
Legal Marijuana Isn’t the Boon Small Businesses Thought It Would Be - matt4077
https://fivethirtyeight.com/features/legal-weed-isnt-the-boon-small-businesses-thought-it-would-be/
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walrus01
One of the things left out entirely is that WA state cannabis farmers are not
yet allowed to grow outdoor under sunlight, so they're facing massive price
pressure in wholesale $/gram sold to processors, but still have the huge
operating costs of running indoor farms with electrical bills for lighting,
lighting equipment, ventilation, climate control etc.

I honestly don't understand this, since it is a lot less expensive to build a
highly secure double-perimeter razorwire fence around a farm than it is to pay
$4500/month electrical bills.

Sunlight is free.

In Canada's recently announced system, which gives a lot of control to
individual provinces, BC has announced that they will allow greenhouse based
farms.

~~~
c256
I think (speculation based on some light reading) the WA indoor/outdoor split
is based on requiring a very high level of oversight and control on the
growing operation — from what I understand, WA processes have per- _plant_
requirements. Put roughly, it’s a lot harder to smuggle 5 plants out of a
climate- and access-controlled building than it is to toss a bundle of foliage
over a fence. I live in WA, and have since before the legalization efforts
were passed. (I voted for it but do not partake, for various uninteresting
reasons.) The approach here was based at least as much on trying to slowly
open small, controlled ports in the dam as it was trying to create a viable
business opportunity. The idea seems to be “there’s enough demand for a boom
now either way, and we can open up later more easily than we can close down.”
Honestly, bitcoin miners using super-cheap electricity might be a greater
concern for the government, at the moment.

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wils1245
Two things of interest that the article doesn’t go into:

\- Taxes on weed in CA are going to be very high, ~20%. This may drive black
market sales.

\- Online ordering through Eaze is popular, which might drive the familiar
winner take all online commerce market dynamic. A lot of people don’t care for
the dispensary experience.

At the end of the day, this is an agricultural product, and a commodity. It
was optimistically compared with beer, but beer is made from a recipe, of
which there are endless variations to try. Some heavy users care about certain
strains and the like, but I have a feeling that for most people weed is weed.
The new edible products are a development, but those too will be comoditized.

~~~
AndrewUnmuted
> Some heavy users care about certain strains and the like, but I have a
> feeling that for most people weed is weed.

As recently as 5-6 years ago, I would have agreed with this sentiment. These
days, however I think this mentality is no longer a responsible one to
propagate.

Today's cannabis is, in general, much more potent than it used to be. And now
there are ways to consume very large amounts of this extremely potent product
in a very short amount of time (concentrates, oils, edibles, etc). No matter
how it's consumed, today's average cannabis user is getting a lot more in
their hit than prior generations. This means that the difference between a
sativa and indica is no longer necessarily a nuanced one.

Today people need to be reasonably sure that what they're getting will meet
their needs, because for some one hit may send them spiraling in the totally
wrong direction. A user with anxiety issues may need to entirely steer clear
of sativas because they are known to cause anxiety attacks. But someone who
needs to be around other people may need to avoid indicas because they are
known to cause delayed responses and decreased social acumen.

This risk is compounded when people use one of these new, super-powerful
'hybrid' strains because their effects on the individual user are harder to
predict than pure indica or sativa strains.

Legalization will put new emphasis on educating users on safe practices, harm
reduction, and other such things. In the US, public schools teach harm
reduction strategies with alcohol in its various forms, and one day it will
probably need to do the same for cannabis.

~~~
root_axis
> _Today people need to be reasonably sure that what they 're getting will
> meet their needs, because for some one hit may send them spiraling in the
> totally wrong direction. A user with anxiety issues may need to entirely
> steer clear of sativas because they are known to cause anxiety attacks. But
> someone who needs to be around other people may need to avoid indicas
> because they are known to cause delayed responses and decreased social
> acumen._

What's the source for this, I'm genuinely interested? As far as I'm aware,
this is more a marijuana folklore thing than an effect that science has
verified.

~~~
renlo
It's pretty common knowledge among heavy weed smokers that those strains have
those effects. Sometimes science lags a bit behind ...

~~~
tomcam
Science lags behind stoners. Duly noted.

~~~
obmelvin
In this case it's mainly attributable to the DEA's scheduling system. People
have to rely on personal experience because there isn't proper research being
done.

