April 20, 2013

"Across the country, the business of growing pot is fast becoming mainstream."

Says the Wall Street Journal:
But it turns out that trying to make a profit in this business is harder than expected. When grown and sold legally, marijuana can be an expensive proposition, with high startup costs, a host of operational headaches and state regulations that a beet farmer could never imagine. In Colorado, for example, managers must submit to background checks that include revealing tattoos. The state also requires cameras in every room that has plants; Mr. Klug relies on 48 of them....
When grown and sold legally?! Why is the Wall Street Journal writing that? You can't grow and sell marijuana legally. This is all a crime under federal law.
Prices for pot, meanwhile, have plummeted, in large part because of growing competition. And bank financing is out of the question: Federal law doesn't allow these businesses, and agents sometimes raid growers even in states where it is legal.
Doesn't allow? You mean: Makes it a felony. Growing marijuana is a criminal enterprise. And there are no "states where it is legal." It is illegal in all of the states under federal law. The states are in the United States — haven't you heard?!
... Pink House Blooms is a $3 million-a-year business, with 2,000 plants in a converted warehouse in an industrial part of Denver... To get started on this scale, [Elliott] Klug says he sank more than $3 million — some of it borrowed from family — into the operation. He says Pink House Blooms is profitable, with demand up 30% some months....

His advice for anyone who wants to become rich by legally dealing pot: "Start with lots of money."
Shouldn't that be: Start by not worrying about what "legally" means? This man is attracting attention, getting his name and these big numbers in print in the WSJ, which presumably loves to profile the risk-takers of business.
Last December, President Barack Obama said his administration had "bigger fish to fry" than going after recreational users. 
Nice for the recreational users to know they aren't big enough, but what solace is that for the man trying to become rich by dealing pot? He is trying to be the big fish. He's trying to get rich in a market that anyone who refuses to commit crimes cannot enter. What a terrible situation! And yet the prices are already plummeting, we're told, because of all the competition. Klug's hope of getting rich is premised on the illegality.

30 comments:

kentuckyliz said...

Prices coming down was entirely predictable.

Your start-up costs can be greatly reduced if you live near a large national forest with lots of remote land, such as the Daniel Boone National Forest.

If you hike it, don't stray off established trails. There are trip wires and hopped up hillbillies in the trees with shotguns guarding their crops...except when the helicopter raids come.

David said...

Tsarnaev is a pothead.

His friends are asking how this seemingly nice and normal kid went so wrong. So is the media.

Pot will not be implicated. It's so unfashionable to do so.

kentuckyliz said...

I predict that the concept of marijuana vaporizers will be incorporated into electronic cigarette technology to produce electronic marijuana cigarettes. People will be walking around apparently smoking an e cig but it's really a joint. Particularly attractive if the distinctive aroma can be eliminated to avoid detection.

AprilApple said...

In CO -the market was/is already flooded with "medical" marijuana pot-growers. All a pot smoker needs to do was/is go to their doctor to acquire a "I'm in pain!" paper. I think it's yellow.

The pot-shops were all over the place. I have noticed that a few are gone.
It's chaos without much of any enforcement. A pot smokers dream.

AprilApple said...

Right now, my biggest concern is that Marco Rubio has allowed himself to be hood-winked and swindled by the corrupt liars in his gang of 8 on immigration.

Hearings? What hearings? oh and if you ask a question in the hearings, a democrat staffer will call the police and have you escorted out of the room.

The real brown shirts of America? - Democrat staffers. (paid 6 figure$)

ironrailsironweights said...

Today's 4/20.

Peter

kentuckyliz said...

Tune in to the History Channel right now...the Stoners and Hippies are on now and next.

Happy 4/20!

Jason (the commenter) said...

Growing pot is becoming mainstream, which means it isn't cool anymore!

sydney said...

I was just reading a medical journal article on marijuana use that said recreational use is now allowed in Washington and Colorado. I get what you are saying about federal law trumping state law, but for us average citizens, this is not clear. If it is against federal law to do something, why can states pass laws that say it is legal?

Steve Koch said...

