As a reminder, I’m watching the legalization of recreational marijuana to see what effect heavy-handed regulation has on a newly legal industry. My hypothesis? Overbearing regulation will restrict, if not strangle, an emerging industry.
4/9 – New York Times – Marijuana Taxes Won’t Save State Budgets – The governor’s office has dropped their estimate of taxes from recreational marijuana sales for the year ending June 30, 2015 from $118M back in February 2014 to $69M now.
That is a mere 0.2% of the state budget, less than a quarter of one percent. The trivial amount massively undercuts the concept that pot taxes will be a big help for state budgets, which is one of the secondary reasons touted to legalize marijuana.
Continue reading “Update on marijuana regulation – #17”
In case you were wondering, I’m watching the legalization of recreational marijuana to see what effect heavy-handed regulation has on a newly legal industry. My hypothesis? Overbearing regulation will restrict, if not strangle, an emerging industry.
Articles discussed in this post: taxes raised from recreational marijuana in Colorado may have to be returned to taxpayers and two radically different plans for legalization in Ohio.
4/1 – New York Times – In Colorado, Marijuana Taxes May Have to Be Passed Back – The taxpayer’s bill of rights in Colorado requires that when the state collects more money that it forecast on passing the state budget, the excess has to go back to taxpayers. Sounds like an okay plan, right?
Wrinkle in that plan is that all programs generating money get hit. Apparently the details in the voter approved plan will require that most or all of the money collected on sales of recreational marijuana may have to be returned to the taxpayers somehow.
To whom and how much remains to be determined. State legislators want to keep the money, of course. So they are trying to figure out how to not return it to the taxpayers.
Continue reading “Update on marijuana regulation – #16”
Here’s a few quick notes on interesting news that I won’t cover in a separate post. I’ll come back to the first article later this week.
3/15 – Bismarck Tribune – Oil adds $43 billion to economy, study say – Research by North Dakota State University profs calculate that oil and gas add $43B to the state’s economy. In 2013, they calculated the energy industry added 55,000 direct jobs and another 26,000 indirectly. Report is available here.
Continue reading “More good stuff on the Bakken – 3/17”
Yesterday was one of those days the internet went out of its way to keep me laughing at the world’s silliness. Might just be my sense of humor. Or maybe not, so follow along if you wish to see if you can find a few smiles and laughs. Perhaps it is just that I’ve been following the strangling impact of heavy-handed regulation of new industries that these stories are so funny.
Three discussions: Stoner rabbits, marijuana industry as a service niche for CPAs, and Jr Deputy Accountant is back.
The Utah legislators should vote down the medical marijuana proposal because a lot of bunny rabbits and other cuddly little critters will get stoned.
Continue reading “Some days the world goes extra bizarre just to keep me laughing”
A reader pointed me toward this report from CNBC: Washington has more pot than it can smoke.
Feels like I hit a jackpot in watching the battle between free enterprise and crushing regulation. Follow along with me as I highlight the story with editorial comments on capitalism and regulation.
You may want to get a fresh cup of coffee. This will be along article.
Why so much discussion?
Why am I spending so much time writing about medical marijuana? As a general matter I don’t give a hoot about this marketplace because I have zero interest in this or any other market for intoxicants.
The medical marijuana markets are a natural experiment in a small, separately visible, newly created market and the impact regulation has on the development of that sort-of-legal industry.
Opportunities to see whether regulations strangle an industry are so limited everywhere else in the economy because other markets are large, well-developed, complex, intertwined, and have already adjusted to regulation.
With medical marijuana we can watch a brand-new industry adjust to brand-new regulations.
Back to the article.
There is apparently a huge excess supply of recreational marijuana over demand in Washington State.
Continue reading “More indications of the battle between free enterprise and regulation in Washington’s recreational marijuana market”
Comments by a reader of my blog informed me that wholesale prices of state-legal-federally-illegal recreational marijuana have dropped dramatically. That got me to wondering what has happened to the pricing.
I’m am otherwise totally clueless of the pricing in this market. What I know I learn by reading the ‘net.
Just so everyone knows, I am following this story because it is a natural experiment to see the impact of crushing regulation imposed on a newly emerging industry.
The commenter shared a recent report on CNBC quoting a producer saying the wholesale prices had dropped from $1,700 to $2,200 per ounce down to $700 per ounce.
The range in price is due to different qualities. That would give wholesale prices in the range of $60 to $77 per gram in the recent past to around $25/gram currently.
That gives these data points:
- $1,700 to $2,200 per ounce sometime prior to the CNBC article
- $700 per ounce at the time of the CNBC article (date unknown)
So using the ‘net, which is the most incredible educational tool ever invented, I search for about 10 minutes and found a lot of great info. Spent another 10 minutes reading promising articles and found the following:
Continue reading “Some data points on pricing in newly legal recreational marijuana. We can already see distortions created by regulation.”
