

Why is a bag of weed always $10 (man)? - jonp
http://timharford.com/2010/09/why-is-a-bag-of-weed-always-10-man/

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wmeredith
This doesn't make sense because it's not true.

I was an avid pot smoker in my college days (long time ago, now) and even over
the relatively small span of a 3 year time period I paid everything for a
quarter-ounce (~7 grams) from $10 ("ditch weed") to $400 (REALLY good stuff
from Cali or Colorado). So I'm not sure what he's talking about with the
$10/gram thing being some benchmark that's lasted decades.

I know that's anecdotal evidence, but it's the shared experience of every
smoker or ex-smoker I've ever known. And considering the wide variations of
produce quality, I think it's odd to suggest that prices are tied to any sort
of specific weight.

It's like saying, "Fish always costs $x per pound. (man) Why?" The answer is
simply, "No it doesn't."

~~~
dedward
I think he's referring to buying by the gram, not looking at bulk costs.

~~~
code_duck
It's too cheap by the gram, or too expensive, depending on the variety. The
cheap (low quality) stuff is like $3 by the gram, at most, and the expensive
stuff is more like $20 a gram, at most.

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bl4k
There is a huge variation in the price of pot, depending on the type of pot
(again, a large variation), where you are, what time of year it is, and who
you are buying it from.

What the $10 is referring to are the bags you can buy on street corners in
some cities. It is the same with crack and heroin, a standard and simple
price, with standard terminology (a bag, a dime, etc.) all to make the street-
based transaction easier and less conspicuous.

It has no bearing on the real value of pot, which can vary from a few dollars
a gram through to $50+ a gram. What changes is the type and amount of pot you
get in a $10 bag.

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biznickman
This is ridiculous ... not that I'm an expert or anything but $20 is the cost
of a gram. How is this guy going to claim to have research without trying to
buy it himself? This article is completely bunk. Compelling title since people
love to discuss the economics of drugs but the premise is way off.

Also as someone who used to know the economics of weed, there are nickel,
dime, and dub ($20) bags. This is for people like high school kids and street
drug dealers that sell at this level though. I would add that you can probably
buy dime bags from the hippies in Golden Gate Park SF, but that feels much
more like a crack deal than some legitimate transaction.

You can also grab a quarter (1/4 of an ounce) but it's not going to cost you
$25 ... it will cost you more than $100.

I love how this was good enough to be published in the Financial times even
though it was wrong. There's a reason that the Freakonomics guys went and
lived with the crack dealers: they wanted actual research, not second hand
rumors.

~~~
jokermatt999
Except that you're also wrong. Pricing varies from region to region, and I've
heard from a friend that $10 is a gram here, and a quarter is much less than
$100. Lookn up online discussions about the price of weed. You'll see a good
variety of answers. Quality also matters in pricing, which adds another
element to it.

~~~
biznickman
you are in the US?

~~~
horacegrant
Yea, I was surprised to see your first comment anywhere but at the top. $10
will buy a g of dirt. $20 beasters/kb. $25+ for true dank (east coast).

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hapless
The answer is actually in the question. The questioner is accustomed to paying
$10 for one gram. There was a time when the traditional "dime bag" was 1/10th
ounce, or nearly three grams.

The $10 price point has "stuck," but the grocery shrink ray strikes all
products. Remember when a $1 candy bar was twice today's size?

~~~
michael_dorfman
Your age is showing.

There was a time when a dime bag was 1/4th of an ounce.

And I'm sure somebody even older than me is going to chime in with a
recollection of an even more outrageous price.

~~~
percept
Old men used to bemoan the price of gas and the morning paper.

Times have changed!

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sosuke
$10 is how much a bag costs, how much a bag contains is the variable I would
think. Kind of the opposite of gasoline.

~~~
Brashman
The article doesn't talk about how much a bag costs. It talks about the price
per gramme staying at $10.

~~~
tfh
This is an example of a bad misleading title.

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char
Currently a gram of medical grade marijuana (or any 'good quality' pot) is
around $20.

The author says that a gram costs, and always has costed, $10. This can
certainly be true today if he's buying relatively low quality marijuana. If
he's been smoking for many decades, he'd notice the quality of pot has gone up
significantly, but so has the price. The kind of stuff my generation's parents
smoked in the 70s is now what people are selling for $10 a gram, and
apparently what the author is still buying.

~~~
yason
If you can get the same quality stuff for $10 you bought in the 80's for $10,
that would still be phenomenal.