From Huffington Post article about a national mj poll they released in December, 2012:

"Fifty-one percent of Americans in the new HuffPost/YouGov poll said that in the two states that have legalized marijuana use for adults, the federal government should exempt any adults following state laws from federal drug law enforcement. Only 30 percent said the federal government should enforce its drug laws in those states in the same way it does in any other state."

Why should the fed gov be regulating mj, why not leave it up to the individual states to regulate or not regulate mj however they see fit?

link: http://www.huffingtonpost.com/2012/12/07/marijuana-legalization-poll_n_2257106.html

Steve Koch said...

From Huffington Post article about a national mj poll they released in December, 2012:

"Fifty-one percent of Americans in the new HuffPost/YouGov poll said that in the two states that have legalized marijuana use for adults, the federal government should exempt any adults following state laws from federal drug law enforcement. Only 30 percent said the federal government should enforce its drug laws in those states in the same way it does in any other state."

Why should the fed gov be regulating mj, why not leave it up to the individual states to regulate or not regulate mj however they see fit?

link: http://www.huffingtonpost.com/2012/12/07/marijuana-legalization-poll_n_2257106.html

Sinnamon Buns said...

Is the professor shocked that people flout the law or merely that they flout it openly? The growing and smoking of marijuana is viewed by many as an administrative infraction rather than opprobrius behavior warranting punishment. Bootleggers have always (and I empasize always) found a market and the more innocuous the proscribed activity in which they engage, the more openly the proscription is flouted. And bootleggers have always had friends in high places too so maybe this guy feels safe advertising.

Sinnamon Buns said...

Is the professor shocked that people flout the law or merely that they flout it openly? The growing and smoking of marijuana is viewed by many as an administrative infraction rather than opprobrius behavior warranting punishment. Bootleggers have always (and I empasize always) found a market and the more innocuous the proscribed activity in which they engage, the more openly the proscription is flouted. And bootleggers have always had friends in high places too so maybe this guy feels safe advertising.

Paco Wové said...

"new HuffPost/YouGov poll"

I'm not sure why opinion polls produced by advocacy groups should be considered drivers of government activity. I thought that was what elections were for.

edutcher said...

They thought simply because the state legalized it, the Feds wouldn't do anything.

The need to take a conlaw class from a distinguished conlawprof like Reynolds or Jacobson or, oh, who is she?

Coulter?

Steve Koch said...

Paco Wové said...

"I'm not sure why opinion polls produced by advocacy groups should be considered drivers of government activity. I thought that was what elections were for."

Public opinion is relevant in democracies and republics and opinion polls are a good way to understand public opinion on a specific issue. Prez Clinton was an extremely popular president and part of the reason why was that he used polling extensively to understand how the electorate felt about specific issues.

Elections are choices between two candidates so voting for a candidate does not mean that you agree with that candidate on all the issues, it just means that you prefer that candidate to the other candidate.

Anglelyne said...

AprilApple: Right now, my biggest concern is that Marco Rubio has allowed himself to be hood-winked and swindled by the corrupt liars in his gang of 8 on immigration.

I am touched by your belief in the innocence and good faith of Mr. Rubio.

Paco Wové said...

"voting for a candidate does not mean that you agree with that candidate on all the issues"

And answering a certain way on an advocacy poll does not mean you agree with the questions, necessarily; you may just be picking the least bad answer.

I don't disagree that polling is a tool, and can be a useful one. But "51% of Americans agree with a poll question" is not a powerful argument.

cubanbob said...

I'm curious as to how the IRS will deal with these businesses. How will it handle the business expense ?deductions of the growers? The personal AGI of the grower?

ndspinelli said...
This comment has been removed by the author.
ken in sc said...

I'm not a pot smoker, but I welcome this movement because I think it may revive the ninth and tenth amendments. Federal law should not necessarily trump local law. This is a federal republic, not a centralized empire.

ALP said...

Great article. When I-502 passed in WA state, where I live, my parents began pestering me to start growing weed. My 70-something parents! Both of them!

I have been trying to explain what an expensive, confusing clusterfuck of a bureacracy this is going to be and thus a bad idea. I have to send this article to them.

Kirk Parker said...