I have multiple interests on this blog. As is extremely obvious, I have been captivated by the energy revolution created by horizontal drilling and hydraulic fracturing. Have also been fascinated by the wide open frontiers of education, publishing, private space exploration, energy, and technology in general.
There are at least two other threads. First, dark worlds far away I’ll never visit, such as selling drugs and sundry other illegal stuff on the net (called “dark nets”). Another thread is the watching how much heavy-handed regulation is dragging down the newly legal industry of recreational marijuana.
Just like the closing scenes of Ghostbusters, those two threads have touched each other and merged.
Continue reading “Mr. “Worlds far away”, please let me introduce Mr. “Natural experiment in heavy-handed regulation”.”
Only a few articles I’ve noticed recently on the state legal sales of recreational marijuana. In case you are just noticing my articles on the topic, my interest is to watch the natural experiment of whether overbearing, heavy-handed regulations strangle a brand new industry.
1/15 – KOMO news – Too much pot: Growers struggle with glut of legal weed – This is essentially a story on implementation issues in Washington state. Initially there was a shortage of state-legal marijuana, now there is a glut. Since last summer, growers have harvested 31,000 pounds (I have no idea how that count is determined).
Article says many users are staying with the lower taxed medical marijuana.
Continue reading “Update on marijuana regulation – #15”
Legalization of marijuana is a natural experiment in how a newly-legal market responds to heavy regulation. First results are in on tax revenue harvested by Colorado. (lousy pun intended)
2/11 – AP at ABCNews – Colorado’s Pot Tax Tally Has Lessons for Other States – Report is in on how much tax revenue was realized from recreational marijuana.
Results? Continue reading “First results on marijuana tax collections in Colorado – #14”
Not a lot of news on how the recreational marijuana market is doing lately. There is some preliminary info suggesting the tax haul won’t be as big as expected. Will take more time before we can fully see how severely the regulatory burden is constricting the market.
Just as a marker for the future, I believe the heavy regulation of recreational marijuana will severely constrain the industry. We shall see. I will watch developments as they become visible.
Continue reading “Update on marijuana regulation – #13”
Not much in the news lately on the crushing effect of overregulation on the newly legal industry of recreational marijuana. (You now know my opinion and can filter my comments accordingly.)
This post will catch up on a few older articles.
11/8 – The Economist – The Marlboro of marijuana – The legal cannabis industry is run by minnows. As liberalisation spreads, that may not last – Here are a few more regulatory restraints that will strangle the industry: Article says that in Colorado, dispensaries have to grow at least 70% of what they sold and growers had to sell at least 70% of what they grew. That recently changed.
Continue reading “Update on marijuana regulation – #12”
Legalization of marijuana in Colorado and Washington is a natural experiment to see what happens when the government lays heavy regulation on a brand new industry. It is also a natural experiment on how to handle an entire industry that moves from the shadows into the lawful world.
10/25 – The Feed – Colorado Thinks Twice on Pot? – Legalization in Colorado passed 55-44. Recent survey says 50% of people in survey think it wasn’t such a great idea.
Current prediction is the state will fall $20M short of the tax revenue forecast. That is one of the unintended consequences I expect to see and think it will be discussed a lot.
Continue reading “Update on marijuana regulation – #11”
The grand natural experiment in regulation of a new industry continues. Oregon, Alaska, and D.C. legalized recreational marijuana on Tuesday.
For concepts such as whether excessive regulation strangles business or not, it would be great to run a huge experiment: let one state our metro area run with heavy regs and another run with light regs; watch for a few years; measure results; then repeal both laws while you study the result.
Doing so would be terribly disruptive, likely illegal, and actually cruel to whichever group suffered poor results.
So what to do? Watch what happens in a locality, region, or state when a new policy is implemented.
That’s what we have in Washington, Colorado, and now Oregon and Alaska. There is a huge natural experiment to see what happens when heavy regulation is imposed on the newly legal industry of providing recreational marijuana.
Continue reading “Two more states legalize – Update on marijuana regulation #10”
I’m watching the impact of heavy regulation on the newly legal business of recreational marijuana in Colorado and Washington.
I don’t plan to focus on the short-term adjustment issues from the grand natural experiment. I’m more interested in waiting for the unintended crushing effect of regulation.
In the meantime, it is entertaining to watch the transition. Sometime you gotta’ just laugh….
10/7 – KOMO News – Exploding ‘pot pop’ removed from three marijuana shops
Continue reading “A lighter moment in watching the regulation experiment – #9”
A few updates on the natural experiments running in Colorado and Washington to see what impact heavy regulation has on a new industry. Maryland offers a few ideas on how to strangle the medical marijuana industry to death before it is born.
Again, so you know why I’m paying attention, my hypothesis is the heavy taxes and regulations will severely restrict the new industry.
8/8 – Spokesman-Review – Pot taxes top $1 million in first month – Continue reading “Update on marijuana regulation – regulation experiment #8”