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euccastro
I don't get why the response claims that the fixed price makes weed a stable
currency. In principle, it just pegs weed to the dollar, right?

~~~
ary
Yes, and a point that isn't mentioned in the article is that the price of weed
might be dropping at roughly the same rate the American dollar is being
inflated. So what we could be looking at is a coincidental equilibrium. As
more US states decriminalize marijuana the costs (risk and otherwise) of
production and distribution decrease. I'm in Denver, CO and just the other day
walked past a small police station with a cannabis dispensary right next to
it.

The times they are a-changin'.

* Edit: Made my initial point less ambiguous.

~~~
Ennis
I assume you mean as more states decriminalize "medical" marijuana...right? I
haven't heard of any that have decriminalized it.

~~~
zoomzoom
Actually, about 12 states have decriminalized MJ. See:
[http://en.wikipedia.org/wiki/Decriminalization_of_non-
medica...](http://en.wikipedia.org/wiki/Decriminalization_of_non-
medical_cannabis_in_the_United_States).

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scrrr
Perhaps it's just convenient to pass a $10 note. No change required.

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metamemetics
It's really simple.

The increase in potency strongly correlates with the increase in inflation.

He is probably holding quality as a fixed constant, so the real price goes
down as the products relative inferiority increases, and the increase in
nominal price due to inflation cancels it out.

edit: (man)

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scrrr
Good question. The answer to that should be related to the answer to why
things change in price.

Reasons for a smaller dollar amount: inflation, cheaper production, too few
buyers, too many sellers (thus more competition)

Reasons for a bigger dollar amount: more expensive production, too many
buyers, too few sellers (thus less competition)

I'm no economist but I suppose the reason should be a combination of the
above. However, my intuition would expect weed gets cheaper over the years due
to inflation and competition. So there is probably another reason: It might
have to do with weed culture itself, which is highly ritualistic I think. The
ritual (of consumption) probably doesn't change and the price doesn't change
either.

~~~
phjohnst
Actually, inflation would raise prices. Given the figures cited in the
article, $10 in 1980 should give something like $20-25 now based on the US
CPI. Thats precisely why it's interesting - the real (vs nominal) price has
actually _fallen_ since 1980.

And then you're right, basic supply and demand theory would suggest that
supply growth has outpaced demand growth over the same period (and by a rate
about the same as the inflation rate to keep nominal prices constant). But
why? loosening regulation/enforcement is mostly on the demand side, I would
say. It's probably getting easier to grow higher quality pot (more information
readily accessible, better equipment, mobility, economies of scale, etc). The
overall market likely behaves perfectly competitively (its a commodity, no
single dealer could charge more per unit of 'high' without losing business).
So, perfect competition with supply growth = lower real prices.

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jewbacca
IANAPothead, though I do pick up once or twice a year for concerts and to be a
good host.

By far the mode price I've encountered for 1/8 oz (3.5g) is $25; $30 if
something very special (though this is in Southern Ontario and British
Columbia, and I've apparently been spoiled for quality). Seeing this hold so
exactly when I moved from Toronto to Vancouver was my delightful first real
encounter with communication-without-intent through large-scale dynamic
systems.

    
    
      ---

Epilogue: somehow, I keep ending up being very good friends with small-time
drug dealers, and Apple employees.

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mattew
Based on what I see in the local paper, in the medical marijuana dispensaries
here in Boulder, regular prices range from around $12 to $16 per gram for high
grade medical marijuana. There are a variety of specials that bring it down to
around $10, but that price seems low as a regular price. I suspect price
varies a fair amount by location. I have heard in CA the prices are closer to
$20 per gram in the dispensaries there.

Interestingly enough, the price at the dispensaries seems to be about what
street prices were before the medical marijuana dispensaries became so
prevalent, maybe even a tad lower.

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dedward
I'd grant that, while not always $10, the price of a gram (usually the
smallest unit sold, other than guys selling individual joints here and there)
- the reason you don't see a lot of price fluctuation is becuase this is a
bottom-end price. The markup is already huge - there is lots of market
fluctuation for the people buying from growers and buying quarter-pounds and
whatnot, depending on quality, quantity, market, etc..... but at some point,
it's weed man. It's not worth someone's time to do a transaction for less than
$10 (or similar) - even if they're buying at a much lower price.

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vishaldpatel
Yeah that was my first thought - supply has kept up with demand enough to
offset inflation.

Tobacco, coffee, gold are better currencies alternatives to weed due to their
stable legality. Weed's stable demand in relatively illegal times may change
drastically if it becomes completely legal. But if that happens, it may be
more stable a currency than tobacco since most people on it feel that it does
no harm and therefore don't feel incentivized to quit.