I think your protestations of "but it's federally illegal!" are missing the point. Two points, actually:

1. There is absolutely no constitutional warrant for a federal law banning the cultivation, consumption, or intrastate trade in marijuana. Sophisticated observers (*cough cough*) already know this; and to the extent that the current interest in mj farming engenders a growing realization of intellectually-bankrupt crock that is current Commerce Clause jurisprudence, that's all to the good.

2. Even beyond the previous point, there's that whole pesky "consent of the governed" thing at work here. Just like the increasingly draconian laws against teaching slaves to read in the antebellum South, no amount of Law is going to force compliance when people's hearts and minds are elsewhere. The most that can happen (and this point is all to the bad) is a decreased respect for the rule of law overall.

SOJO said...

I have friends that have been legally buying pot for years now, so no, I don't think of it as illegal "anywhere in the United States." It's just a Starbucks thing, except every few years, the federal level decides to change their mind again and raid everyone and take their money. Then they relax, say they don't care anymore, and it all springs up again including enormous state level regulations.

Ann Althouse said...

"There is absolutely no constitutional warrant for a federal law banning the cultivation, consumption, or intrastate trade in marijuana. Sophisticated observers (*cough cough*) already know this; and to the extent that the current interest in mj farming engenders a growing realization of intellectually-bankrupt crock that is current Commerce Clause jurisprudence, that's all to the good."

Smoke enough and the Constitution might mean whatever you want it to mean, but in the real world, no court would say that. Scalia voted with the majority in Raich, which let Congress regulate even home-grown, home-consumed marijuana on the ground that it's a commodity.

John said...

Absent licensing, regulation and legal costs, why would MJ cost any more to grow than any other hardy plant?

On a per pound basis, it should cost about the same as oregano or lettuce to grow.

I have smoked copious quantities of pot in the 60's, think it is pretty close to harmless and have no desire to ever smoke it again. I do feel very strongly that it should be legal. Licensed, taxed and restricted to adults perhaps but legal.

The basic justification for the legality of pot is the same as is used to justify abortion rights. My body, my choice.

John Henry

prairie wind said...

One of the biggest reasons pot should be legalized by the states and by the feds is that keeping it illegal is expensive. Think of how many people have been incarcerated because of pot over the 40 years of the War on Drugs. Think of the huge number of prisons built in the last 20 years. Think of how much it costs to keep someone in prison. Think how much it costs the family on the outside, trying to manage without the now-missing income. Think of all the single-parent families these laws have created. God, the list just goes on and on.

Right now seems an excellent time to apply pressure to state and federal governments to stop putting people in prison because of pot. Government bodies are in financial straits and this would be a huge savings for them. Actual savings--not just a decrease in projected rates of increase.

prairie wind said...

One of the biggest reasons pot should be legalized by the states and by the feds is that keeping it illegal is expensive. Think of how many people have been incarcerated because of pot over the 40 years of the War on Drugs. Think of the huge number of prisons built in the last 20 years. Think of how much it costs to keep someone in prison. Think how much it costs the family on the outside, trying to manage without the now-missing income. Think of all the single-parent families these laws have created. God, the list just goes on and on.

Right now seems an excellent time to apply pressure to state and federal governments to stop putting people in prison because of pot. Government bodies are in financial straits and this would be a huge savings for them. Actual savings--not just a decrease in projected rates of increase.

Dave said...

"Smoke enough and the Constitution might mean whatever you want it to mean"

This kind of statement does not encourage me to buy through the Althouse portal. I don't see how it is helpful to the "conversation".

Kirk Parker said...

"Scalia voted with the majority in Raich, which let Congress regulate even home-grown, home-consumed marijuana on the ground that it's a commodity."

Yes, I know, and more's the pity. The intellectual bankruptcy that allows some justices to pretend that the authority for Congress to regulate interstate commerce allows them to regulate anything and everything as long as they supply the thinnest pretext of a connectional justification, is terribly destructive to the legitimacy of the court. It's as bad as Roe v. Wade, really.

BTW this has nothing to do with my own personal consumption of marijuana, as my lifetime accumulated dosage currently measures 0.0000 micrograms--heck, if I were in a position to vote for a constitutional amendment allowing the federal government to regulate personal production and consumption of certain drugs, I might even do so.