopting a bad argument from our opponents. California patients have access. California patients have choice. No California patient has to shop at dispensaries. The fact that the vast majority do patronize dispensaries is proof that they are not as bad as they are portrayed. I never hear California patients (except Scott Imler) complaining about dispensaries and arguing that California should go back to prohibiting them.

We need dispensaries because without them many patients go without medicine. The question is how do we work to make the medicine safe, high quality and affordable. How do we make everyone accountable? I 28 is the best answer to these questions.

John Sajo, Voter Power

1/29/2010 12:39 PM Madeline writes: Importing an already unaffordable, crumbling model from California seems like a recipe for disaster.

JS responds: We studied California carefully and tried to adopt the positive aspects and find alternative policies to prevent the negative. I 28 was carefully drafted and has the following differences from California:

1) Oregon already has a mandatory patient registration card system.

2) Oregon will specifically license commercial producers. They will have clear uniform statewide rules to follow. California dispensaries are forced to buy gray market medicine because there is no legal commercial market.

3) I 28 creates a specific program to help low income patients. California has no such system.

4) I 28 creates statewide regulation by DHS OMMP that will be able to deal with most of the feared outcomes.

Madeline writes: In my opinion I28 was drafted by growers/caregivers and not with an affordable supply of medicine for patients in mind.

JS responds: I 28 was drafted with input from hundreds of people, most of them patients. All my posts today point out why your statement that I 28 was not drafted with an affordable supply in mind is completely untrue. We create the only government program in the country that will provide free medical cannabis to patients. Madeline, your alternative is to require growers to sell at a fixed price even if the laws of economics make it physically impossible.

Madeline writes: In Oregon we could do so much better. Patients are still losing their jobs, their child custody rights and more. Ten years later and medical marijuana still does not protect us adequately. Let's go for legalization and not commercialization!

JS responds: I am all for legalization. I have been working for legalization since before you were a prison guard. But how do we get there? You are chief petitioner of an initiative to commercialize marijuana so I don't understand what you mean by your last statement. Please explain. And unfortunately even legalization will not necessarily end all the problems you cite above. Patients losing their jobs may happen even after legalization.

Thank you for the discussion.

John Sajo, Voter Power

1/29/2010 9:16 PM Is "profit" a dirty word?

The entire reason people can charge $400/oz for a plant anybody can learn to grow is the illegality and over-regulation. If you, I, or Todd McCormick could just freely grow it & sell it, then we would become what's known as market forces. If I price mine at $400, and you grow a similar quality & sell it for $300, I'm going to get stuck with a large inventory. I come down to $175, Todd goes to $120... at some point, we can't go down any farther & still be able to afford to grow. I suspect that even Madeline wouldn't be put off by that price ;) . Complying with regulations, keeping grows small enough to comply with state law & stay off of the feds' radar, having a high barrier to entry for distributors, all serve to increase the price artificially. The same applies to any industry: health care, power, water, tv, hops for beer, etc.

I suspect that, if California takes the next step & legalizes, we'll see a re-arrangement, but we'll see something truly remarkable if the feds end the war on drugs: with no fear or risk, people will be free to shop openly for price and quality.

Dan F.

1/29/2010 11:38 PM The reason for the high product costs associated with California dispensary sales seems obvious to most posts here in DPFOR on the subject. However, I believe costs will remain high for two important reasons, and those reasons would be fairly apply to Oregon as well.

1. Demand for cannabis out-paces supply in a significant way. The shear number of dispensaries and the high prices collected in California can be seen as evidence that demand is high and will remain high (no pun intended). Demand right now seems constant, if somewhat insatiable. (And appears to remain insatiable in the current social/political climate.) Even the mere perception that supply is limited keeps pressure on demand and will continue to keep pressure on the demand for cannabis for some time. In my opinion. it would take a number of years using the current supply system in California to manage or even eke out just a small decrease in costs.

Canada cannabis street prices seem to range in the $200 - $300 for average quality, mostly because prohibition is not so pronounced, but still a significant factor. The demand in Canada remains high but availability of supply has lowered prices somewhat.

2. Dispensaries are subject to unreasonable regulation and control. The fact that dispensaries are still subject to closure/seizure by local and federal authorities is cause for major concern. However nessesary, regulation and control inevitably increases costs. Over regulation and control increases costs dramatically. A number of dispensaries will lose lots of money when thier dispensary is closed due to limits imposed by local regulations. It seems wise for them to hold funds for relocation, criminal defenses, investigations, taxes, lobbying efforts, and then things like insurance, security, thefts, and other losses.

According to the explaination by Christine McGarvin quoted from the Mail Tribune - "Under the initiative, each dispensary would have to pay a $2,000 license fee and a 10 percent tax on gross sales...and... Producers would have to pay a $1,000 license fee and the 10 percent tax." That adds up to over 20% of product costs not including costs for accounting, oversight and tax compliance. Taxes will play a major roll in Oregon in keeping costs high.

In doing brief research for non-profit dispensary model, $50. per ounce (not including taxes) was the low-end ballpark figure for a storefront dispensary, just as Jennifer suggested in her findings.

The costs associated with non-profit status, to me, were negligable when considering using a proper accounting system designed for retail outlets, a do-it-yourself structure with non-gratis board members.

The biggest costs for a store front dispensary would of course be the products. These costs would be a significant factor in the over costs. Has anyone out there done any analysis on production costs ?????? I realize the scales of economy in production have a profound influence on overall costs and would vary depending upon the model used.

If I recall Stormy Ray suggested that cannabis can be manufacture for $100/oz ... but I think that was non-gratis indoor production and would not play a significant part of a commerical enterprise (non-profit model) that produces significant supplies.

Doug H.

go to Bottom   ( skip to End )  |   ( next )  |   Maintain an Entry or Give us FeedBack     |     ( prev )  |   ( go to Top )  back to Top

To change or delete an entry above, or to send a message to the webster instead of posting it, use this tool.

Who are you?
e-mail address:
Request:

[ Also this Section >     News Index   |   2014   |   2013   |   2012   |   2011   |   2010   |   2009   |   2006   |   Sources   |   NewsFeeds   |   ToolShed   |   NewsLetters   ]
  Home   |   About   |   Contact   |   Donate   |   GuestBook   |   Action   |   Library   |   OMMA   |   Biz   |   Links   |   News   |   Legislation   |   Events   |   Calendar   |   Orgz   |   MERCY-TV   |

Comments, questions and suggestions? E-mail the Webster To communicate ideas, changes or requests for further information about these pages -or- for compliments, complaints or to report broken links with the web site in general, you can eMail the Webster.   Also, feel free to visit the Guestbook and leave a note.

You are visitor # 1714!     (since 2/1/2010)  Thanx for stopping by. Tell your friends. Tell your enemies!   This page ( /news/2010/LAPD_Reports_Markup.html ) was last modified on:  Wednesday, 16-Jun-2010 10:05:21 PDT

click here to return to the
Click here to go to the Medical Cannabis Resource Center Home page
Center home page

This site ...
Hosted by Drug Policy Central
... Empowerment Tools - of, by and for the People!