Comment by cbanek | Hacker News Reader

Comment by cbanek | Hacker News Reader

The other factor not talked about is that in general the prices seem to be going down due to a lot of supply (both on the retail/licensed market, and the grey/black market). About ten years ago, a really good pound (in bulk) could go for $3k-$4k to a dispensary. Now the high end seems to have fallen out and you're maybe lucky to get half of that. I think a lot of people ran their business plan numbers where they were, but now that there's a lot more supply, just the raw numbers are going down. There's also a lot more low quality product on the market, which pushes down prices on higher quality things slowly. And yes, the licensing, taxes, and testing are just insult to injury on top of that.

Overall I think it's a good thing though. Since real medical patients never get their pot on medical insurance, the reduction in cost really helps consumers.

Source: anecdotal data from friends that were in the industry, and prices at Harborside back in "the day."

>could go for $3k-$4k to a dispensary. Now the high end seems to have fallen out and you're maybe lucky to get half of that.

For comparison, bulk price of tobacco is a few bucks a pound. Admittedly I am not an expert in marijuana vs tobacco cultivation, but I doubt it's 1,000 times more expensive. Ultimately, the problem with profiting in a legal marijuana industry is that people simply don't smoke that much pot.

Say that there's 260 million adults in the US and they all smoke 1 joint per day. Assuming:

1 joint = 1 g of marijuana 1 lb = 454g 1 acre can yield 600 lbs of marijuana 1 farm is 1000 acres

If you do the math, that means we need roughly 350 farms worth of marijuana. Or in terms of acreage, roughly 0.04% of all the acreage in the U.S. under cultivation. In other words, even if we assume a ridiculous level of smoking there's simply not a huge demand for pot. Using more realistic amounts, a handful of large farms could produce all the marijuana consumed in the country.

Consider that a lot of mass-produced flower is used for production of concentrates. The yield weight of cannabis extracts might be 10-20% of plant matter input.

> Now the high end seems to have fallen out and you're maybe lucky to get half of that.

Barely. I do lots of work with growers.. the sweet spot for a pound these days is $600 to $850, depending on quality. On top of that, transaction volumes are increasing too.. before you could make a deal on a handfull of pounds, now purchasers are interested in buying a "box" or a hundred pounds at a time.

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