There was a joke that claimed you could take a parrot and make them into an economist just by teaching them to say “supply and demand”. We all understand that the supply or scarcity of a product will help dictate the demand and the price for the product. Well, marijuana growers are just as susceptible to the governing dynamics of economics as the rest of us.
However, with the recent downfall of our American economy over the past couple of years, quite a different effect has occurred for the marijuana growers in the Western United States. Since 1998 Oregon has allowed for the use of medicinal marijuana. The states bordering to the north and south, California and Washington also allow for the use of medical marijuana.
The opening of these laws have allowed professional marijuana growers to gain a foot hold in the market by legally growing for patients that have been prescribed marijuana. Each patient is allowed to have up to 18 seedlings and six plants in Oregon. Each patient is allowed to have up to one and a half pounds of marijuana at any given time. A good grower can easily produce three pounds or more off of six plants in a four month growing cycle.
So, what does all of this mean? It means that a lot of people are now able to grow with less fear of legal repercussions. The next contributing factor is that for the past two years we have had record unemployment rates and people desperate to make money, at times by any means possible. According to an unidentified source the flood of marijuana in recent months has made it a buyers market.
One source told us that they have been contacted by many people looking to sell some of their finished product at lower than average prices. They went on to explain that there is so much pot on the market in the Northwest United States that it is hard to get rid of at the moment.
Our source went on to tell us a story about their friend who grows in Humboldt County California, a well-known marijuana producing area of the United States. He explained that due to the flood of pot in the market the friend was unable to sell their product in California and came to Oregon to try and find buyers, with little luck.
Normally, when marijuana is sold in small amounts such as a three and a half gram bag of marijuana or an eighth of an ounce is sold for $40. Eight of these bags makes one ounce and if purchased as an ounce the seller will usually give a discount between $20 to $80, (6% to 25% savings) depending on the quality. Some growers can’t even get rid of their product for up to a 50% discount.
Historically during bad economic times the sales of drugs and alcohol increase due to the depression people feel and their need to escape. The economy has taken its toll on everyone and hopefully the recession will be over soon. As jobs come back and fewer people are in desperate positions this small bursting marijuana bubble will regulate itself back to the stable market that it use to be.
As the economy improves the sales of intoxicants should go back down. As the rest of America has been fighting to rebuild the economy and get jobs the marijuana growers have been busy growing and it seems that they may have grown themselves into their own recession by flooding the market and bringing the price down.