The American Marijuana Market
The CNBC report Marijuana Inc. offered this unavoidable message: As the domestic and international financial markets continue their dismal decline, one homegrown economy is thriving: marijuana!
Marijuana production and consumption are ubiquitous, yet the market is very difficult to define. Independent researcher Jon Gettman’s 2006 report illustrated that marijuana is the nation’s No. 1 cash crop. Tabulating the number of marijuana plants seized or eradicated by law enforcement in 2005, he estimated the market to be $35.8 billion.
The DEA's Domestic Cannabis Eradication Program for 2007 seized more than seven million marijuana plants. The government estimates that a single plant will yield about three-quarters of a pound of useable marijuana. Adding that up, the program took 5.5 million pounds of marijuana off the market.
The National Drug Intelligence Center (NDIC) 2009 assessment reported that "25,085,000 individuals aged 12 and older used marijuana in 2007.”
If every single one of those 25 million Americans consumes a quarter-ounce of cannabis every week, then the required supply would be about 18 million pounds per year. Did the DEA's eradication program wipe out more than one-third of the marijuana market in 2007? Of course not.
According to the government’s own data, marijuana remains the most available and widely-used drug in America. Almost a decade of steady pricing on retail cannabis sales across the country strongly hint at a consistently well-supplied market. But how much is the marijuana market worth? With our current recession, this becomes a powerfully important question.
The DEA estimates an annual domestic cultivation supply in excess of 22 million pounds. That amount indicates a retail market for domestic cannabis anywhere from $50 billion to $85 billion. But again, we can see that such a limited supply would barely cover their estimated 25 million consumers.
So, let’s follow along with the speculations of some law enforcement and pro-regulation activists that eradication data reveals only about 10% of all this fine American cannabis being grown. Under that assumption, there would have been approximately 60 million pounds of domestic marijuana produced in 2007.
That would be enough for 80 million Americans to smoke a quarter-ounce of cannabis per week. A conservative estimate of 60 million pounds of cannabis retailed by the ounce adds up to $230 billion.
Considering that the marijuana economy in Mendocino County, California alone is worth as much as $1 billion, the national marijuana market would far exceed our speculation here of $230 billion.
And let's not forget that imported cannabis continues to enter the country via Mexico, Jamaica and Colombia. Clearly, domestically grown marijuana does not meet the entire American market demand.
The United Nations has reported that Americans are the biggest consumers of marijuana in the world. “The amount of marijuana available - including marijuana produced both domestically and internationally - in the United States is unknown," the NDIC acknowledges.
Moving the cannabis market above ground would bring thousands of existing workers and new jobs with it, and instantly pump billions of dollars of tax revenues into all levels of the economy and government.
It's both nearsighted and downright un-patriotic to not consider regulating cannabis at this critical economic juncture in American history.
Blog by Chris Goldstein - originally published at www.celebstoner.com
Chris hosts Active Voice Radio and co-founded NORML Audio Stash.