This is my greatest frustration around the use of drugs. I think it's
ludicrous that more research isn't done on substances that millions of people
take.

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topshelfdata
Hi folks, I'm one of the founders of
[https://www.topshelfdata.com](https://www.topshelfdata.com), the site that
provided most of the data used in the article.

Let me know if you have any questions related to the data that I can answer
(it may take a few hours since I am about to hit the sack).

Related: here's our Show HN post that was on the front page of HN earlier this
year.
[https://news.ycombinator.com/item?id=13767772](https://news.ycombinator.com/item?id=13767772)

------
Chardok
This is interesting for the fact of watching a black market item go to retail
and the expectations of "street" price versus actual market price might have
been just too high.

There will certainly be a niche market for gourmet, organic, homegrown and
cared for buds, but for the remainder of products: oils, waxes, edibles,
infusions - you are not going to notice the difference between a small
business and a larger growing operation except on price.

It seems rather obvious when you think about it though. I would compare
cannabis to produce rather than beer/wine/spirits, in the sense that your
small growers are going to have a tough time competing with giant farm
operations, and will really have to differentiate themselves in specific ways
to actually make it worth while.

~~~
walrus01
I think it is pretty similar to the boutique small volume/high-cost products
sold in Whole Foods. There are still a number of small artisanal handmade soap
manufacturers, and they command premium prices for what is perceived as a
premium product. People buy them. People also buy giant packs of soap at
Walmart. Both markets exist simultaneously. The small places will almost
certainly not be able to compete in a race to the bottom on pricing with
corporate entities that have the capital to spend several million on a farming
facility.

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itomato
Access to the banking services other small businesses enjoy would help.

I will pay tax on an 1/8th before I will subject myself to Criminal
Prosection.

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shams93
Well for growers you can get better quality on a smaller scale so the grow
side of the business will always have a door open for people who can grow high
quality medicines.

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jchook
If you ask me, this "slow roll-out" of legal cannabis in the United States has
been planned and directed entirely by big business the entire time.

~~~
Animats
Maybe it's a plot to make the lower classes more passive so they don't revolt.
I've been amazed to see the GOP reverse course on this.

~~~
mythrwy
Plenty of Democrats have "reversed course" as well.

I think Hillary was against legalizing the herb wasn't she? Did she ever
reverse position?

Politicians are just politicians for the most part. Whatever they think will
get them in office.

~~~
Synaesthesia
She’s always been against legalization. Still is AFAIK.

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skimaskninja87
Easy answer.... Squares don't know how to sell weed. It's been so underground
for so long, walking in a store or searching online comparing prices is both a
foreign and weird process. These shops may need to recruit some real hustlers.
No different than hiring a sales staff.

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pravda
Holy guacamole those weed prices are off the scales!

$7.50 a gram? Weed should cost about the same amount as catnip.

I can buy 4 oz of catnip for $8 on eBay. That's over 100g, about 8 cents a
gram.

~~~
mrob
Catnip is sold as leaves and stems, but marijuana is usually sold as the
flowers. The percentage waste is much higher. And catnip does not require
careful segregation of male and female plants to avoid unwanted seed
production.

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StanislavPetrov
That's because what we need is deregulation of cannabis, not "legalization".
You need only look at the massive tome of over 200 pages that California has
proposed to regulate recreational marijuana starting in 2018 to see what the
issue is. Laws and regulations have their place in society to a certain
degree. Our country has gone way, way overboard as far as laws and regulations
are concerned. This massive over-litigation on every level acts as a massive
drain on our resources, our economy, and our society as a whole. Any
regulations "needed" for cannabis should be able to fit on a single sheet of
paper - but we would be far better off if the government had no role at all.
The burdensome, poorly-written, oft-conflicting tangle of regulations written
by unintelligent politicians at the behest of their wealthy donors do far more
harm than good in most cases, and certainly as it regards cannabis. It isn't
some sort of an accident that startup costs for regulatory compliance are
massive - that's the whole reason for their existence. We are $21 trillion
dollars and debt on the federal level and saturated with even more debt on
every level from state to county to village. Our bridges and roads are falling
apart, our pensions are underfunded and every year more Americans slide into
poverty. Not only is the nanny state a terrible idea, but its an idea that we
no longer afford - especially when the nanny is a corrupt Wall Street crony.