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timthorn
Tim Harford is always an excellent read/listen. I highly reccomend his Radio 4
programme, "More or Less":
[http://news.bbc.co.uk/1/hi/programmes/more_or_less/default.s...](http://news.bbc.co.uk/1/hi/programmes/more_or_less/default.stm)

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james1071
Well, that struck me as a pretty pompous answer from the economics dude. If he
could have been bothered, he could have found official price stats for various
drugs and then written something factual.

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johnohara
Glad to see comments being posted where nobody has any true expertise. Proof:
The conversation should have turned to "grade" from "quantity" and hasn't.

Good on all of you. Don't rearrange your own 1's and 0's.

I'm no expert either, thankfully. Although the medical benefits do seem to be
real (i.e. pain reduction, appetite stimulation, etc.)

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IsaacSchlueter
Did any of you actually read the text? The Economist's answer is hilarious.

~~~
ancornwell
That was pretty funny. Put weed on a modern commodities market and you can be
sure stability vanishes.

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snorkel
Because the math is easier for suppliers who don't want make change.

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vbsredlofb
12,5 grams is 60 liras (~$45) in Turkey.

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eof
In my experience, if you are going to buy a gram of good weed in anywhere but
northern california or colorado, $20 is about the going rate.

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michaelhalligan
I was curious enough about this to ask a pothead friend about this, his
statement is that buying in such small quantities he expects to pay $20-$25
per gram for "high grade" plant material at the pot stores^W^Wmedical
marijuana dispensaries in SF. "$10 is what suburban tourists pay for a gram of
twigs, seeds, and brown mexiweed on haight street". was his direct quote.

~~~
code_duck
He's correct, this "$10 a gram" question doesn't make much sense. Fortunately,
I've studied this topic and can share some knowledge.

There are basically two qualities of marijuana on the market in the US: low
grade Mexican imports, and high grade domestic/canadian. You could add a
third, a 'midgrade', which would be really good mexican or low grade canadian
(mass imported BC bud, aka 'beesters'). (Interestingly, in the UK and Europe,
the Mexican equivalent is 'African').

The Mexican stuff sells for $200-$1200 a lb, depending on your proximity to
the border. For instance, it might be $250 a lb in Las Cruces, NM, $500 in
Albuquerque, and $600 in Denver. This equates to a price of $25-80 an ounce
retail varying similarly by location. It is not very fresh, may be chemically
adulterated (splashed with gasoline to hide the smell, for instance), is
compressed into bricks. Your average teenager or blue collar worker smokes
this. . Potency by weight is probably 2-6% active cannabinoids. Smell ranges
from hay-like, to mildy sweet and herbal, to old and musty. It's the Budweiser
of pot.

The other type is the high grade, aka 'kind bud', 'headdies', 'nugs', or so
on. This is typically produced in hydroponic farms in the US, from seeds of
Californian or Dutch varieties that have been the result of intensive breeding
for quality. As such, it is much more fresh and potent. Sometimes the Canadian
material is compressed a bit, but never into 'bricks' like the Mexican.
Potency by weight is probably 5-25% active cannabinoids. This is preferred by
connoisseur smokers, upscale customers, people concerned about their health
and medical patients. That's the type you'll find at the medical dispensaries
in California or Colorado, for instance - locally grown, high quality. Smell
is fresh and herbal, showing a wide range of floral scents typical to the
plant. A beer comparison would be a tasty craft brew from a brew pub or a
regional microbrew. I guess the Canadian stuff would be the equivalent of Sam
Adams. The prices range from $250 to $450 an ounce, showing little regional
variation. My friend has a license to produce for dispensaries in Colorado,
and he said the prices there are $175 to $350 an ounce, similar to the old
prices on the black market. The price for this type is usually, as noted,
$20-25 a gram. More typical is a 1/8 ounce (3.5 g) for $50-60, and a quarter
ounce for $80-100. So, it actually works out to about $14 a gram.

And, there HAS been inflation in the price of this in the past 20 years,
invalidating this article's viewpoint, but it goes in spurts. The price for a
quarter ounce of this higher quality type was about $60-80 in the early 90s,
and then became $80-100 in the later half of the decade. It's stayed
remarkably stable at that price, and $350-400 an ounce, since then.

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daeken
A small correction: "kine bud", not "kind bud".

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code_duck
Yeah, I've heard it both ways - I don't know what the original origin of that
term is.

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weaksauce
From urban dictionary...

Kine is a hawaiian words that translates to "the one". It is used to express
like or show praise towards something or someone. The term has been
popularized in the continental United States in reference to potent Cannabis.

~~~
code_duck
Seems reasonable. I don't think the neo-hippies I heard this from 5-15 years
ago were thinking anything about Hawaii, though. They thought 'kind bud' or
'the kind' and either didn't think about it, or assumed that meant something
that was 'nice' to them.

