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A Look at Legalized Pot’s Strange Economics

Ryan Allway

January 10th, 2014

Policy, Top Story

Bloomberg BusinessWeek recently published a story covering the strange economics surrounding marijuana following its legalization in Colorado. Legal cannabis retailers are selling out of marijuana priced at $400 per ounce when medical dispensaries are charging just $200 per ounce and black market rates are as low as $156 per ounce.

While some of the rate discrepancy can be blamed on Colorado’s 15% wholesale and 10% retail tax on marijuana transactions, the real culprit may be the high production costs due to state tax policies, shifting market behaviors, and contradictory drug laws nationwide. The removal of these barriers could lower the price of legal marijuana as much as 90%, according to some experts.

Critics of the tax policies associated with legalized marijuana contend that the black market will come back strong if taxes remain very high on legalized product. Lawmakers that have so far taxed based on weight are now considering taxes based on THC content – much the same as alcohol is taxed. These critics further assert that states would already benefit from sharply lower drug enforcement costs that should offset the costs.

Read More at Bloomberg BusinessWeek

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.

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CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

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